Cyclerion(CYCN) - 2025 Q1 - Quarterly Report

FORM 10-Q Filing Information This section provides essential details of the SEC filing, including its type, registrant, and securities information Basic Filing Details This section provides the fundamental details of the SEC filing, identifying it as a Quarterly Report for the period ended March 31, 2025, and specifying its Commission File Number - The document is a Quarterly Report (Form 10-Q) for the period ended March 31, 2025[2] - The Commission File Number is 001-38787[2] Registrant Information This section identifies Cyclerion Therapeutics, Inc. as the registrant, detailing its state of incorporation and the address of its principal executive offices - Registrant: CYCLERION THERAPEUTICS, INC[2] - State of incorporation: Massachusetts[2] - Principal executive offices: 245 First Street, 18th Floor, Cambridge, Massachusetts 02142[2][5] Securities and Filer Status This section outlines the company's registered securities, confirms its compliance with SEC filing requirements, and specifies its filer status as a non-accelerated filer and smaller reporting company Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock, no par value | CYCN | The Nasdaq Capital Market LLC | - The registrant has filed all required reports and submitted every Interactive Data File during the preceding 12 months[3] - Filer Status: Non-accelerated filer and Smaller reporting company[4] - As of May 2, 2025, there were 3,210,094 shares of common stock outstanding[4] CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This section warns that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ General Statement This section advises that the report contains forward-looking statements, which are based on current expectations and assumptions but are subject to inherent uncertainties and risks that could cause actual results to differ materially - The report contains forward-looking statements, which are not historical facts and involve substantial risks and uncertainties[9] - Forward-looking statements are based on current expectations and assumptions, but actual results may differ materially due to inherent uncertainties, risks, and changes in circumstances[10] Important Factors and Risks This section details specific factors that could materially affect the company's actual results, including challenges in acquiring and developing new product candidates, significant doubt about its ability to continue as a going concern, and various operational and financial risks - Risks include potential failure to acquire license rights for new product candidates, establish clinical studies, obtain regulatory approvals, or successfully commercialize products[10] - There is substantial doubt regarding the company's ability to continue as a going concern, necessitating near-term capital raising[10] - Uncertainties exist regarding future financial performance, potential revenues, expense levels, cash flows, and profitability[10] - Other risks include inability to maintain Nasdaq listing, risks associated with the investment in Tisento Therapeutics Inc., and potential failure to out-license olinciguat technology[10][12] PART I — FINANCIAL INFORMATION This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements for Cyclerion Therapeutics, Inc., including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with comprehensive notes explaining the basis of presentation, significant accounting policies, and details of various financial accounts and agreements. A critical note addresses the company's 'Going Concern' status due to recurring losses and the need for additional funding Condensed Consolidated Balance Sheets This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | ASSETS | | | | Cash and cash equivalents | $3,639 | $3,232 | | Accounts receivable | 581 | 556 | | Prepaid expenses | 256 | 421 | | Other current assets | 21 | 16 | | Total current assets | 4,497 | 4,225 | | Other investment | 5,350 | 5,350 | | Total assets | $9,847 | $9,575 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $483 | $390 | | Accrued research and development costs | 50 | 52 | | Accrued expenses and other current liabilities | 534 | 283 | | Total current liabilities | 1,067 | 725 | | Total stockholders' equity | 8,780 | 8,850 | | Total liabilities and stockholders' equity | $9,847 | $9,575 | - Total assets increased by $272 thousand from $9,575 thousand at December 31, 2024, to $9,847 thousand at March 31, 2025[14] - Total current liabilities increased by $342 thousand from $725 thousand at December 31, 2024, to $1,067 thousand at March 31, 2025[14] Condensed Consolidated Statements of Operations and Comprehensive Loss This section outlines the company's financial performance, including revenues, expenses, and net loss over specific periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues: | | | | Revenue from option agreement | $81 | $— | | Total revenues | 81 | — | | Cost and expenses: | | | | Research and development | 36 | 44 | | General and administrative | 1,502 | 1,574 | | Total cost and expenses | 1,538 | 1,618 | | Loss from operations | (1,457) | (1,618) | | Other income, net: | | | | Interest income | 28 | 76 | | Total other income, net | 28 | 76 | | Net loss | $(1,429) | $(1,542) | | Basic and diluted net loss per share | $(0.56) | $(0.62) | | Comprehensive loss | $(1,429) | $(1,546) | - Total revenues increased from $0 in Q1 2024 to $81 thousand in Q1 2025, primarily from an option agreement[17] - Net loss decreased by $113 thousand, from $(1,542) thousand in Q1 2024 to $(1,429) thousand in Q1 2025[17] - Basic and diluted net loss per share improved from $(0.62) in Q1 2024 to $(0.56) in Q1 2025[17] Condensed Consolidated Statements of Stockholders' Equity This section details changes in the company's equity, including net loss, stock issuance, and share-based compensation Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share data) | | Balance at December 31, 2024 | Net loss | Issuance of common stock - private placement, net of issuance cost | Vesting of restricted stock awards | Share-based compensation expense | Balance at March 31, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Common Stock Shares | 2,545,922 | — | 499,998 | 15,024 | — | 3,060,944 | | Paid-in capital | $276,342 | — | $1,245 | — | $114 | $277,701 | | Accumulated deficit | $(267,492) | $(1,429) | — | — | — | $(268,921) | | Total Stockholders' equity | $8,850 | $(1,429) | $1,245 | — | $114 | $8,780 | - Total stockholders' equity decreased from $8,850 thousand at December 31, 2024, to $8,780 thousand at March 31, 2025, primarily due to net loss offset by proceeds from private placement and share-based compensation[20] - 499,998 shares of common stock were issued through a private placement, contributing $1,245 thousand to paid-in capital[20] Condensed Consolidated Statements of Cash Flows This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(968) | $(1,871) | | Net cash provided by financing activities | $1,375 | $— | | Effect of exchange rate changes on cash and cash equivalents | — | (4) | | Net increase (decrease) in cash and cash equivalents | $407 | $(1,875) | | Cash and cash equivalents, beginning of period | $3,232 | $7,571 | | Cash and cash equivalents, end of period | $3,639 | $5,696 | - Net cash used in operating activities decreased significantly from $(1,871) thousand in Q1 2024 to $(968) thousand in Q1 2025[23] - Net cash provided by financing activities was $1,375 thousand in Q1 2025 due to a private placement, compared to $0 in Q1 2024[23] - Cash and cash equivalents increased by $407 thousand in Q1 2025, ending at $3,639 thousand[23] Notes to the Condensed Consolidated Financial Statements This section presents comprehensive notes explaining the basis of presentation, significant accounting policies, and details of various financial accounts and agreements 1. Nature of Business This note describes the company's strategic shift to neuropsychiatric diseases, its operational model, and revenue generation from legacy assets - Cyclerion Therapeutics, Inc. became an independent public company on April 1, 2019, after a tax-free spin-off from Ironwood Pharmaceuticals, Inc[26] - The company is now focused on building a new pipeline for neuropsychiatric diseases, prioritizing an individualized therapy for treatment-resistant depression (TRD) as its foundational product candidate[26] - Cyclerion has discontinued internal research and development of sGC stimulators, instead leveraging legacy sGC assets (Praliciguat, Olinciguat, Zagociguat, CY3018) to generate revenue[27][28][30][31] - As of March 31, 2025, Cyclerion has one employee and utilizes consultants to manage operating expenses[26] 2. Summary of Significant Accounting Policies This note outlines the accounting principles used in preparing the financial statements, including the going concern assessment - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP, with certain disclosures condensed or omitted[36] - Management evaluates the company's ability to continue as a going concern, analyzing prospective operating budgets and cash needs[39] - Substantial doubt exists about the company's ability to continue as a going concern, as current cash is expected to fund operations only through Q3 2025, and additional funding is needed[41] - No new accounting pronouncements adopted during the three months ended March 31, 2025, had a material effect on the financial statements, and no future standards are expected to have a material impact[43][44] 3. Fair Value of Financial Instruments This note details the fair value measurements of financial instruments, primarily cash equivalents Fair Value Measurements of Cash Equivalents (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Money market funds (Level 1) | $3,376 | $3,025 | | Total Cash equivalents | $3,376 | $3,025 | - Cash equivalents, primarily money market funds, are classified within Level 1 of the fair value hierarchy, based on quoted market prices in active markets[45] - The carrying amounts of accounts receivable, prepaid expenses, other current assets, accounts payable, and accrued expenses approximate their fair value due to their short-term nature[46] 4. Other Investment This note describes the company's investment in Tisento Parent, accounted for at cost less impairment - The company's investment in Tisento Parent is accounted for as an equity security without a readily determinable fair value, measured at cost less any impairment[48] - Despite having a variable interest in Tisento Parent, the company does not hold a controlling financial interest and therefore does not consolidate Tisento under the VIE model[47] - No impairment loss was recognized on the Tisento investment as of March 31, 2025[48] 5. Property and Equipment This note provides details on the company's property and equipment, which is fully depreciated Property and Equipment, Net (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Software | $126 | $126 | | Property and equipment, gross | 126 | 126 | | Less: accumulated depreciation and amortization | (126) | (126) | | Property and equipment, net | $— | $— | - Property and equipment, net, was $0 as of March 31, 2025, and December 31, 2024, due to full accumulated depreciation[49] - No depreciation and amortization expenses were recorded during the three months ended March 31, 2025 and 2024[49] 6. Accrued Expenses and Other Current Liabilities This note details the composition and changes in accrued expenses and other current liabilities Accrued Expenses and Other Current Liabilities (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Professional fees | $489 | $220 | | Other | 45 | 63 | | Total Accrued expenses and other current liabilities | $534 | $283 | - Accrued expenses and other current liabilities increased by $251 thousand, from $283 thousand at December 31, 2024, to $534 thousand at March 31, 2025, primarily due to an increase in professional fees[50] 7. Commitments and Contingencies This note outlines the company's contractual commitments, indemnification obligations, and separation benefits - The company enters into cancellable contracts for clinical and preclinical research and other services, generally without significant cancellation penalties[51] - Officers and directors are indemnified, and the company also indemnifies business partners, contractors, clinical sites, and customers in the ordinary course of business[52][53] - No material costs have been incurred for indemnification obligations to date, and the estimated fair value of these obligations is minimal[53][54] - Final separation benefits of $0.2 million were paid to the former Chief Financial Officer in May and August 2024, with no further obligations as of March 31, 2025[55] 8. Share-based Compensation Plans This note describes the company's equity incentive plans and the associated share-based compensation expense - Cyclerion adopted the 2019 Employee Stock Purchase Plan (ESPP) and 2019 Equity Incentive Plan, and mirrored Ironwood's 2005 and 2010 Equity Plans for equity conversion post-separation[56][57] Share-based Compensation Expense (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $12 | $26 | | General and administrative | 102 | 155 | | Total | $114 | $181 | - Total share-based compensation expense decreased from $181 thousand in Q1 2024 to $114 thousand in Q1 2025[58] - As of March 31, 2025, unrecognized share-based compensation expense for unvested stock options is $0.3 million (weighted average period 3.56 years) and for unvested RSAs is $0.3 million (weighted average period 2.43 years)[61][64] 9. Loss per share This note details the calculation of basic and diluted net loss per share, including anti-dilutive securities Net Loss Per Share (in thousands, except per share data) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss | $(1,429) | $(1,542) | | Weighted average shares used in calculating net loss per share — basic and diluted | 2,556 | 2,494 | | Net loss per share — basic and diluted | $(0.56) | $(0.62) | - Basic and diluted net loss per share improved to $(0.56) in Q1 2025 from $(0.62) in Q1 2024[66] - Potential shares from Preferred Stock, stock options, and RSAs (totaling 829,645 in Q1 2025) were excluded from diluted EPS calculation as they were anti-dilutive[66] 10. Option/License Agreement This note provides details on the company's option and license agreements for its sGC stimulator assets - The Option Agreement for Olinciguat was extended to May 2025, with the Optionee paying a $150,000 fee in August 2024 and an additional $25,000 for the extension, plus reimbursement for patent expenses[67] - The Akebia License Agreement for Praliciguat was amended in December 2024, resulting in $1.25 million paid in December 2024 and an additional $0.5 million due by September 30, 2025[69][70] - Under the amended Akebia agreement, Cyclerion is eligible for up to $558.5 million in future development, regulatory, and commercialization milestone payments, and tiered royalties ranging from mid-single-digits to twenty percent of net sales[70] - Akebia has assumed control and expenses for certain Praliciguat patents earlier than originally agreed[70] 11. Subsequent Events This note confirms that no material events occurred after the balance sheet date requiring recognition or disclosure - No events or transactions requiring recognition or disclosure occurred after the balance sheet date through the date the consolidated financial statements were issued[74] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance and condition, discussing its strategic shift to neuropsychiatric diseases, particularly treatment-resistant depression (TRD), and efforts to leverage legacy sGC assets for revenue. It details the financial results for the quarter, including revenue from option agreements, changes in R&D and G&A expenses, and the company's liquidity position, emphasizing the 'going concern' uncertainty and future funding requirements Overview This section outlines Cyclerion's strategic shift to neuropsychiatric diseases, efforts to reduce expenses, and revenue generation from legacy assets - Cyclerion's strategy is to build a new pipeline for neuropsychiatric diseases, with a foundational product candidate for treatment-resistant depression (TRD) identified through asset evaluations[76] - The company aims to significantly reduce operating expenses, generate revenue from legacy soluble guanylate cyclase (sGC) stimulator clinical assets, and raise funds to support TRD product plans[77] - Regina Graul, Ph.D., was promoted to CEO in August 2024, and Rhonda Chicko was hired as CFO contractor; Dr. Graul is the only current employee, with consultants used to limit operating expenses[78] Financial Overview This section provides a summary of the company's financial strategy, including R&D expenses and key licensing agreements - Research and development expenses are primarily for compensation, benefits, facilities, and third-party contracts related to manufacturing, nonclinical studies, and clinical trials, and are charged to operations as incurred[79][97] - The Praliciguat license agreement with Akebia was amended in December 2024, providing $1.75 million in amendment payments ($1.25 million received, $0.5 million due Sep 2025) and potential milestones up to $558.5 million plus tiered sales-based royalties[80][81][82] - The Olinciguat option agreement with a third party was extended to May 2025, with an option fee of $150,000 received in August 2024 and an additional $25,000 for the extension[83] - Zagociguat and CY3018 were sold to Tisento Therapeutics, Inc. in July 2023 for $8.0 million cash, $2.4 million expense reimbursement, and 10% equity in Tisento Parent, leading to a significant decrease in R&D expenses[84] - Tisento announced the first patient dosed in its global Phase 2b PRIZM study for zagociguat in MELAS on January 27, 2025[85][86] Research and Development Expenses (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Personnel and related internal costs | $12 | $37 | | Others | 24 | 7 | | Total research and development expenses | $36 | $44 | Results of Operations This section analyzes the company's financial performance, detailing changes in revenues, expenses, and net loss for the period Summary of Results of Operations (in thousands) | | March 31, 2025 | March 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue from option agreement | $81 | $— | $81 | 100% | | Total revenues | $81 | $— | $81 | 100% | | Research and development | $36 | $44 | $(8) | (18)% | | General and administrative | $1,502 | $1,574 | $(72) | (5)% | | Total cost and expenses | $1,538 | $1,618 | $(80) | (5)% | | Loss from operations | $(1,457) | $(1,618) | $161 | (10)% | | Interest income | $28 | $76 | $(48) | (63)% | | Net loss | $(1,429) | $(1,542) | $113 | (7)% | - Revenue of $0.1 million was recognized in Q1 2025 from the Olinciguat option extension fee and expense reimbursement[101] - General and administrative expenses decreased by approximately $0.1 million due to lower insurance and board member fees, partially offset by increased professional consulting[103] - Interest income decreased by $0.1 million for the three months ended March 31, 2025, primarily attributable to a decrease in the money market fund balance[104] Liquidity and Capital Resources This section discusses the company's cash position, capital raising activities, and future funding requirements, highlighting going concern uncertainty - On March 21, 2025, the company closed a private placement of 499,998 common shares for gross proceeds of approximately $1.375 million[105] - A Registration Statement on Form S-3 (Shelf) was filed and declared effective in February 2025, allowing for the sale of up to $25.0 million in securities, limited to one-third of the public float[106] - As of March 31, 2025, unrestricted cash and cash equivalents were approximately $3.6 million[110] - The company expects current cash to fund operations through Q3 2025 but needs additional funding due to anticipated operating losses, leading to substantial doubt about its ability to continue as a going concern[112][118] Summary of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(968) | $(1,871) | $903 | (48)% | | Net cash provided by financing activities | $1,375 | $— | $1,375 | — | | Net increase (decrease) in cash and cash equivalents | $407 | $(1,875) | $2,282 | 122% | - Net cash used in operating activities decreased by $903 thousand, from $(1,871) thousand in Q1 2024 to $(968) thousand in Q1 2025, primarily due to lower net loss and changes in working capital[115][116] - Net cash provided by financing activities was $1.4 million in Q1 2025 from the private placement[117] - Future funding requirements are uncertain and depend on the scope, progress, and costs of R&D, regulatory review, commercialization, intellectual property, and market conditions[119][126] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Cyclerion Therapeutics, Inc. is not required to provide quantitative and qualitative disclosures about market risk in this report - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[128] Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2025, concluding they were effective at a reasonable assurance level. No material changes in internal control over financial reporting occurred during the period Evaluation of Disclosure Controls and Procedures This section confirms management's assessment of the effectiveness of disclosure controls and procedures - Management, with the participation of the CEO and CFO, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2025[129] - Control systems have inherent limitations and can only provide reasonable, not absolute, assurance that objectives are met, and cannot prevent all errors or fraud[129] Changes in Internal Control over Financial Reporting This section reports on any material changes in internal control over financial reporting during the period - No changes in internal control over financial reporting occurred during the period covered by this report that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[130] PART II — OTHER INFORMATION This part covers legal proceedings, risk factors, unregistered sales of equity, other information, and exhibits Item 1. Legal Proceedings This section states that the company is not currently involved in any material legal proceedings, though it acknowledges the potential for future claims - The company is not a party to any material legal proceedings at this time[133] - The company may be subject to various legal proceedings and claims in the future, which could have a material adverse effect on its financial position or results of operations[133] Item 1A. Risk Factors As a smaller reporting company, Cyclerion Therapeutics, Inc. is not required to present risk factors in this quarterly report, directing readers to its Annual Report on Form 10-K for a comprehensive discussion of risks - As a 'smaller reporting company,' the company is not required to provide risk factors in this Quarterly Report on Form 10-Q[134] - Readers are directed to the 'Risk Factors' section in Part I, Item 1A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for a further description of factors that could materially affect the business[134] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the completion of a private placement of unregistered common stock in March 2025, which generated $1.375 million in net proceeds intended for general corporate purposes - On March 21, 2025, the company completed a private placement of 499,998 unregistered shares of common stock at $2.75 per share, resulting in net proceeds of $1.375 million[135] - The net proceeds are intended for general corporate purposes[135] - The private placement was made to several accredited investors under Regulation D of the Securities Act of 1933[135] Item 5. Other Information This section confirms that no directors or Section 16 officers engaged in specific trading plan activities during the first quarter of 2025 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 plans or non-Rule 10b5-1 trading arrangements during the first quarter of 2025[136] Item 6. Exhibits This section refers to the Exhibit Index, which lists various documents filed as exhibits to the Quarterly Report, including certifications and XBRL data - The report includes an Exhibit Index listing various certificates (CEO, CFO pursuant to Sarbanes-Oxley Act) and Inline XBRL documents[137][140] Signatures This section contains the official signatures of the company's authorized officers, certifying the report's submission - The report is signed by Regina Graul, President and Chief Executive Officer, and Rhonda Chicko, Chief Financial Officer, on May 6, 2025[143][144]