What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-03-30 compared with 2025-03-04 · 177 added, 263 removed, 541 unchanged (45% of the section changed)

1 unchanged sentence

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.

With respect to the year ended December 31, 2025, 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.

18 unchanged sentences

Attestation Report of the Registered Public Accounting Firm

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.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting as we are a “smaller reporting company” and “non-accelerated filer” as defined under the rules of the Securities and Exchange Commission.

Changes in Internal Control over Financial Reporting

63 unchanged sentences

333-257145)).

Patent License Agreement, dated as of September 19, 2025, by and between Cyclerion Therapeutics, Inc.

and Massachusetts Institute of Technology (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on November 12, 2025 (File No.

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.

Collaboration and Option Agreement, dated as of January 3, 2026, by and between Cyclerion Therapeutics, Inc.

and Medsteer, SAS

Sales Agreement by and between Cyclerion Therapeutics, Inc.

and Guggenheim Securities, LLC, dated May 7, 2025.

(incorporated by reference to Exhibit 1.1 to Current Report on Form 8-K filed on May 7, 2025) (File No.001-38787)

Registration Rights Agreement, dated March 21, 2025, by and among Cyclerion Therapeutics, Inc.

and the investors party thereto (incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed on March 25, 2025) (File No.001-38787)

Consulting Agreement with Rhonda Chicko dated August 4, 2025 (incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on August 5, 2025 (File No.

Insider Trading Prevention Policy

13 unchanged sentences

* Certain portions of this exhibit (indicated by asterisks) have been omitted because they are not material and are the type that the Registrant treats as private or confidential.

The certifications attached as Exhibits 32.1 and 32.2 that accompany this Report, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of Cyclerion Therapeutics, Inc.

under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Report irrespective of any general incorporation language contained in such filing.

# Filed herewith.

Form 10-K Summary.

28 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Cyclerion Therapeutics, Inc.

To the Shareholders and the Board of Directors of Cyclerion Therapeutics, Inc.

Opinion on the Financial Statements

22 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of indicators of impairment of investment in Tisento Therapeutics Holdings Inc.

Description of the Matter

As discussed in Notes 2 and 4 to the consolidated financial statements, as of December 31, 2025, the Company had recognized an Other investment of $5.4 million which was accounted for as a financial instrument without a readily determinable fair value.

Such investment was recorded using the measurement alternative for investments without readily determinable fair values, whereby the investment was measured at cost less any impairment recorded or adjustments for observable price changes.

As of December 31, 2025, no impairment loss was recognized.

Auditing the Company's assessment of indicators of impairment of the Other investment was complex and required significant judgment in applying our audit procedures and in the evaluation of the results of the procedures performed to determine if any impairment indicators were present.

In addition, there was a significant degree of subjectivity in evaluating the relevance and reliability of the audit evidence obtained.

How We Addressed the Matter in Our Audit

We performed audit procedures to test management’s evaluation of events or changes in circumstances that might be indicators of impairment of the Company’s Other investment.

Such procedures included, among others:

(i) evaluating the appropriateness of management’s assessment of indicators of impairment;

(ii) independently obtaining and assessing evidence, including from external sources, to corroborate management’s judgments and evaluating contrary evidence;

(iii) reading the minutes of the Company’s Board of Directors meetings;

and (iv) performing inquiries of management of Tisento Therapeutics Holdings Inc.

and the Company regarding their knowledge of impairment indicators.

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

26 unchanged sentences

Accumulated deficit

Accumulated other comprehensive loss

Total stockholders' equity

5 unchanged sentences

Revenue from license agreement

Option to license revenue

Revenue from purchase agreement

Revenue from option agreement

Total revenues

2 unchanged sentences

General and administrative

Impairment loss

Total cost and expenses

3 unchanged sentences

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

Net income (loss) per share - basic and diluted

Net loss per share from continuing operations

Net income per share from discontinued operations

Net loss per share:

Basic and diluted net loss per share

Weighted average shares used in calculating:

1 unchanged sentence

Other comprehensive loss:

Other comprehensive income (loss):

Foreign currency translation adjustment (loss) gain

Other comprehensive loss:

Foreign currency translation adjustment loss

Comprehensive loss

7 unchanged sentences

Balance at December 31, 2023

Issuance of common stock

Issuance of preferred shares

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

Vesting of restricted stock awards

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

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

Foreign currency translation adjustment

Fractional shares issuance

Release of foreign currency translation adjustment upon liquidation of a subsidiary

Balance at December 31, 2024

Issuance of common stock - private placement, net of issuance cost

Issuance of common stock - ATM

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, 2025

6 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Gain on disposal of discontinued operations

Gain from settlement of account payable

Impairment loss

Share-based compensation expense

3 unchanged sentences

Other current assets

Operating lease assets

Accounts payable

2 unchanged sentences

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Net proceeds from disposal of discontinued operations

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from stock purchase agreement

Proceeds from exercises of stock options and ESPP

Proceeds from ATM

Proceeds from private placement

Issuance costs paid for private placement

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental cash flow disclosure:

Non-cash gain on disposal of discontinued operations

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

6 unchanged sentences

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 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.

Cyclerion has one employee as of December 31, 2025 and also relies on a team of specialist consultants for its operations.

Cyclerion is focused on building a new pipeline of innovative therapeutics to address serious neuropsychiatric diseases.

The Company’s current strategic focus is centered on the development of a novel therapeutic approach for treatment-resistant depression (“TRD”), which represents a substantial clinical and commercial opportunity.

Over the past year, the Company has refined its 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 its foundational development program.

In September 2025, the Company entered into a license agreement with the Massachusetts Institute of Technology (“MIT”) for intellectual property supporting this program (see Note 11), and in January 2026 entered into a collaboration and option-to-license agreement with Medsteer SAS (“Medsteer”) to access certain technology, data assets, and technical know-how related to drug delivery and physiological monitoring.

The Company is advancing development planning, regulatory strategy, and commercial positioning for this program and intends to initiate a Phase 2 proof-of-concept study in Australia in the second half of 2026.

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

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

1 unchanged sentence

(“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 the Company upon signing of the license agreement.

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.

On December 1, 2025, Akebia publicly announced that it has recently initiated (defined as first patient dosed) 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 and it was received in February 2026.

The Company is eligible to receive additional milestone cash payments of up to approximately $ 557.5 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.

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

The Company is currently exploring potential license opportunities for olinciguat.

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.

On July 28, 2023, the Company sold Zagociguat and CY3018 to Tisento Therapeutics, Inc.

(“Tisento”), a newly formed private company focused on their development, in exchange for $ 8.0 million in cash consideration, $ 2.4 million as reimbursement for certain operating expenses related to zagociguat and CY3018 for the period between signing and closing of the transaction, and 10 % of all of Tisento ’s parent’s outstanding equity securities.

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

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

6 unchanged sentences

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

On May 11, 2023, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with an investor group that included the former CEO, JW Celtics Investment Corp and JW Cycle Inc.

which subsequently changed their names to Tisento Therapeutics Holdings Inc.

(“Tisento Parent”) and Tisento.

Upon the closing on July 28, 2023, of the transactions contemplated by the Asset Purchase Agreement, the Company sold to Tisento specified assets relating to the Company’s zagociguat and CY3018 programs (the "Transferred Assets") and Tisento assumed certain liabilities relating thereto, including, but not limited to (i) liabilities, costs and expenses arising after the date of the Asset Purchase Agreement relating to the employment of certain Cyclerion employees and the conduct of certain preclinical and clinical trial activities prior to the closing of the transactions contemplated by the Asset Purchase Agreement, and (ii) liabilities relating to such assets to the extent relating to the period after the closing of the transaction.

In consideration for such sale and assumption, at such closing the Company received proceeds of $8.0 million as cash consideration, $2.4 million as reimbursement for certain operating expenses related to such assets for the period between signing and closing of the Asset Purchase Agreement, and shares of common stock of Tisento Parent comprising 10% of the then issued and outstanding equity securities of Tisento Parent immediately following such closing, subject to certain protections against dilution.

Reverse Stock Split

On May 15, 2023, the Company filed Articles of Amendment to the Company's Restated Articles of Organization with the Secretary of Commonwealth of Massachusetts to effect a 1-for-20 reverse stock split of the Company's 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.

2025 Equity Private Placement

On March 21, 2025 , the Company entered into a Stock Purchase Agreement (the “2025 Equity Private Placement”) for a private placement of 499,998 shares of the Company’s common stock, at a purchase price of $ 2.75 per share for total gross proceeds of approximately $ 1.375 million.

The closing of the 2025 Equity Private Placement occurred on March 25, 2025.

T he Company incurred transaction costs of $ 0.1 million for the 2025 Equity Private Placement.

The Shares issued were not registered under the Securities Act of 1933, as amended, or any state securities laws and will be issued pursuant to the exemption from registration provided for under Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.

In connection with the 2025 Equity Private Placement, the Company entered into a Registration Rights Agreement with the investors, dated March 21, 2025, pursuant to which the Company agreed to register the resale of the Shares pursuant to a registration statement which was filed with the SEC and declared effective by the SEC on May 15, 2025.

At-the-Market Offering

On September 3, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market offering (the “ATM Offering”) under the 2020 Shelf.

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.

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 to the value of one-third of our public float until such time as the public float exceeds $ 75 million.

On February 4, 2025, the Company filed a Registration Statement on Form S-3 (the “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 Registration Statement was declared effective by the SEC in February 2025.

On May 7, 2025, the Company and Guggenheim Securities, LLC (“Guggenheim Securities”) entered into a Sales Agreement (the “Sales Agreement”), pursuant to which the Company may offer and sell shares of common stock, no par value per share (the “Shares”), having an aggregate offering price of up to $ 20,000,000 from time to

time through or to Guggenheim Securities, acting as the Company’s 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 the Company.

The Company has provided Guggenheim Securities with customary indemnification rights, and t he Company will pay Guggenheim Securities cash commission of 3.0 % of the gross proceeds of the Shares sold under the Sales Agreement.

During the year ended December 31, 2025, the Company sold 715,220 shares of its common stock for net proceeds of $ 2.1 million under the Sales Agreement, after deducting commissions paid to Guggenheim Securities of $ 0.1 million.

Basis of Presentation

18 unchanged sentences

Accordingly, the Company has concluded that substantial doubt exists about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and

satisfaction of liabilities in the ordinary course of business.

The 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.

4 unchanged sentences

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

In accordance with ASC 205-20 “Presentation of Financial Statements:

Discontinued Operations”, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.

In the period in which the component meets held-for-sale or discontinued operations criteria the major current assets, non-current assets, current liabilities, and non-current liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations and disclosed in the notes to financial statements.

At the same time, the results of all discontinued operations, less applicable income taxes, shall be reported as components of net loss separate from the net income (loss) of continuing operations.

The Transferred Assets met the definition of a discontinued operation.

Accordingly, the Company has classified the results of the Transferred Assets as discontinued operations in its consolidated statements of operations for all periods presented.

All assets and liabilities associated with the Transferred Assets were classified as assets and liabilities of discontinued operations in the Note 4, "Discontinued Operations".

All amounts included in the notes to the consolidated financial statements relate to continuing operations unless otherwise noted.

For additional information, see Note 4, “Discontinued Operations”.

Variable Interest Entities

8 unchanged sentences

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.

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, 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.

3 unchanged sentences

The Company considers all highly liquid investment instruments with a remaining maturity when purchased of three months or less to be cash equivalents.

Investments qualifying as cash equivalents may consist of money market funds and overnight repurchase agreements.

Investments qualifying as cash equivalents may consist of

money market funds and overnight repurchase agreements.

The carrying amount of cash equivalents approximates fair value.

Property and Equipment

Property and equipment are recorded at cost, and are depreciated when placed into service using the straight-line method based on their estimated useful lives as follows:

Asset Description

Estimated Useful

Life (In Years)

Computer equipment

Software costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software.

The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality.

Maintenance and training costs related to software obtained for internal use are expensed as incurred.

Costs for capital assets not yet placed into service have been capitalized as construction in progress and are depreciated in accordance with the above guidelines once placed into service.

Maintenance and repair costs are expensed as incurred.

Property and equipment that is no longer required for the business is considered disposed of when it ceases to be used.

Disposals are either sold or retired and the net book value is removed from the consolidated balance sheet and a corresponding gain or loss on the sale or disposal is recognized as a component of operating expenses in the consolidated statements of operations and comprehensive loss.

Fair Value of Investment Instruments

3 unchanged sentences

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

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

• 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.

• 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.

12 unchanged sentences

To date, the Company has not had significant write-offs of bad debt and the Company did not have an allowance for doubtful accounts as of December 31, 2025 or 2024 .

Impairment of Long-Lived Assets

The Company regularly reviews the carrying amount of its long-lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives.

If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset’s value is recoverable.

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, 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”).

The Company determined if the arrangement was a lease at the inception of the contract.

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.

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 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.

Variable lease costs that do not depend on an index or rate were recognized as incurred.

ROU assets and operating lease liabilities were remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification.

The difference between the remeasured ROU assets and the operating lease liabilities were recognized as a gain or loss in operating expenses.

The Company reviewed any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective ROU asset.

During the year ended December 31, 2023, the Company recorded $ 3.3 million for impairment of ROU asset.

See Note 9, “Leases,” for additional information.

Upon executing a revenue generating arrangement, the Company assesses whether it is probable the Company will collect consideration in exchange for the good or service it transfers to the customer.

6 unchanged sentences

The Company must develop assumptions that require significant judgment to determine the stand-alone selling price for each performance obligation identified in the contract.

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) option to license agreement which are fully described in Note 15, License Agreement .

The Company derives revenue from (1) license agreement, (2) purchase agreement and (3) option to license agreement which are fully described in Note 11, License and Option Agreement .

Research and Development Costs

19 unchanged sentences

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

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.

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

19 unchanged sentences

Except as discussed elsewhere in the notes to the consolidated financial statements, the Company did not adopt any new accounting pronouncements during the years ended December 31, 2025 and 2024, that had a material effect on its consolidated financial statements.

In August 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses (Topic 326), which requires incremental disclosures on estimating expected credit losses.

The Company will adopt this guidance beginning with its annual report for fiscal 2027.

The Company is currently evaluating the potential effect that the updated standard will have on its financial statement disclosures.

Recently Adopted Accounting Pronouncements

In June 2016 the FASB issued ASU 2016-13, Financial Instruments-Credit Losses.

This standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

As a smaller reporting company, ASU 2016-13 became effective for the Company for fiscal years beginning after December 15, 2022.

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.”

In November 2023, the FASB issued ASU No.

2023-07, Improvements to Reportable Segment Disclosures (Topic 280), which requires incremental disclosures on reportable segments, primarily through enhanced disclosures on significant segment expenses.

The Company adopted this guidance beginning with its annual report for fiscal 2025 and interim periods thereafter on a retrospective basis.

The adoption did not have a material effect on the consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid.

2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received.

For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

For entities other than PBEs, the requirements will be effective for annual periods beginning after December 15, 2025.

An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented.

As of December 31,

2025, the Company adopted this new ASU and it only impacts the Company's income tax disclosures with no impact to its operations, cash flows, or financial condition.

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.

13 unchanged sentences

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

On May 11, 2023, the Company entered into the Purchase Agreement with Tisento for Tisento’s acquisition of substantially all of the assets comprising the Company’s zagociguat and CY3018 programs, in exchange for consideration at closing of $ 8.0 million, the reimbursement of employee expenses or R&D expenses of $ 2.4 million that Tisento reimbursed the Company for upon closing, and 10 % of the issued and outstanding shares of Tisento Parent (Note 5).

Upon closing of the transaction, the Company transferred certain fully depreciated software included within property and equipment to Tisento.

The carrying value of the disposal group was lower than its fair value, less costs to sell, and accordingly, a gain on disposal was recorded during the year ended December 31, 2023.

The operations of the Transferred Assets are presented as discontinued for all periods presented.

The transaction closed on July 28, 2023.

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

Year Ended December 31, 2023

Revenue from grants

Total revenues

Cost and expenses:

Research and development

General and administrative

Total cost and expenses

Loss from operations

Gain on disposal 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):

Year Ended December 31, 2023

Cash flows from operating activities:

Share-based compensation expense

The transaction consideration received from the sale of the Transferred Assets were as follows (in thousands):

Closing payment

Expense reimbursement

Investment in Tisento Parent

Gross transaction consideration from the sale

Net assets sold

Gain on disposal of discontinued operations

During the year ended December 31, 2023, the Company incurred $ 1.3 million in closing costs associated with the sale of the Transferred Assets.

The Company also incurred $ 0.9 million in transaction costs associated with the sale of the Transferred Assets during the year ended December 31, 2023, respectively.

All of the closing and transaction costs were recognized as part of discontinued operations - general and administrative.

Other Investment

2 unchanged sentences

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.

2 unchanged sentences

However, all activities that most significantly impact Tisento Parent and its subsidiary’s economic performance are directed by the Tisento Parent board and the board approves decisions by a simple majority.

Based on the board composition, the Company determined that no one party has control over the Tisento Parent board and power is not shared because the activities that most significantly affect Tisento Parent and its subsidiary’s economic performance do not require the consent of all of the parties.

Based on the board composition, the Company

determined that no one party has control over the Tisento Parent board and power is not shared because the activities that most significantly affect Tisento Parent and its subsidiary’s economic performance do not require the consent of all of the parties.

Rather, all decisions are made by a simple majority vote of the Tisento Parent board.

10 unchanged sentences

Valuations were derived by reference to observable valuation measures for comparable companies or transactions, including weighted average cost of capital ( 21 % to 23 %), terminal decline rate ( 25 % to 75 %) and the discount rate referenced by a two-year treasury rate of 4.01 %.

Property and Equipment

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

Property and equipment, gross

accumulated depreciation and amortization

Property and equipment, net

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

1 unchanged sentence

Professional fees

Employee compensation

Accrued expenses and other current liabilities

1 unchanged sentence

Other Funding Commitments

In the normal course of business, the Company enters into contracts with clinical research organizations and other third parties for clinical and preclinical research studies and other services and products for operating purposes.

The Company may enter into contracts with clinical research organizations and other third parties for clinical and preclinical research studies and other services and products for operating purposes.

These contracts are generally cancellable, with notice, at the Company’s option and do not have any significant cancellation penalties.

5 unchanged sentences

The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited.

However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

However, to date the Company has not incurred material costs to defend

lawsuits or settle claims related to these indemnification provisions.

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

1 unchanged sentence

Separation Benefits

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.

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.

The Company gained access to the licensed rooms and services beginning in the third quarter of 2021.

The letter of credit security deposit related to the sublease was released.

The Company determined that the Sublease Termination Agreement constituted a non-monetary exchange under ASC 845 Nonmonetary Transactions (“ASC 845”) where, in return for the free rooms and the services, the Company agreed to terminate its rights and obligations under the sublease agreement.

In accordance with ASC 845, the Company determined that the accounting for the transaction should be based on the fair value of assets or services involved.

During the year ended December 31, 2020, the Company estimated the fair value of the rooms and services to be approximately $ 1.5 million and $ 2.9 million, respectively.

The Company determined that the licensed rooms represent a lease under ASC Topic 842 Leases.

The Company obtained control of the rooms in the third quarter of 2021 and the prepaid rooms balance of approximately $ 1.4 million was reclassified from other assets to a ROU asset.

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 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 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.

After the closing of the Asset Purchase Agreement, the Company had no plans in the foreseeable future to use the licensed rooms and the Company is restricted from subleasing the rooms.

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.

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.

The Company has no further separation benefits obligation as of December 31, 2025 and 2024.

Share-based Compensation Plans

35 unchanged sentences

No share-based compensation expense related to these performance-based options was recognized during the years ended December 31, 2025, and 2024, respectively.

Market-based Stock Options

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.

Stock compensation cost is expensed on a straight-line basis over the derived service period for each stock price target within the award, ranging from approximately 4.0 to 4.6 years.

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

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:

Outstanding as of December 31, 2023

Cancelled or forfeited

Outstanding as of December 31, 2024

Exercisable at December 31, 2024

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

Restricted Stock Awards

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

No RSA was granted during the year ended December 31, 2025.

The Company granted 65,000 RSAs during the year ended December 31, 2024.

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

7 unchanged sentences

Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period as follows:

Net loss from continuing operations (in thousands)

Net gain from discontinued operations (in thousands)

Total net loss (in thousands)

Weighted average shares used in calculating net gain (loss) per share — basic and diluted (in thousands)

Net gain (loss) per share — basic and diluted

Net loss per share from continuing operations

Net gain per share from discontinued operations

Total loss per share

Net loss (in thousands)

Weighted average shares used in calculating net loss per share — basic and diluted (in thousands)

Net loss per share — basic and diluted

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, 2025 and 2024:

Yer Ended December 31,

Preferred Stock

Stock Options

There was no provision for income taxes for the years ended December 31, 2024, and 2023, due to the Company’s operating losses and a full valuation allowance on deferred tax assets.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The components of net income (loss) before income tax expense are as follows (in thousands):

Year Ended December 31,

A reconciliation of income taxes computed using the U.S.

federal statutory rate to that reflected in operations follows (in thousands):

federal statutory rate to that reflected in operations follows after adoption of ASU 2023-09 on a retrospective basis (in thousands):

Year Ended December 31,

International

Loss before benefit from income taxes

Income tax benefit using U.S.

federal statutory rate

State income taxes, net of federal benefit

Non-deductible share-based compensation

Share-based compensation - shortfalls/(windfalls)

Permanent differences

US Federal Statutory Tax Rate

Foreign tax effects

Non-deductible items

Change in valuation allowance

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.

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

The Company’s effective tax rate differs from the statutory rate primarily due to continued losses and the maintenance of a full valuation allowance on deferred tax assets, resulting in zero income tax expense for the period.

Deferred tax assets (liabilities) consist of the following as of December 31, 2025 and 2024 (in thousands):

5 unchanged sentences

Capitalized research and development

Accruals and reserves

Total deferred tax assets

6 unchanged sentences

The valuation allowance increased by approximately $ 0.2 million during the year ended December 31, 2025 primarily due to increases in capitalized research and development expenses, net operating losses, tax credit carryforwards and deferred tax assets related to share-based compensation.

The Company did not generate net operating loss carryforwards or tax credit carryforwards available for its use until its inception and operation as a standalone legal entity.

At December 31, 2025 and 2024 , Cyclerion has federal net operating loss carryforwards of approximately $ 211 million and $ 195 million, respectively, to offset future federal taxable income that will be carried forward indefinitely until utilized.

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 as of December 31, 2024

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

As of December 31, 2025 and 2024 , Cyclerion had state net operating loss carryforwards of approximately $ 212 million and $ 196 million, respectively, to offset future state taxable income, which will begin

to expire in 2039 and will continue to expire through 2045 .

Cyclerion also had tax credit carryforwards of approximately $ 10.8 million as of December 31, 2025 , to offset future federal and state income taxes.

Federal credits begin to expire in 2039 and will continue to expire through 2044.

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 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

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.

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 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

Included in compensation expense is de minimis related to the defined contribution 401(k) Savings Plan for the years ended December 31, 2025 and 2024 , respectively.

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.

Patent License Agreement

On September 19, 2025, the Company and MIT entered into a Patent License Agreement (the “MIT License Agreement”) pursuant to which MIT granted to the Company 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, the Company paid a nominal upfront license fee and patent reimbursement fee.

Thereafter, the Company is 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, the Company is 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.

The Company 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.

Akebia License Agreement

On June 3, 2021, the Company and Akebia entered into a License Agreement (the “Akebia License Agreement”) relating to the exclusive worldwide license by the Company to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing the pharmaceutical compound known as praliciguat and other related products and forms thereof enumerated in the License Agreement (collectively, the “Products”).

On June 3, 2021, the Company and Akebia entered into a License Agreement (the “Akebia License Agreement”) relating to the exclusive worldwide license by the Company to Akebia of its rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing the pharmaceutical compound known as praliciguat and other related products and forms thereof enumerated in the License Agreement (collectively, the “Products”).

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.

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.

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

Under the terms of the 2024 Amendment, Akebia paid $ 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 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.

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 the Company and which was received in February 2026.

Pursuant to the terms of the Akebia License Agreement, as amended, Cyclerion is eligible to receive additional potential future development, regulatory, and commercialization milestone payments up to $ 557.5 million i n total, 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.

2 unchanged sentences

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

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

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 Material Purchase Agreement

On September 3, 2025, the Company and Akebia entered into a Material Purchase Agreement (the “Purchase Agreement”) relating to the purchase of additional development materials (the "Additional Development Materials") by Akebia for Akebia's use pursuant to the Akebia License Agreement.

Akebia paid $ 0.8 million to the Company for the purchase during the year ended December 31, 2025 and the Additional Development Materials

were delivered to Akebia as of December 31, 2025.

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

The delivery of the Additional Development Materials by the Company represents a single performance obligation and consideration was recognized upon delivery.

The Company recognized revenue of $ 0.8 million during the year ended December 31, 2025.

Option Agreement

Under the terms of the Option Agreement, the Optionee paid the Company 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 the Company provided notice on October 23, 2025 that it was terminating the Option Agreement.

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.

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.

On January 6, 2026, the Company sold 405,000 shares of common stock under the Sales Agreement for net proceeds of approximately $ 0.8 million .

The Company exhausted all sales under the 2025 Shelf.

On January 3, 2026, the Company and the Medsteer, SAS (“Medsteer”) entered into a Collaboration and Option Agreement (the “Collaboration Agreement”) pursuant to which Medsteer granted to the Company (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 the Company’s 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.

The Company 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 addition two years at the Company’s option and upon payment of a nominal fee or by mutual agreement of the Company 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.

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