0000950170-22-001958 | 10-K | XBRL Viewer | Cyclerion Therapeutics INC

Nature of Business	12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	1. Nature of Business Nature of Operations Cyclerion Therapeutics, Inc. (“Cyclerion”, the “Company” or “we”) is a clinical-stage biopharmaceutical company on a mission to develop treatments that restore cognitive function. Our lead asset, CY6463, is a pioneering, central nervous system (CNS) penetrant, soluble guanylate cyclase (sGC) stimulator that is currently in clinical development for Alzheimer's disease with vascular pathology (ADv), cognitive impairment associated with schizophrenia (CIAS), and Mitochondrial Encephalomyopathy, Lactic Acidosis and Stroke-like episodes (MELAS). sGC stimulators are small molecules that act synergistically with nitric oxide (NO) as positive allosteric modulators of sGC to boost production of cyclic guanosine monophosphate (cGMP). cGMP is a key second messenger that, when produced by sGC, regulates diverse and critical biological functions in the CNS including neuronal function, neuroinflammation, cellular bioenergetics, and vascular function. Cyclerion GmbH, a wholly owned subsidiary, was incorporated in Zug, Switzerland on May 3, 2019. Cyclerion GmbH is an operational entity with one employee who is the Company’s Chief Scientific Officer. The functional currency is the Swiss franc. Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts for the 2019 tax year. Cyclerion Securities Corporation has no employees. Company Overview The Company’s mission is to develop treatments that restore cognitive function. Its priorities are advancing its ongoing CY6463 clinical programs and next generation compound, CY3018. CNS assets. CY6463 is an orally administered CNS-penetrant sGC stimulator that is being developed as a symptomatic and potentially disease-modifying therapy for serious CNS diseases. NO-sGC-cGMP is a fundamental CNS signaling network, but it has not yet been leveraged for its full therapeutic potential. CY6463 enhances the brain’s natural ability to produce cGMP, an important second messenger in the CNS, by stimulating sGC, a key node in the NO-sGC-cGMP pathway. This pathway is critical to basic CNS functions and deficient NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of neurodegenerative diseases. Agents that stimulate sGC to produce cGMP may compensate for deficient NO signaling. On January 13, 2020, we announced positive results from our Phase 1 first-in-human study that provided the foundation for continued development of CY6463. The Phase 1 healthy participant study results indicate that CY6463 was well tolerated. Pharmacokinetic (PK) data, obtained from both blood and cerebral spinal fluid (CSF), support once-daily dosing, with or without food, and demonstrated CY6463 penetration of the blood-brain-barrier with CSF concentrations expected to be pharmacologically active. On October 14, 2020, we announced positive topline results from our CY6463 Phase 1 translational pharmacology study in healthy elderly participants. Treatment with CY6463 for 15 days in this 24-subject study confirmed and extended results seen in the earlier first-in-human Phase 1 study: once daily oral treatment demonstrated blood-brain-barrier penetration with expected CNS exposure and target engagement. Results also showed significant improvements in neurophysiological and objective performance measures as well as in inflammatory biomarkers associated with aging and neurodegenerative diseases. CY6463 was shown to be safe and generally well tolerated. Significant effects on cerebral blood flow and markers of bioenergetics were not observed in this study of healthy elderly participants. We believe that these results, together with nonclinical data, support continued development of CY6463 as a potential new medicine for serious CNS diseases. We have initiated exploratory clinical trials with CY6463 ADv, CIAS, and MELAS. The ADv study will be supported in part by a grant from the Alzheimer’s Association’s Part the Cloud-Gates Partnership Grant Program, which provides Cyclerion with $2 million of funding over two years. Our next generation CNS asset, CY3018, is a differentiated CNS-penetrant sGC stimulator with greater CSF-to-plasma exposure relative to CY6463. CY3018 is intended to expand the potential of sGC stimulation for the treatment of disorders of the CNS. Non-CNS assets. We have other assets that are outside of our current strategic focus. These non-core assets are not being internally developed at this time. 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 the pharmaceutical compound praliciguat and other related products and forms thereof enumerated in such agreement. Olinciguat is an orally administered, once-daily, vascular sGC stimulator that was evaluated in a Phase 2 study of participants with sickle cell disease. We released topline results from this study in October 2020. Olinciguat is available for licensing to a third party partner. The Separation On April 1, 2019, Ironwood completed the separation of its sGC business, and certain other assets and liabilities, into a separate, independent publicly traded company by way of a pro-rata distribution of all of the outstanding shares of common stock of Cyclerion Therapeutics, Inc. through a dividend distribution of one share of the Company’s common stock, with no par value per share, for every 10 shares of Ironwood common stock held by Ironwood stockholders as of the close of business on March 19, 2019, the record date for the Distribution (the entire transaction being the “Separation”). As a result of the Separation, the Company became an independent public company and commenced trading under the symbol “CYCN” on the Nasdaq Global Select Market on April 2, 2019. 2020 Equity Private Placement On July 29, 2020, the Company entered into a Common Stock Purchase Agreement (the “2020 Equity Private Placement”) for the private placement of 6,062,500 shares of the Company’s common stock, for total gross proceeds of approximately $24.3 million. The closing of the 2020 Equity Private Placement occurred on July 29, 2020. The Company did not utilize the services of a placement agent or broker and accordingly incurred no material related transaction fees, or commissions. 2021 Equity Private Placement On June 3, 2021, the Company entered into a Common Stock Purchase Agreement (the “June 2021 Equity Private Placement”) for the private placement of 5,735,988 shares of the Company’s common stock, for total gross proceeds of approximately $18 million. The closing of the June 2021 Equity Private Placement occurred on June 7, 2021. The Company did not utilize the services of a placement agent or broker and accordingly incurred no material related transaction fees or commissions. At-the-Market Offering On July 24, 2020, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (the “SEC”) in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $150.0 million. The Shelf was declared effective as of July 31, 2020. On September 3, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market offering (the “ATM Offering”) under the Shelf. Under the ATM Offering, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $50.0 million through Jefferies as its sales agent. The Company will pay to Jefferies cash commissions of 3.0 percent of the gross proceeds of sales of common stock under the Sales Agreement. During the year ended December 31, 2021, the Company sold 3,353,059 shares of its common stock for net proceeds of $12.5 million under the ATM Offering, after deducting commissions paid to Jefferies of approximately $0.4 million. Basis of Presentation The consolidated financial statements and the related disclosures have been prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, the consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and the results of its operations for the fiscal years presented. The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, Cyclerion GmbH, and Cyclerion Securities Corporation. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements. Going Concern At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. The Company has experienced negative operating cash flows for all historical periods presented and the Company expects these losses to continue into the foreseeable future as the Company continues the development and clinical testing of its product candidates CY6463, CY3018 and its discovery research programs. Through December 31, 2021, the Company had raised an aggregate of $219.8 million (in net proceeds) from equity private placements and the ATM Offering. After considering the Company’s current research and development plans and the timing expectations related to the progress of its programs, and after considering its existing cash and cash equivalents of $54.0 million as of December 31, 2021, the Company did not identify conditions or events that would raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements were issued.

Nature of Business

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

1. Nature of Business

Nature of Operations

Cyclerion Therapeutics, Inc. (“Cyclerion”, the “Company” or “we”) is a clinical-stage biopharmaceutical company on a mission to develop treatments that restore cognitive function. Our lead asset, CY6463, is a pioneering, central nervous system (CNS) penetrant, soluble guanylate cyclase (sGC) stimulator that is currently in clinical development for Alzheimer's disease with vascular pathology (ADv), cognitive impairment associated with schizophrenia (CIAS), and Mitochondrial Encephalomyopathy, Lactic Acidosis and Stroke-like episodes (MELAS). sGC stimulators are small molecules that act synergistically with nitric oxide (NO) as positive allosteric modulators of sGC to boost production of cyclic guanosine monophosphate (cGMP). cGMP is a key second messenger that, when produced by sGC, regulates diverse and critical biological functions in the CNS including neuronal function, neuroinflammation, cellular bioenergetics, and vascular function.

Cyclerion GmbH, a wholly owned subsidiary, was incorporated in Zug, Switzerland on May 3, 2019. Cyclerion GmbH is an operational entity with one employee who is the Company’s Chief Scientific Officer. The functional currency is the Swiss franc.

Cyclerion Securities Corporation, a wholly owned subsidiary, was incorporated in Massachusetts on November 15, 2019 and was granted securities corporation status in Massachusetts for the 2019 tax year. Cyclerion Securities Corporation has no employees.

Company Overview

The Company’s mission is to develop treatments that restore cognitive function. Its priorities are advancing its ongoing CY6463 clinical programs and next generation compound, CY3018.

CNS assets. CY6463 is an orally administered CNS-penetrant sGC stimulator that is being developed as a symptomatic and potentially disease-modifying therapy for serious CNS diseases. NO-sGC-cGMP is a fundamental CNS signaling network, but it has not yet been leveraged for its full therapeutic potential. CY6463 enhances the brain’s natural ability to produce cGMP, an important second messenger in the CNS, by stimulating sGC, a key node in the NO-sGC-cGMP pathway. This pathway is critical to basic CNS functions and deficient NO-sGC-cGMP signaling is believed to play an important role in the pathogenesis of neurodegenerative diseases. Agents that stimulate sGC to produce cGMP may compensate for deficient NO signaling.

On January 13, 2020, we announced positive results from our Phase 1 first-in-human study that provided the foundation for continued development of CY6463. The Phase 1 healthy participant study results indicate that CY6463 was well tolerated. Pharmacokinetic (PK) data, obtained from both blood and cerebral spinal fluid (CSF), support once-daily dosing, with or without food, and demonstrated CY6463 penetration of the blood-brain-barrier with CSF concentrations expected to be pharmacologically active.

On October 14, 2020, we announced positive topline results from our CY6463 Phase 1 translational pharmacology study in healthy elderly participants. Treatment with CY6463 for 15 days in this 24-subject study confirmed and extended results seen in the earlier first-in-human Phase 1 study: once daily oral treatment demonstrated blood-brain-barrier penetration with expected CNS exposure and target engagement. Results also showed significant improvements in neurophysiological and objective performance measures as well as in inflammatory biomarkers associated with aging and neurodegenerative diseases. CY6463 was shown to be safe and generally well tolerated. Significant effects on cerebral blood flow and markers of bioenergetics were not observed in this study of healthy elderly participants. We believe that these results, together with nonclinical data, support continued development of CY6463 as a potential new medicine for serious CNS diseases.

We have initiated exploratory clinical trials with CY6463 ADv, CIAS, and MELAS. The ADv study will be supported in part by a grant from the Alzheimer’s Association’s Part the Cloud-Gates Partnership Grant Program, which provides Cyclerion with $2 million of funding over two years.

Our next generation CNS asset, CY3018, is a differentiated CNS-penetrant sGC stimulator with greater CSF-to-plasma exposure relative to CY6463. CY3018 is intended to expand the potential of sGC stimulation for the treatment of disorders of the CNS.

Non-CNS assets. We have other assets that are outside of our current strategic focus. These non-core assets are not being internally developed at this time. 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 the pharmaceutical compound praliciguat and other related products and forms thereof enumerated in such agreement. Olinciguat is an orally administered, once-daily, vascular sGC stimulator that was evaluated in a Phase 2 study of participants with sickle cell disease. We released topline results from this study in October 2020. Olinciguat is available for licensing to a third party partner.

The Separation

On April 1, 2019, Ironwood completed the separation of its sGC business, and certain other assets and liabilities, into a separate, independent publicly traded company by way of a pro-rata distribution of all of the outstanding shares of common stock of Cyclerion Therapeutics, Inc. through a dividend distribution of one share of the Company’s common stock, with no par value per share, for every 10 shares of Ironwood common stock held by Ironwood stockholders as of the close of business on March 19, 2019, the record date for the Distribution (the entire transaction being the “Separation”). As a result of the Separation, the Company became an independent public company and commenced trading under the symbol “CYCN” on the Nasdaq Global Select Market on April 2, 2019.

2020 Equity Private Placement

On July 29, 2020, the Company entered into a Common Stock Purchase Agreement (the “2020 Equity Private Placement”) for the private placement of 6,062,500 shares of the Company’s common stock, for total gross proceeds of approximately $24.3 million. The closing of the 2020 Equity Private Placement occurred on July 29, 2020. The Company did not utilize the services of a placement agent or broker and accordingly incurred no material related transaction fees, or commissions.

2021 Equity Private Placement

On June 3, 2021, the Company entered into a Common Stock Purchase Agreement (the “June 2021 Equity Private Placement”) for the private placement of 5,735,988 shares of the Company’s common stock, for total gross proceeds of approximately $18 million. The closing of the June 2021 Equity Private Placement occurred on June 7, 2021. The Company did not utilize the services of a placement agent or broker and accordingly incurred no material related transaction fees or commissions.

At-the-Market Offering

On July 24, 2020, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (the “SEC”) in relation to the registration of common stock, preferred stock, debt securities, warrants and units of any combination thereof for an aggregate initial offering price not to exceed $150.0 million. The Shelf was declared effective as of July 31, 2020. On September 3, 2020, the Company entered into a Sales Agreement (the “Sales Agreement”) with Jefferies LLC (“Jefferies”) with respect to an at-the-market offering (the “ATM Offering”) under the Shelf. Under the ATM Offering, the Company may offer and sell, from time to time at its sole discretion, shares of its common stock, having an aggregate offering price of up to $50.0 million through Jefferies as its sales agent. The Company will pay to Jefferies cash commissions of 3.0 percent of the gross proceeds of sales of common stock under the Sales Agreement. During the year ended December 31, 2021, the Company sold 3,353,059 shares of its common stock for net proceeds of $12.5 million under the ATM Offering, after deducting commissions paid to Jefferies of approximately $0.4 million.

Basis of Presentation

The consolidated financial statements and the related disclosures have been prepared in accordance with U.S. generally accepted accounting principles. In the opinion of management, the consolidated financial statements reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position and the results of its operations for the fiscal years presented.

The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries, Cyclerion GmbH, and Cyclerion Securities Corporation. All significant intercompany accounts and transactions have been eliminated in the preparation of the accompanying consolidated financial statements.

Going Concern

At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of the Company’s cash needs and comparing those needs to the current cash and cash equivalent balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by the Company’s plans or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern.

The Company has experienced negative operating cash flows for all historical periods presented and the Company expects these losses to continue into the foreseeable future as the Company continues the development and clinical testing of its product candidates CY6463, CY3018 and its discovery research programs. Through December 31, 2021, the Company had raised an aggregate of $219.8 million (in net proceeds) from equity private placements and the ATM Offering.

After considering the Company’s current research and development plans and the timing expectations related to the progress of its programs, and after considering its existing cash and cash equivalents of $54.0 million as of December 31, 2021, the Company did not identify conditions or events that would raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date these financial statements were issued.

Consolidated and Combined Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated and combined balance sheets
Cash and cash equivalents	$ 53,961	$ 54,395
Restricted cash	0	3,837
Total cash, cash equivalents and restricted cash	$ 53,961	$ 58,232	$ 102,621

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of property and equipment, net

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


	December 31,			December 31,
	2021			2020
Software	$	2,214		$	2,214
Computer and office equipment		51			44
Leasehold improvements		—			14,894
Property and equipment, gross		2,265			17,152
Less: accumulated depreciation and amortization		(2,200	)		(10,287	)
Property and equipment, net	$	65		$	6,865

Share-based Compensation Plans - Stock Options (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Number of Options
Granted (in shares)	0	0
Weighted Average Remaining Contractual Term (years)
Granted (in shares)	0	0
Weighted average grant date fair value per option share		$ 1.97
Total intrinsic value	$ 100	$ 100
Unrecognized share-based compensation expense	$ 200,000
Expected period to recognize the expense	2 years 2 months 1 day
Assumptions used to estimate fair value of stock options
Weighted average risk-free interest rate	1.09%	0.43%
Expected dividend yield	0.00%	0.00%
Expected option term (in years)	5 years 10 months 24 days	6 years 3 months 18 days
Expected stock price volatility	85.45%	91.73%
Number of shares vested	50,000	0
Employee Stock Option Member
Number of Options
Outstanding at beginning of the year (in shares)	7,426,356
Granted (in shares)	1,176,250	1,382,846
Exercised (in shares)	(72,419)
Cancelled or forfeited (in shares)	(1,449,761)
Outstanding at end of the year (in shares)	7,080,426	7,426,356
Exercisable (in shares)	4,518,213
Weighted Average Exercise Price
Outstanding at beginning of the year (in dollars per share)	$ 11.87
Granted (in dollars per share)	2.98
Exercised (in dollars per share)	2.17
Cancelled or forfeited (in dollars per share)	10.69
Outstanding at end of the year (in dollars per share)	10.73	$ 11.87
Exercisable (in dollars per share)	$ 13.46
Weighted Average Remaining Contractual Term (years)
Weighted Average Remaining Contractual Term, Outstanding (in years)	6 years 10 months 24 days	7 years
Weighted Average Remaining Contractual Term, Exercisable (in years)	5 years 10 months 24 days
Aggregate Intrinsic Value, Outstanding	$ 0	$ 1,178,000
Aggregate Intrinsic Value, Exercisable	$ 0
Granted (in shares)	1,176,250	1,382,846
Weighted average grant date fair value per option share	$ 2.17
Total grant date fair value of options granted	$ 2,600,000	$ 2,700
Expected period to recognize the expense	3 years 3 months 14 days

Share-based Compensation Plans (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of share-based compensation expense

The following table provides share-based compensation reflected in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021		2020
Research and development	$	3,945	$	6,799
General and administrative		5,666		8,193
	$	9,611	$	14,992

Schedule of stock option activity

A summary of stock option activity for the year ended December 31, 2021 is as follows:


						Weighted
				Weighted		Average		Average
				Average		Remaining		Intrinsic
	Number			Exercise		Contractual		Value (in
	of Options			Price		Term (Years)		thousands)
Outstanding as of December 31, 2020		7,426,356		$	11.87		7.0	$	1,178
Granted		1,176,250			2.98
Exercised		(72,419	)		2.17
Cancelled or forfeited		(1,449,761	)		10.69
Outstanding as of December 31, 2021		7,080,426		$	10.73		6.9		—
Exercisable at December 31, 2021		4,518,213		$	13.46		5.9	$	—

Schedule of weighted-average assumptions used in estimating the fair value of the stock options

The weighted-average Black-Scholes assumptions used in estimating the fair value of the stock options granted by Cyclerion following the Separation during the years ended December 31, 2021 and 2020 were as follows:


	Year ended December 31,
	2021			2020
Weighted average risk-free interest rate		1.09	%		0.43	%
Expected dividend yield		—			—
Expected option term (in years)		5.9			6.3
Expected stock price volatility		85.45	%		91.73	%

Summary of stock awards containing market conditions activity

A summary of stock awards containing market conditions activity for the years ended December 31, 2021 and 2020 is as follows:


						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Number of			Exercise		Contractual		Value (in
	Options			Price		Term (years)		thousands)
Outstanding as of December 31, 2020		600,000		$	2.01	$	8.9	$	630
Granted		—			—		—		—
Exercised		—			—		—		—
Cancelled or forfeited		(150,000	)	$	—	$	—	$	—
Outstanding as of December 31, 2021		450,000		$	2.01		7.9	$	—
Exercisable at December 31, 2021		—		$	—		—	$	—

Schedule of weighted-average assumptions used in estimating the fair value of the stock awards containing market conditions

The fair value of stock options containing market conditions is estimated using Monte Carlo simulations. No stock options containing market conditions were granted during the years ended December 31, 2021 and 2020.

Summary of RSU activity

A summary of RSU activity for the years ended December 31, 2021 is as follows:


				Weighted Average
	Number			Grant Date
	of Shares			Fair Value
Unvested as of December 31, 2020		294,913		$	14.52
Granted		39,369			3.17
Vested		(143,774	)		12.01
Forfeited		(97,704	)		14.41
Unvested as of December 31, 2021		92,804		$	13.70

Related Party Transactions (Details) $ in Millions	12 Months Ended
Related Party Transactions (Details) $ in Millions	Dec. 31, 2020 USD ($)
Other Related Party Transactions
Related Party Transaction [Line Items]
Amounts due to related party	$ 0.3
Payments to provide research and development transaction support services	1.5
Ironwood \| Development agreement
Related Party Transaction [Line Items]
Revenue from related party	$ 2.3

- Definition

Carrying amount as of the balance sheet date of obligations due all related parties.

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-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives of Property and Equipment

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


Asset Description		Estimated Useful Life (In Years)
Laboratory equipment		5
Computer and office equipment		3
Furniture and fixtures		7
Software		3

Summary of Significant Accounting Policies - Revenue, Patent Costs, and Interest and Other Income (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenue
Development Agreement, initial term	2 years
Development Agreement, renewal period	1 year
Development Agreement, period for notification of cancellation	6 months
Interest and other income, net
Net sublease income		$ 0.3
Interest and other income, net
Interest and other income, net
Interest income generated form cash and cash equivalents balances		0.3
Net sublease income		$ 0.3

Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2021
Laboratory equipment
Property and Equipment
Estimated Useful Life (In Years)	5 years
Computer and office equipment
Property and Equipment
Estimated Useful Life (In Years)	3 years
Furniture and fixtures
Property and Equipment
Estimated Useful Life (In Years)	7 years
Software
Property and Equipment
Estimated Useful Life (In Years)	3 years

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

4. Fair Value of Financial Instruments

The Company’s cash equivalents are generally classified within Level 1 of the fair value hierarchy. The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values as of December 31, 2021 and December 31, 2020 (in thousands):


	Fair Value Measurements as of December 31, 2021:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	52,917	$	—	$	—	$	52,917
Cash equivalents	$	52,917	$	—	$	—	$	52,917


	Fair Value Measurements as of December 31, 2020:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	53,240	$	—	$	—	$	53,240
Cash equivalents	$	53,240	$	—	$	—	$	53,240

During the year ended December 31, 2021 and 2020, there were no transfers between levels. The fair value of the Company's cash equivalents, consisting of money market funds, is based on quoted market prices in active markets with no valuation adjustment.

The Company believes the carrying amounts of its prepaid expenses and other current assets, restricted cash, accounts payable, and accrued expenses approximate their fair value due to the short-term nature of these amounts.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Leases - Sublease as Lessee (Details)	3 Months Ended
Leases - Sublease as Lessee (Details)	Mar. 31, 2019
Leases [Abstract]
Operating sublease, option to extend	true

Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (51,647)	$ (77,802)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization	472	2,297
Net loss on disposal of property and equipment	(6,322)	(159)
(Gain) / loss on lease modification and termination	(881)	1,669
Sublease termination income, net	0	(2,875)
Gain on extinguishment of debt	3,564	0
Share-based compensation expense	9,611	14,992
Changes in operating assets and liabilities:
Accounts receivable	100	0
Related party accounts receivable	(127)	(1,346)
Prepaid expenses	112	(1,150)
Other current assets	(1,244)	55
Operating lease assets	59	2,598
Other assets	(366)	888
Accounts payable	679	(1,301)
Related party accounts payable	(286)	205
Accrued research and development costs	4,932	(776)
Accrued expenses and other current liabilities	(4,335)	(1,983)
Operating lease liabilities	(1,048)	(2,692)
Net cash (used in) operating activities	(36,517)	(72,490)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(7)	(1,524)
Proceeds from sale of property and equipment	1,464	1,542
Net cash provided by (used in) investing activities	1,457	18
Proceeds from equity private placement and ATM
Proceeds from equity private placement and ATM	30,503	24,250
Proceeds from exercises of stock options and ESPP	282	331
Proceeds from short-term note payable	0	3,509
Net cash provided by financing activities	30,785	28,090
Effect of exchange rate changes on cash, cash equivalents and restricted cash	4	(7)
Net (decrease) increase in cash, cash equivalents and restricted cash	(4,271)	(44,389)
Cash, cash equivalents and restricted cash, beginning of period	58,232	102,621
Cash, cash equivalents and restricted cash, end of period	53,961	58,232
Supplemental cash flow disclosure:
Cash paid for initial direct costs of lease modification	0	6,507
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets
Cash and cash equivalents	53,961	54,395
Restricted cash	0	3,837
Total cash, cash equivalents and restricted cash	$ 53,961	$ 58,232

Summary of Significant Accounting Policies - Segments and Cash (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 Segment	Dec. 31, 2020 USD ($)
Segment Information
Number of reportable business segment \| Segment	1
Restricted Cash
Contingent liability under an unused letter of credit, posted as a security deposit \| $		$ 3.8

Loss Per Share - Schedule Of Earnings Per Share Diluted By Common Class (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units	$ 7,623,230	$ 8,321,269
Employee Stock Option Member
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units	7,530,426	294,913
Restricted Stock Units
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Dilutive Securities, Effect on Basic Earnings Per Share, Options and Restrictive Stock Units	$ 92,804	$ 8,026,356

Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Accrued Liabilities and Other Liabilities [Abstract]

Schedule of accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	December 31,		December 31,
	2021		2020
Accrued incentive compensation	$	1,369	$	1,720
Salaries		266		514
Accrued vacation		345		555
Professional fees		398		689
Accrued severance and benefit costs		28		3,640
Other		498		176
Accrued expenses and other current liabilities	$	2,904	$	7,294

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Cyclerion Therapeutics, Inc. and its wholly owned subsidiaries, Cyclerion GmbH and Cyclerion Securities Corporation. All intercompany transactions and balances are eliminated in consolidation.

Segment Information

Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by the Company's chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company currently operates in one reportable business segment - human therapeutics.

Use of Estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of expenses during the reported periods. On an ongoing basis, the Company’s management evaluates its estimates, judgments and methodologies. Significant estimates and assumptions in the consolidated financial statements include those related to revenue, impairment of long-lived assets, valuation procedures for right-of-use

("ROU") assets and operating lease liabilities, income taxes, including the valuation allowance for deferred tax assets, research and development expenses, contingencies, share-based compensation, and going concern. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.

Cash and Cash Equivalents

Cash and Cash Equivalents including Restricted Cash

The Company considers all highly liquid investment instruments with a remaining maturity when purchased of three months or less to be cash equivalents. Investments qualifying as cash equivalents may consist of money market funds and overnight repurchase agreements. The carrying amount of cash equivalents approximates fair value.

Restricted Cash

he Company did not have any restricted cash balances. As of December 31, 2020, the Company was contingently liable under an unused letter of credit with a bank, related to the Company's facility lease, in the amount of approximately $3.8 million. The Company recorded the collateral used to secure the letter of credit as restricted cash. The full amount of restricted cash was recorded as a component of non-current assets at December 31, 2020.

Property and Equipment


Asset Description		Estimated Useful Life (In Years)
Laboratory equipment		5
Computer and office equipment		3
Furniture and fixtures		7
Software		3

Included in property and equipment are certain costs of software obtained for internal use. Costs incurred during the preliminary project stage are expensed as incurred, while costs incurred during the application development stage are capitalized and amortized over the estimated useful life of the software. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Maintenance and training costs related to software obtained for internal use are expensed as incurred.

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

Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. The Company has no capital leases.

Property and equipment that is no longer required for the business is considered disposed of when it ceases to be used. Disposals are either sold or retired and the net book value is removed from the consolidated balance sheet and a corresponding gain or loss on the sale or disposal is recognized as a component of operating expenses in the consolidated statements of operations and comprehensive loss.

Fair Value of Investment Instruments

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must

maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•

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

•

Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Foreign Currency Translation Adjustment

The functional currency of the Company’s foreign subsidiary is its local currency, the Swiss franc. The assets and liabilities of the Company’s foreign subsidiary are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for the Company’s foreign subsidiary is included as a foreign currency translation adjustment in the consolidated statements of stockholders’ equity and as a component of comprehensive loss in the consolidated statements of operations and comprehensive loss.

The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the re-measurement of intercompany balances are recorded in the consolidated statements of operations.

Accounts Receivable

The Company makes judgments as to its ability to collect outstanding receivables and provides an allowance for receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. The Company’s receivables primarily relate to amounts earned under a development agreement with Ironwood, licensing agreement, and supply agreement. The Company believes that credit risks associated with these agreements are not significant. To date, the Company has not had significant write-offs of bad debt and the Company did not have an allowance for doubtful accounts as of December 31, 2021 or 2020.

Impairment of Long-Lived Assets

The Company regularly reviews the carrying amount of its long-lived assets to determine whether indicators of impairment may exist, which warrant adjustments to carrying values or estimated useful lives. If indications of impairment exist, projected future undiscounted cash flows associated with the asset are compared to the carrying amount to determine whether the asset’s value is recoverable. If the carrying value of the asset exceeds such projected undiscounted cash flows, the asset will be written down to its estimated fair value. There were no significant impairments of long-lived assets for the years ended December 31, 2021 or 2020.

Leases

Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”) using the optional transition method. The adoption of ASC 842 represents a change in accounting principle that aims to increase transparency and comparability among organizations by requiring the recognition of right-of-use assets and lease liabilities on the balance sheet for both operating and finance leases. In addition, the standard requires enhanced disclosures that meet the objective of enabling financial statement users to assess the amount, timing, and uncertainty of cash flows arising from leases. The reported results for the years ended December 31, 2021 and 2020 reflect the application of ASC 842 guidance.

The recognition of right-of-use assets and lease liabilities related to the Company’s operating leases under ASC 842 has had a material impact on the Company’s consolidated financial statements.

As part of the ASC 842 adoption, the Company has used certain practical expedients outlined in the guidance. These practical expedients include:

•

Account policy election to use the short-term lease exception by asset class;

•

Election of the practical expedient package during transition, which includes:

•

An entity need not reassess whether any expired or existing contracts are or contain leases.

•

An entity need not reassess the classification for any expired or existing leases. As a result, all leases that were classified as operating leases in accordance with ASC 840 are classified as operating leases under ASC 842, and all leases that were classified as capital leases in accordance with ASC 840 are classified as finance leases under ASC 842.

•

An entity need not reassess initial direct costs for any existing leases.

The Company had a property lease for its headquarters location at 301 Binney Street, Cambridge, MA (the “Head Lease”). The Company determined if the arrangement was a lease at the inception of the contract. The asset component of the Company’s operating leases was recorded as operating lease right-of-use assets, and the liability component was recorded as current portion of operating lease liabilities and operating lease liabilities, net of current portion, in the Company’s consolidated balance sheets.

ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at the commencement date. The Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments if an implicit rate of return is not provided with the lease contract. Operating lease right-of-use assets are adjusted for incentives received.

Lease cost was recognized on a straight-line basis over the lease term, and included amounts related to short-term leases. Variable lease costs that do not depend on an index or rate were recognized as incurred.

ROU assets and operating lease liabilities were remeasured upon certain modifications to leases using the present value of remaining lease payments and estimated incremental borrowing rate upon lease modification. The difference between the remeasured ROU assets and the operating lease liabilities were recognized as a gain or loss in operating expenses. The Company reviewed any changes to its lease agreements for potential modifications and/or indicators of impairment of the respective ROU asset.

On October 18, 2019, the Company entered into an agreement to sublease 15,700 rentable square feet of its Head Lease to a subtenant (the “Sublease Agreement”). Sublease income was recognized on straight-line basis over the term of the sublease agreement and was recorded net of the related rent expense from the Head Lease within interest and other income, net in the consolidated statements of operations and comprehensive loss. In sublease agreements that contain non-monetary consideration, the Company estimated the fair market value of the non-monetary consideration received using market data and recognized it on a straight-line basis over the sublease term. Variable lease consideration that did not depend on an index or rate was allocated to a non-lease component and was recognized over time in accordance with the pattern of transfer.

No modification or impairment was deemed to have occurred by entering into the sublease agreement because the Company was not released, either fully or in part, from its obligations under the Head Lease. See Note 8, Leases.

On February 28, 2020 the Company entered into an amendment to its Head Lease (the “Lease Amendment”). The Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 40,000 rentable square feet. The Company continued to lease approximately 74,000 rentable square feet under terms of the amended lease. The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease

and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a gain of approximately $2.1 million as a component of operating expenses for the year ended December 31, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases.

On September 15, 2020, the Company entered into an amendment to its Head Lease (the “Second Lease Amendment”). The Second Lease Amendment provided for the partial termination of the Company's rights and obligations with respect to a portion of the leased premises of approximately 17,000 rentable square feet (the “Surrender Space”). The Surrender Space included the 15,700 rentable square feet being subleased by the Company to a subtenant. The Company continued to lease approximately 57,000 rentable square feet under terms of the amended lease. The Second Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification and the Company recorded a loss of approximately $0.4 million as a component of operating expenses for the year ended December 31, 2020. No impairment of the ROU asset was deemed to have occurred. See Note 8, Leases.

On September 15, 2020, concurrent with the execution of the Second Lease Amendment, the Company entered into an agreement with its subtenant to terminate the Sublease Agreement of approximately 15,700 rentable square feet (“the Sublease Termination Agreement”). Under the terms of the Sublease Termination Agreement, the former subtenant is obligated to provide licensed rooms and services to the Company free of charge through the original sublease term. Upon termination of the sublease, the Company recognized sublease termination income of approximately $3.1 million related to the prepaid rooms and services, and wrote off the remaining indirect costs from the sublease of approximately $0.2 million, in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. See Note 8, Leases.

On April 30, 2021, the Company entered into a Termination Agreement (the "Termination Agreement") for its Head Lease as initially amended on February 28, 2020, and further amended on September 15, 2020. Pursuant to the Termination Agreement, the Company surrendered the leased space of approximately 57,000 square feet to the building’s landlord. The Company did not pay any termination fees with the Termination Agreement. As a result of the termination of the Head Lease, the related right-of-use asset was written off, the lease liability was derecognized, and the $3.8 million security deposit was returned to the Company and recorded as part of our cash balance. In total, the Company recognized a loss on the termination of the Head Lease of $0.9 million for the year ended December 31, 2021. The loss is included in “General and administrative” expenses on our consolidated statement of operations and comprehensive loss.

Paycheck Protection Program Loan

On April 21, 2020, the Company received loan proceeds in the amount of approximately $3.5 million pursuant to a promissory note agreement with a bank under the Paycheck Protection Program. The Paycheck Protection Program, established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. The Promissory Note had an original loan maturity of April 20, 2022, a stated interest rate of 1.0% per annum, and had payments of principal and interest that were due monthly after an initial six-month deferral period where interest accrued, but no payments were due. The Promissory Note provided for customary events of default, including, among others, those relating to failure to make payment when due and breaches of representations. The loan was subject to all the terms and conditions applicable under the PPP and was subject to review by the SBA for compliance with program requirements, including the Company’s certification that the economic uncertainty, at the time, made the PPP loan request necessary to support ongoing operations. On October 2, 2020, the SBA issued procedural guidance with respect to PPP loans and changes in ownership and the Company believes that it is compliant with respect to the 2020 Equity Private Placement and the ATM Offering.

In June 2020, the Payroll Protection Program Flexibility Act was signed into law adjusting certain key terms of loans issued under the PPP. In accordance with the PPPFA, the initial deferral period may be extended from six to up to ten months and the loan maturity may be extended from two to five years. The PPPFA also provided for certain other changes, including the extent to which the loan may be forgiven.

The loan’s principal and accrued interest were forgivable to the extent that the proceeds were used for eligible purposes, subject to certain limitations, and that the Company maintained its payroll levels over a twenty-four-week period following the loan date. The loan forgiveness amount may have been reduced if the Company

terminated employees or reduced salaries during the twenty-four-week period. PPP loans are subject to audit and the SBA has indicated that companies that received over $2 million in proceeds should expect an audit. The Company believes that it has used the proceeds for eligible purposes consistent with the provisions of the PPPFA.

As the legal form of the Promissory Note is a debt obligation, the Company accounted for it as debt under Accounting Standards Codification (ASC) 470, Debt and recorded a short-term liability of $3.5 million in the consolidated balance sheets upon receipt of the loan proceeds. The Company accrued interest over the term of the loan and did not record additional interest at a market rate because the guidance on imputing interest in ASC 835-30, Interest excludes transactions where interest rates are prescribed by a government agency. Approximately $0.1 million of interest expense has been recognized within interest and other income, net in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2021. In August 2021, the Company applied with the SBA for forgiveness of the PPP loan and was notified on November 4, 2021 that the SBA has approved our application to forgive the entire amount of the loan and accrued interest. The Company recorded a gain on extinguishment of debt of $3.6 million representing the principal and accrued interest for the PPP Loan.

Revenue

Upon executing a revenue generating arrangement, the Company assesses whether it is probable the Company will collect consideration in exchange for the good or service it transfers to the customer. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), it performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations. The Company must develop assumptions that require significant judgment to determine the stand-alone selling price for each performance obligation identified in the contract. The assumptions that are used to determine the stand-alone selling price may include forecasted revenues, development timelines, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company derives revenue from (1) license agreement and (2) supply agreement which are fully described in Note 14, License Agreement.

The Company generated revenue from a Development Agreement with Ironwood, pursuant to which the Company provided certain research and development services with respect to certain of Ironwood’s products and product candidates. Such research and development activities were governed by a joint steering committee composed of representatives of both companies. Services performed were invoiced at a mutually agreed upon rate and the initial term of the agreement was two years from the date of Separation and automatically renewed for one year unless either party notified the other at least six months prior to the expiration. Ironwood and the Company agreed that the Development Agreement would not be renewed beyond its initial term which ended on March 31, 2021.

The Company generates revenue from research and development grants under contracts with third parties that do not create customer-vendor relationships. The Company’s research and development grants are non-exchange transactions and are not within the scope of ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Contribution revenue earned from activities performed pursuant to research and development grants is reported as grant revenue in the Company’s consolidated statements of operations. Revenue from these grants is recognized as the Company incurs qualifying expenses as stipulated by the terms of the respective grant. Cash received from grants in advance of incurring qualifying expenses is recorded as deferred revenue. The Company records revenue and a corresponding receivable when qualifying costs are incurred before receiving payment from the grants.

Research and Development Costs

The Company expenses research and development costs to operations as incurred. The Company defers and capitalizes nonrefundable advance payments made by the Company for research and development activities until the related goods are received or the related services are performed. The Company estimates the period over which such services will be performed and the level of effort to be expended in each period. If actual timing of performance or the level of effort varies from the estimate, the Company will adjust the amounts recorded accordingly. The

Company has not experienced any material differences between accrued or prepaid costs and actual costs since inception.

Research and development expenses are comprised of costs incurred in performing research and development activities, which may include salary, benefits and other employee-related expenses; share-based compensation expense; laboratory supplies and other direct expenses; facilities expenses; overhead expenses; third-party contractual costs relating to nonclinical studies and clinical trial activities and related contract manufacturing expenses, development of manufacturing processes and regulatory registration of third-party manufacturing facilities; and other outside expenses.

General and Administrative Expenses

The Company expenses general and administrative costs to operations as incurred. General and administrative expense consists of compensation, share-based compensation, benefits and other employee-related expenses for personnel in the Company’s administrative, finance, legal, information technology, business development and human resource functions. Other costs include the legal costs of pursuing patent protection of the Company’s intellectual property, general and administrative related facility costs, insurance costs and professional fees for accounting and legal services.

Income taxes

The Company is primarily subject to U.S. federal and Massachusetts state income taxes. For federal and state income taxes, deferred tax assets and liabilities are recognized based upon temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred income taxes are based upon prescribed rates and enacted laws applicable to periods in which differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Accordingly, the Company provides a valuation allowance, if necessary, to reduce deferred tax assets to amounts that are realizable.

The tax positions taken or expected to be taken in the course of preparing the Company tax returns are required to be evaluated to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet a more-likely-than-not threshold would be recorded as a tax expense in the current year. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. It does not consider the likelihood of whether or not the IRS will review the position. Cyclerion evaluates uncertain tax positions on a quarterly basis and adjusts the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Any changes to these estimates, based on the actual results obtained and/or a change in assumptions, could affect Cyclerion's income tax provision in future periods. There were no uncertain tax positions that require accrual or disclosure in the consolidated financial statements as of December 31, 2021, and 2020. The Company’s policy is to recognize interest and penalties related to income tax, if any, in income tax expense. As of December 31, 2021, and 2020, the Company has no accruals for interest or penalties related to income tax matters.

Patent Costs

Patent fees and patent related costs in connection with filing and prosecuting patent applications are expensed as incurred and are classified as general and administrative expenses in the accompanying consolidated financial statements. The Company incurred and recorded as operating expense legal and other fees related to patents of approximately $1.4 million and $1.7 million for the years ended December 31, 2021 and 2020, respectively.

Interest and Other Income, Net

For the year ended December 31, 2021, interest and other income, net consisted of a de minimis amount of interest income related to interest generated from our cash and cash equivalents balances and a de minimis amount

of interest expense related to the PPP loan. For the year ended December 31, 2020, interest and other income, net consisted of $0.3 million of interest income related to interest generated from our cash and cash equivalents balances and $0.3 million of net sublease income.

Subsequent Events

The Company considers events or transactions that have occurred after the balance sheet date of December 31, 2021, but prior to the filing of the financial statements with the Securities and Exchange Commission, to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the filing of the financial statements accompanying this Annual Report on Form 10-K. See Note 14, Subsequent Events.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. Except as discussed elsewhere in the notes to the consolidated financial statements, the Company did not adopt any new accounting pronouncements during the years ended December 31, 2021 and 2020, that had a material effect on its consolidated financial statements.

In June 2016 the FASB issued ASU 2016-13, Financial Instruments-Credit Losses. This standard requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. As a smaller reporting company, ASU 2016-13 will become effective for the Company for fiscal years beginning after December 15, 2022, and early adoption is permitted. The Company is currently evaluating the impact that ASU 2016-13 will have on its financial statements and related disclosures.

In May 2021 the FASB issued Accounting Standards Update No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, a consensus of the Emerging Issues Task Force (EITF) , which amends the FASB Accounting Standards Codification (ASC or the “Codification”) to provide explicit guidance, and, thus, reduce diversity in practice, on accounting by issuers for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange. This amendment provides that for an entity that presents earnings per share (EPS) in accordance with Topic 260, the effects of a modification or an exchange of a freestanding equity-classified written call option that is recognized as a dividend should be an adjustment to net income (or net loss) in the basic EPS calculation. The amended guidance becomes mandatorily effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years, and should be applied prospectively to modifications or exchanges occurring on or after the effective date. The Company is currently evaluating the impact that ASU 2021-04 will have on its financial statements and related disclosures.

No other accounting standards known by the Company to be applicable to it that have been issued by the FASB or other standard-setting bodies and that do not require adoption until a future date are expected to have a material impact on the Company’s consolidated financial statements upon adoption.

Leases - Summary (Details) $ in Thousands				12 Months Ended
Leases - Summary (Details) $ in Thousands	Sep. 15, 2020 USD ($) ft²	Feb. 28, 2020 USD ($) ft²	Apr. 01, 2019 USD ($) ft² Item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2021	Apr. 30, 2021 USD ($) ft²	Oct. 18, 2019 ft²
Leases
Term of lease						8 years 10 months 17 days
Letter of credit posted with the landlord as a security deposit					$ 3,800
Operating lease right-of-use asset				$ 1,402	43,402
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Space subleased to third party (in square feet) \| ft²	15,700							15,700
Gain (loss) on lease modification				881	(1,669)
Gain (Loss) on Termination of Lease				6,300
Current portion of operating lease liabilities				0	3,293
Noncurrent lease liability				0	38,933
Total lease costs				2,400	8,600
Head Lease
Leases
Rented space (in square feet) \| ft²			114,000
Term of lease			123 months
Number of extension option \| Item			2
Renewal term			5 years
Letter of credit posted with the landlord as a security deposit			$ 7,700
Security Deposit Returned							$ 3,800
Space subleased to third party (in square feet) \| ft²								15,700
Gain (Loss) on Termination of Lease				900
Lease Amendment
Leases
Rented space (in square feet) \| ft²		74,000
Letter of credit posted with the landlord as a security deposit		$ 5,000
Incremental borrowing rate (as a percent)		9.70%
Rentable space terminated from lease agreement (in square feet) \| ft²		40,000
Decrease in security deposit		$ 2,700
Decrease in remaining operating lease payments		41,900
Cash paid for lease termination fees		6,300
Cash paid for initial direct costs of lease modification		200
Decrease in right-of-use assets related to lease modification and termination		21,400
Decrease in operating lease liabilities due to lease modification and termination		$ 23,500
Gain (loss) on lease modification					2,100
Second Lease Amendment
Leases
Rented space (in square feet) \| ft²	57,000
Letter of credit posted with the landlord as a security deposit					3,800
Incremental borrowing rate (as a percent)	6.10%
Operating lease right-of-use asset					43,400
Rentable space terminated from lease agreement (in square feet) \| ft²	17,000
Decrease in security deposit				1,200
Decrease in remaining operating lease payments	$ 16,900
Cash paid for lease termination fees	0
Cash paid for initial direct costs of lease modification	0
Decrease in right-of-use assets related to lease modification and termination	5,900
Decrease in operating lease liabilities due to lease modification and termination	$ 5,500
Space subleased to third party (in square feet) \| ft²	15,700
Gain (loss) on lease modification					(400)
Current portion of operating lease liabilities					3,300
Noncurrent lease liability					38,900
Variable lease costs				700	$ 2,200
Termination Agreement
Leases
Surrendered Lease Space \| ft²							57,000
Security Deposit Returned							$ 3,800
Gain (Loss) on Termination of Lease				900
WeWork
Leases
Total lease costs				$ 100

Summary of Significant Accounting Policies - Paycheck Protection Program Loan (Details) - USD ($) $ in Thousands		12 Months Ended
	Apr. 21, 2020	Dec. 31, 2021	Dec. 31, 2020
Leases
Proceeds from short-term note payable		$ 0	$ 3,509
Short-term liability		3,500
Gain (Loss) on Extinguishment of Debt		3,564	$ 0
PPP Loan
Leases
Proceeds from short-term note payable	$ 3,500
Interest Expense		$ 100

Workforce Reduction

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Workforce Reduction

13. Workforce Reduction

2020 Workforce Reduction

On November 5, 2020, the Company began a reduction of its current workforce by forty-eight (48) full-time employees to align its resources with its current priorities of focusing on the MELAS study, the planned ADv study and further characterization of CY6463 novel pharmacology.

The Company recorded total costs related to the 2020 Workforce Reduction were approximately $5.0 million including approximately $0.1 million in stock-based compensation from the modification of certain share-based equity awards.

The Company reduced its workforce by thirty-one (31) employees in the fourth quarter of 2020 and recorded approximately $4.1 million of severance and benefits costs in accordance with ASC Topic 420, Exit or Disposal Cost Obligations, or ASC 420, including a de minimis amount of stock-based compensation expense, for the year ended December 31, 2020. The workforce reduction was completed by the end of the first quarter of 2021.

The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the year ended December 31, 2021 (in thousands):


	Amounts accrued at December 31, 2020			Charges			Amount paid		Adjustments		Amounts accrued at December 31, 2021
2020 workforce reduction	$	(3,640	)	$	(878	)	$	4,490	$	—	$	(28	)
Total	$	(3,640	)	$	(878	)	$	4,490	$	—	$	(28	)

Defined Contribution Plan (Details) - USD ($)	12 Months Ended
Defined Contribution Plan (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Defined Contribution Plan
401 (k) Savings Plan	us-gaap:QualifiedPlanMember
Matching contribution (as a percent of employee's contributions)	75.00%
Maximum amount of employer matching contribution	$ 6,000
Compensation expense related to the defined contribution 401(k) Savings Plan	$ 300,000	$ 500,000
Minimum
Defined Contribution Plan
Percent of compensation eligible employees may elect to contribute	1.00%
Maximum
Defined Contribution Plan
Percent of compensation eligible employees may elect to contribute	100.00%

Related Party Transactions

12 Months Ended

Dec. 31, 2021

Related Party Transactions

3. Related Party Transactions

Development Agreement with Ironwood

As part of the Separation from Ironwood, the Company entered into a Development Agreement with Ironwood.

Under the Development Agreement, the Company provided certain research and development services to Ironwood at mutually agreed upon rates and the amounts earned are recorded as revenue from related party for the year ended December 31, 2020. Such research and development activities were governed by a joint steering

committee composed of representatives of both Ironwood and the Company. Ironwood and the Company have agreed not to renew the Development Agreement beyond the end of its initial term on March 31, 2021. These transactions under the Development Agreement were considered related party transactions due to Mark Currie’s role as President of the Company through December 31, 2020, and board member of Ironwood. In January 2021, Mark Currie’s role transitioned from President of the Company to a senior advisor on a consulting basis. Therefore, effective January 2021, transactions under the Development Agreement are no longer accounted for as related party transactions. The Company recorded approximately $2.3 million for the year ended December 31, 2020.

Other Related Party Transactions

During the year ended December 31, 2020, the Company recorded approximately $1.5 million of research and development costs to a related party which it engaged to provide research and development transaction support services. The entity became a related party when Mark Currie, the Company’s President through December 31, 2020, joined its board in January 2020. There was approximately $0.3 million due to the related party for the year ended December 31, 2020. In January 2021, Mark Currie’s role transitioned from President of the Company to a senior advisor on a consulting basis. Therefore, effective January 2021, transactions under this agreement are no longer accounted for as related party transactions.

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Schedule of financial assets measured at fair value on a recurring basis and indicating the level of the fair value hierarchy


	Fair Value Measurements as of December 31, 2021:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	52,917	$	—	$	—	$	52,917
Cash equivalents	$	52,917	$	—	$	—	$	52,917


	Fair Value Measurements as of December 31, 2020:
	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	53,240	$	—	$	—	$	53,240
Cash equivalents	$	53,240	$	—	$	—	$	53,240

Share-based Compensation Plans - Summary of RSU activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Weighted-Average Grant Date Fair Value
Expected period to recognize the expense	2 years 2 months 1 day
Weighted average grant date fair value per option share		$ 1.97
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	25.00%
Number of Shares
Unvested at the beginning of the period (in shares)	294,913
Granted (in shares)	39,369
Vested (in shares)	(143,774)
Forfeited (in shares)	(97,704)
Unvested the end of the period (in shares)	92,804	294,913
Weighted-Average Grant Date Fair Value
Unvested at the beginning of the period (in dollars per share)	$ 14.52
Granted (in dollars per share)	3.17
Vested (in dollars per share)	12.01
Forfeited (in dollars per share)	14.41
Unvested restricted common stock at the end of the period (in dollars per share)	$ 13.70	$ 14.52
Expected period to recognize the expense	1 year 1 month 17 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 3.17

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Summary of reconciliation of income taxes computed using the U.S. federal statutory rate

A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows (in thousands):


	Year Ended December 31,
	2021			2020
U.S.	$	(51,686	)	$	(77,884	)
International		39			82
Loss before benefit from income taxes	$	(51,647	)	$	(122,406	)
Income tax benefit using U.S. federal statutory rate	$	(10,846	)	$	(16,338	)
State income taxes, net of federal benefit		(3,631	)		(5,619	)
Non-deductible share-based compensation		(911	)		16
Share-based compensation - shortfalls/(windfalls)		946			1,047
Permanent differences		(420	)		(94	)
PPP loan forgiveness		(748	)		—
Tax credits		(805	)		(2,469	)
Other		(9	)		(16	)
Change in valuation allowance		16,424			23,473
	$	—		$	—

Summary of deferred tax assets (liabilities)

Deferred tax assets (liabilities) consist of the following as of December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	43,700		$	27,007
Tax credit carryforwards		8,044			7,185
Share-based compensation		7,702			5,890
Operating lease - liability		—			11,536
Property and equipment		(1	)		1,362
Capitalized research and development		11,147			12,684
Accruals and reserves		91			518
Other		4			—
Total deferred tax assets	$	70,687		$	66,182

Deferred tax liabilities:
Operating lease - right of use asset	$	(383	)	$	(11,857	)
Prepaid sublease termination		(758	)		(1,203	)
Total deferred tax liabilities		(1,141	)		(13,060	)
Net deferred tax assets		69,546			53,122

Valuation allowance		(69,546	)		(53,122	)
Net deferred tax assets	$	—		$	—

Share-based Compensation Plans (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) TradingDay $ / shares shares	Dec. 31, 2020 USD ($) $ / shares shares
Share-based Compensation Plans
Share-based compensation	$ 9,611	$ 14,992
Number of shares vested \| shares	50,000	0
Unrecognized share-based compensation expense	$ 200
Expected period to recognize the expense	2 years 2 months 1 day
Weighted average grant date fair value per option share \| $ / shares		$ 1.97
Granted (in shares) \| shares	0	0
Research and development
Share-based Compensation Plans
Share-based compensation	$ 3,945	$ 6,799
General and administrative
Share-based Compensation Plans
Share-based compensation	$ 5,666	8,193
Restricted Stock Units
Share-based Compensation Plans
Expected period to recognize the expense	1 year 1 month 17 days
Unrecognized share-based compensation expense	$ 700
Performance stock options
Share-based Compensation Plans
Threshold consecutive trading days, used as a base for measurement of vesting of stock awards \| TradingDay	30
Performance stock options \| Minimum [Member]
Share-based Compensation Plans
Expected option term (in years)	4 years
Performance stock options \| Maximum
Share-based Compensation Plans
Expected option term (in years)	4 years 7 months 6 days
Employee Stock Option Member
Share-based Compensation Plans
Share based compensation expense	$ 0	$ 0
Expected period to recognize the expense	3 years 3 months 14 days
Weighted average grant date fair value per option share \| $ / shares	$ 2.17
Unrecognized share-based compensation expense	$ 8,100
Granted (in shares) \| shares	1,176,250	1,382,846

Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

8. Leases

The FASB issued ASU 2016-02, or the leasing standard or ASC 842, in February 2016. ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. ASU 2016-02 also requires certain qualitative and quantitative disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases.

On April 1, 2019, the Company entered into the Head Lease ("the Head Lease"), a direct operating lease for its former headquarters located at 301 Binney Street, Cambridge, MA consisting of approximately 114,000 rentable square feet of office and laboratory space on the first and second floors. The Head Lease had a term of 123 months with two five-year extension options and certain expansion rights. The Head Lease also included a letter of credit of $7.7 million, posted with the landlord as a security deposit, which was collateralized by a money market account recorded as restricted cash on the Company’s consolidated balance sheets. The Company had also entered into customary non-disturbance arrangements with the building landlord’s mortgagee and with the property ground lessor recognizing Company's leasehold interest in this property.

On February 28, 2020 the Company entered into an amendment to its Head Lease. The Lease Amendment partially terminated the Company’s rights and obligations with respect to an approximately 40,000 rentable square feet. The Company continued to lease the remaining space of approximately 74,000 square feet including the area covered by the subleased premise, discussed below. In connection with this Lease Amendment, the Company reduced its remaining lease payments through June 2029 by approximately $41.9 million and paid a $6.3 million termination fee and $0.2 million related to other initial direct costs, which were deferred and recognized over the remaining lease term. The Company’s security deposit was also reduced by approximately $2.7 million to approximately $5.0 million.

The Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 9.7%, which resulted in a reduction of the ROU asset of $21.4 million and a reduction in the operating lease liabilities of $23.5 million. The Company recorded the resulting gain of approximately $2.1 million as a component of operating expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020.

On September 15, 2020 the Company entered into the Second Lease Amendment to its Head Lease. The Second Lease Amendment provided for the partial termination of the Company’s rights and obligations with respect to a portion of the leased premises of approximately 17,000 rentable square feet. The Surrender Space included 15,700 rentable square feet being subleased by the Company to a subtenant. The Company continued to lease approximately 57,000 square feet of space. The Company reduced its remaining lease payments through June 2029 by approximately $16.9 million. The Company paid no termination or other initial direct costs related to the execution of the Second Lease Amendment. The Company’s security deposit was reduced by approximately $1.2 million to approximately $3.8 million, which is classified as restricted cash on the Company’s consolidated balance sheet as of December 31, 2020.

The Second Lease Amendment was determined to be a lease modification that qualified as a change of accounting on the existing lease and not a separate contract. As such, the ROU assets and operating lease liabilities were remeasured using an incremental borrowing rate at the date of modification of 6.1%, which resulted in a reduction of the ROU asset of $5.9 million and a reduction in the operating lease liabilities of $5.5 million. The

Company recorded the resulting loss of approximately $0.4 million as a component of operating expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020.

On April 30, 2021, the Company entered into a Termination Agreement (the "Termination Agreement") for its Head Lease as initially amended on February 28, 2020, and further amended on September 15, 2020. Pursuant to the Termination Agreement, the Company surrendered the leased space of approximately 57,000 square feet to the building’s landlord. The Company did not pay any termination fees in connection with the Termination Agreement. As a result of the termination of the Head Lease, the related right-of-use asset was written off, the lease liability was derecognized, and the $3.8 million security deposit was returned to the Company and recorded as part of our cash balance. In total, the Company recognized a loss on the termination of the Head Lease of $0.9 million for the year ended December 31, 2021. The loss is included in “General and administrative” expenses on our consolidated statement of operations and comprehensive loss.

The Company had an operating lease ROU asset of approximately $43.4 million related to the amended Head Lease recorded in its consolidated balance sheets as of December 31, 2020. The Company had current and non-current operating lease liabilities of approximately $3.3 million, and $38.9 million, respectively, related to the amended Head Lease recorded in its consolidated balance sheets as of December 31, 2020.

Lease cost was recognized on a straight-line basis over the lease term. For the years ended December 31, 2021 and 2020, the Company recognized a total of approximately $2.4 million and $8.6 million, respectively, of total lease costs. Variable lease costs not subject to an index or rate were recognized as incurred. For the years ended December 31, 2021 and 2020, the Company recognized a total of approximately $0.7 million and $2.2 million, respectively, of variable lease costs related to the Head Lease, as amended.

In May 2021, the Company signed a membership agreement to lease space with WeWork at 501 Boylston Street, Boston, Massachusetts. The lease commenced on August 1, 2021 and was accounted for as a short term lease. The Company recorded $0.1 million in lease expense associated with the membership agreement during the year ended December 31, 2021.

Supplemental cash flow information related to leases for the periods reported is as follows:


	December 31,		December 31,
	2021		2020
Decrease in right-of-use assets related to lease modifications and termination (in thousands)	$	42,058	$	27,333
Decrease in operating lease liabilities due to lease modifications and termination (in thousands)	$	41,177	$	29,002
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$	1,887	$	7,411
Weighted-average remaining lease term of operating leases (in years)		—		8.5
Weighted-average discount rate of operating leases		—		6.1	%

On October 18, 2019, the Company entered into an agreement with a third party to sublease 15,700 rentable square feet of its lease premises under the Head Lease. The sublease was scheduled to expire on June 30, 2029, unless earlier terminated in accordance with the sublease agreement, and has no extension options. The sublease provides for annual base rent of approximately $1.5 million in the first year, which increases on a yearly basis by 3.0% (subject to an abatement of base rent of approximately $0.7 million for the first six months of the sublease). As part of the consideration for the sublease, the sublessee agreed to provide licensed rooms and services within the sublease premises to the Company over the sublease term free of charge. In addition, the sublessee is responsible for its pro rata share of certain costs, taxes and operating expenses related to the subleased space, the consideration for which is variable and is based on the actual operating costs of the lessor. The Company allocated the total consideration in the sublease agreement between the lease and non-lease components in the contract based on their relative standalone prices. The Company determined that the variable consideration relates exclusively to non-lease components and will be recognized as incurred. The sublease included an initial security deposit of $0.5 million, which was provided by the sublessee in the form of a letter of credit, and an additional security deposit of $0.4 million within nine months of the sublease commencement.

On September 15, 2020, concurrent with execution of the Second Lease Amendment, the Company entered into the Sublease Termination Agreement to terminate its sublease of 15,700 rentable square feet. Under the terms of the Sublease Termination Agreement, the subtenant is relieved of its obligation to provide future cash rental payments to the Company. The agreements requiring the former subtenant to provide licensed rooms and services to the Company free of charge through the original sublease term survived the sublease termination. The Company gained access to the licensed rooms and services beginning in the third quarter of 2021. The letter of credit security deposit related to the sublease was released.

The Company determined that the Sublease Termination Agreement constituted a non-monetary exchange under ASC 845 Nonmonetary Transactions (“ASC 845”) where, in return for the free rooms and the services, the Company agreed to terminate its rights and obligations under the sublease agreement. In accordance with ASC 845, the Company determined that the accounting for the transaction should be based on the fair value of assets or services involved. The Company estimated the fair value of the rooms and services to be approximately $1.5 million and $2.9 million, respectively. Accordingly, prepaid rooms and services of $4.4 million were recorded upon the sublease termination, of which $1.6 million was recorded in other current assets and $2.8 million was recorded in other assets in the consolidated balance sheets as of December 31, 2020. Termination fee income of $3.1 million was recognized related to the rooms and services, after considering the rent receivable balance of $1.3 million outstanding from the subtenant. The remaining unamortized direct costs of $0.2 million were written off. The effects of the Sublease Termination Agreement were recorded within sublease termination income, net in the consolidated statements of operations and comprehensive loss. Total gross sublease income of approximately $1.5 million, and net sublease income of approximately $0.3 million was recorded in interest and other income, net in the consolidated statements of operations and comprehensive loss for year ended December 31, 2020.

The Company determined that the licensed rooms represent a lease under ASC 842. The Company obtained control of the rooms in the third quarter of 2021 and the prepaid rooms balance of approximately $1.4 million was reclassified from other assets to a ROU asset. The related lease expense is recognized on a straight-line basis over the lease term of 8.88 years. The Company recorded $0.1 million of lease expense during the year ended December 31, 2021. The Company determined that the licensed services represent a non-lease component, which is recognized separately from the lease component for this asset class. The expense related to the licensed services is recognized on a straight-line basis over the period the services are received. The Company recorded $0.2 million for the year ended December 31, 2021. Both the lease expense and services expense are recognized as a component of research and development costs in the consolidated statements of operations and comprehensive loss.

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

There was no provision for income taxes for the years ended December 31, 2021, and 2020, due to the Company’s operating losses and a full valuation allowance on deferred tax assets. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows (in thousands):


	Year Ended December 31,
	2021			2020
U.S.	$	(51,686	)	$	(77,884	)
International		39			82
Loss before benefit from income taxes	$	(51,647	)	$	(122,406	)
Income tax benefit using U.S. federal statutory rate	$	(10,846	)	$	(16,338	)
State income taxes, net of federal benefit		(3,631	)		(5,619	)
Non-deductible share-based compensation		(911	)		16
Share-based compensation - shortfalls/(windfalls)		946			1,047
Permanent differences		(420	)		(94	)
PPP loan forgiveness		(748	)		—
Tax credits		(805	)		(2,469	)
Other		(9	)		(16	)
Change in valuation allowance		16,424			23,473
	$	—		$	—

The effective income tax rate is based upon the income for the year, the composition of the income in different countries, and adjustments, if any, for the potential tax consequences, benefits or resolutions of audits or other tax contingencies. Our income tax rate in foreign jurisdictions is lower than our income tax rate in the United States.

Deferred tax assets (liabilities) consist of the following as of December 31, 2021 and 2020 (in thousands):


	Year Ended December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	43,700		$	27,007
Tax credit carryforwards		8,044			7,185
Share-based compensation		7,702			5,890
Operating lease - liability		—			11,536
Property and equipment		(1	)		1,362
Capitalized research and development		11,147			12,684
Accruals and reserves		91			518
Other		4			—
Total deferred tax assets	$	70,687		$	66,182

Deferred tax liabilities:
Operating lease - right of use asset	$	(383	)	$	(11,857	)
Prepaid sublease termination		(758	)		(1,203	)
Total deferred tax liabilities		(1,141	)		(13,060	)
Net deferred tax assets		69,546			53,122

Valuation allowance		(69,546	)		(53,122	)
Net deferred tax assets	$	—		$	—

Management of Cyclerion has evaluated the positive and negative evidence bearing upon the possible realization of its deferred tax assets. Management has considered the Company's history of operating losses, in addition to the expected timing of the reversal of existing temporary differences and concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company will not realize the benefit of its deferred tax assets. Accordingly, the net deferred tax assets have been fully reserved at December 31, 2021 and December 31, 2020. Management reevaluates the positive and negative evidence on a quarterly basis.

The valuation allowance increased by approximately $16.4 million during the year ended December 31, 2021 primarily due to increases in capitalized research and development expenses, net operating losses, tax credit carryforwards and deferred tax assets related to share-based compensation.

Cyclerion did not generate net operating loss carryforwards or tax credit carryforwards available for its use until its inception and operation as a standalone legal entity. At December 31, 2021 and 2020, Cyclerion has federal net operating loss carryforwards of approximately $160 million and $98.8 million, respectively, to offset future federal taxable income that will be carried forward indefinitely until utilized. As of December 31, 2021, and 2020, Cyclerion had state net operating loss carryforwards of approximately $159.6 million and $98.9 million, respectively, to offset future state taxable income, which will begin to expire in 2039 and will continue to expire through 2040. Cyclerion also had tax credit carryforwards of approximately $8.4 million and $7.5 million as of December 31, 2021 and 2020, respectively, to offset future federal and state income taxes. Federal credits begin to expire in 2039 and will continue to expire through 2040. State credits begin to expire in 2022 and continue through 2034.

The Company’s ability to use its operating loss carryforwards and tax credits to offset future taxable income could be subject to restrictions under Section 382 of the U.S. Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). These potential restrictions may limit the future use of the operating loss carryforwards and tax credits if certain ownership changes described in the Internal Revenue Code occur. Changes in stock ownership may occur that would create these limitations on the Company’s use of the operating loss carryforwards and tax credits. In such a situation, the Company may be required to pay income taxes, even though significant operating loss carryforwards and tax credits exist.

The Company has not as yet conducted a study of its research and development credit carry forwards. This study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credits, and if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the consolidated balance sheets or statements of operations if an adjustment were required.

Upon audit, taxing authorities may challenge all or part of an uncertain income tax position. While Cyclerion has no history of tax audits since its inception on a standalone basis, it may be subject to tax audits by federal and state taxing authorities in the future. Accordingly, Cyclerion regularly assesses the outcome of potential examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. Cyclerion had no unrecognized tax benefits as of December 31, 2021 and 2020. Cyclerion will recognize interest and penalties, if any, related to uncertain tax positions in income tax expense. As of December 31, 2021 and 2020, no interest or penalties have been accrued. There are no current federal or state income tax audits in progress.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law. The CARES Act is an emergency economic stimulus package in response to the COVID-19 pandemic, which among other things contains numerous income tax provisions, some of which are effective retroactively for fiscal years ended before the date of enactment. The CARES Act includes certain tax relief provisions, including modifications to the NOL rules, including a provision to carryback losses from 2018 – 2021 tax years, temporary changes to business interest expense disallowance rules (IRC §163(j)), qualified improvement property, payroll tax delays/ credits, and several other tax and non-tax benefits. These tax provisions should have no significant income tax ramifications for Cyclerion, but the Company will continue to monitor any changes and guidance in order to consider potential opportunities. The CARES Act also created a program called the Paycheck Protection Program to be administered by the SBA. Cyclerion received $3.5 million of loan proceeds on April 21, 2020 under the PPP, as fully described in Note 2, Summary of Significant Accounting Policies.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Schedule of supplemental cash flow information related to leases

Supplemental cash flow information related to leases for the periods reported is as follows:


	December 31,		December 31,
	2021		2020
Decrease in right-of-use assets related to lease modifications and termination (in thousands)	$	42,058	$	27,333
Decrease in operating lease liabilities due to lease modifications and termination (in thousands)	$	41,177	$	29,002
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$	1,887	$	7,411
Weighted-average remaining lease term of operating leases (in years)		—		8.5
Weighted-average discount rate of operating leases		—		6.1	%

Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 2021

Accrued Liabilities and Other Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	December 31,		December 31,
	2021		2020
Accrued incentive compensation	$	1,369	$	1,720
Salaries		266		514
Accrued vacation		345		555
Professional fees		398		689
Accrued severance and benefit costs		28		3,640
Other		498		176
Accrued expenses and other current liabilities	$	2,904	$	7,294

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

Other Funding Commitments

In the normal course of business, the Company enters into contracts with clinical research organizations and other third parties for clinical and preclinical research studies and other services and products for operating purposes. These contracts are generally cancellable, with notice, at the Company’s option and do not have any significant cancellation penalties.

Guarantees

On September 6, 2018, Cyclerion was incorporated in Massachusetts and its officers and directors are indemnified for certain events or occurrences while they are serving in such capacity.

The Company enters into certain agreements with other parties in the ordinary course of business that contain indemnification provisions. These typically include agreements with directors and officers, business

partners, contractors, clinical sites and customers. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company’s activities. These indemnification provisions generally survive termination of the underlying agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. However, to date the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of these obligations is minimal. Accordingly, the Company did not have any liabilities recorded for these obligations as of December 31, 2021 or December 31, 2020.

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 53,961	$ 54,395
Accounts receivable	100	0
Related party accounts receivable	0	127
Prepaid expenses	928	816
Other current assets	468	3,163
Total current assets	55,457	58,501
Restricted cash, net of current portion	0	3,837
Property and equipment, net	65	6,865
Operating lease right-of-use asset	1,402	43,402
Other assets	2,407	2,773
Total assets	59,331	115,378
Current liabilities:
Accounts payable	1,828	1,149
Related party accounts payable	0	286
Accrued research and development costs	6,353	1,421
Accrued expenses and other current liabilities	2,904	7,294
Short-term note payable	0	3,509
Current portion of operating lease liabilities	0	3,293
Total current liabilities	11,085	16,952
Operating lease liabilities, net of current portion	0	38,933
Commitments and contingencies
Stockholders' equity
Common stock, no par value, 400,000,000 shares authorized and 43,410,185 issued and outstanding at December 31, 2021 and 400,000,000 shares authorized and 34,047,300 issued and outstanding at December 31, 2020	0	0
Accumulated deficit	(215,076)	(163,429)
Paid-in capital	263,345	222,949
Accumulated other comprehensive loss	(23)	(27)
Total stockholders' equity	48,246	59,493
Total liabilities and stockholders' equity	$ 59,331	$ 115,378

Share-based Compensation Plans - Stock Awards Containing Market Conditions (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Number of Options
Granted (in shares)	0	0
Assumptions used to estimate fair value of performance-based stock options
Weighted average risk-free interest rate	1.09%	0.43%
Expected dividend yield	0.00%	0.00%
Expected stock price volatility	85.45%	91.73%
Performance stock options \| Minimum
Assumptions used to estimate fair value of performance-based stock options
Expected option term (in years)	4 years
Performance stock options \| Maximum
Assumptions used to estimate fair value of performance-based stock options
Expected option term (in years)	4 years 7 months 6 days
Employee Stock Option Member
Number of Options
Outstanding at beginning of the year (in shares)	7,426,356
Granted (in shares)	1,176,250	1,382,846
Exercised (in shares)	(72,419)
Cancelled or forfeited (in shares)	(1,449,761)
Outstanding at end of the year (in shares)	7,080,426	7,426,356
Exercisable (in shares)	4,518,213
Weighted-Average Exercise Price
Outstanding at beginning of the year (in dollars per share)	$ 11.87
Granted (in dollars per share)	2.98
Exercised (in dollars per share)	2.17
Cancelled or forfeited (in dollars per share)	10.69
Outstanding at end of the year (in dollars per share)	10.73	$ 11.87
Exercisable (in dollars per share)	$ 13.46
Weighted Average Remaining Contractual Term (years)
Weighted average remaining contractual term, outstanding at the end of period (in years)	6 years 10 months 24 days	7 years
Weighted Average Remaining Contractual Term, Exercisable (in years)	5 years 10 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	6 years 10 months 24 days	7 years
Aggregate intrinsic value, outstanding at the end of period	$ 0	$ 1,178
Aggregate intrinsic value, exercisable at the end of period	$ 0
Market-based Stock Options
Number of Options
Outstanding at beginning of the year (in shares)	600,000
Cancelled or forfeited (in shares)	(150,000)
Outstanding at end of the year (in shares)	450,000	600,000
Weighted-Average Exercise Price
Outstanding at beginning of the year (in dollars per share)	$ 2.01
Outstanding at end of the year (in dollars per share)	$ 2.01	$ 2.01
Weighted Average Remaining Contractual Term (years)
Weighted average remaining contractual term, outstanding at the end of period (in years)	7 years 10 months 24 days
Weighted Average Remaining Contractual Term, Exercisable (in years)		8 years 10 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	7 years 10 months 24 days
Aggregate intrinsic value, exercisable at the end of period		$ 630

Loss per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net loss	$ (51,647)	$ (77,802)
Denominator:
Weighted average shares used in calculating net loss per share — basic and diluted (in thousands)	39,144	30,403
Net loss per share — basic and diluted	$ (1.32)	$ (2.56)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

+ Details

Workforce Reduction (Details) $ in Thousands		3 Months Ended	12 Months Ended
Workforce Reduction (Details) $ in Thousands	Nov. 05, 2020 USD ($) Employees	Dec. 31, 2020 USD ($) Employees	Dec. 31, 2021 USD ($)
2020 Workforce Reduction
Restructuring Cost And Reserve [Line Items]
Beginning of period			$ 3,640
Charges			(878)
Amount paid			4,490
Adjustments			0
End of period		$ 3,640	$ 28
Current workforce reductions \| November 2020 Workforce Reduction
Restructuring Cost And Reserve [Line Items]
Reduction in workforce, number of employees \| Employees	48	31
Restructuring costs	$ 5,000
Severance and benefits costs		$ 4,100
Stock-based compensation from the modification of share based equity awards	$ 100

Consolidated and Combined Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenues [Abstract]
Revenue from license agreement	$ 3,000	$ 0
Revenue From Development Agreement	320	0
Revenue from grants	622	0
Revenue from related party	0	2,296
Total revenues	3,942	2,296
Cost and expenses:
Research and development	37,636	56,414
General and administrative	20,620	28,816
Gain (loss) on lease modification	881	(1,669)
Total cost and expenses	59,137	83,561
Loss from operations	(55,195)	(81,265)
Sublease termination income, net	0	2,875
Gain on extinguishment of debt	3,564	0
Interest and other income, net	(16)	588
Net loss	$ (51,647)	$ (77,802)
Net loss per share:
Basic and diluted net loss per share (in dollars per share)	$ (1.32)	$ (2.56)
Weighted average shares used in calculating:
Basic and diluted net loss per share (in shares)	39,144	30,403
Other comprehensive loss:
Net loss	$ (51,647)	$ (77,802)
Other comprehensive loss:
Foreign currency translation adjustment	4	(7)
Comprehensive loss	$ (51,643)	$ (77,809)

Consolidated and Combined Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands	Total	Common Stock	Paid in capital	Accumulated Deflicit	Accumulated other comprehensive loss
Beginning balance at Dec. 31, 2019	$ 97,729		$ 183,376	$ (85,627)	$ (20)
Beginning balance (in shares) at Dec. 31, 2019		27,598,133
Net loss	(77,802)			(77,802)
Issuance of common stock - 2020 private placement	24,250		24,250
Issuance of common stock - 2020 private placement (in shares)		6,062,500
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan	331		331
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)		386,667
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan	14,992		14,992
Foreign currency translation adjustment	(7)				(7)
Ending balance at Dec. 31, 2020	59,493		222,949	(163,429)	(27)
Ending balance (in shares) at Dec. 31, 2020		34,047,300
Net loss	(51,647)			(51,647)
Issuance of common stock - 2020 private placement	18,028		18,028
Issuance of common stock - 2020 private placement (in shares)		5,735,988
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan	282		282
Issuance of common stock upon exercise of stock options, RSUs and employee stock purchase plan (in shares)		273,838
Issuance of common stock - ATM (in Shares)		3,353,059
Issuance of common stock - ATM (in Values)	12,475		12,475
Share-based compensation expense related to issuance of stock options and RSUs to employees and employee stock purchase plan	7,915		7,915
Share based compensation expense related to issuance of stock options and RSUs to non employees	1,696		1,696
Foreign currency translation adjustment	4				4
Ending balance at Dec. 31, 2021	$ 48,246	$ 0	$ 263,345	$ (215,076)	$ (23)
Ending balance (in shares) at Dec. 31, 2021		43,410,185

Defined Contribution Plan

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Defined Contribution Plan

12. Defined Contribution Plan

In 2019, Cyclerion adopted a defined contribution 401(k) Savings Plan similar to the plan in place at Ironwood. The plan assets under the Ironwood defined contribution 401(k) Savings Plan were transferred to the Cyclerion plan. Subject to certain IRS limits, eligible employees may elect to contribute from 1% to 100% of their

compensation. Cyclerion contributions to the plan are at the sole discretion of the board of directors. Currently, Cyclerion provides a matching contribution of 75% of the employee’s contributions, up to $6,000 annually.

Included in compensation expense is approximately $0.3 million and $0.5 million related to the defined contribution 401(k) Savings Plan for the years ended December 31, 2021 and 2020, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property and Equipment
Property and equipment. gross	$ 2,265	$ 17,152
Less: accumulated depreciation and amortization	(2,200)	(10,287)
Property and equipment, net	65	6,865
Depreciation and amortization	472	2,297
Gain (Loss) on Termination of Lease	6,300
Gain Loss On Sale Of Property Plant Equipment	6,322	159
Software
Property and Equipment
Property and equipment. gross	2,214	2,214
Computer and office equipment
Property and Equipment
Property and equipment. gross	51	44
Leasehold improvements
Property and Equipment
Property and equipment. gross	$ 0	$ 14,894

License Agreements

12 Months Ended

Dec. 31, 2021

License Agreement [Abstract]

License Agreements

14. License Agreement

Akebia License Agreement

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

Akebia paid a $3.0 million up-front payment to the Company upon signing of the License Agreement and the Company is eligible to receive additional milestone cash payments of up to $12.0 million in the next 18 months. Further milestone cash payments by Akebia are scheduled in the License Agreement based on the initiation of phase 3 clinical trials in the U.S. for Products for first and second indication, for FDA approvals, for approvals in certain other major markets, and for certain sales milestones. In addition to these cash milestone payments, Akebia will pay the Company tiered royalty payments on net sales in certain major markets at percentages ranging from the mid-single digits to the high-teens, subject to certain reductions and offsets.

Pursuant to the License Agreement, the Company determined the License Agreement represents a service arrangement under the scope of ASC 606. Given the reversion of the rights under the License Agreement represents a penalty in substance for a termination by Akebia, the contract term would be the stated term of the License Agreement.

The Company determined that the grant of license to our patents and trademarks, know how transfer, the assignment of regulatory submissions and trademarks and additional knowledge transfer assistance obligations represent a single promise and performance obligation to be transferred to Akebia over time due to the nature of the promises in the contract. The provision of development materials on hand was identified as a separate performance obligation. However, it is immaterial in the context of the contract as the development materials are low value and do not have an alternative use to the Company.

The consideration related to sales-based milestone payments, including royalties, will be recognized when the related sales occur as these amounts have been determined to relate predominantly to the license. The Company will re-evaluate the probability of achievement of the milestones and any related constraints each reporting period.

Akebia Supply Agreement

On August 3, 2021, the Company and Akebia entered into a Supply Agreement (the “Supply Agreement”) relating to the manufacturing by the Company of the Initial Supply of the Drug Product and placebo ("Initial Supply") for Akebia's use pursuant to the License Agreement. Akebia will pay the Company for the manufacturing costs at mutually agreed upon rates.

The Company determined the Supply Agreement has stand-alone value under the scope of ASC 606 and should not be combined with the License Agreement. Given that the Supply Agreement can be terminated at any time without cause with 30 days notice, the Company deemed the Supply Agreement to be a month-to-month contract. The manufacturing of the Initial Supply by the Company represents a single performance obligation and consideration related to the manufacturing costs will be recognized over time as costs are incurred based on an input method. The Company recorded $0.3 million amount as revenue from the Supply Agreement for the year ended December 31, 2021.

Nature of Business (Details)					12 Months Ended
Nature of Business (Details)	Jun. 03, 2021 USD ($) shares	Sep. 03, 2020 USD ($)	Jul. 29, 2020 USD ($) shares	Apr. 01, 2019	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($)	Jul. 24, 2020 USD ($)
Nature of Business
Health care trust fund, Description					We have initiated exploratory clinical trials with CY6463 ADv, CIAS, and MELAS. The ADv study will be supported in part by a grant from the Alzheimer’s Association’s Part the Cloud-Gates Partnership Grant Program, which provides Cyclerion with $2 million of funding over two years.
Common stock dividend issued (shares of Cyclerion per ten shares of Ironwood)				0.1
Proceeds from equity private placement and ATM					$ 30,503,000	$ 24,250,000
Proceeds from 2020 Equity private placement and ATM					30,503,000	24,250,000
Issuance of common stock - 2020 private placement					18,028,000	$ 24,250,000
Cash and cash equivalents					54,000,000.0
Private Placement
Nature of Business
Issuance of common stock - 2020 private placement (in shares) \| shares	5,735,988		6,062,500
Proceeds from equity private placement and ATM	$ 18,000,000		$ 24,300,000
Proceeds from 2020 Equity private placement and ATM	$ 18,000,000		$ 24,300,000
Net proceeds from issuance of shares to accredited investors					219,800
IPO
Nature of Business
Maximum amount of Aggregate initial offering price							$ 150,000,000.0
ATM Offering
Nature of Business
Cash commission of gross proceeds of sales of common stock, percentage		3.00%
Net Proceeds from Issuance of Common Stock					12,500,000
Commission Paid From Gross Proceeds Of Sales Of Common Stock					$ 400,000
Number of common stock sold \| shares					3,353,059
ATM Offering \| Maximum
Nature of Business
Issuance of common stock - 2020 private placement		$ 50,000,000.0

Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Income tax, penalties and interest accrued	$ 0	$ 0

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accrued Liabilities and Other Liabilities [Abstract]
Accrued incentive compensation	$ 1,369	$ 1,720
Salaries	266	514
Accrued vacation	345	555
Professional fees	398	689
Accrued severance and benefit costs	28	3,640
Other	498	176
Accrued expenses and other current liabilities	$ 2,904	$ 7,294

Leases - Sublease as Lessor (Details) $ in Thousands			3 Months Ended	12 Months Ended
Leases - Sublease as Lessor (Details) $ in Thousands	Sep. 15, 2020 USD ($) ft²	Oct. 18, 2019 USD ($) ft² Item	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Apr. 01, 2019
Lessor Lease Description [Line Items]
Space subleased to third party (in square feet) \| ft²	15,700	15,700
Sublease termination agreement estimated fair value of rooms				$ 1,500
Sublease termination agreement estimated fair value of services				2,900
Sublease termination agreement prepaid rooms and services					$ 4,400
Other current assets				468	3,163
Gain (loss) on lease modification				881	(1,669)
Gross sublease income, net of rent expense					1,500
Net sublease income					300
Prepaid rooms balance reclassified from other assets			$ 1,400
Term of lease			8 years 10 months 17 days
lease expense				100
License And Service Member
Lessor Lease Description [Line Items]
lease expense				200
Head Lease
Lessor Lease Description [Line Items]
Space subleased to third party (in square feet) \| ft²		15,700
Sublease, Annual base rent		$ 1,500
Sublease, Increase in base rent over the term of the lease (as a percent)		3.00%
Sublease, Abatement of base rent		$ 700
Sublease, Abatement period		6 months
Sublease, Number of extension options \| Item		0
Sublease, Initial security deposit received		$ 500
Sublease, Additional security deposit to be received		$ 400
Sublease, additional security deposit period		9 months
Term of lease						123 months
Sublease Termination Agreement
Lessor Lease Description [Line Items]
Sublease termination agreement prepaid rooms and services	$ 3,100
Other current assets					1,600
Other assets					$ 2,800
Gain (loss) on lease modification				3,100
Rent receivables outstanding from subtenant				1,300
Write off lease unamortized direct cost	$ 200			$ 200

Grant Revenue

12 Months Ended

Dec. 31, 2021

Disaggregation of Revenue [Line Items]

Grant Revenue

15. Grant Revenue

In August 2021, the Company was approved to receive funding from the PTC Grant for the Phase 2 study of CNS sGC stimulation in AD with vascular features. The granting period is July 1, 2021, to December 31, 2022, and the Company will receive an award of up to $2 million. The Company determined that this transaction is non-reciprocal as there is not considered to be a commensurate value exchanged with the Alzheimer's Association as the funding provider. Where commensurate value is not exchanged for goods and services provided, a recipient assesses whether the grant is conditional or unconditional. The Company considered all conditions and barriers associated with this grant and determined the grant is conditional and revenue will be recognized upon achieving certain milestones and incurring internal costs specifically covered by this grant. Under ASC 958-605, revenues will be recognized as the Company incurs expenses related to the PTC Grant.

The Company incurred approximately $0.6 million of allowable expenses and recognized a corresponding amount of grant revenue for the year ended December 31, 2021.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Income Taxes - Additional disclosures (Details) - USD ($)		12 Months Ended
	Apr. 21, 2020	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Deferred tax assets, valuation allowance		$ 16,424,000	$ 23,473,000
Tax credit carryforwards		8,400	7,500
Provision for income tax		0	0
Unrecognized tax benefits		0	0
Accrued interest or penalties		0	0
Proceeds from short-term note payable		0	3,509,000
PPP Loan
Income Taxes
Proceeds from short-term note payable	$ 3,500,000
Federal
Income Taxes
Net operating loss carryforwards		$ 160,000,000	98,800,000
Income tax credit expiration description		Federal credits begin to expire in 2039 and will continue to expire through 2040. State credits begin to expire in 2022 and continue through 2034
State
Income Taxes
Net operating loss carryforwards		$ 159,600,000	$ 98,900,000
Income tax credit expiration description		begin to expire in 2039 and will continue to expire through 2040

Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

16. Subsequent Events

The Company has evaluated all events and transactions that occurred after the balance sheet date through the date the consolidated financial statements were issued and determined that there were no such events requiring recognition or disclosure in the consolidated financial statements.

Leases - Schedule of supplemental cash flow information related to leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Decrease in right-of-use assets related to lease modification and termination	$ 42,058	$ 27,333
Decrease in operating lease liabilities due to lease modifications and termination	41,177	29,002
Cash paid for amounts included in the measurement of lease liabilities (in thousands)	$ 1,887	$ 7,411
Weighted-average remaining lease term of operating leases (in years)		8 years 6 months
Weighted-average discount rate of operating leases		6.10%

Share-based Compensation Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-based Compensation Plans

9. Share-based Compensation Plans

In 2019, Cyclerion adopted share-based compensation plans. Specifically, Cyclerion adopted the 2019 Employee Stock Purchase Plan (“2019 ESPP”) and the 2019 Equity Incentive Plan (“2019 Equity Plan”). Under the 2019 ESPP, eligible employees may use payroll deductions to purchase shares of stock in offerings under the plan, and thereby acquire an interest in the future of the Company. The 2019 Equity Plan provides for stock options and restricted stock units (“RSUs”).

Cyclerion also mirrored two of Ironwood’s existing plans, the Amended and Restated 2005 Stock Incentive Plan (“2005 Equity Plan”) and the Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan (“2010 Equity Plan). These mirror plans were adopted to facilitate the exchange of Ironwood equity awards for Cyclerion equity awards upon the Separation as part of the equity conversion. As a result of the Separation and in accordance with the EMA, employees of both companies retained their existing Ironwood vested options and received a pro-rata share of Cyclerion options, regardless of which company employed them post-Separation. For employees that were ultimately employed by Cyclerion, unvested Ironwood options and RSUs were converted to unvested Cyclerion options and RSUs.


	Year Ended December 31,
	2021		2020
Research and development	$	3,945	$	6,799
General and administrative		5,666		8,193
	$	9,611	$	14,992

Stock Options

Stock options granted under the Company’s equity plans generally have a ten-year term and vest over a period of four years, provided the individual continues to serve at the Company through the vesting dates. Options granted under all equity plans are exercisable at a price per share not less than the fair market value of the underlying common stock on the date of grant. The estimated fair value of options, including the effect of estimated forfeitures, is recognized over the requisite service period, which is typically the vesting period of each option.

A summary of stock option activity for the year ended December 31, 2021 is as follows:


						Weighted
				Weighted		Average		Average
				Average		Remaining		Intrinsic
	Number			Exercise		Contractual		Value (in
	of Options			Price		Term (Years)		thousands)
Outstanding as of December 31, 2020		7,426,356		$	11.87		7.0	$	1,178
Granted		1,176,250			2.98
Exercised		(72,419	)		2.17
Cancelled or forfeited		(1,449,761	)		10.69
Outstanding as of December 31, 2021		7,080,426		$	10.73		6.9		—
Exercisable at December 31, 2021		4,518,213		$	13.46		5.9	$	—

During the years ended December 31, 2021 and 2020, the Company granted stock options to purchase an aggregate of 1,176,250 shares and 1,382,846 shares, respectively, at weighted average grant fair values per option share of $2.17 and $1.97, respectively. The total grant fair value of options granted during the years ended December 31, 2021 and 2020 was $2.6 million and $2.7 million, respectively.

The total intrinsic value of options exercised for the years ended December 31, 2021 and 2020 was $0.1 million and $0.1 million, respectively.

As of December 31, 2021, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested time-based stock options held by the Company’s employees is $8.1 million and the weighted average period over which that expense is expected to be recognized is 3.29 years.


	Year ended December 31,
	2021			2020
Weighted average risk-free interest rate		1.09	%		0.43	%
Expected dividend yield		—			—
Expected option term (in years)		5.9			6.3
Expected stock price volatility		85.45	%		91.73	%

For the years ended December 31, 2021 and 2020, expected volatility was estimated using an average of the historical volatility of the common stock of a group of similar companies that were publicly traded. The

Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available.

The Company has granted to certain employees performance based options to purchase shares of common stock. These options are subject to performance based milestone vesting. During the year ended December 31, 2021, 50,000 shares vested as a result of performance milestone achievements and no shares vested during the year ended December 31, 2020. The Company recorded a de minimis and no share-based compensation expense related to these performance-based options for the years ended December 31, 2021, and 2020, respectively.

Market-based Stock Options

The Company also has granted to certain employees stock options containing market conditions that vest upon the achievement of specified price targets of the Company’s share price for a period through December 31, 2024. Vesting is measured based upon the average closing price of the Company’s share price for any thirty consecutive trading days, subject to certain service requirements. Stock compensation cost is expensed on a straight-line basis over the derived service period for each stock price target within the award, ranging from approximately 4.0 to 4.6 years. The Company accelerates expense when a stock price target is achieved prior to the derived service period. The Company does not reverse expense recognized if the share price target(s) are ultimately not achieved but expense is reversed when a stock award recipient has a break in service prior to the completion of the derived service period. As of December 31, 2021, there was $0.2 million of unrecognized compensation costs related to stock options containing market conditions, which is expected to be recognized over a weighted-average period of 2.17 years.

A summary of stock awards containing market conditions activity for the years ended December 31, 2021 and 2020 is as follows:


						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Number of			Exercise		Contractual		Value (in
	Options			Price		Term (years)		thousands)
Outstanding as of December 31, 2020		600,000		$	2.01	$	8.9	$	630
Granted		—			—		—		—
Exercised		—			—		—		—
Cancelled or forfeited		(150,000	)	$	—	$	—	$	—
Outstanding as of December 31, 2021		450,000		$	2.01		7.9	$	—
Exercisable at December 31, 2021		—		$	—		—	$	—

Restricted Stock Units

The RSUs generally vest 25% per year on the approximate anniversary of the date of grant until fully vested, provided the employee remains continuously employed with the Company through each vesting date. Shares of the Company’s common stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of all RSUs is based on the market value of the Company’s common stock on the date of grant. Compensation expense, including the effect of estimated forfeitures, is recognized over the applicable service period.

A summary of RSU activity for the years ended December 31, 2021 is as follows:


				Weighted Average
	Number			Grant Date
	of Shares			Fair Value
Unvested as of December 31, 2020		294,913		$	14.52
Granted		39,369			3.17
Vested		(143,774	)		12.01
Forfeited		(97,704	)		14.41
Unvested as of December 31, 2021		92,804		$	13.70

As of December 31, 2021, the unrecognized share-based compensation expense, net of estimated forfeitures, related to all unvested restricted stock units by the Company’s employees is $0.7 million and the weighted-average period over which that expense is expected to be recognized is 1.13 years.

Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Cash equivalents:
Total cash equivalents	$ 52,917	$ 53,240
Level 1
Cash equivalents:
Total cash equivalents	52,917	53,240
Money market funds
Cash equivalents:
Total cash equivalents	52,917	53,240
Money market funds \| Level 1
Cash equivalents:
Total cash equivalents	$ 52,917	$ 53,240

Loss per share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

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


	Year Ended December 31,
	2021			2020
Numerator:
Net loss (in thousands)	$	(51,647	)	$	(77,802	)

Denominator:
Weighted average shares used in calculating net loss per share — basic and diluted (in thousands)		39,144			30,403
Net loss per share — basic and diluted	$	(1.32	)	$	(2.56	)

Schedule Of Earnings Per Share Diluted By Common Class

The following table sets forth potential shares that were considered anti-dilutive for the years ended December 31, 2021 and 2020:


	Year Ended December 31,
	2021		2020
Stock Options	$	7,530,426	$	294,913
RSUs		92,804		8,026,356
	$	7,623,230	$	8,321,269

License Agreement - Additional Information (Details) - USD ($) $ in Thousands		12 Months Ended		18 Months Ended
	Jun. 03, 2021	Dec. 31, 2021	Dec. 31, 2020	Mar. 31, 2023
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenues		$ 3,942	$ 2,296
Akebia Research License Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Up Front Payment Received	$ 3,000
Akebia Research License Agreement [Member] \| Forecast [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Additional milestone cash payment				$ 12,000
Akbeia Supply Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenues		$ 300

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Summary of Significant Accounting Policies - Leases (Details) $ in Thousands			12 Months Ended
	Sep. 15, 2020 USD ($) ft²	Feb. 28, 2020 USD ($) ft²	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Apr. 30, 2021 USD ($) ft²	Oct. 18, 2019 ft²	Apr. 01, 2019 ft²
Leases
Election of practical expedients package				true
Space subleased to third party (in square feet) \| ft²	15,700					15,700
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Gain (Loss) on Termination of Lease			$ 881	$ (1,669)
Gain (loss) on lease modification			881	(1,669)
Sublease termination agreement prepaid rooms and services				4,400
Gain (Loss) on Termination of Lease			6,300
Head Lease
Leases
Space subleased to third party (in square feet) \| ft²						15,700
Rented space (in square feet) \| ft²							114,000
Gain (Loss) on Termination of Lease			900
Security Deposit Returned					$ 3,800
Lease Amendment
Leases
Rentable space terminated from lease agreement (in square feet) \| ft²		40,000
Rented space (in square feet) \| ft²		74,000
Gain (Loss) on Termination of Lease				2,100
ROU asset, impairment loss		$ 0
Gain (loss) on lease modification				2,100
Second Lease Amendment
Leases
Space subleased to third party (in square feet) \| ft²	15,700
Rentable space terminated from lease agreement (in square feet) \| ft²	17,000
Rented space (in square feet) \| ft²	57,000
Gain (Loss) on Termination of Lease				(400)
ROU asset, impairment loss	$ 0
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700
Gain (loss) on lease modification				$ (400)
Sublease Termination Agreement
Leases
Rentable space terminated from lease agreement (in square feet) \| ft²	15,700				57,000
Gain (Loss) on Termination of Lease			3,100
Gain (loss) on lease modification			3,100
Sublease termination agreement prepaid rooms and services	$ 3,100
Write off lease unamortized direct cost	$ 200		200
Termination Agreement
Leases
Gain (Loss) on Termination of Lease			$ 900
Security Deposit Returned					$ 3,800

Property and Equipment

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment

5. Property and Equipment

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


	December 31,			December 31,
	2021			2020
Software	$	2,214		$	2,214
Computer and office equipment		51			44
Leasehold improvements		—			14,894
Property and equipment, gross		2,265			17,152
Less: accumulated depreciation and amortization		(2,200	)		(10,287	)
Property and equipment, net	$	65		$	6,865

As of December 31, 2021, and 2020, the Company’s property and equipment was primarily located in Cambridge, Massachusetts.

Depreciation and amortization expense of the Company’s property and equipment was approximately $0.5 million and $2.3 million for the years ended December 31, 2021 and 2020, respectively.

During the year ended December 31, 2021, the Company recorded a non-cash loss of $6.3 million, on the disposal of leasehold improvements as a result of its Head Lease (as defined below) termination (see Note 8 to the Consolidated Financial Statements). The non-cash loss on the disposal of leasehold improvements was recognized as a component of operating expenses in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2021.

Workforce Reduction (Tables)

12 Months Ended

Dec. 31, 2021

Restructuring and Related Activities [Abstract]

Schedule of accrued liabilities activity allocated to Cyclerion in connection with the reduction in workforce

The following table summarizes the accrued liabilities activity recorded in connection with the reduction in workforce for the year ended December 31, 2021 (in thousands):


	Amounts accrued at December 31, 2020			Charges			Amount paid		Adjustments		Amounts accrued at December 31, 2021
2020 workforce reduction	$	(3,640	)	$	(878	)	$	4,490	$	—	$	(28	)
Total	$	(3,640	)	$	(878	)	$	4,490	$	—	$	(28	)

Leases - Future minimum lease operating payments (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Future minimum lease payments under non-cancelable operating leases under ASC 842
Less: current portion of operating lease liabilities	$ 0	$ 3,293
Operating lease liabilities, net of current portion	$ 0	$ 38,933

Share-based Compensation Plans - Schedule of Weighted Average Assumptions used in estimating the fair value of the stock options (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Weighted average risk-free interest rate	1.09%	0.43%
Expected dividend yield	0.00%	0.00%
Expected option term (in years)	5 years 10 months 24 days	6 years 3 months 18 days
Expected stock price volatility	85.45%	91.73%

Income Taxes - Reconciliation of income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
U.S.	$ (51,686)	$ (77,884)
International	39	82
Loss before benefit from income taxes	(51,647)	(122,406)
Income tax benefit using U.S. federal statutory rate	(10,846)	(16,338)
State income taxes, net of federal benefit	(3,631)	(5,619)
Non-deductible share-based compensation	(911)	16
Share-based compensation - shortfalls/(windfalls)	946	1,047
Permanent differences	(420)	(94)
Tax credits	(805)	(2,469)
Other	(9)	(16)
Change in valuation allowance	16,424	23,473
Income Tax Expense (Benefit), Total	0	$ 0
Paycheck Protection Program Loan [Member]
PPP loan forgiveness	$ 748

Grant Revenue (Additional Information) (Details) - USD ($) $ in Millions	12 Months Ended	18 Months Ended
	Dec. 31, 2021	Dec. 31, 2022
Revenue Recognition and Deferred Revenue [Abstract]
PTC Grant Award		$ 2.0
Allowable Expenses on Grant Revenue	$ 0.6

Income Taxes - Deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$ 43,700	$ 27,007
Tax credit carryforwards	8,044	7,185
Share-based compensation	7,702	5,890
Operating lease - liability	0	11,536
Property and equipment	1	1,362
Capitalized research and development	11,147	12,684
Accruals and reserves	91	518
other	4
Total deferred tax assets	70,687	66,182
Deferred tax liabilities:
Operating lease - right of use asset	383	11,857
Prepaid sublease termination	758	(1,203)
Total deferred tax liabilities	(1,141)	(13,060)
Net deferred tax assets	69,546	53,122
Valuation allowance	(69,546)	(53,122)
Net deferred tax assets	$ 0	$ 0

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Principles of Consolidation

Segment Information

Use of Estimates

Cash and Cash Equivalents including Restricted Cash

As of December 31, 2021, The Company did not have any restricted cash balances. As of December 31, 2020, the Company was contingently liable under an unused letter of credit with a bank, related to the Company's facility lease, in the amount of approximately $3.8 million. The Company recorded the collateral used to secure the letter of credit as restricted cash. The full amount of restricted cash was recorded as a component of non-current assets at December 31, 2020.

Property and Equipment


Asset Description		Estimated Useful Life (In Years)
Laboratory equipment		5
Computer and office equipment		3
Furniture and fixtures		7
Software		3

Leasehold improvements are amortized over the shorter of the estimated useful life of the asset or the lease term. The Company has no capital leases.

Fair Value of Investment Instruments

•

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

•

Foreign Currency Translation Adjustment

Accounts Receivable

Impairment of Long-Lived Assets

Leases

The recognition of right-of-use assets and lease liabilities related to the Company’s operating leases under ASC 842 has had a material impact on the Company’s consolidated financial statements.

As part of the ASC 842 adoption, the Company has used certain practical expedients outlined in the guidance. These practical expedients include:

•

Account policy election to use the short-term lease exception by asset class;

•

Election of the practical expedient package during transition, which includes:

•

An entity need not reassess whether any expired or existing contracts are or contain leases.

•

An entity need not reassess initial direct costs for any existing leases.

Paycheck Protection Program Loan

Revenue

Research and Development Costs

Company has not experienced any material differences between accrued or prepaid costs and actual costs since inception.

General and Administrative Expenses

Income taxes

Patent Costs

Interest and Other Income, Net

Subsequent Events

New Accounting Pronouncements

Loss per share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Loss per share

10. Loss per share

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


	Year Ended December 31,
	2021			2020
Numerator:
Net loss (in thousands)	$	(51,647	)	$	(77,802	)

Denominator:
Weighted average shares used in calculating net loss per share — basic and diluted (in thousands)		39,144			30,403
Net loss per share — basic and diluted	$	(1.32	)	$	(2.56	)

We exclude shares of common stock related to stock options and RSUs from the calculation of diluted net loss per share since the inclusion of such shares would be anti-dilutive. The following table sets forth potential shares that were considered anti-dilutive for the years ended December 31, 2021 and 2020:


	Year Ended December 31,
	2021		2020
Stock Options	$	7,530,426	$	294,913
RSUs		92,804		8,026,356
	$	7,623,230	$	8,321,269