KRSA 10-K & 10-Q changes, risk factors and insider trading

There is substantial doubt regarding our ability to continue as a going concern. We will need to raise additional funding,funding in the near-term, which may not be available on acceptable terms, if at all, to continue as a going concern and advance our current and any potential future product candidates. Failure to obtain capital when needed may force us to delay, limit or terminate our product development efforts or otherour operations.operations altogether. Raising additional capital may dilute our existing shareholders, restrict our operations or cause us to relinquish valuable rights.

We arehave in the process of in-licensingin-licensed a product candidate for treatment resistant depression and our approach to the discovery and development of this and any future product candidates we may develop may never lead to marketable products.

We may be unable to obtain regulatory approval fof clinical trials and product approval and unable to generate product revenue for any product candidate.

Any of our current or future product candidates may cause side effects that may result in label restrictions.

There is uncertainty as to any liquidity or monetizable value of our equity interest in Tisento, a privately-held company, which faces all the risks of an early-stage pharmaceutical development company.

We may not be successful in entering into necessary licenses or collaboration agreements and maintaining such licenses, and we may enter into collaboration or license arrangements in the future that ultimately are not successful.

We may be unable to adequately protect our proprietary and licensed technologies or obtain and maintain issued patents that are sufficient to protect our product candidates.

The impact of healthcare reform and other governmental and private payor initiatives, as well as the potential for reductions in federal government funding for development and clinical trials as well as funding for certain treatments may harm our business.

We have limited trading history and a relatively limited public float for our shares and our common stock market price may fluctuate widely.

Any future failure to comply with Nasdaq’s current and proposed continued listing requirements could result in the delisting of our common stock.

We are a biopharmaceutical company that was incorporated in 2018. Our business was conducted within Ironwood Pharmaceuticals, Inc. prior to that time, and we had no history as an independent company prior to the completion of the separation which occurred in 2019. We are seeking to develop new products for treatment resistant depression. We have also developed a pipeline of sGC stimulators, but we have no products approved for commercial sale, and we have never generated revenue from product sales nor have Tisento or Akebia ever generated product sales from products incorporating our compounds. Our operating activities to date have been limited primarily to organizing and staffing our company, business planning, raising capital, developing our technology, identifying potential product candidates, pursuing partnership opportunities,opportunities and obtaining licenses we deem necessary for our treatment resistant depression candidate, and conducting early-stage clinical trials for our product candidates.

Our business has incurred operating losses due to costs incurred in connection with our research and development activities and general and administrative expenses associated with our operations. Our net losses for the years ended December 31, 20242025 and 20232024 were $3.1$3.5 million and $5.3$3.1 million, respectively. We expect to incur significant losses for at least the next several years, and for these losses to significantly increase, as we continue our research activities and conduct development of, and seek regulatory approvals for, our product candidates.

Our expenses couldwould increase beyond expectations if we are required by the FDA, the EMA, or other regulatory agencies, domestic or foreign, to perform clinical and other studies in addition to those that we currently anticipate. Even if one or more of the product candidates that we develop is approved for commercial sale, we may never generate revenue in amounts sufficient to achieve and maintain profitability.

There is substantial doubt about our ability to continue as a going concern. We will need to raise additional funding in the near term, which may not be available on acceptable terms, if at all to continue as a going concern and advance our product candidates. Failure to obtain capital when needed may force us to delay, limit or terminate our product development efforts or otheroperations operations.altogether. Raising additional capital maywould dilute our existing shareholders, restrict our operations or cause us to relinquish valuable rights.

There is substantial doubt regarding our ability to continue as a going concern. As of December 31, 2024,2025, we had unrestricted cash and cash equivalents of approximately $3.2 million. Our management believes that such cash and cash equivalents will not be sufficient to fund our operating expenses and capital requirements beyondthrough the second quarter,mid-2026, whether or not we curtail efforts with respect to certain of our current and future product candidates. We will require significant additional funding to advance any of our product candidates beyond the short term and to sustain our operations. In the event that we are unable to raise the capital necessary, we may need to curtail our operations or cease operations altogether. Because there is substantial doubt about our ability to continue as a going concern for a reasonable period of time, an investment in our common stock is highly speculative and holders of our common stock could suffer a total loss of their investment.

We may also seek to raise such capital through public or private financing of our securities, royalty financing or debt financing. Raising funds in the current economic environment is, and may in the future, continue to be challenging, and such financing may not be available in sufficient amounts or on acceptable terms, if at all. The terms of any financing may harm existing shareholders. The issuance of additional securities, whether equity or debt, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities maywould dilute the ownership of existing shareholders.

If we sell shares or other equity securities in one or more other transactions, or issue stock, stock options or other securities pursuant to our current equity plans, investors may be materially diluted by such subsequent issuances. We will need significant additional capital in the near term to continue our current plans. No assurance can be given that we will be able to obtain such funds upon favorable terms and conditions, if at all. Failure to do so could have a material adverse effect on our business. To the extent we raise additional capital by issuing equity securities, our stockholders maywould likely experience substantial dilution. We may sell common stock, preferred stock, convertible securities or other equity or convertible securities in one or more transactions that may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, antidilution, and conversion and redemption rights, subject to applicable law, and at prices and in a manner we determine from time to time. Such issuances and the exercise of any convertible securities will dilute the percentage ownership of our stockholders and may affect the value of our capital stock and could adversely affect the rights of the holders of such stock, thereby reducing the value of such stock. Moreover, any exercise of convertible securities may adversely affect the terms upon which we will be able to obtain additional equity capital, since the holders of such convertible securities can be expected to exercise them at a time when we would, in all likelihood, not be able to obtain any needed capital on terms more favorable to us than those provided in such convertible securities.

Incurring debtdebt, if available, would result in increased fixed payment obligations, and we may agree to restrictive covenants, such as limitations on our ability to incur additional debt or limitations on our ability to acquire, sell or license intellectual property rights that could impede our ability to conduct our business. In the event we are unable to raise financing, we may need to reduce or cease operations.

Research and development of biopharmaceutical products is inherently risky. We may encounter substantial delays in our activities, including our planned clinical studies, or we may fail to demonstrate safety and efficacy to the satisfaction of applicable regulatory authorities in the development of products to treat patients with serious diseases.

Our business depends heavily on the successful development, clinical testing, regulatory approvals and commercialization of olinciguatour (optionedlead toproduct CVCO)candidate andfor treatment resistant depression, praliciguat (out-licensed to Akebia), any potential future out-licensing of olinciguat, and any future potential product candidates we may acquire or license as well as both the Transferred Assets product candidates we have sold to Tisento. Any of our current or potential product candidates will require regulatory approval.

Before obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy, complex and expensive nonclinical and clinical studies that our product candidates are both safe and effective for use in each target indication. Each product candidate must demonstrate an adequate benefit-risk profile for its intended use in its intended patient population. In some instances, significant variability in safety or efficacy appear in different clinical studies of the same product candidate due to numerous factors, including changes in study protocols, differences in the number and characteristics of the enrolled study participants, variations in the dosing regimen and other clinical study parameters or the dropout rate among study participants. Product candidates in later stages of clinical studies often fail to demonstrate adequate safety and efficacy despite promising nonclinical testing and early clinical studies. Companies in the biopharmaceutical industry often suffer significant setbacks in both early and later-stage clinical studies; as most product candidates that begin clinical studies are never approved for commercialization by regulatory authorities. Favorable results in earlier stage trials may not be replicated in later stage trials. If we fail to produce positive results in our clinical trials, the development timeline, regulatory approval and commercialization prospects of our assets and, correspondingly, our business and financial prospects, would be materially adversely affected.

Identifying and qualifying participants to participate in any clinical studies of our product candidates would be critical to the success of those clinical trials. The timing of any clinical studies will depend in part on the speed at which participants can be recruited to participate in testing these product candidates. Estimates of the prevalence of target indications may vary considerably. Determining the incidence of these conditions, including in specific geographies or demographic groups, would be challenging. The lower the actual prevalence of these conditions, the more challenges would be encountered enrolling participants in those clinical studies, which could delay development of those product candidates. Clinical trial enrollment may also encounter difficulties for a variety of other reasons. The number of participants eligible for a clinical trial may be substantially limited by stringent eligibility criteria in a study protocol, such as the inclusion of biomarker-driven identification or other highly specific criteria related to stage of disease progression or to specific patient reported outcome measures. The number of participants required to power the statistical analysis of the study’s endpoints may be very large leading to an extended enrollment period. Issues such as the proximity of participants to a study site, the complexity of the study design, the ability to recruit investigators with appropriate skill and experience, competing clinical studies for similar therapies or targeting similar participants, perceptions of the benefit-risk profile of the product candidate relative to other available therapies or product candidates, and ability to obtain and maintain institutional review board,board or IRB,(“IRB”), or ethics committee,committee or EC,(“EC”) approvals and participant consents all could have a substantial impact on the timing of clinical trial enrollment. If sufficient participants cannot be enrolled in clinical studies in a timely way, obtaining study results would be delayed, which may harm our business, prospects, financial condition and results of operations.

The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. If we, Tisento, Akebia and any other future licensees, as applicable, are ultimately unable to obtain regulatory approval for the product candidates, we will be unable to generate product revenue and our business will be substantially harmed.

delays in reaching or failing to reach agreement on acceptable terms with prospective contract research organizations, or CROs,contract research organizations (“CRO”), and clinical study sites, the terms of which can be subject to considerable negotiation and may vary significantly among different CROs and study sites;

We are seeking capital, capabilities, and transactions to advance the development of our product candidate for treatment resistant depression and other product candidates we may acquire rights to in the future. There can be no assurance that this process will result in any effective negotiations toward, reaching terms of, executing agreements relating to, or completing any transaction or that any such transaction will be successful. Failure to complete any of the foregoing efforts would materially adversely affect our business, prospects, financial condition and results of operations.

On June 3, 2021, we entered into a license agreement withthe Akebia License Agreement relating to the exclusive worldwide license to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing the pharmaceutical compound praliciguat and other related products and forms thereof enumerated in such agreement. Under the agreement, Akebia is responsible for all research, development, regulatory, and commercialization activities for certain products. On December 13, 2024, we and Akebia entered into Amendment #1 to License Agreement (the “2024 Amendment”) to the original 2021Akebia licenseLicense agreement.Agreement. Under the terms of the 2024 Amendment, Akebia paid the Company (i) $1.25 million in December 2024 and has agreed to pay an additional $0.5 million on or beforein September 30, 2025. In addition, Akebia has agreed to assume control of the preparation, filing, prosecution and maintenance of certain Cyclerion patents, and the expenses associated therewith, at an earlier date than as originally agreed between the parties. The parties have agreed to the reduction of certain development milestones and the increase of certain royalty rates on net sales and sublicense income. Pursuant to the terms of the 2021Akebia License Agreement, as amended, 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. The agreement may be terminated by either party in the event of a material breach by the other party or by us in the event of certain patent disputes. There can be no assurances that the agreement will result in any therapies or that it will not be terminated prior to the realization by us of any remaining eligible revenues or that Akebia will be able to successfully bring any of the licensed product candidates to market due to financial limitations or other business factors in the future or if Akebia is unable to raise additional capital on favorable terms, if at all. Akebia may at any time terminate the Akebia License Agreement upon 180 days written notice. subject to Akebia’s obligation to grant Cyclerion a non-exclusive, royalty-free license, with the right to grant multiple tiers of sublicenses, to certain licensed compounds or products as defined in the Akebia License Agreement as well as certain rights to regulatory submissions, product trademarks, contracts with third party suppliers and certain other rights.

Our investment in Tisento is subject to all of the risks associated with an earlier stage biotechnology company. The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. While we believe that Tisento’s technology, development experience and scientific knowledge provide it with competitive advantages, it may face potential competition from many different sources, including large pharmaceutical and biotechnology companies, academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for the research, development, manufacturing and commercialization of similar products. Any investigational products that weTisento may successfully develop and commercialize will compete with new immunotherapies that may become available in the future. As a result, our investment in Tisento is risky and our equity interest in Tisento could be significantly diluted in the future if Tisento seeks to raise additional capital or is unable to raise additional capital on favorable terms, if at all. If Tisento suffers adverse effects, it may not be able to continue as a going business concern, and we may lose our entire investment. Tisento is a privately-held company and there is no public market for its securities. As a result, it may be difficult to sell any of our securities position in Tisento in the near term, if at all.

We expect in the future to rely on third parties to conduct any nonclinical or clinical studies for any existing or potential future product candidates. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, necessary regulatory approvals for or commercialization of any potential future product candidates may not be obtainable and our business could be substantially harmed.

These factors may materially impede the willingness or ability of third parties to complete quality nonclinical and clinical studies and may subject us to unexpected cost increases that are beyond our control. Nevertheless, we may be responsible for ensuring that each of any future nonclinical and clinical studies is conducted in accordance with any applicable protocol, legal, regulatory and scientific requirements and standards, and our reliance on CROs and other third parties does not necessarily relieve us of our regulatory responsibilities. We, and any future CROs and other third parties are required to comply with regulations and guidelines, such as good laboratory practices (“GLPs”), good clinical practices (“GCPs”), and current Good Manufacturing Practices. These regulations are enforced by the FDA and comparable foreign regulatory authorities for any products in clinical development. The FDA enforces compliance to regulations through periodic inspections of clinical study sponsors, principal investigators, and third parties. If the FDA determines there was a failure to comply with the regulations the clinical data generated in any clinical studies may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require the performance of additional clinical studies before approving any marketing applications. We cannot assure you that, upon inspection, the FDA will determine that any potential future nonclinical studies, clinical studies or product manufacturing will comply with these regulations. Our failure or the failure of our CROs or other third parties to comply with these regulations may require the repeat of those clinical studies, which would delay the regulatory approval process and could also result in enforcement action up to and including civil and criminal penalties.

If we or our licensors, licensees or Tisento are unable to adequately protect proprietary technologies, or obtain and maintain issued patents that are sufficient to protect their respective product candidates, others could compete against us, our licensees and Tisento more directly, which would have a material adverse impact on our business, prospects, financial condition and results of operations.

Our success will depend in part on our and ourlicensors, licensees and Tisento’s ability to obtain and maintain patent and other proprietary protection in the United States and other countries for commercially important technology, inventions and know-how related to our business, defend and enforce patents, should they issue, preserve the confidentiality of trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties. We strive to protect and enhance the proprietary technologies that we believe are important to our business, including seeking patents intended to cover our product candidates and compositions, their methods of use and any other Inventions that are important to the development of our business.

We have 2022 issued U.S. patents, eleven12 pending U.S. patents applications and numerous foreign patents and pending patent applications. Patent families are filed either as utility U.S. patents or under an international patent law treaty (PCT) that provides a unified procedure for filing a single initial patent application to seek patent protection for an invention simultaneously in each of the 157158 contracting states, followed by the process of entering national phase, which requires a separate application in each of the member states in which national patent protection is sought. We also rely on patents issued to licensors providing patent licenses for our treatment resistant depression candidate.

Our success will depend in part on our ability to operate without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of third parties. Other parties may allege that our product candidates or the use of our technologies infringesor technologies licensed by us infringe or otherwise violatesviolate patent claims or other intellectual property rights held by them or that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to compositions, materials, formulations, methods of manufacture or methods for treatment related to our product candidates. Because patent applications can take many years to issue, third parties may have currently pending patent applications which may later result in issued patents that our product candidates may infringe, or which such third parties claim are infringed by our technologies.

We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.property we own or license from third parties.

Our employee, consultants, non-academic outside scientific collaborators and other advisors enter into confidentiality and intellectual property assignment agreements with us or have entered into confidentiality and intellectual property assignment agreements with Ironwood.Ironwood or third parties licensing intellectual property to us. We seek to have inventions assigned to us by the parties rendering services whenever possible. Our in-bound licenses seek to insure that all of the intellectual property licensed to us is owned by the licensor. However, we may not be able to enter into these agreements with all parties (for example with academic collaborators) or these agreements may not be honored and may not effectively assign intellectual property rights to us.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions over the lifetime of owned patents and applications For in-bound licensed intellectual property rights, failure to maintain compliance with such requirements would adversely impact our rights as regards those patents and applications. In some cases, an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors or other third parties might be able to enter the market earlier than would otherwise have been the case and this circumstance could have a material adverse effect on our business, prospects, financial condition and results of operations.

Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to biotechnology or pharmaceuticals. This could make it difficult to stop the infringement of patents, if obtained, or the misappropriation of or marketing of competing products in violation of other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, patent protection might not be sought in certain countries, and there will not be a benefit of patent protection in such countries.

As is the case with other biotechnology companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biotechnology industry involves both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementingimplemented wide-ranging patent reform legislation: the Leahy-Smith America Invents Act, or the America Invents Act. The America Invents Act includes a number of significant changes to U.S. patent law. These provisions affect the way patent applications will be prosecuted and may also affect patent litigation. It is not yet clear what, if any, impact the America Invents Act will have on the operation of certain elements of our business.product candidates. However, the America Invents Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any patents that may issue from our patent applications, all of which could have a material adverse effect on our business, prospects, financial condition and results of operations.

We may be subject to claims that we or our employees, advisors or consultants or third parties from whom we license certain technologies have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third party. We may be subject to claims that an employee, advisor or consultant performed work for us that conflicts with that person's obligations to a third party, such as an employer, and thus, that the third party has an ownership interest in the intellectual property arising out of work performed for us. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. If we fail in defending such claims, in addition to paying money claims, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our product candidates, which would materially harm our commercial development efforts.

Our results of operations could be harmed by general conditions in the global economy and in the global financial markets as well as adverse economic conditions caused by political unrest.unrest or loss of government funding for product candidates. A severe or prolonged economic downturn and severe political disruption could result in a variety of risks to our business, including weakened demand for our product candidates and our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting in supply disruption. Any of the foregoing could harm our business, prospects, financial condition and results of operations.

If our information technology systems or data, or those of CRO and other third parties upon which we rely, are or were compromised, we could experience adverse impacts resulting from such compromise, including, but not limited to, regulatory investigations or actions; litigation; fines and penalties; interruptions to our commercial operations, clinical trials or other operations; harm to our reputation; loss of revenue or profits; loss of sales and other adverse consequences.

publication of research reports by securities analysts about us or our competitors or our industry and speculation regarding our company or our stock price in the financial or scientific press or in online investor communities;•changes in market conditions in the pharmaceutical and biotechnology sector;

Nasdaq's rules, which impose certain continued listing requirements, including a minimum $1 bid price, and the Proposed Market Value Rule, such that a failure to meet these requirements would lead Nasdaq to take further steps to delist our common stock; and changes in general market and economic conditions.

We run the risk of inadvertently being deemed an investment company required to register under the Investment Company Act of 1940 (the “Investment Company Act”) because a significant portion of our assets consists of investments in companies in which we own less than a majority interest. The risk varies depending on events beyond our control, such as significant appreciation or depreciation in the market value of certain of our publicly traded holdings, adverse developments with respect to our ownership of certain of our subsidiaries, transactions involving the sale of certain assets and our participation in any partnership or other fund established to finance future broadband and real estate projects in which we may engage. If we are deemed to be an inadvertent investment company, we may seek to rely on a safe harbor under the Investment Company Act that would provide us a one-year grace period to take steps to avoid being deemed to be an investment company. In order to ensure we avoid being deemed an investment company, we have taken, and may need to continue to take, steps to reduce the percentage of our assets that constitute investment assets under the Investment Company Act. These steps have included, among others, selling marketable securities that we might otherwise hold for the long term and deploying our cash in non-investment assets. We have recently sold marketable securities, including at times at a loss, and we may be forced to sell our investment assets at unattractive prices or to sell assets that we otherwise believe benefit our business in the future to remain below the requisite threshold. We may also seek to acquire additional non-investment assets to maintain compliance with the Investment Company Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that are not otherwise attractive to our business. Any of these actions could have a material adverse effect on our results of operations and financial condition. Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid being deemed to be an investment company in accordance with the safe harbor. If we were unsuccessful, then we would have to register as an investment company, and we would be unable to operate our business in its current form. We would be subject to extensive, restrictive, and potentially adverse statutory provisions and regulations relating to, among other things, operating methods, management, capital structure, indebtedness, dividends, and transactions with affiliates. If we were deemed to be an investment company and did not register as an investment company when required to do so, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, that we would be unable to enforce contracts with third parties, and/or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which we were an unregistered investment company.

Praliciguat is an orally administered, once-daily systemic sGC stimulator. On June 3, 2021, we entered into a license agreement with Akebia relating to the exclusive worldwide license to Akebia of our rights to the development, manufacture, medical affairs and commercialization of pharmaceutical products containing praliciguat and other related products and forms thereof enumerated in such agreement. In 2021, Akebia paid a $3.0 million upfront payment to us upon signing of the license agreement.

On December 13, 2024, we announced that Cyclerion and Akebia re-negotiated a mutually beneficial amendment to Akebia's exclusive license agreement for praliciguat. Under this new license amendment, we will receivereceived $1.75 million in amendment payments, of which $1.25 million was paid in December 2024 and an additional payment of $0.5 million iswas duepaid in September 2025. In addition, Akebia is responsible for all intellectual property expenses associated with praliciguat at an earlier date than as originally agreed between the parties. On December 1, 2025, Akebia publicly announced that it has recently initiated Phase 2 clinical trials for the treatment of focal segmental glomerulosclerosis (“FSGS”) using Praliciguat. Pursuant to the terms of amendment, upon initiation (defined as first patient dosed) of a Phase 2 clinical trial in the U.S. for a product, a $1.0 million development milestone payment would be due to us and the payment was received in February 2026. We are eligible to receive additional milestone cash payments of up to approximately $558.5$557.5 million in total related to potential future development, regulatory, and commercialization milestone payments for praliciguat. In exchange for a reduction in certain development milestone payments, we are eligible to receive certain higher-tiered sales-based royalties ranging from mid-single-digits to twenty percent. In 2021, Akebia paid a $3.0 million upfront payment to us upon signing of the Akebia License Agreement, and subsequently paid us an additional $1.25 million in December 2024 and is obligated to pay us an additional $0.5 million in September 2025.

Olinciguat is a Phase 2, orally administered, once-daily, vascular sGC stimulator. On July 22, 2024, we entered into an Option to License Agreement (the “Option Agreement”) with a third party (the “Optionee”), pursuant to which the Optionee hashad an option (the “Option”) to enter into an exclusive license to olinciguat for human therapeutics, subject to certain carveouts. Under the terms of the Option Agreement, the Optionee paid us an Option fee of $150,000 in August 2024.2024 and subsequent fees totaling $80,000 to extend the term of the Option Agreement. The Optionee mayoriginally could exercise the Option on or before March 20, 2025, which mayoption beperiod was ultimately extended forthrough August 22, 2025. Thereafter, the parties had an additional two-month60 perioddays forto annegotiate additionalthe feeterms of $25,000. If the Optionee exercises the Option during the Option Period, the Parties shall promptly commence negotiations of thea definitive license agreement. The parties were unable to agree upon the terms of thea license agreement willand bewe negotiatedwere inprovided goodnotice faithon withinOctober a23, period2025 notthat toit exceedwas 90 days after the date of exercise of the Option. If the parties cannot reach agreement, all rights revert to us. In addition, the Optionee has agreed to reimburse us for certain patent expenses incurred duringterminating the Option period.Agreement. We are currently exploring potential license opportunities for olinciguat.

Revenues.Revenue from option agreement. On July 22, 2024, we entered into the Option Agreement with the Optionee, under which the Optionee hashad the Option to enter into an exclusive license to olinciguat for human therapeutics, subject to certain carveouts. We recognized revenue of $0.2 million related to the Option fee payment and expense reimbursement during the year ended December 31, 2024.2024 On December 13, 2024,and we enteredrecognized intorevenue of $0.3 million related to the AmendmentOption withextension Akebiafee, amendment fee and anexpense amendment providing for payments aggregating $1.75 million all of which was recognized in revenuereimbursement during the year ended December 31, 2024. $1.25 million of this amount was paid in December 2024 and the remaining $0.5 million is payable in September 2025.

Research and development expenses. The decreaseincrease in research and development expenses of approximately $1.2$0.7 million for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 was driven by decreasesan increase of approximately $0.5 million in employee-related expenses primarily due to the workforce reduction in 2023, approximately $0.2 million in information technology services savings, approximately $0.1 million in license fees, $0.6 million in professional consulting to support the research studyand costdevelopment savings,efforts approximatelyrelated to CYC-126, and $0.1 million in reduced outside service fees, approximatelyoffset $0.2by milliona indecrease lab equipment and service savings and approximatelyof $0.1 million in labstock spacecompensation rent.expenses.

GainGeneral fromand discontinuedadministrative operations.expenses. The decreaseincrease in gaingeneral fromand discontinuedadministrative operationsexpenses of approximately $7.3$0.7 million for the year ended December 31, 20242025 compared to the year ended December 31, 2023,2024 was primarily driven by thean saleincrease of Transferred$0.8 Assetsmillion in Julyprofessional 2023.consulting, After$0.1 themillion salein outside service fee and $0.7 million in corporate legal fees, offset by a decrease of Transferred$0.3 Assets, no discontinued operation was recognizedmillion in thepatent statementfees, of$0.2 operationsmillion in insurance expense, $0.1 million in board member fees and comprehensive$0.3 loss.million in employee-related expenses.

Interest and other income, net. Interest and other income decreased by approximately $0.2$0.1 million for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 primarily attributable to the decreasereduction in ourinterest money market fund balance.rates.

On February 4, 2025, we filed a Registration Statement on Form S-3 (the “2025 Shelf”) with the securities and Exchange Commission (the “SEC”) in relation to the registration of common stock, preferred stock, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $25.0 million. The amount we can sell in any twelve-month period under the 2025 Shelf, which was declared effective in February 2025, cannot exceed one-third of the value of our public float.

You should carefully review and consider the information regarding certain factors which could materially affect our business, financial condition or future results set forth under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.2025 and Part 1, Item 1A of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026. There have been no material changes in our risk factors since our AnnualQuarterly Report on Form 10-K10-Q for the yearfiscal quarter ended DecemberMarch 31, 2025, except as set forth below:2026.

Based on Cyclerion’s capitalization as of December 31, 2025 and Korsana’s capitalization as of MarchJune 31,30, 2026 and assuming Cyclerion’s net cash as of closing being equal to $0,$(2.5) million, each share of Korsana Common Stock and Korsana Series A Preferred Stock is currently estimated to be entitled to receive approximately 1.10091.4735 shares of Cyclerion Common Stock. Each share of Korsana Series Seed Preferred Stock will be converted into the right to receive a number of shares of Cyclerion Series B Preferred Stock, equal to the Exchange Ratio divided by 1,000. The estimated Exchange Ratio does not give effect to the proposed Cyclerion reverse stock split and is subject to adjustment based on Cyclerion’s estimated net cash at the closing of the First Merger.

Based on its current operating plan, Cyclerion expects that its current cash and cash equivalents will fund its operationsoperating expenses until the closing of the contemplated Merger, which is subject to approval by its shareholders and the shareholders of Korsana and other customary closing conditions; however, Cyclerion has based this estimate on assumptions that may prove to be wrong, and Cyclerion could use its capital resources sooner than Cyclerion expects.

The following table summarizes our research and development expenses, employee and facility related costs allocated to research and development expense, and discovery and pre-clinical phase programs, for the three and six months ended MarchJune 31,30, 2026 and 2025. The product pipeline expenses relate primarily to external costs associated with nonclinical studies.

Revenue from option agreement. On July 22, 2024, we entered into the Option Agreement with the Optionee, which the Optionee had the Option to enter into an exclusive license to olinciguat for human therapeutics, subject to certain carveouts. We recognized revenue of $0.1 million and $0.2 million related to the Option extension fee and expense reimbursement during the three and six months ended MarchJune 31,30, 2025.2025, respectively. The Option Agreement was terminated in October 2025 and no revenue was recognized during the three and six months ended MarchJune 31,30, 2026.

Research and development expense. The increasedecrease in research and development expense of approximately $0.7$0.1 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, was primarily drivenour by increasestermination of approximatelyresearch $0.6and milliondevelopment efforts in professionalthe consultingfirst andhalf approximatelyof $0.1 million in license option fee.2026.

General and administrative expense. The increase in generalresearch and administrativedevelopment expensesexpense of approximately $1.0$0.6 million for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 20252025, was primarily driven by increases of approximately $0.3$0.5 million in professional consulting and $0.9 million in corporate legal fees, offset by a decrease ofapproximately $0.1 million in patentlicense feesoption and $0.1 million in insurance expense.fee.

Interest income. Interest income was not changed significantly for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025.

On MarchJune 31,30, 2026, we had approximately $2.8$1.4 million of unrestricted cash and cash equivalents. Our cash equivalents include amounts held in U.S. government money market funds. We invest cash in excess of immediate requirements in accordance with our investment policy, which requires all investments held by us to be at least “AAA” rated or equivalent, with a remaining final maturity when purchased of less than twelve months, so as to primarily achieve liquidity and capital preservation.

We have incurred recurring losses since our inception, including a net loss of $3.2$4.9 million for the threesix months ended MarchJune 31,30, 2026. In addition, as of MarchJune 31,30, 2026, we had an accumulated deficit of $274.2$276.0 million. We expect that our cash and cash equivalents as of MarchJune 31,30, 2026, will be sufficient to fund operationsour intooperating expenses through the thirdanticipated quarterclosing of 2026,the Merger, however we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern.

The following is a summary of cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:

Net cash used in operating activities of $1.0$2.6 million for the threesix months ended MarchJune 31,30, 20252026 was primarily a result of our $1.4$4.9 million net loss from operations. The net loss was offset by non-cash stock-based compensation expense of $0.1 million, a decrease in prepaidaccounts expensesreceivable of $0.2$1.0 million, a decrease in prepaid expense of $0.3 million and an increase in accounts payable of $0.1$1.1 millionmillion. andThe annet increaseloss was also adjusted by a decrease in accrued expensesresearch and otherdevelopment current liabilitiescosts of $0.1$0.2 million.

Net cash used in investment activities of $0.1 million for the threesix months ended MarchJune 31,30, 2026 was due to purchase of lab equipment acquired during the threesix months ended MarchJune 31,30, 2026. There was no investing activity in the threesix months ended MarchJune 31,30, 2025.

Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2026 of $0.8 million was due to the net proceeds received from ATM related to the issuance of 405,000 shares of our common stock under the ATM. Net cash provided by financing activities for the threesix months ended MarchJune 31,30, 2025 of $1.4$1.2 million was due to cash received from the 2025 Equity Private Placement related to issuance of 499,998 shares common stock at a purchase price of $2.75 per share.

If we are unable to complete the Merger, we expect our expenses to fluctuate as we continue to maintain out-license opportunities and potentially seek to broaden our portfolio through in-licensing of complementary assets. We expect that our cash and cash equivalents as of MarchJune 31,30, 2026, will be sufficient to fund operations through the anticipated closing date of the Merger. As a result, if we are unable to complete the Merger, we will need to obtain additional funding to sustain operations as we expect to continue to generate operating losses for the foreseeable future. Failure to obtain necessary capital when needed would likely delay development of any current or potential future product candidates, and would likely make it difficult for us to continue our operations. Because there is substantial doubt about our ability to continue as a going concern for a reasonable period of time, an investment in our common stock is highly speculative; holders of our common stock could suffer a total loss of their investment.

Because of the many risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount of our working capital requirements if the Merger is not consummated. OurIf the Merger is not consummated and if we are thereafter unable to raise additional capital, we expect we would cease operations and seek to dissolve the Corporation. In the event we were able to raise additional capital, our expenses will fluctuate, and our future funding requirements will depend on, and could increase or decrease significantly as a result of many factors, including the:

We exclude assets, liabilities or obligations pertaining to uncertain tax positions from our summary of contractual commitments and obligations as we cannot make a reliable estimate of the period of cash settlement with the respective taxing authorities. As of MarchJune 31,30, 2026, we had no uncertain tax positions.