10-Q
false--12-31us-gaap:QualifiedPlanMemberQ300017552370001755237cycn:CurrentWorkforceReductionsMembercycn:October2019WorkforceReductionPlanMember2020-01-012020-03-310001755237cycn:SecondAmendedHeadquartersLeaseMember2020-09-142020-09-150001755237us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001755237cycn:WorkforceReductionPlan2020Member2020-12-310001755237us-gaap:CommonStockMember2021-04-012021-06-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-07-012020-09-300001755237cycn:October2019WorkforceReductionPlanMember2020-01-012020-09-300001755237cycn:WorkforceReductionPlan2020Member2021-01-012021-09-300001755237us-gaap:PrivatePlacementMember2020-07-292020-07-2900017552372020-03-310001755237us-gaap:PrivatePlacementMember2021-06-032021-06-030001755237us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-04-012020-06-300001755237cycn:AkebiaResearchLicenseAgreementMember2021-06-032021-06-030001755237us-gaap:OfficeEquipmentMember2020-12-310001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-06-300001755237cycn:CyclerionGmbhMember2019-05-0300017552372021-09-300001755237srt:MinimumMember2021-01-012021-09-300001755237us-gaap:EmployeeStockOptionMember2020-01-012020-12-310001755237us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001755237cycn:JefferiesLLCMembercycn:AtTheMarketOfferingMember2021-01-012021-09-300001755237us-gaap:AdditionalPaidInCapitalMember2020-09-300001755237cycn:AmendedHeadquartersLeaseMember2020-02-272020-02-280001755237us-gaap:CommonStockMember2020-07-012020-09-300001755237cycn:AmendedHeadquartersLeaseMember2020-02-280001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-09-300001755237us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-12-3100017552372020-12-3100017552372021-04-012021-06-300001755237us-gaap:RetainedEarningsMember2021-01-012021-03-310001755237us-gaap:GrantMember2021-01-012021-09-300001755237us-gaap:FairValueMeasurementsRecurringMember2021-09-3000017552372019-04-012019-04-010001755237us-gaap:AdditionalPaidInCapitalMember2020-06-300001755237us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-09-300001755237us-gaap:PerformanceSharesMember2021-01-012021-09-3000017552372020-09-150001755237us-gaap:RetainedEarningsMember2021-09-3000017552372020-01-012020-09-300001755237cycn:October2019WorkforceReductionPlanMember2020-09-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-04-012021-06-300001755237us-gaap:PrivatePlacementMember2021-01-012021-09-300001755237us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001755237cycn:DevelopmentAgreementMembercycn:IronwoodPharmaceuticalsIncMember2020-01-012020-09-3000017552372021-06-300001755237cycn:HeadquartersLeaseMember2021-01-012021-09-300001755237us-gaap:RetainedEarningsMember2020-01-012020-03-310001755237us-gaap:FairValueMeasurementsRecurringMember2020-12-310001755237us-gaap:AdditionalPaidInCapitalMember2021-06-300001755237us-gaap:CommonStockMember2021-09-300001755237us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001755237us-gaap:CommonStockMember2020-09-300001755237cycn:October2019WorkforceReductionPlanMember2021-09-300001755237us-gaap:LeaseholdImprovementsMember2021-09-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-07-012021-09-300001755237us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001755237cycn:October2019WorkforceReductionPlanMember2019-12-310001755237us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001755237us-gaap:CommonStockMember2020-12-310001755237us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001755237cycn:TerminationAgreementMember2021-04-302021-04-300001755237cycn:SecondAmendedHeadquartersLeaseMember2020-09-150001755237cycn:CurrentWorkforceReductionsMembercycn:November2020WorkforceReductionPlanMember2020-10-012020-12-310001755237us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001755237us-gaap:AdditionalPaidInCapitalMember2020-12-3100017552372021-07-012021-09-300001755237us-gaap:IPOMember2020-07-240001755237us-gaap:RetainedEarningsMember2020-04-012020-06-300001755237us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001755237srt:MinimumMemberus-gaap:PerformanceSharesMember2021-01-012021-09-3000017552372020-01-012020-03-310001755237us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001755237us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001755237us-gaap:CommonStockMember2020-06-300001755237cycn:SubleaseTerminationAgreementMember2021-01-012021-09-300001755237us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-03-310001755237us-gaap:AdditionalPaidInCapitalMember2020-03-310001755237us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300001755237us-gaap:CommonStockMember2020-01-012020-03-310001755237cycn:AmendedHeadquartersLeaseMember2020-01-012020-12-310001755237us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001755237us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-3100017552372021-07-012022-12-310001755237cycn:SecondAmendedHeadquartersLeaseMember2021-01-012021-09-300001755237us-gaap:AdditionalPaidInCapitalMember2021-03-310001755237us-gaap:CommonStockMember2021-07-012021-09-300001755237us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-12-310001755237cycn:SecondAmendedHeadquartersLeaseMember2021-07-012021-09-300001755237us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001755237us-gaap:RetainedEarningsMember2021-03-310001755237cycn:TerminationAgreementMember2021-04-300001755237us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001755237cycn:CurrentWorkforceReductionsMembercycn:October2019WorkforceReductionPlanMember2019-01-012019-12-310001755237us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-3000017552372020-06-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-09-300001755237cycn:SecondAmendedHeadquartersLeaseMember2021-09-300001755237cycn:CurrentWorkforceReductionsMembercycn:October2019WorkforceReductionPlanMember2019-10-292019-10-300001755237us-gaap:RetainedEarningsMember2020-12-310001755237us-gaap:CommonStockMember2021-01-012021-03-310001755237us-gaap:RetainedEarningsMember2020-06-300001755237cycn:CurrentWorkforceReductionsMembercycn:November2020WorkforceReductionPlanMember2020-11-042020-11-050001755237cycn:SecondAmendedHeadquartersLeaseMember2020-01-012020-09-300001755237us-gaap:GeneralAndAdministrativeExpenseMember2020-07-012020-09-300001755237us-gaap:OfficeEquipmentMember2021-09-300001755237us-gaap:CommonStockMember2019-12-310001755237cycn:SecondAmendedHeadquartersLeaseMember2020-12-310001755237cycn:DevelopmentAgreementMembercycn:IronwoodPharmaceuticalsIncMember2020-07-012020-09-300001755237us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001755237us-gaap:AdditionalPaidInCapitalMember2019-12-310001755237us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001755237us-gaap:AdditionalPaidInCapitalMember2021-09-300001755237cycn:AkebiaResearchLicenseAgreementMembersrt:ScenarioForecastMember2021-10-012023-03-3100017552372020-04-012020-06-300001755237us-gaap:EmployeeStockOptionMember2021-09-300001755237us-gaap:EmployeeStockOptionMember2020-12-310001755237us-gaap:RetainedEarningsMember2021-04-012021-06-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-06-300001755237srt:MaximumMemberus-gaap:PerformanceSharesMember2021-01-012021-09-300001755237us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-09-300001755237us-gaap:RetainedEarningsMember2020-09-300001755237us-gaap:RetainedEarningsMember2020-07-012020-09-3000017552372021-01-012021-09-300001755237us-gaap:PerformanceSharesMember2020-07-012020-09-300001755237cycn:HeadquartersLeaseMember2019-04-012019-04-010001755237us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001755237us-gaap:SubsequentEventMember2021-11-012021-11-300001755237us-gaap:CommonStockMember2021-06-3000017552372021-03-310001755237us-gaap:RestrictedStockUnitsRSUMember2020-12-310001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2019-12-310001755237srt:MaximumMember2021-01-012021-09-3000017552372021-11-050001755237us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300001755237us-gaap:PerformanceSharesMember2020-01-012020-09-3000017552372019-12-310001755237us-gaap:RetainedEarningsMember2021-06-300001755237cycn:HeadquartersLeaseMember2021-07-012021-09-300001755237cycn:HeadquartersLeaseMember2019-10-180001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2021-03-310001755237us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001755237cycn:SubleaseTerminationAgreementMember2021-09-300001755237cycn:SecondAmendedHeadquartersLeaseMember2020-07-012020-09-300001755237us-gaap:RestrictedStockUnitsRSUMember2021-09-300001755237us-gaap:CommonStockMember2020-03-310001755237us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001755237cycn:HeadquartersLeaseMember2019-04-010001755237us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001755237cycn:SecondAmendedHeadquartersLeaseMember2020-01-012020-12-310001755237us-gaap:RetainedEarningsMember2021-07-012021-09-3000017552372021-01-012021-03-310001755237us-gaap:PerformanceSharesMember2021-07-012021-09-300001755237us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001755237us-gaap:RetainedEarningsMember2019-12-3100017552372020-09-300001755237cycn:WorkforceReductionPlan2020Member2021-09-3000017552372020-07-012020-09-300001755237us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember2020-01-012020-03-310001755237us-gaap:LeaseholdImprovementsMember2020-12-310001755237us-gaap:CommonStockMember2021-03-310001755237us-gaap:CommonStockMember2020-04-012020-06-300001755237srt:MaximumMembercycn:JefferiesLLCMembercycn:AtTheMarketOfferingMember2020-09-032020-09-030001755237us-gaap:RetainedEarningsMember2020-03-310001755237cycn:JefferiesLLCMembercycn:AtTheMarketOfferingMember2020-09-032020-09-030001755237cycn:CyclerionSecuritiesCorporationMember2019-11-150001755237cycn:HeadquartersLeaseMember2019-10-172019-10-18cycn:Employeescycn:Itemxbrli:pureutr:sqftcycn:TradingDayxbrli:sharesiso4217:USDxbrli:sharescycn:Employeeiso4217:USD

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

 

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2021

or

 

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

Commission File Number 001-38787

CYCLERION THERAPEUTICS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Massachusetts
(State or other jurisdiction of
incorporation or organization)

 

83-1895370
(I.R.S. Employer
Identification No.)

 

 

 

245 First Street, 18th Floor, Cambridge, Massachusetts
(Address of principal executive offices)

 

02142
(Zip Code)

 

(857) 327-8778

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, no par value

 

CYCN

 

The Nasdaq Stock Market LLC
(Nasdaq Global Select Market)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

 

Accelerated filer ☐

 

 

 

Non-accelerated filer ☒

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒

As of November 5, 2021, the registrant had 43,315,745 shares of common stock, no par value, outstanding.

 


 

CYCLERION PHARMACEUTICALS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

 

 

 

Page

 

PART I — FINANCIAL INFORMATION

 

Item 1.

Financial Statements (unaudited)

5

 

Condensed Consolidated Balance Sheets as of September 30, 2021, and December 31, 2020

5

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for Three and Nine Months Ended September 30, 2021, and 2020

6

 

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for Three and Nine Months Ended September 30, 2021, and 2020

7

 

Condensed Consolidated Statements of Cash Flows for Three and Nine Months Ended September 30, 2021, and 2020

9

 

Notes to the Condensed Consolidated Financial Statements

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

31

Item 4.

Controls and Procedures

31

 

 

 

 

PART II — OTHER INFORMATION

 

Item 1.

Legal Proceedings

32

Item 1A.

Risk Factors

32

Item 5.

Other Information

32

Item 6.

Exhibits

32

 

Signatures

34

 

 

 

 


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. All statements in this report, other than statements of historical facts, including statements about future events, financing plans, financial position, business strategy, budgets, projected costs, plans and objectives of management for future operations, are forward-looking statements that involve certain risks and uncertainties. Use of the words “may,” “might,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal” or the negative of those words or other similar expressions may identify forward-looking statements that represent our current judgment about possible future events, but the absence of these words does not necessarily mean that a statement is not forward-looking.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national, or global political, economic, business, competitive, market and regulatory conditions and the following:

the timing, investment and associated activities involved in developing, obtaining regulatory approval for, launching and commercializing our product candidates, including CY6463;
the coronavirus (“COVID-19”) pandemic affecting our clinical trials and other operating activities;
our relationships with third parties, collaborators and our employees;
our ability to execute our strategic priorities;
our ability to finance our operations and business initiatives;
the success of collaboration or license arrangements of our product candidates;
whether the praliciguat out-license will result in the creation of any therapies for the treatment of patients with kidney disease;
whether any development, regulatory, and commercialization milestones or royalty payments provided for in the agreement with Akebia (as defined below) will be achieved;
the impact on our business of workforce and expense reduction initiatives;
our plans with respect to the development, manufacture or sale of our product candidates and the associated timing thereof, including the design and results of pre-clinical and clinical studies;
the safety profile and related adverse events of our product candidates;
the efficacy and perceived therapeutic benefits of our product candidates, their potential indications and their market potential;
U.S. and non-U.S. regulatory requirements for our product candidates, including any post-approval development and regulatory requirements, and the ability of our product candidates to meet such requirements;
our ability to attract and retain employees needed to execute our business plans and strategies and our ability to manage the impact of any loss of key employees;
our ability to obtain and maintain intellectual property protection for our product candidates and the strength thereof;

 

3


 

our future financial performance, revenues, expense levels, payments, cash flows, profitability, tax obligations, capital raising and liquidity sources, real estate needs and concentration of voting control, as well as the timing and drivers thereof, and internal control over financial reporting;
our ability to compete with other companies that are or may be developing or selling products that are competitive with our product candidates;
the impact of government regulation in the life sciences industry, particularly with respect to healthcare reform;
potential indemnification liabilities we may owe to Ironwood after the Separation (as defined below); and
trends and challenges in the markets for our potential products.

See the “Risk Factors” section in Item 1A of our annual report on Form 10-K for the fiscal year ended December 31, 2020, and elsewhere in this Quarterly Report on Form 10-Q for a further description of these and other factors. We caution you that the risks, uncertainties, and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits, or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. All forward-looking statements in this report apply only as of the date of this report or as of the date they were made and, except as required by applicable law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise.

 

4


 

Cyclerion Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(In thousands except share and per share data)

(Unaudited)

 

 

 

September 30,
2021

 

 

December 31,
2020

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

62,503

 

 

$

54,395

 

Accounts receivable

 

 

158

 

 

 

 

Related party accounts receivable

 

 

 

 

 

127

 

Prepaid expenses

 

 

562

 

 

 

816

 

Other current assets

 

 

459

 

 

 

3,163

 

Total current assets

 

 

63,682

 

 

 

58,501

 

Restricted cash, net of current portion

 

 

 

 

 

3,837

 

Property and equipment, net

 

 

112

 

 

 

6,865

 

Operating lease right-of-use asset

 

 

1,449

 

 

 

43,402

 

Other assets

 

 

2,499

 

 

 

2,773

 

Total assets

 

$

67,742

 

 

$

115,378

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,174

 

 

$

1,149

 

Related party accounts payable

 

 

 

 

 

286

 

Accrued research and development costs

 

 

3,432

 

 

 

1,421

 

Accrued expenses and other current liabilities

 

 

3,240

 

 

 

7,294

 

Short-term note payable

 

 

3,509

 

 

 

3,509

 

Current portion of operating lease liabilities

 

 

 

 

 

3,293

 

Total current liabilities

 

 

11,355

 

 

 

16,952

 

Operating lease liabilities, net of current portion

 

 

 

 

 

38,933

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

Common stock, no par value, 400,000,000 shares authorized and 43,310,089 issued and outstanding at September 30, 2021 and 400,000,000 shares authorized and 34,047,300 issued and outstanding at December 31, 2020

 

 

 

 

 

 

Accumulated deficit

 

 

(204,300

)

 

 

(163,429

)

Paid-in capital

 

 

260,713

 

 

 

222,949

 

Accumulated other comprehensive loss

 

 

(26

)

 

 

(27

)

Total stockholders' equity

 

 

56,387

 

 

 

59,493

 

Total liabilities and stockholders' equity

 

$

67,742

 

 

$

115,378

 

 

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

 

5


 

Cyclerion Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands except per share data)

(Unaudited)

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from license agreement

 

$

0

 

 

$

 

 

$

3,000

 

 

$

 

Revenue from development agreement

 

 

77

 

 

 

 

 

 

138

 

 

 

 

Revenue from related party

 

 

 

 

 

400

 

 

 

 

 

 

2,163

 

Revenue from grants

 

 

271

 

 

 

 

 

 

271

 

 

 

 

Total revenues

 

 

348

 

 

 

400

 

 

 

3,409

 

 

 

2,163

 

Cost and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

7,032

 

 

 

13,703

 

 

 

27,178

 

 

 

44,322

 

General and administrative

 

 

4,601

 

 

 

8,033

 

 

 

16,207

 

 

 

21,551

 

(Gain) / loss on lease modification and termination

 

 

 

 

 

444

 

 

 

881

 

 

 

(1,669

)

Total cost and expenses

 

 

11,633

 

 

 

22,180

 

 

 

44,266

 

 

 

64,204

 

Loss from operations

 

 

(11,285

)

 

 

(21,780

)

 

 

(40,857

)

 

 

(62,041

)

Sublease termination income, net

 

 

 

 

 

2,875

 

 

 

 

 

 

2,875

 

Interest and other income (expenses), net

 

 

(5

)

 

 

93

 

 

 

(15

)

 

 

592

 

Net loss

 

$

(11,290

)

 

$

(18,812

)

 

$

(40,872

)

 

$

(58,574

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

$

(0.26

)

 

$

(0.59

)

 

$

(1.08

)

 

$

(2.01

)

Weighted average shares used in calculating:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per share

 

 

43,291

 

 

 

32,096

 

 

 

37,730

 

 

 

29,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(11,290

)

 

$

(18,812

)

 

$

(40,872

)

 

$

(58,574

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment (loss) gain

 

 

 

 

 

3

 

 

 

1

 

 

 

(7

)

Comprehensive loss

 

$

(11,290

)

 

$

(18,809

)

 

$

(40,871

)

 

$

(58,581

)

 

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

 

6


 

Cyclerion Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands except share data)

(Unaudited)

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Accumulated
other
comprehensive

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

loss

 

 

equity (deficit)

 

Balance at December 31, 2019

 

 

27,598,133

 

 

$

 

 

$

183,376

 

 

$

(85,627

)

 

$

(20

)

 

$

97,729

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(20,228

)

 

 

 

 

 

(20,228

)

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

 

 

156,761

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

1

 

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

 

 

 

 

 

 

 

 

4,036

 

 

 

 

 

 

 

 

 

4,036

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

2

 

Balance at March 31, 2020

 

 

27,754,894

 

 

$

 

 

$

187,413

 

 

$

(105,855

)

 

$

(18

)

 

$

81,540

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(19,534

)

 

 

 

 

 

(19,534

)

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

 

 

102,816

 

 

 

 

 

 

155

 

 

 

 

 

 

 

 

 

155

 

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

 

 

 

 

 

 

 

 

3,952

 

 

 

 

 

 

 

 

 

3,952

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12

)

 

 

(12

)

Balance at June 30, 2020

 

 

27,857,710

 

 

$

 

 

$

191,520

 

 

$

(125,389

)

 

$

(30

)

 

$

66,101

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(18,812

)

 

 

 

 

 

(18,812

)

Issuance of common stock - 2020 private placement

 

 

6,062,500

 

 

 

 

 

 

24,250

 

 

 

 

 

 

 

 

 

24,250

 

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

 

 

41,345

 

 

 

 

 

 

16

 

 

 

 

 

 

 

 

 

16

 

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

 

 

 

 

 

 

 

 

3,796

 

 

 

 

 

 

 

 

 

3,796

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

3

 

Balance at September 30, 2020

 

 

33,961,555

 

 

$

 

 

$

219,582

 

 

$

(144,201

)

 

$

(27

)

 

$

75,354

 

 

 

7


 

Cyclerion Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(In thousands except share data)

(Unaudited)

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Accumulated
other
comprehensive

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

loss

 

 

equity (deficit)

 

Balance at December 31, 2020

 

 

34,047,300

 

 

$

 

 

$

222,949

 

 

$

(163,429

)

 

$

(27

)

 

$

59,493

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(13,399

)

 

 

 

 

 

(13,399

)

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

 

 

82,625

 

 

 

 

 

 

27

 

 

 

 

 

 

 

 

 

27

 

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

 

 

 

 

 

 

 

 

1,921

 

 

 

 

 

 

 

 

 

1,921

 

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

 

 

 

 

 

 

 

 

391

 

 

 

 

 

 

 

 

 

391

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2021

 

 

34,129,925

 

 

$

 

 

$

225,288

 

 

$

(176,828

)

 

$

(27

)

 

$

48,433

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(16,182

)

 

 

 

 

 

(16,182

)

Issuance of common stock - June 2021 equity private placement and ATM

 

 

9,087,547

 

 

 

 

 

 

30,497

 

 

 

 

 

 

 

 

 

30,497

 

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

 

 

57,777

 

 

 

 

 

 

133

 

 

 

 

 

 

 

 

 

133

 

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

 

 

 

 

 

 

 

 

1,942

 

 

 

 

 

 

 

 

 

1,942

 

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

 

 

 

 

 

 

 

 

398

 

 

 

 

 

 

 

 

 

398

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

1

 

Balance at June 30, 2021

 

 

43,275,249

 

 

$

 

 

$

258,258

 

 

$

(193,010

)

 

$

(26

)

 

$

65,222

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(11,290

)

 

 

 

 

 

(11,290

)

Issuance of common stock - ATM

 

 

1,500

 

 

 

 

 

 

6

 

 

 

 

 

 

 

 

 

6

 

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

 

 

33,340

 

 

 

 

 

 

37

 

 

 

 

 

 

 

 

 

37

 

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

 

 

 

 

 

 

 

 

2,018

 

 

 

 

 

 

 

 

 

2,018

 

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

 

 

 

 

 

 

 

 

394

 

 

 

 

 

 

 

 

 

394

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2021

 

 

43,310,089

 

 

$

 

 

$

260,713

 

 

$

(204,300

)

 

$

(26

)

 

$

56,387

 

 

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

 

8


 

Cyclerion Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended
September 30,

 

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(40,872

)

 

$

(58,574

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

424

 

 

 

1,827

 

Net loss on disposal of property and equipment

 

 

6,322

 

 

 

205

 

(Gain) / loss on lease modification and termination

 

 

881

 

 

 

(1,669

)

Sublease termination income, net

 

 

 

 

 

(2,875

)

Share-based compensation expense

 

 

7,064

 

 

 

11,785

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(158

)

 

 

 

Related party accounts receivable

 

 

127

 

 

 

1,074

 

Prepaid expenses

 

 

254

 

 

 

748

 

Other current assets

 

 

1,254

 

 

 

(8

)

Operating lease assets

 

 

(105

)

 

 

(3,592

)

Other assets

 

 

274

 

 

 

(979

)

Accounts payable

 

 

25

 

 

 

(1,094

)

Related party accounts payable

 

 

(286

)

 

 

414

 

Accrued research and development costs

 

 

2,011

 

 

 

(38

)

Operating lease liabilities

 

 

(1,048

)

 

 

(2,000

)

Accrued expenses and other current liabilities

 

 

(4,054

)

 

 

(3,673

)

Net cash (used in) operating activities

 

 

(27,887

)

 

 

(58,449

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(7

)

 

 

(1,489