What changed in this filing

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Item 9A. Controls and Procedures

2025-03-04 compared with 2024-03-05 · 147 added, 222 removed, 657 unchanged (36% of the section changed)

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Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and our principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

including our principal executive and our principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

With respect to the year ended December 31, 2024, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures.

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Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S.

generally accepted accounting principles (“GAAP”).

Internal control over financial reporting is a process designed by, or under the supervision of, our President and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

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Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting.

However, these inherent

limitations are known features of the financial reporting process.

However, these inherent limitations are known features of the financial reporting process.

Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

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This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting.

Our report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the Securities and Exchange Commission for “emerging growth companies” that permit us to provide only management’s report in this report.

Our report was not subject to attestation by our independent

registered public accounting firm pursuant to the rules of the Securities and Exchange Commission for “emerging growth companies” that permit us to provide only management’s report in this report.

Changes in Internal Control over Financial Reporting

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EXHIBIT INDEX

Separation Agreement, dated March 30, 2019, by and between Ironwood Pharmaceuticals, Inc.

and Cyclerion Therapeutics, Inc.

(incorporated by reference to Exhibit 2.1 to Current Report on Form 8-K filed on April 2, 2019 (File No.

Restated Articles of Organization of Cyclerion Therapeutics, Inc.

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Description of Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended

Tax Matters Agreement, dated March 30, 2019, by and between Ironwood Pharmaceuticals, Inc.

and Cyclerion Therapeutics, Inc.

(incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed on April 2, 2019 (File No.

Employee Matters Agreement, dated March 30, 2019, by and between Ironwood Pharmaceuticals, Inc.

and Cyclerion Therapeutics, Inc.

(incorporated by reference to Exhibit 10.4 to Current Report on Form 8-K filed on April 2, 2019 (File No.

Development Agreement, dated April 1, 2019, by and between Ironwood Pharmaceuticals, Inc.

and Cyclerion Therapeutics, Inc.

(incorporated by reference to Exhibit 10.5 to Current Report on Form 8-K filed on April 2, 2019 (File No.

Intellectual Property License Agreement, dated April 1, 2019, by and between Ironwood Pharmaceuticals, Inc.

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and individual directors and officers (incorporated by reference to Exhibit 10.7 to Form 10 filed on January 28, 2019 (File No.

Offer Letter, effective April 1, 2019, by and between Cyclerion Therapeutics, Inc.

(incorporated by reference to Exhibit 10.11 to Current Report on Form 8-K filed on April 2, 2019 (File No.

Offer Letter, effective April 1, 2019, by and between Cyclerion Therapeutics, Inc.

and Anjeza Gjino

Offer Letter, effective April 1, 2019, by and between Cyclerion Therapeutics, Inc.

and Cheryl Gault (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on May 4, 2022 (File No.

Amended and Restated Recognition Bonus Agreement, dated December 21, 2022, by and between Cyclerion Therapeutics, Inc.

and Anjeza Gjino

Amended and Restated Recognition Bonus Agreement, dated December 21, 2022, by and between Cyclerion Therapeutics, Inc.

and Cheryl Gault

Cyclerion Therapeutics, Inc.

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Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan and forms of agreement thereunder (incorporated by reference to Exhibit 4.5 to Registration Statement on Form S-8 filed on March 29, 2019 (File No.

Cyclerion Therapeutics, Inc.

Executive Severance Plan (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on August 9, 2022 (File No.

Non-Employee Director Compensation Policy (amended and restated as of December 17, 2021) (incorporated by reference to Exhibit 10.6 to Quarterly Report on Form 10-Q filed on May 4, 2022 (File No.

License Agreement, dated as of June 3, 2021, by and between Cyclerion Therapeutics, Inc.

and Akebia Therapeutics, Inc (incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q filed on July 29, 2021 (File No.

Amendment #1 to License Agreement by and between the Company and Akebia Therapeutics, Inc.

dated December 13, 2024 (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on December 17, 2024)

Common Stock Purchase Agreement, dated as of June 3, 2021, by and between Cyclerion Therapeutics, Inc.

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333-257145)).

Offer Letter to Regina Graul dated December 1, 2023

Consulting Agreement with Peter Hecht dated December 1, 2023

Restricted Stock Agreement with Regina Graul dated December 1, 2023.

Restricted Stock Agreement with Peter Hecht dated December 1, 2023.

Restricted Stock Agreement with Regina Graul dated January 1, 2024.

Restricted Stock Agreement with Peter Hecht dated January 1, 2024.

Amendment to Original Offer Letter to Regina Graul (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on August 7, 2024 (File No.

Insider Trading Prevention Policy

List of Subsidiaries

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Policy for the Recovery of Erroneously Awarded Compensation adopted November 30, 2023

Policy for the Recovery of Erroneously Awarded Compensation adopted November 30, 2023 (incorporated by reference to Exhibit 97.1 to Annual Report on Form 10-K filed on March 5, 2024 (File No.

Inline XBRL Instance Document

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/s/ Regina Graul

President and Chief Executive Officer

POWER OF ATTORNEY

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/s/ Regina Graul

President (Principal Executive Officer)

President, Chief Executive Officer (Principal Executive Officer) and Director

/s/ Rhonda Chicko

Rhonda Chicko

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Chief Financial Officer (Principal Financial and Accounting Officer)

/s/ Errol De Souza

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/s/ Dina Katabi

/s/ Terrance McGuire

Terrance McGuire

Index to Consolidated Financial Statements of Cyclerion Therapeutics, Inc.

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We have served as the Company’s auditor since 2018.

/s/ Ernst & Young LLP

Boston, Massachusetts

March 4, 2025

/s/ Ernst & Young LLP

Cyclerion Therapeutics, Inc.

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Total current assets

Operating lease right-of-use asset

Other investment

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Stockholders' equity

Preferred shares, no par value, 500,000 shares authorized and 351,037 series A convertible preferred stock issued and outstanding at December 31, 2023

Preferred stock, no par value, 100,000,000 shares authorized and 351,037 shares of Series A convertible preferred stock issued and outstanding at December 31, 2024 and 2023

Common stock, no par value, 400,000,000 shares authorized at December 31, 2024 and 2023;

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The accompanying notes are an integral part of these consolidated financial statements.

*Adjusted retroactively for reverse stock split - see Note 1

Cyclerion Therapeutics, Inc.

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(In thousands except per share data)

Year Ended December 31,

Revenue from development agreement

Revenue from license agreement

Option to license revenue

Total revenues

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Loss from operations

Interest and other income, net

Other income, net

Interest income

Gain from settlement of account payable

Total other income, net

Net loss from continuing operations

Discontinued operations:

Gain (loss) from discontinued operations

Gain from discontinued operations

Net income (loss) per share - basic and diluted

Net loss per share from continuing operations

Net income (loss) per share from discontinued operations

Net income per share from discontinued operations

Net loss per share

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Other comprehensive loss:

Foreign currency translation adjustment gain

Other comprehensive income (loss):

Foreign currency translation adjustment (loss) gain

Comprehensive loss

The accompanying notes are an integral part of these consolidated financial statements.

*Adjusted retroactively for reverse stock split - see Note 1

Cyclerion Therapeutics, Inc.

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Balance at December 31, 2022

Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan

Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan

Share‑based compensation expense related to issuance of stock options to non-employees

Foreign currency translation adjustment

Balance at December 31, 2022

Issuance of common stock

Issuance of preferred stock

Issuance of preferred shares

Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan

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Balance at December 31, 2023

Vesting of restricted stock awards

Share-based compensation expense related to issuance of stock options and restricted stock awards

Foreign currency translation adjustment

Release of foreign currency translation adjustment upon liquidation of a subsidiary

Balance at December 31, 2024

The accompanying notes are an integral part of these consolidated financial statements.

*Adjusted retroactively for reverse stock split - see Note 1

Cyclerion Therapeutics, Inc.

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Gain on disposal of discontinued operations

Depreciation and amortization

Gain from settlement of account payable

Impairment loss

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Cyclerion Therapeutics, Inc.

(“Cyclerion”, the “Company” or “we”) became an independent public company on April 1, 2019 after Ironwood Pharmaceuticals, Inc., or Ironwood, completed a tax-free spin-off of its sGC business, which we refer to herein as the "Separation".

(“Cyclerion”, the “Company” or “we”) became an independent public company on April 1, 2019 after Ironwood Pharmaceuticals, Inc.

completed a tax-free spin-off of their sGC business.

Cyclerion is focused on building a new pipeline with therapeutics to treat certain neuropsychiatric diseases.

Cyclerion has prioritized an individualized therapy for treatment resistant depression (“TRD”) as its foundational product candidate and has 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, the Company believes that this product is well suited to be its foundation moving forward for Cyclerion.

The Company is currently developing an integrated development and commercial strategy in TRD.

Cyclerion has one employee as of December 31, 2024.

At inception, Cyclerion was a biopharmaceutical company focused on the treatment of serious diseases with novel soluble guanylate cyclase ("sGC") stimulators in both the CNS and the periphery.

The nitric oxide ("NO") sGC cyclic guanosine monophosphate ("cGMP") signaling pathway is a fundamental mechanism that precisely controls key aspects of physiology throughout the body.

The NO-sGC-cGMP pathway regulates diverse and critical biological functions in both the central nervous system ("CNS") and the periphery and has been successfully targeted with several drugs.

At inception, Cyclerion was a biopharmaceutical company focused on the treatment of serious diseases with novel soluble guanylate cyclase (“sGC”) stimulators in both the central nervous system (“CNS”) and the periphery.

The Company’s strategy changed and Cyclerion's sGC assets have either been sold, out-licensed or has plans to be out-licensed to a third party.

The Company’s prior strategy to conduct research and development on sGC stimulators has been discontinued and Cyclerion does not intend to internally pursue research and development or commercialization with any sGC asset.

The Company is leveraging its legacy sGC stimulator assets to generate revenues which, in the near-term will be used to implement its strategic building plan in TRD.

Praliciguat is an orally administered, once-daily systemic sGC stimulator.

On June 3, 2021, Cyclerion entered into a license agreement (as defined below) with Akebia Therapeutics Inc.

On June 3, 2021, Cyclerion entered into a license agreement with Akebia Therapeutics Inc.

(“Akebia”) relating to the exclusive worldwide license to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing praliciguat and other related products and forms thereof enumerated in such agreement.

Cyclerion is eligible to receive up to $ 585 million in total potential future development, regulatory, and commercialization milestone payments.

Cyclerion is also eligible to receive tiered, sales-based royalties ranging from single-digit to high-teen percentages and subject to reduction upon expiration of patent rights or the launch of a generic product.

Olinciguat is a phase 2 an orally administered, once-daily, vascular sGC stimulator that Cyclerion intends to out-license to an entity with strong cardiovascular and/or cardiopulmonary capabilities.

Zagociguat is a clinical-stage CNS-penetrant sGC stimulator that has shown rapid improvement in cerebral blood flow, functional brain connectivity, brain response to visual stimulus, cognitive performance, and biomarkers associated mitochondrial function and inflammation in clinical studies.

On December 13, 2024, Cyclerion announced that Cyclerion and Akebia have re-negotiated a mutually beneficial amendment to their exclusive license agreement for praliciguat, a systemic sGC stimulator.

Under this new license amendment, Cyclerion 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.

The Company is eligible to receive additional milestone cash payments of up to approximately $ 558.5 million in total potential future development, regulatory, and commercialization milestone payments for praliciguat.

In exchange for a reduction in certain development milestone payments, Cyclerion is 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 the Company upon signing of the license agreement.

Olinciguat is a Phase 2, orally administered, once-daily, vascular sGC stimulator.

On July 22, 2024, the Company 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 the Company an Option fee of $ 150,000 in August 2024.

The Optionee may exercise the Option on or before February 22, 2025, which may be extended for an additional two-month period for an additional fee of $ 25,000 (the “Option Period”).

If the Optionee exercises the Option during the Option Period, the Optionee and the Company 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 the Company.

In addition, the Optionee has agreed to reimburse the Company for certain patent expenses incurred during the Option period.

associated mitochondrial function and inflammation in clinical studies.

CY3018 is a CNS-targeted sGC stimulator that preferentially localizes to the brain and has a pharmacology profile that suggests its potential for the treatment of neuropsychiatric diseases and disorders.

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See “Asset Purchase Agreement” and “Note 4” below.

Cyclerion is actively evaluating other activities aimed at enhancing shareholder value, which may potentially include collaborations, licenses, mergers, acquisitions and/or other targeted investments.

The Company has shifted its strategy to identify, non-sGC stimulator assets within the CNS therapeutic area to build a new portfolio.

If the Company identifies suitable new assets, they will develop the new assets and retain contract research, development and manufacturing organizations for these specific purposes.

Additionally, Cyclerion plans to raise funds for further research and development activities associated with any new assets.

The Company’s goal is to find the best combination of capital, capabilities, and transactions that will enable the advancement of current and any future assets the Company may acquire for patients in a way that maximizes shareholder value.

Cyclerion GmbH, a wholly owned subsidiary, was incorporated in Zug, Switzerland on May 3, 2019.

The functional currency is the Swiss franc.

Subsequent to December 31, 2023 , the liquidation process for Cyclerion GmbH has been concluded and the subsidiary is pending deregistration from the commercial registry.

Cyclerion GmbH has no employees.

Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts for the 2019 tax year.

Cyclerion Securities Corporation has no employees.

Cyclerion GmbH was liquidated and de-registered in May 2024.

Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts.

Stock Purchase Agreement

In March 2023, the Company entered into a stock purchase agreement with the Company's former Chief Executive Officer (the “CEO”) pursuant to which he invested $ 5 million in cash for 225,000 shares of common stock and 351,037 shares of Series A Convertible Preferred Stock of the Company at a price of $ 8.68 per share (after giving effect to the 1-for-20 reverse stock split the Company implemented on May 15, 2023).

Such Series A Convertible Preferred Stock is convertible into shares of our common stock on a one-to-one basis.

The closing of the equity investment took place on May 19, 2023, and (to comply with Nasdaq listing requirements) our shareholders approved such convertibility on July 19, 2023.

The Series A Convertible Preferred Stock is convertible into shares of the Company's common stock on a one-to-one basis.

The closing of the equity investment took place on May 19, 2023, and (to comply with Nasdaq listing requirements) the Company's shareholders approved such convertibility on July 19, 2023.

Asset Purchase Agreement

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Under the ATM Offering, the Company could offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $ 50.0 million through Jefferies as its sales agent.

The Company agreed to pay Jefferies cash commissions of 3.0 percent of the gross proceeds of sales of common stock which could be sold under the Sales Agreement.

Prior to January 1, 2022, the Company sold 3,353,059 shares of its common stock for net proceeds of $ 12.5 million under the ATM Offering, since entering into the Sales Agreement.

No shares of common stock have been issued or sold under the ATM Offering in 2022 or 2023.

Company agreed to pay Jefferies cash commissions of 3.0 percent of the gross proceeds of sales of common stock which could be sold under the Sales Agreement.

No shares of common stock have been issued or sold under the ATM Offering in 2023.

The 2020 Shelf expired in July 31, 2023.

Due to the current market value of our publicly traded common stock held by non-affiliates, our ability to raise future funding though a shelf offering will be limited.

Due to the current market value of our publicly traded common stock held by non-affiliates, our ability to raise future funding though a shelf offering will be limited to the value of one-third of our public float until such time as the public float exceeds $ 75 million.

Basis of Presentation

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In the opinion of management, the consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and the results of its operations for the fiscal years presented.

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, Cyclerion GmbH, and Cyclerion Securities Corporation.

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, Cyclerion Securities Corporation and Cyclerion GmbH which was dissolved in May 2024.

All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements.

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Under ASC 205-40, the future receipt of potential funding from future partnerships, equity or debt issuances, certain cost reduction measures and the potential milestones from the Akebia agreement cannot be considered probable at this time because these plans are not entirely within the Company’s control and/or have not been approved by the Board of Directors as of the date of these consolidated financial statements.

The Company expects that its cash, cash equivalents and marketable securities as of December 31, 2023 , will be sufficient to fund operations through the first quarter of 2025, however the Company will need to obtain additional funding to sustain operations as it expects to continue to generate operating losses for the foreseeable future.

The Company expects that its cash and cash equivalents as of December 31, 2024 , will be sufficient to fund operations through mid-2025, however the Company will need to obtain additional funding to sustain operations as it expects to continue to generate operating losses for the foreseeable future.

The Company's expectation to generate negative operating cash flows in the future and the need for additional funding to support its planned operations, raise substantial doubt regarding the Company’s ability to continue as a going concern.

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Segment Information

Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company's President who is the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company currently operates in one reportable business segment - human therapeutics.

The Company operates and manages its business as a single segment for the purposes of assessing performance and making operating decisions.

The Company’s president and chief executive officer, who is the chief operating decision maker ("CODM"), reviews the Company’s financial information on a consolidated basis for purposes of evaluating financial performance and allocating resources.

When evaluating the Company’s financial performance, the CODM regularly reviews net loss, non-operating expenses and operating expenses excluding non-cash stock based compensation expense.

Discontinued Operations

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The preparation of consolidated financial statements in accordance with U.S.

generally accepted accounting principles ("GAAP") requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of expenses during the reported periods.

consolidated financial statements, and the amounts of expenses during the reported periods.

On an ongoing basis, the Company’s management evaluates its estimates, judgments and methodologies.

Significant estimates and

assumptions in the consolidated financial statements include those related to revenue, fair value determination of other investment, impairment of long-lived assets, valuation procedures for right-of-use ("ROU") assets and operating lease liabilities, income taxes, including the valuation allowance for deferred tax assets, research and development expenses, contingencies, share-based compensation and going concern.

Significant estimates and assumptions in the consolidated financial statements include those related to revenue, fair value determination of other investment, impairment of long-lived assets, valuation procedures for right-of-use ("ROU") assets and operating lease liabilities, income taxes, including the valuation allowance for deferred tax assets, research and development expenses, contingencies, share-based compensation and going concern.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

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• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Foreign Currency Translation Adjustment

The functional currency of the Company’s foreign subsidiary is its local currency, the Swiss franc.

The assets and liabilities of the Company’s foreign subsidiary are translated into U.S.

The functional currency of the Company’s former foreign subsidiary is its local currency, the Swiss franc.

The assets and liabilities of the Company’s former foreign subsidiary are translated into U.S.

dollars at exchange rates in effect at the balance sheet date.

Income and expense items are translated at the average exchange rates prevailing during the period.

The cumulative translation effect for the Company’s foreign subsidiary is included as a foreign currency translation adjustment in the consolidated statements of stockholders’ equity and as a component of comprehensive loss in the consolidated statements of operations and comprehensive loss.

The cumulative translation effect for the Company’s former foreign subsidiary was included as a foreign currency translation adjustment in the consolidated statements of stockholders’ equity and as a component of comprehensive loss in the consolidated statements of operations and comprehensive loss.

The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary.

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Provisions are made based upon a specific review of all significant outstanding invoices.

The Company’s receivables primarily relate to amounts earned under a development agreement with Ironwood, licensing agreement, and supply agreement.

The Company believes that credit risks associated with these agreements are not significant.

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If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value.

There were no significant impairments of long-lived assets for the years ended December 31, 2023 or 2022, except for the impairment loss of ROU assets recognized during the year ended December 31, 2023 .

Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”) using the optional transition method.

The adoption of ASC 842 represents a change in accounting principle that aims to increase transparency and comparability among organizations by requiring the recognition of right-of-use assets and lease liabilities on the balance sheet for both operating and finance leases.

In addition, the standard requires enhanced disclosures that meet the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases.

The reported results for the years ended December 31, 2023 and 2022 reflect the application of ASC 842 guidance.

The recognition of right-of-use assets and lease liabilities related to the Company’s operating leases under ASC 842 has had a material impact on the Company’s consolidated financial statements.

As part of the ASC 842 adoption, the Company has used certain practical expedients outlined in the guidance.

These practical expedients include:

• Account policy election to use the short-term lease exception by asset class;

• Election of the practical expedient package during transition, which includes:

• An entity need not reassess whether any expired or existing contracts are or contain leases.

• An entity need not reassess the classification for any expired or existing leases.

As a result, all leases that were classified as operating leases in accordance with ASC 840 are classified as operating leases under ASC 842, and all leases that were classified as capital leases in accordance with ASC 840 are classified as finance leases under ASC 842.

• An entity need not reassess initial direct costs for any existing leases.

There were no significant impairments of long-lived assets for the years ended December 31, 2024 or 2023, except for the impairment loss of right-of-use assets recognized during the year ended December 31, 2023.

The Company had a property lease for its headquarters location at 301 Binney Street, Cambridge, MA (the “Head Lease”).

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The asset component of the Company’s operating leases was recorded as operating lease right-of-use assets, and the liability component was recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion, in the Company’s consolidated balance sheets.

ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date.

Right-of-use assets (ROU) assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date.

The Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments if an implicit rate of return is not provided with the lease contract.

Operating lease right-of-use assets are adjusted for incentives received.

Operating lease ROU assets are adjusted for incentives received.

Lease cost was recognized on a straight-line basis over the lease term, and included amounts related to short-term leases.

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The assumptions that are used to determine the stand-alone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success.

The Company derives revenue from (1) license agreement and (2) supply agreement which are fully described in Note 15, License Agreement .

The Company generates revenue from research and development grants under contracts with third parties that do not create customer-vendor relationships.

The Company’s research and development grants are non-exchange transactions and are not within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

Contribution revenue earned from activities performed pursuant to research and development grants is reported as grant revenue in the Company’s consolidated statements of operations.

Revenue from these grants is recognized as the Company incurs qualifying expenses as stipulated by the terms of the respective grant.

Cash received from grants in advance of incurring qualifying expenses is recorded as deferred revenue.

The Company records revenue and a corresponding receivable when qualifying costs are incurred before receiving payment from the grants.

The Company derives revenue from (1) license agreement and (2) option to license agreement which are fully described in Note 15, License Agreement .

Research and Development Costs

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The Company expenses general and administrative costs to operations as incurred.

General and administrative expense consists of compensation, share-based compensation, benefits and other employee-related expenses for personnel in the Company’s administrative, finance, legal, information technology, business development and human resource functions.

General and administrative expense consists of compensation, share-based compensation, benefits and other employee-related expenses for personnel and outside consultants providing the Company’s administrative, finance, legal, information technology, business development and human resource functions.

Other costs include the legal costs of pursuing patent protection of the Company’s intellectual property, general and administrative related facility costs, insurance costs and professional fees for accounting and legal services.

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Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences are expected to reverse.

A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be

Accordingly, the Company provides a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are realizable.

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Patent fees and patent related costs in connection with filing and prosecuting patent applications are expensed as incurred and are classified as general and administrative expenses in the accompanying consolidated financial statements.

The Company incurred and recorded as operating expense legal and other fees related to

patents of approximately $ 1.1 million and $ 1.7 million for the years ended December 31, 2023 and 2022 , respectively.

The Company incurred and recorded as operating expense legal and other fees related to patents of approximately $ 0.6 million and $ 1.1 million for the years ended December 31, 2024 and 2023 , respectively.

Interest and Other Income, Net

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The Company adopted ASU 2016-13 in the first quarter of 2023, and the adoption of this standard did not have any impact on the Company's financial position or results of operations.

In November 2023 the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

The Company adopted this standard effective January 1, 2024 using a retrospective method, and the adoption of this standard did not have any impact on the Company's financial position or results of operations.

For further information, refer to the Segments section in Note 2 “Summary of Significant Accounting Policies.”

No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s consolidated financial statements upon adoption.

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The fair value of the Company's cash equivalents, consisting of money market funds, is based on quoted market prices in active markets with no valuation adjustment.

The Company believes the carrying amounts of its prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair value due to the short-term nature of these amounts.

The Company believes the carrying amounts of its accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair value due to the short-term nature of these amounts.

Discontinued Operations

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The transaction closed on July 28, 2023.

The following table presents the results of the discontinued operations for the year ended December 31, 2023 and 2022 (in thousands):

The following table presents the results of the discontinued operations for the year ended December 31, 2023 (in thousands):

Year Ended December 31, 2023

7 unchanged sentences

Gain on disposal of discontinued operations

Net gain (loss) from discontinued operations

The following table summarizes the carrying amounts of major classes of assets and liabilities of discontinued operations as of December 31, 2022 (in thousands).

December 31, 2022

Prepaid expenses

Other current assets

Total current assets of discontinued operations

Total assets of discontinued operations

Accounts payable

Accrued research and development costs

Accrued expenses and other current liabilities

Total current liabilities of discontinued operations

Total liabilities of discontinued operations

Net liabilities of discontinued operations

Net gain from discontinued operations

The following table presents the significant non-cash item for the discontinued operations that are included in the accompanying consolidated statements of cash flows (in thousands):

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The Company has determined that the Company’s investment in Tisento Parent is an equity security, whereby such investment does not give the Company a controlling financial interest or significant influence over the investee.

Further, the Company assessed the accounting for its investment in Tisento Parent in accordance with ASC 810-10, Consolidation—Overall.

Further, the Company assessed the accounting for its investment in Tisento Parent in accordance

with ASC 810-10, Consolidation—Overall.

After determining that no scope exception applies under the guidance of ASC 810-10-15-12 and ASC 810-10-15-17, the Company concluded that it has a variable interest in Tisento Parent through its investment in Tisento Parent common stock.

Tisento Parent does not have sufficient equity to finance its activities without additional subordinated financial support as Tisento Parent is a startup entity in its early

stages of raising funds and will require significant capital to advance its programs to commercial stage.

Tisento Parent does not have sufficient equity to finance its activities without additional subordinated financial support as Tisento Parent is a startup entity in its early stages of raising funds and will require significant capital to advance its programs to commercial stage.

Therefore, the Company concluded that its investment in Tisento Parent is a variable interest entity (“VIE”) in accordance with ASC 810-10-15-14(a) and is subject to potential consolidation under the VIE model.

15 unchanged sentences

Property and equipment, net consisted of the following (in thousands):

Computer equipment

Property and equipment, gross

1 unchanged sentence

Property and equipment, net

As of December 31, 2023, and 2022, the Company’s property and equipment was primarily located in Boston, Massachusetts.

During the year ended December 31, 2023 , the Company did no t record depreciation and amortization expenses.

The Company recorded $ 0.1 million of depreciation and amortization expenses for the year ended December 31, 2022.

During the year ended December 31, 2024 and 2023, the Company did no t record depreciation and amortization expenses.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

Accrued incentive compensation

Accrued vacation

Professional fees

Accrued severance and benefit costs

Accrued expenses and other current liabilities

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As a result, the estimated fair value of these obligations is minimal.

Accordingly, the Company did not have any liabilities recorded for these obligations as of December 31, 2023 or December 31, 2022.

Accordingly, the Company did no t have any liabilities recorded for these obligations as of December 31, 2024 or December 31, 2023.

Separation Benefits

As part of the separation benefit of former Chief Financial Officer, the Company shall pay to former Chief Financial Officer a payment of $ 0.1 million on each of the six-month and nine-month anniversaries of November 15, 2023, in the event the former Chief Financial Officer has not secured full-time employment prior to the anniversary date.

In May 2021 the Company signed a 12-month membership agreement to lease space with WeWork at 501 Boylston Street, Boston, Massachusetts, commencing on August 1, 2021.

The agreement was extended for six months on August 1, 2022.

The 12-month agreement and 6-month extension are accounted for as short-term leases.

The lease agreement was terminated during the year ended December 31, 2023.

The Company recorded $ 0.1 million and $ 0.1 million, respectively, in lease expense associated with the membership agreement during the years ended December 31, 2023, and 2022.

As part of the separation benefit of the former Chief Financial Officer, the Company paid $ 0.1 million each in May 2024 and August 2024, as the former Chief Financial Officer had not secured full-time employment prior to the six-month anniversary and nine-month anniversary of November 15, 2023.

The Company has no further separation benefits obligation as of December 31, 2024.

On September 15, 2020, the Company entered into a Sublease Termination Agreement (the "Sublease Termination Agreement") to terminate its sublease of 15,700 rentable square feet, of its leased premises under the Head Lease.

Under the terms of the Sublease Termination Agreement, the subtenant was relieved of its obligation to

provide future cash rental payments to the Company.

Under the terms of the Sublease Termination Agreement, the subtenant was relieved of its obligation to provide future cash rental payments to the Company.

The agreements requiring the former subtenant to provide licensed rooms and services to the Company free of charge through the original sublease term survived the sublease termination.

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The related lease expense is recognized on a straight-line basis over the lease term of 8.88 years.

The Company recorded $ 0.2 million and $ 0.4 million of lease expense during the years ended December 31, 2023 and 2022, respectively.

The Company recorded $ 0.2 million of lease expense during the year ended December 31, 2023.

The Company determined that the licensed services represent a non-lease component, which is recognized separately from the lease component for this asset class.

The expense related to the licensed services is recognized on a straight-line basis over the period the services are received.

The Company recorded $ 0.1 million and $ 0.2 million for the years ended December 31, 2023 and 2022, respectively.

The Company recorded $ 0.1 million for the year ended December 31, 2023.

Both the lease expense and services expense are recognized as a component of research and development costs in the consolidated statements of operations and comprehensive loss.

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In August 2023, the ROU asset and other assets were fully impaired, and the Company recognized a $ 3.3 million impairment loss during the year ended December 31, 2023.

No lease expense or services expense was recognized during the year ended December 31, 2024.

Share-based Compensation Plans

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Exercisable at December 31, 2024

During the years ended December 31, 2023 and 2022, the Company granted stock options to purchase an aggregate of 4,000 shares and 84,765 shares, respectively, at weighted average grant fair values per option share of $ 2.95 and $ 18.20 respectively.

During the years ended December 31, 2024 and 2023, the Company granted stock options to purchase an aggregate of 55,849 shares and 4,000 shares, respectively, at weighted average grant date fair values per option share of $ 2.80 and $ 2.95 respectively.

There were no options exercised during the year ended December 31, 2024 and 2023.

As of December 31, 2023, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested time-based stock options held by the Company’s employees is $ 0.3 million and the weighted average period over which that expense is expected to be recognized is 3.46 years.

As of December 31, 2024, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested time-based stock options held by the Company’s employee and non-employees is $ 0.4 million and the weighted average period over which that expense is expected to be recognized is 3.64 years.

The weighted-average Black-Scholes assumptions used in estimating the fair value of the stock options granted by Cyclerion during the years ended December 31, 2024 and 2023 were as follows:

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These options are subject to performance-based milestone vesting.

During the year ended December 31, 2023 , there were no shares that vested as a result of performance milestone achievements and 2,500 shares vested during the year ended December 31, 2022 .

The Company recorded a de minimis and no share-based compensation expense related to these performance-based options for the years ended December 31, 2023, and 2022, respectively.

During the year ended December 31, 2024 and 2023, there were no shares that vested as a result of performance milestone achievements.

No share-based compensation expense related to these performance-based options was recognized during the years ended December 31, 2024, and 2023, respectively.

Market-based Stock Options

The Company also has granted to certain employees stock options containing market conditions that vest upon the achievement of specified price targets of the Company’s share price for a period through December 31,

The Company also has previously granted to certain employees stock options containing market conditions that vest upon the achievement of specified price targets of the Company’s share price for a period through December 31, 2024.

Vesting is measured based upon the average closing price of the Company’s share price for any thirty consecutive trading days, subject to certain service requirements.

1 unchanged sentence

The Company accelerates expense when a stock price target is achieved prior to the derived service period.

The Company does not reverse expense recognized if the share price target(s) are ultimately not achieved but expense is reversed when a stock award recipient has a break in service prior to the completion of the derived service period.

As of December 31, 2023, there were 7,500 outstanding stock options containing market conditions with a weighted average exercise price of $ 40.20 .

As of December 31, 2023, there was a de minimis amount of unrecognized compensation costs related to stock options containing market conditions, which is expected to be recognized over a weighted-average period of 0.35 years.

The Company does not reverse expense recognized when the share price target(s) are ultimately not achieved but expense is reversed when a stock award recipient has a break in service prior to the completion of the derived service period.

During the year ended December 31, 2024, 7,500 stock options containing market conditions were forfeited and there were no outstanding stock options containing market conditions as of December 31, 2024.

A summary of stock awards containing market conditions activity for the year ended December 31, 2024 is as follows:

4 unchanged sentences

No stock options containing market conditions were granted during the years ended December 31, 2024 and 2023.

Restricted Stock Units

The RSUs generally vest 25 % per year on the approximate anniversary of the date of grant until fully vested, provided the employee remains continuously employed with the Company through each vesting date.

Shares of the Company’s common stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes.

The fair value of all RSUs is based on the market value of the Company’s common stock on the date of grant.

Compensation expense, including the effect of estimated forfeitures, is recognized over the applicable service period.

A summary of RSU activity for the years ended December 31, 2023 is as follows:

Weighted Average

Unvested as of December 31, 2022

Unvested as of December 31, 2023

Restricted Stock Awards

The Company granted 200,000 RSAs during the year ended December 31, 2023.

28,750 RSAs vest upon grant.

113,750 RSAs vest ratably over a 42-month period, 2,500 RSAs vest over a 6-month period and 55,000 RSAs vest ratably over a 48-month period, provided the grantee remains continuously as a director or an employee of the Company through each vesting date .

Shares of the Company’s common stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes.

The fair value of all RSAs is based on the market value

of the Company’s common stock on the date of grant.

The Company granted 65,000 and 200,000 RSAs during the year ended December 31, 2024 and 2023, respectively.

The fair value of all RSAs is based on the market value of the Company’s common stock on the date of grant.

Compensation expense, including the effect of estimated forfeitures, is recognized over the applicable service period.

7 unchanged sentences

Net loss from continuing operations (in thousands)

Net gain (loss) from discontinued operations (in thousands)

Net gain from discontinued operations (in thousands)

Total net loss (in thousands)

2 unchanged sentences

Net loss per share from continuing operations

Net gain (loss) per share from discontinued operations

Net gain per share from discontinued operations

Total loss per share

*Adjusted retroactively for reverse stock split - see Note 1

We exclude shares of common stock related to Preferred Stock, stock options, RSUs and RSAs from the calculation of diluted net loss per share since the inclusion of such shares would be anti-dilutive.

The Company excludes potential shares of common stock related to Preferred Stock, stock options and RSAs from the calculation of diluted net loss per share since the inclusion of such shares would be anti-dilutive.

The following table sets forth potential shares that were considered anti-dilutive for the years ended December 31, 2024 and 2023:

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The effective income tax rate is based upon the income for the year, the composition of the income in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of audits or other tax contingencies.

Our income tax rate in foreign jurisdictions is lower than our income tax rate in the United States.

The Company's income tax rate in foreign jurisdictions is lower than the Company's income tax rate in the United States.

Deferred tax assets (liabilities) consist of the following as of December 31, 2024 and 2023 (in thousands):

4 unchanged sentences

Share-based compensation

Property and equipment

Capitalized research and development

1 unchanged sentence

Total deferred tax assets

Deferred tax liabilities:

Operating lease - right of use asset

Prepaid sublease termination

Total deferred tax liabilities

Net deferred tax assets

Valuation allowance

Net deferred tax assets

Management has evaluated the positive and negative evidence bearing upon the possible realization of its deferred tax assets.

The Company has evaluated the positive and negative evidence bearing upon the possible realization of its deferred tax assets.

Management has considered the Company's history of operating losses, in addition to the expected timing of the reversal of existing temporary differences and concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company will not realize the benefit of its deferred tax assets.

5 unchanged sentences

As of December 31, 2024, and 2023 , Cyclerion had state net operating loss carryforwards of approximately $ 196 million and $ 178 million, respectively, to offset future state taxable income, which will begin to expire in 2040 and will continue to expire through 2042 .

Cyclerion also had tax credit carryforwards of approximately $ 10.8 million and $ 10.2 million as of December 31, 2023 and 2022 , respectively, to offset future federal and state income taxes.

Cyclerion also had tax credit carryforwards of approximately $ 10.8 million as of December 31, 2024

and 2023 , to offset future federal and state income taxes.

Federal credits begin to expire in 2040 and will continue to expire through 2041.

21 unchanged sentences

Currently, the Company provides a matching contribution of 75 % of the employee’s contributions, up to $ 6,000 annually.

Included in compensation expense is approximately $ 0.1 million and $ 0.2 million related to the defined contribution 401(k) Savings Plan for the years ended December 31, 2023 and 2022 , respectively.

Included in compensation expense is de minimis and approximately $ 0.1 million related to the defined contribution 401(k) Savings Plan for the years ended December 31, 2024 and 2023 , respectively.

Workforce Reduction

Workforce Reductions

On October 6, 2022, the Company began a reduction of its current workforce by thirteen (13) full-time employees to align its resources with its current priorities of focusing on a mitochondrial disease-focused strategy.

The workforce reduction was completed in the fourth quarter of 2022.

The Company recorded total costs related to the 2022 Workforce Reduction of approximately $ 1.3 million, including a de minimis amount of stock-based compensation from the modification of certain share-based equity awards.

No cost related to the 2022 Workforce Reduction was recognized during the year ended December 31, 2024 and 2023.

The Company had further reductions of workforce in 2023 in connection with the sale of the Transferred Assets to Tisento and change to the Company’s strategy.

The Company recorded total costs of approximately $ 0.6 million related to the reduction in workforce during 2023.

The Company recorded total costs of approximately $ 0.6 million related to the reduction in workforce during the year ended December 31, 2023.

No cost related to further workforce reductions was recognized during the year ended December 31, 2024.

All the accrued liabilities were paid off as of December 31, 2023 and no activities occurred during the year ended December 31, 2024.

The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the year ended December 31, 2023 (in thousands) :

Workforce reductions

License Agreement

License and Option Agreement

Option Agreement

On July 22, 2024, the Company 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 the Company an Option fee of $ 150,000 in August 2024.

The Optionee may 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 .

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 the Company.

In addition, the Optionee has agreed to reimburse the Company for certain patent expenses incurred during the Option period.

The Company recognized revenue of $ 0.2 million related to the Option fee payment and expense reimbursement for the year ended December 31, 2024.

Akebia License Agreement

1 unchanged sentence

Pursuant to the Akebia License Agreement, Akebia will be responsible for all future research, development, regulatory, and commercialization activities for the Products.

Akebia paid a $ 3.0 million up-front payment to the Company upon signing of the License Agreement and the Company is eligible to receive additional milestone cash payments of up to $ 585 million in total potential future development, regulatory, and commercialization milestone payments for praliciguat.

In addition to these cash milestone payments, Akebia will pay the Company tiered royalty payments on net sales in certain major markets at percentages ranging from the mid-single digits to the high-teens, subject to certain reductions and offsets.

Akebia paid a $ 3.0 million up-front payment to the Company upon signing of the License Agreement.

On December 13, 2024, the Company and Akebia entered into Amendment #1 to License Agreement (the “Amendment”) to the original License Agreement between the parties dated June 3, 2021 (the “2021 License Agreement”).

Under the terms of the Amendment, Akebia paid the Company $ 1.25 million in December 2024 and is obligated to pay an additional $ 0.5 million on or before September 30, 2025.

In addition, Akebia has agreed to assume control of the preparation, filing, prosecution and maintenance of certain Cyclerion patents, and the expenses associated therewith, at an earlier date than as originally agreed between the parties.

The parties have agreed to the reduction of certain development milestones and the increase of certain royalty rates on net sales and sublicense income.

Pursuant to the terms of the 2021 License Agreement, as amended, Cyclerion is eligible to receive up to $ 558.5 million in total potential future development, regulatory, and commercialization milestone payments, and Akebia will pay Cyclerion tiered royalties ranging from mid-single digit to twenty percent of net sales.

Cyclerion’s obligations to deliver certain drug products have also ceased.

Pursuant to the Akebia License Agreement, the Company determined the Akebia License Agreement represents a service arrangement under the scope of ASC 606.

Given the reversion of the rights under the Akebia License Agreement represents a penalty in substance for a termination by Akebia, the contract term would be the stated term of the License Agreement.

The Company determined that the grant of license to our patents and trademarks, know how transfer, the assignment of regulatory submissions and trademarks and additional knowledge transfer assistance obligations represent a single promise and performance obligation to be transferred to Akebia over time due to the nature of the promises in the contract.

The provision of development materials on hand was identified as a separate performance obligation.

The Company determined that the grant of license to its patents and trademarks, know how transfer, the assignment of regulatory submissions and trademarks and additional knowledge transfer assistance obligations represent a single promise and performance obligation to be transferred to Akebia over time due to the nature of the promises in the contract.

The provision of development materials on hand was identified as a separate performance

However, it is immaterial in the context of the contract as the development materials are low value and do not have an alternative use to the Company.

1 unchanged sentence

The Company will re-evaluate the probability of achievement of the milestones and any related constraints each reporting period.

Akebia Supply Agreement

On August 3, 2021, the Company and Akebia entered into a Supply Agreement (the “Supply Agreement”) relating to the manufacturing by the Company of the Initial Supply of the Drug Product and placebo ("Initial Supply") for Akebia's use pursuant to the Akebia License Agreement.

Akebia will pay the Company for the manufacturing costs at mutually agreed upon rates.

The Company determined the Supply Agreement has stand-alone value under the scope of ASC 606 and should not be combined with the Akebia License Agreement.

Given that the Supply Agreement can be terminated at any time without cause with 30 days’ notice, the Company deemed the Supply Agreement to be a month-to-month contract.

The manufacturing of the Initial Supply by the Company represents a single performance obligation and consideration related to the manufacturing costs will be recognized over time as costs are incurred.

The Company recorded a de minimis amount and approximately $ 0.3 million, respectively, for the years ended December 31, 2023 and 2022 , as revenue from the Supply Agreement.

Grant Revenue

In August 2021, the Company was approved to receive funding from the PTC Grant for the Phase 2 study of CNS sGC stimulation in AD with vascular features.

The granting period is July 1, 2021, to December 31, 2022, and the Company received an award of $ 2.0 million.

The Company determined that this transaction is non-reciprocal as there is not considered to be a commensurate value exchanged with the Alzheimer's Association as the funding provider.

Where commensurate value is not exchanged for goods and services provided, a recipient assesses whether the grant is conditional or unconditional.

The Company considered all conditions and barriers associated with this grant and determined the grant is conditional and revenue will be recognized upon achieving certain milestones and incurring internal costs specifically covered by this grant.

Under ASC 958-605, revenues will be recognized as the Company incurs expenses related to the PTC Grant.

The Company incurred approximately $ 0.1 million and approximately $ 0.6 million of allowable expenses and recognized a corresponding amount of grant revenue for the years ended December 31, 2023 and 2022 .

Subseq uent Events

The Company has evaluated all events and transactions that occurred after the balance sheet date through the date the consolidated financial statements were issued and determined that there were no such events requiring recognition or disclosure in the consolidated financial statements.

The Company has evaluated all events and transactions that occurred after the balance sheet date through the date the consolidated financial statements were issued.

On February 4, 2025, the Company filed a Registration Statement on Form S-3 with the SEC in relation to the registration of common stock, preferred stock, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $ 25.0 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures