What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-03-04 · 122 added, 71 removed, 139 unchanged (58% of the section changed)

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As a result of many factors, such as those referenced or set forth under “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in Item 1A of this Annual Report on Form 10‑K, our actual results may differ materially from those anticipated in these forward‑looking statements.

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 patient’s 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.

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.

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.

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 Chief Financial Officer, Rhonda Chicko, 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;

Graul is the only current employee to date.

Our goal is to hire additional C-suite executives later this year.

We focus on building a pipeline of innovative therapeutics to address serious neuropsychiatric disorders with significant unmet medical need.

Our current strategic focus is centered on the development of a novel therapeutic approach for neuropsychiatric conditions, with the lead indication being treatment-resistant depression (“TRD”), which we believe represents a substantial clinical and commercial opportunity.

Over the past year, we have refined our strategic direction toward programs that combine established pharmacologic agents with enabling technologies designed to improve precision, reproducibility, and patient outcomes.

As part of this strategy, Cyclerion has evaluated multiple opportunities and prioritized CYC-126, an individualized therapy for TRD as our foundational development program.

In September 2025, we entered into a license agreement with the Massachusetts Institute of Technology (“MIT”) for intellectual property supporting this TRD program.

In January 2026, we also entered into a collaboration and option-to-license agreement with Medsteer SAS (“Medsteer”), a developer of anesthesia delivery and monitoring technologies.

This agreement provides Cyclerion with access to Medsteer’s technical expertise, data assets, and intellectual property relating to technology-enabled drug delivery and physiological monitoring, and grants us the right, but not the obligation, to obtain additional rights under specified conditions.

We intend to evaluate these capabilities as part of our broader development strategy for our TRD program.

Given the substantial unmet medical need in TRD, the stage of clinical development, and the potential commercial opportunity, we believe this program is well positioned to serve as the foundation of our future development efforts.

The program team is currently advancing an integrated clinical, regulatory, and commercial strategy for this TRD program.

In parallel with the advancement of our neuropsychiatric strategy, Cyclerion continues to evaluate opportunities related to our legacy soluble guanylate cyclase (“sGC”) stimulator assets, including potential collaborations, monetization opportunities, or other strategic transactions intended to maximize shareholder value.

To support execution of our strategy, we intend to seek additional capital through equity or other financing transactions.

In February 2025, our registration statement on Form S-3 (the “Shelf Registration”) was declared effective by the U.S.

Securities and Exchange Commission (the “SEC”), providing flexibility to access the capital markets, subject to market conditions and other factors.

Under current SEC regulations, because the aggregate market value of our common stock held by non-affiliates is less than $75 million, the amount of securities we may sell under the Shelf Registration during any twelve-month period is limited to one-third of the aggregate market value of our voting and non-voting common equity held by non-affiliates.

Cyclerion operates with a lean organizational structure and utilizes a combination of internal leadership and external consultants to advance our programs while managing operating expenses.

Regina Graul, Ph.D., was appointed Chief Executive Officer and Director in August 2024 after previously serving as President.

Rhonda Chicko serves as Chief Financial Officer.

We may expand our leadership team and operational capabilities over time as our development programs advance.

Financial Overview

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On June 3, 2021, we entered into a license agreement with 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.

In 2021, Akebia paid a $3.0 million upfront payment to us upon signing of the license agreement.

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.

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.

On December 1, 2025, Akebia publicly announced that it has recently initiated Phase 2 clinical trials for the treatment of focal segmental glomerulosclerosis (“FSGS”) using Praliciguat.

Pursuant to the terms of amendment, upon initiation (defined as first patient dosed) of a Phase 2 clinical trial in the U.S.

for a product, a $1.0 million development milestone payment would be due to us and the payment was received in February 2026.

We are eligible to receive additional milestone cash payments of up to approximately $557.5 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.

In September 2025, we entered in a Material Purchase Agreement (the “Purchase Agreement”) with Akebia relating to purchase additional development materials (the “Additional Development Materials”) by Akebia for Akebia's use pursuant to the license agreement.

Akebia paid $0.8 million to us for the purchase during the year ended December 31, 2025 and the Additional Development Materials were delivered to Akebia as of December 31, 2025 and we recognized revenue of $0.8 million during the year ended December 31, 2025.

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 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 us.

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

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 were provided notice on October 23, 2025 that it was terminating the Option Agreement.

We are currently exploring potential license opportunities for olinciguat.

Zagociguat and CY3018 are orally administered CNS-penetrant sGC stimulators.

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Research and development expenses decreased significantly after July 28, 2023, due to sale of the Transferred Assets which resulted in a reduction of research and development efforts.

On January 27, 2025, Tisento announced that the first patient had been dosed in its global Phase 2b PRIZM study.

The study is investigating the impact of once-daily oral zagociguat treatment on fatigue, cognitive impairment, and other key aspects of the rare mitochondrial disease MELAS (Mitochondrial Encephalomyopathy, Lactic Acidosis,

and Stroke-like Episodes).

On June 17, 2025, Tisento announced that the U.S.

Food and Drug Administration (FDA) has granted Fast Track designation to zagociguat for the treatment of MELAS.

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.

In August 2025, Tisento announced that the first patient was enrolled in Tisento's open-label extension study in MELAS and in January 2026, Tisento announced that it completed enrollment in PRIZM.

Further information regarding the study is available at ClinicalTrials.gov (NCT06402123).

On September 19, 2025, Cyclerion and the Massachusetts Institute of Technology (“MIT”) entered into a Patent License Agreement (the “MIT License Agreement”) pursuant to which MIT granted to us an exclusive worldwide license to develop and commercialize products using certain technology for the treatment of neuropsychiatric disorders, such as depression, in humans.

Under the MIT License Agreement, we paid a nominal upfront license fee and patent reimbursement fee.

Thereafter, we are also required to pay MIT a nominal annual license maintenance fee.

This annual license maintenance fee is nonrefundable;

however, the license maintenance fee may be credited to royalties earned during the same calendar year, if any.

License maintenance fees paid in excess of royalties due in such calendar year shall not be creditable to amounts due for future years.

Under the terms of the MIT License Agreement, MIT will be eligible to receive up to $4.4 million upon the achievement of certain development, regulatory and sales milestone payments.

MIT will also receive tiered royalties in a range of percentages in the low single digits based on future net sales of licensed products as set forth in the MIT License Agreement.

Further, we are required to pay MIT varying percentages of income received as consideration for any sublicenses granted pursuant to the MIT License Agreement depending on the circumstances of the sublicense and the development milestones of sublicensed products.

The term of the MIT License Agreement will expire in its entirety upon the expiration of certain patent rights for the licensed patents, unless earlier terminated by the parties in accordance with the terms of the MIT License Agreement.

We recorded research and development expense of $0.1 million for the year ended December 31, 2025, which consisted of upfront fees, patent reimbursement fees and transaction costs related to the license.

On January 3, 2026, we and Medsteer SAS (“Medsteer”) entered into a Collaboration and Option Agreement (the “Collaboration Agreement”) pursuant to which Medsteer granted to us (i) a non-exclusive, worldwide, royalty-free, sublicensable license of certain of Medsteer’s technology, software and intellectual property to develop an anesthetic delivery system with Medsteer and (ii) an exclusive option (the “Option”), exercisable at our sole discretion, to obtain an exclusive, worldwide, royalty-bearing, sublicensable license of certain of Medsteer’s technology, software and intellectual property to develop or commercialize licensed products in any field of use except for sedation regulation for patients undergoing major surgery, in multi-bed or intensive unit wards, or in the context of medical transport.

We may exercise the Option at any time until the earlier of the second anniversary of the effective date of the Collaboration Agreement, which period may be extended for an additional two years at our option and upon payment of a nominal fee or by mutual agreement of us and Medsteer.

Under the terms of the Collaboration Agreement, the Company will pay to Medsteer a nominal upfront payment, a payment upon exercise of the Option, and Medsteer will be eligible to receive up to $3.7 million upon the achievement of certain development, regulatory and sales milestone payments.

Medsteer will also receive an annual royalty payment and royalties in a percentage in the low single digits based on future net sales of licensed products, subject to certain adjustments as set forth in the Collaboration Agreement.

We continue to evaluate other activities aimed at enhancing shareholder value, which may potentially include collaborations, licenses, mergers, acquisitions, and/or other targeted investments.

The following table summarizes our research and development expenses of continuing operations, employee and facility related costs allocated to research and development expense, and discovery and pre-clinical phase programs, for the year ended December 31, 2024 and 2023.

programs, for the year ended December 31, 2025 and 2024.

The product pipeline expenses related primarily to external costs associated with nonclinical studies and clinical trial costs.

(in thousands)

Product pipeline external costs

Personnel and related internal costs

Facilities and other

Total research and development expenses

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Revenue from license agreement

Option to license revenue

Revenue from purchase agreement

Revenue from option agreement

Total revenues

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General and administrative

Impairment loss

Total cost and expenses

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Gain from settlement of account payable

Gain from insurance recovery

Total other income, net

Net loss from continuing operations

Discontinued operations:

Gain from discontinued operations

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.

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

On December 13, 2024, we entered into the Amendment with Akebia and an amendment providing for payments aggregating $1.75 million all of which was recognized in revenue during the year ended December 31, 2024.

$1.25 million of this amount was paid in December 2024 and the remaining $0.5 million is payable in September 2025.

Revenue from license agreement.

On December 13, 2024, we entered into the 2024 Amendment with Akebia providing for payments aggregating $1.75 million all of which was recognized in revenue during the year ended December 31, 2024.

$1.25 million of this amount was paid in December 2024 and the remaining $0.5 million was paid in September 2025.

On December 1, 2025, Akebia publicly announced that it has recently initiated Phase 2 clinical trials for the treatment of focal segmental glomerulosclerosis (“FSGS”) using praliciguat.

Pursuant to the terms of amendment, upon initiation of a Phase 2 clinical trial in the U.S.

for a product, a $1.0 million development milestone payment would be due to us.

We recognized revenue and accounts receivable of $1.0 million during the year ended December 31, 2025, and the $1.0 million payment was received in February 2026.

Revenues from purchase agreement .

In September 2025, we entered into the Purchase Agreement with Akebia.

Akebia paid $0.8 million to us for the purchase of Additional Development Materials during the year ended December 31, 2025.

The Additional Development Materials were delivered to Akebia as of December 31, 2025 and we recognized revenue of $0.8 million during the year ended December 31, 2025.

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 year ended December 31, 2024 and we recognized revenue of $0.3 million related to the Option extension fee, amendment fee and expense reimbursement during the year ended December 31, 2025.

Research and development expenses.

The decrease in research and development expenses of approximately $1.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 was driven by decreases of approximately $0.5 million in employee-related expenses primarily due to the workforce reduction in 2023, approximately $0.2 million in information technology services savings, approximately $0.1 million in research study cost savings, approximately $0.1 million in reduced outside service fees, approximately $0.2 million in lab equipment and service savings and approximately $0.1 million in lab space rent.

The increase in research and development expenses of approximately $0.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 was driven by an increase of $0.1 million in license fees, $0.6 million in professional consulting to support the research and

development efforts related to CYC-126, and $0.1 million in outside service fees, offset by a decrease of $0.1 million in stock compensation expenses.

General and administrative expenses.

The decrease in general and administrative expenses of approximately $2.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 was primarily driven by decreases of approximately $0.4 million in employee-related expenses primarily due to the workforce reduction in 2023, approximately $1.5 million in savings in legal services, approximately $0.4 million in audit and tax services, approximately $0.2 million in outside services, reductions of $0.4 million in insurance expenses and approximately $0.3 million in information technology services, which were partially offset by an increase of approximately $0.5 million in professional consulting.

Impairment loss.

The impairment loss consists of an impairment of an operating lease of approximately $3.3 million during the year ended December 31, 2023.

There was no impairment loss recognized during the year ended December 31, 2024, as the right-of-use asset was fully impaired as of December 31, 2023.

Gain from discontinued operations.

The decrease in gain from discontinued operations of approximately $7.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, was driven by the sale of Transferred Assets in July 2023.

After the sale of Transferred Assets, no discontinued operation was recognized in the statement of operations and comprehensive loss.

The increase in general and administrative expenses of approximately $0.7 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 was primarily driven by an increase of $0.8 million in professional consulting, $0.1 million in outside service fee and $0.7 million in corporate legal fees, offset by a decrease of $0.3 million in patent fees, $0.2 million in insurance expense, $0.1 million in board member fees and $0.3 million in employee-related expenses.

Interest and other income, net.

Interest and other income decreased by approximately $0.2 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily attributable to the decrease in our money market fund balance.

Interest and other income decreased by approximately $0.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily attributable to the reduction in interest rates.

Gain from settlement of account payable.

During the year ended December 31, 2024, we reached a settlement agreement with a vendor for a disputed account payable and recorded a gain of $0.4 million on settlement of account payable.

No such transaction occurred during the year ended December 31, 2025.

Gain from insurance recovery.

During the year ended December 31, 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 during the year ended December 31, 2024.

Liquidity and Capital Resources

To date, we have been funded primarily from sales of our equity securities, payments received in connection with the sale of assets to Tisento, milestone payments from Akebia and an option to license payment.

On July 24, 2020, we filed a Registration Statement on Form S-3 (the “2020 Shelf”) with the Securities and Exchange Commission (the “SEC”) in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $150.0 million.

On September 3, 2020, we entered into the Sales Agreement with Jefferies with respect to the ATM Offering under the 2020 Shelf.

The 2020 Shelf expired in July 2023.

We did not sell any shares of our common stock under the Shelf in 2022 or 2023.

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 year ended December 31, 2025.

On February 4, 2025, we filed a Registration Statement on Form S-3 (the “2025 Shelf”) with the securities and Exchange Commission (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.

The amount we can sell under the 2025 Shelf, which was declared effective in February 2025, cannot exceed one-third of the value of our public float.

The amount we can sell in any twelve-month period under the 2025 Shelf, which was declared effective in February 2025, cannot exceed one-third of the value of our public float.

On May 7, 2025, we entered into an "at the market" equity offering program (the “ATM Program”) pursuant to a Sales Agreement (the “2025 Sales Agreement”) by and between us and Guggenheim Securities LLC (“Guggenheim Securities”).

Pursuant to the terms of the 2025 Sales Agreement, we can sell, from time to time, shares of our common stock, having an aggregate offering price of up to $20,000,000 from time to time through or to Guggenheim Securities, acting as our agent, subject to the application of General Instruction I.B.6 of Form S-3 (“Instruction I.B.6”) pertaining to primary offerings by certain registrants, including shares of common stock offered directly by the Company (the “ATM Shares”).

We intend to use the net proceeds from the ATM Program to fund the development of product candidates and for other general corporate purposes, including funding potential new clinical programs and product candidates.

financing our existing businesses and operations and expanding our businesses and operations through new product development programs and additional hires.

Subject to the terms and conditions of the Sales Agreement, Guggenheim Securities will use its commercially reasonable efforts to sell the ATM Shares from time to time, based upon our instructions.

We have provided Guggenheim Securities with customary indemnification rights, and Guggenheim Securities will be entitled to a commission of 3.0% of the gross proceeds of the ATM Shares sold under the Sales Agreement.

Sales of the ATM Shares will be made pursuant to a previously filed and effective registration statement on Form S-3 (File No.

ATM Shares may be offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement.

Sales of the ATM Shares, if any, will be made at

market prices by any method that is deemed to be an “at the market” offering as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on the Nasdaq Capital Market or any other trading market for our common stock.

We have no obligation to sell any of the ATM Shares and may at any time suspend offers under the Sales Agreement or terminate the Sales Agreement.

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.

During the year ended December 31, 2025, we sold 715,220 ATM Shares for net proceeds of $2.1 million.

On January 6, 2026, we sold 405,000 ATM Shares for net proceeds of $0.8 million.

The Company exhausted all sales under the 2025 Shelf.

The foregoing description of the terms of the Sales Agreement does not purport to be a complete statement of the rights and obligations of the parties under the Sales Agreement and the transactions contemplated thereby and is qualified in its entirety by reference to the Sales Agreement, which is filed as Exhibit 1.1 to the Current Report on Form 8-K as filed with the SEC on May 7, 2025 and is incorporated herein by reference.

On May 19, 2023, we sold 225,000 shares of our common stock, pursuant to a Common Stock Purchase Agreement, and 351,037 shares of Series A Preferred Stock, to our former CEO, for total gross proceeds of approximately $5 million.

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The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.

performing our analysis, management excluded certain elements of our operating plan that cannot be considered probable.

In performing our analysis, management excluded certain elements of our operating plan that cannot be considered probable.

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

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The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of the uncertainties described above.

Reverse Stock Split

On May 15, 2023, we filed Articles of Amendment to our Restated Articles of Organization with the Secretary of Commonwealth of Massachusetts to effect a 1-for-20 reverse stock split of our issued and outstanding shares of common stock.

The reverse stock split was reflected on the Nasdaq Capital Market beginning with the opening of trading on May 16, 2023.

All share amounts and per share amounts disclosed in this Annual Report on Form 10-K have been adjusted retroactively to reflect the reverse stock split for all periods presented.

The following is a summary of cash flows for the years ended December 31, 2025 and 2024:

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Net cash used in operating activities

Net cash provided by investing activities

Net cash provided by financing activities

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Net cash used in operating activities was $3.3 million for the year ended December 31, 2025 was primarily a result of our $3.5 million net loss from operations.

The net loss was also adjusted by an increase in accounts receivable of $0.4 million and a decrease in accrued expenses and other current liabilities of $0.1 million.

The net loss was offset by non-cash stock-based compensation expense of $0.4 million, an increase of accounts payable of $0.1 million and an increase of accrued research and development costs of $0.2 million.

Net cash used in operating activities was $4.3 million for the year ended December 31, 2024 was primarily a result of our $3.1 million net loss from operations.

The net loss was also adjusted by gain from settlement of accounts payable of $0.4 million, an increase in accounts receivable of $0.6 million, a decrease in accounts payable, accrued expenses and other current liabilities of $1.0 million.

The net loss was offset by non-cash stock-based compensation expense of $0.6 million.

Net cash used in operating activities was $21.2 million for the year ended December 31, 2023 was primarily a result of our $5.3 million net loss from operations.

The net loss was adjusted by gain on disposal of discontinued operations of $15.8 million, a decrease in accounts payable of $1.8 million, a decrease in accrued research and development costs of $2.2 million and a decrease in accrued expenses and other current liabilities of $1.6 million.

The net loss was also offset by impairment loss of $3.3 million, non-cash stock-based compensation expense of $1.1 million, a decrease in account receivable of $0.1 million, a decrease in prepaid expenses of $0.4 million, a decrease in other current assets of $0.2 million, a decrease in operating lease assets of $0.1 million and a decrease in other assets of $0.2 million.

Cash Flows from Investing Activities

Net cash provided by investing activities for the year ended December 31, 2023 of $10.4 million was due to cash proceeds received from the disposal of discontinued operations of approximately $10.4 million.

There was no investing activity incurred during the year ended December 31, 2024.

Cash Flows from Financing Activities

Net cash provided by financing activities for the year ended December 31, 2023 of $5.0 million was due to cash received from the May 2023 stock purchase agreement of $5.0 million.

Net cash provided by financing activities for the year ended December 31, 2025 of $3.3 million was due to $1.2 million net proceeds 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 $2.1 million net proceeds received from ATM related to the issuance of 715,220 shares of our common stock under the ATM.

There was no financing activity incurred during the year ended December 31, 2024.

Funding Requirements

We expect our expenses to fluctuate as we continue to maintain out-license opportunities and seek to broaden our portfolio through in-licensing of complementary CNS assets.

We expect our expenses to fluctuate as we continue to maintain out-license opportunities and potentially seek to broaden our portfolio through in-licensing of complementary assets.

We expect that our cash and cash equivalents as of December 31, 2025, will be sufficient to fund operations through mid-2026.

As a result, 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 our operations.

Failure to obtain necessary capital when needed may delay development of any current or potential future product candidates, or our ability to continue our operations.

Because there is substantial doubt about our ability to continue as a going concern for a reasonable period of time, an investment in our common stock is highly speculative;

holders of our common stock could suffer a total loss of their investment.

Because of the many risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements.

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In addition, debt financing would result in increased fixed payment obligations.

research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we raise funds through collaborations, strategic alliances or licensing arrangements with third parties, as to which raise there can be no assurances, we may have to relinquish rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us.

If we are unable to raise funds, we may need to cease operations.

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Separation Benefits

As part of the separation benefit of the former Chief Financial Officer, we 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.

We have no further separation benefits obligation as of December 31, 2024.

As part of the separation benefit of the former Chief Financial Officer, we paid $0.1 million each in May 2024 and August 2024.

We have no further separation benefits obligation as of December 31, 2025 and 2024.

Off-Balance Sheet Arrangements

We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements (as that term is defined in Item 303(a)(4)(ii) of Regulation S-K) or other contractually narrow or limited purposes.

contractually narrow or limited purposes.

As such, we are not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in those types of relationships.

8 unchanged sentences

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 7. Management’s Discussion and Analysis