UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2024

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

For the transition period from________ to_________.

Commission File Number: 001-40874

Cingulate Inc.

(Exact name of registrant as specified in its charter)

Delaware		86-3825535
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1901 W. 47^th Place Kansas City, KS		66205
(Address of principal executive offices)		(Zip Code)

(913) 942-2300

(Registrant’s telephone number, including area code)

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

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common Stock, par value $0.0001 per share

CING

The Nasdaq Stock Market LLC

(Nasdaq Capital Market)

Warrants, exercisable for one share of common stock

CINGW

The Nasdaq Stock Market LLC

(Nasdaq Capital Market)

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

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

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

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☒

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

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

As of November 6, 2024, 3,212,233 shares of the registrant’s common stock, $0.0001 par value, were issued and outstanding.

Cingulate Inc.

Form 10-Q for the Quarter Ended September 30, 2024

TABLE OF CONTENTS

		Page
	PART I
Item 1	Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4	Controls and Procedures	30

	PART II
Item 1	Legal Proceedings	31
Item 1A	Risk Factors	31
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 5	Other Information	32
Item 6	Exhibits	33

Signatures		34

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “estimate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions intended to identify statements about the future. These statements speak only as of the date of filing this report with the Securities and Exchange Commission (SEC) and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements include, without limitation, statements about the following:

	●	our ability to maintain compliance with the continued listing requirements of The Nasdaq Stock Market LLC (Nasdaq);

	●	our lack of operating history and need for additional capital;

	●	our plans to develop and commercialize our product candidates;

	●	the timing of our planned clinical trials for CTx-1301, CTx-1302, and CTx-2103;

	●	the timing of our New Drug Application (NDA) submissions for CTx-1301, CTx-1302, and CTx-2103;

	●	the timing of and our ability to obtain and maintain regulatory approvals for CTx-1301, CTx-1302, CTx-2103, or any other future product candidate;

	●	the clinical utility of our product candidates;

	●	our commercialization, marketing and manufacturing capabilities and strategy;

	●	our ability to identify strategic partnerships;

	●	our expected use of cash;
	●	our competitive position and projections relating to our competitors or our industry;
	●	our ability to identify, recruit, and retain key personnel;

	●	the impact of laws and regulations;

	●	our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (JOBS Act);

	●	our plans to identify additional product candidates with significant commercial potential that are consistent with our commercial objectives; and
	●	our estimates regarding future revenue and expenses.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. You should refer to the “Risk Factors” section in this report and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on April 1, 2024, for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. We operate in an evolving environment and new risk factors and uncertainties may emerge from time to time. It is not possible for management to predict all risk factors and uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this report will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. You should review the factors and risks and other information we describe in the reports we will file from time to time with the SEC.

PART I — FINANCIAL INFORMATION

Cingulate Inc.

Consolidated Balance Sheets (unaudited)

	September 30,			December 31,
	2024			2023
ASSETS

Current assets:
Cash and cash equivalents	$	10,040,149		$	52,416
Other receivables		2,247			14,622
Prepaid expenses and other current assets		1,301,215			511,556
Total current assets		11,343,611			578,594

Property and equipment, net		2,066,515			2,545,965
Operating lease right-of-use assets		169,978			366,877

Total assets		13,580,104			3,491,436

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable		906,215			5,199,106
Accrued expenses		402,152			1,651,518
Note payable		-			3,000,000
Finance lease liability, current		8,806			17,057
Operating lease liability, current		225,368			358,085
Total current liabilities		1,542,541			10,225,766

Long-term liabilities:
Finance lease liability, net of current		-			4,436
Operating lease liability, net of current		-			130,663
Total long-term liabilities		-			135,099
Total liabilities		1,542,541			10,360,865

Stockholders’ Equity
Common Stock, $0.0001 par value; 240,000,000 shares authorized and 3,044,165 and 97,293 shares issued and outstanding as of September 30, 2024 and December 31, 2023		305			10
Preferred Stock, $0.0001 par value; 10,000,000 shares authorized and 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023		-			-
Additional Paid-in-Capital		114,394,459			86,074,004
Accumulated deficit		(102,357,201	)		(92,943,443	)
Total stockholders’ equity		12,037,563			(6,869,429	)

Total liabilities and stockholders’ equity	$	13,580,104		$	3,491,436

See notes to consolidated financial statements.

Cingulate Inc.

Consolidated Statements of Operations and Comprehensive Loss (unaudited)

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Operating expenses:
Research and development	$	1,428,504		$	3,923,852		$	5,116,582		$	10,508,395
General and administrative		1,853,583			1,825,822			4,319,902			5,453,643
Operating loss		(3,282,087	)		(5,749,674	)		(9,436,484	)		(15,962,038	)

Interest and other income (expense), net		50,483			(229,380	)		22,726			(638,212	)
Loss before income taxes		(3,231,604	)		(5,979,054	)		(9,413,758	)		(16,600,250	)
Income tax benefit (expense)		-			-			-			-

Net loss and comprehensive loss	$	(3,231,604	)	$	(5,979,054	)	$	(9,413,758	)	$	(16,600,250	)

Net loss per share of common stock, basic and diluted	$	(1.83	)	$	(72.60	)	$	(10.06	)	$	(278.84	)

Weighted average number of shares used in computing net loss per share of common stock, basic and diluted		1,766,362			82,361			936,118			59,533

See notes to consolidated financial statements.

Cingulate Inc.

Consolidated Statements of Stockholders’ Equity (unaudited)

											Accumulated
	Common Stock				Additional			Accumulated			Other Comprehensive		Stockholders’
	Shares		Amount		Paid-in-Capital			Deficit			Income		Equity
Balance January 1, 2023		47,123		5	$	73,290,513		$	(69,408,496	)	$	-	$	3,882,022
Activity for the three months to March 31, 2023:
Unrealized losses on available for sale investments		-		-		-			-			-		-
Stock-based compensation expense		-		-		204,479			-			-		204,479
Net loss		-		-		-			(4,004,887	)		-		(4,004,887	)
Balance March 31, 2023		47,123	$	5	$	73,494,992		$	(73,413,383	)	$	-	$	81,614
Activity for the three months to June 30, 2023:
Unrealized losses on available for sale investments		3,114		-		218,798			-			-		218,798
Stock-based compensation expense		-		-		217,376			-			-		217,376
Net loss		-		-		-			(6,616,309	)		-		(6,616,309	)
Balance June 30, 2023		50,237	$	5	$	73,931,166		$	(80,029,692	)	$	-	$	(6,098,521	)

Activity for the three months to September 30, 2023:
Issuance of common stock in connection with At the Market Offering and Purchase Agreement, net of fees		7,412		1	$	1,621,938								1,621,939
Issuance of common stock in connection with private placement with WFIA		7,596		1	$	999,999								1,000,000
Issuance of common stock and pre-funded warrants sold for cash in public offering, net of fees		7,167		1		3,310,550								3,310,551
Issuance of pre-funded warrants in connection with the conversion of related party note payable		-		-		3,949,765								3,949,765
Capital contribution in connection with conversion of related party note payable						1,862,735								1,862,735
Stock-based compensation expense		-		-		236,251			-			-		236,251
Net loss		-		-		-			(5,979,054	)		-		(5,979,054	)
Balance September 30, 2023		72,412	$	8	$	85,912,404		$	(86,008,746	)	$	-	$	(96,334	)

Balance January 1, 2024		97,293		10	$	86,074,004		$	(92,943,443	)	$	-	$	(6,869,429	)
Activity for the three months to March 31, 2024:
Issuance of common stock in connection with At the Market Offering and Purchase Agreement, net of fees		23,650		2		3,115,282			-			-		3,115,284
Issuance of common stock in public offering, net of fees		296,000		30		6,432,862			-			-		6,432,892
Issuance of pre-funded warrants in connection with the conversion of related party note payable		-		-		2,734,739			-			-		2,734,739
Capital contribution in connection with conversion of related party note payable		-		-		586,511			-			-		586,511
Issuance of restricted common stock		596		-		24,024			-			-		24,024
Stock-based compensation expense		-		-		164,575			-			-		164,575
Net loss		-		-		-			(2,972,477	)		-		(2,972,477	)
Balance March 31, 2024		417,539	$	42	$	99,131,997		$	(95,915,920	)	$	-	$	3,216,119
Activity for the three months to June 30, 2024:
Issuance of common stock upon exercise of pre-funded warrants		86,334		9		(9	)							-
Issuance of common stock in connection with At the Market Offering and Purchase Agreement, net of fees		121,279		12		1,109,990			-			-		1,110,002
Warrant inducement		143,958		14		1,614,549			-			-		1,614,563
Issuance of restricted common stock		11,652		1		98,433			-			-		98,434
Stock-based compensation expense		-		-		254,331			-			-		254,331
Net loss		-		-		-			(3,209,677	)		-		(3,209,677	)
Balance June 30, 2024		780,762	$	78	$	102,209,291		$	(99,125,597	)	$	-	$	3,083,772
Balance		780,762	$	78	$	102,209,291		$	(99,125,597	)	$	-	$	3,083,772
Activity for the three months to September 30, 2024:
Issuance of common stock upon exercise of pre-funded warrants		16,498		2		(2	)							-
Share adjustment due to fractional rounding of August 2024 reverse split		130,602		13		(13	)							-
Issuance of common stock in connection with At the Market Offering and Purchase Agreement, net of fees		2,116,303		212		11,791,412			-			-		11,791,624
Stock-based compensation expense		-		-		393,771			-			-		393,771
Net loss		-		-		-			(3,231,604	)		-		(3,231,604	)
Balance September 30, 2024		3,044,165	$	305	$	114,394,459		$	(102,357,201	)	$	-	$	12,037,563
Balance		3,044,165	$	305	$	114,394,459		$	(102,357,201	)	$	-	$	12,037,563

See notes to consolidated financial statements

Cingulate Inc.

Consolidated Statements of Cash Flows (unaudited)


	Nine Months Ended September 30,
	2024			2023
Operating activities:
Net loss	$	(9,413,758	)	$	(16,600,250	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		492,788			410,593
Stock-based compensation		935,135			658,106
Changes in operating assets and liabilities:
Other receivables		12,375			228,596
Prepaid expenses and other current assets		(789,659	)		1,368,658
Operating lease right-of-use assets		196,899			194,125
Trade accounts payable and accrued expenses		(5,542,256	)		1,517,952
Current portion of operating lease liability		(132,718	)		13,428
Long-term portion of operating lease liability		(130,663	)		(263,380	)
Net cash used in operating activities		(14,371,857	)		(12,472,172	)

Investing activities:
Purchase of property and equipment		(13,338	)		(37,136	)
Net cash used in investing activities		(13,338	)		(37,136	)

Financing Activities:
Proceeds from the issuance of common stock and pre-funded common stock purchase warrants, net of fees		24,385,615			6,151,288
Proceeds from note payable		-			3,000,000
Principal payments on finance lease obligations		(12,687	)		(11,943	)
Net cash provided by financing activities		24,372,928			9,139,345

Cash and cash equivalents:
Net increase (decrease) in cash and cash equivalents		9,987,733			(3,369,963	)
Cash and cash equivalents at beginning of year		52,416			5,356,276
Cash and cash equivalents at end of period	$	10,040,149		$	1,986,313

Cash payments:
Interest paid	$	6,160		$	10,266

See notes to consolidated financial statements

CINGULATE INC.

Notes to Consolidated Financial Statements

(1) Nature of the Business and Liquidity

Organization

Cingulate Inc. (Cingulate, or the Company), a Delaware corporation, is a biopharmaceutical company focused on the development of products utilizing its drug delivery platform technology that enables the formulation and manufacture of once-daily tablets of multi-dose therapies, with an initial focus on the treatment of Attention Deficit/Hyperactivity Disorder (ADHD). The Company is developing two proprietary, first-line stimulant medications, CTx-1301 (dexmethylphenidate) and CTx-1302 (dextroamphetamine), for the treatment of ADHD intended for all patient segments: children, adolescents, and adults. CTx-1301 and CTx-1302 utilize a flexible core tableting technology with target product profile designed to deliver a rapid onset and last the entire active day with a controlled descent of plasma drug level and have favorable tolerability. The Company is progressing with the remaining clinical requirements for CTx-1301 and is targeting a New Drug Application (NDA) for CTx-1301in mid-2025. In addition, the Company has a third product to treat anxiety, CTx-2103, in a formulation stage.

The consolidated financial statements and notes for the periods ended September 30, 2024 and 2023, represent the full consolidation of Cingulate and its subsidiaries, including Cingulate Therapeutics LLC (CTx) and all references to the Company represent this full consolidation.

Liquidity

The Company has incurred operating losses and negative cash flows from operations since inception. As a pre-revenue entity, the Company is dependent on the ability to raise capital to support operations until such time as the product candidates under development are U.S. Food and Drug Administration (FDA) approved, manufactured, commercially available to the marketplace and produce revenues. On September 30, 2024, the Company had cash and cash equivalents of approximately $10.0 million, and an accumulated deficit of approximately $102.4 million. However, the Company will need additional funding for operations and development. Management is evaluating various strategies to obtain additional funding, which may include additional offerings of equity, issuance of debt, or other capital sources, including potential collaborations with other companies or other strategic transactions. Successful implementation of these plans involves both the Company’s efforts and factors that are outside its control, such as market factors and FDA approval of product candidates. The Company can give no assurance that its plans will be effectively implemented in such a way that they will sufficiently alleviate or mitigate the conditions and events noted above, which results in 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 accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.

(2) Summary of Significant Accounting Policies

(a) Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The consolidated financial statements include the accounts of Cingulate and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

(b) Unaudited Interim Financial Information

The accompanying consolidated balance sheets as of September 30, 2024 and December 31, 2023, the consolidated statements of operations and comprehensive loss for the three and nine-month periods ended September 30, 2024 and 2023, the consolidated statement of stockholders’ equity for the three and nine-month periods ended September 30, 2024 and 2023, the consolidated statements of cash flows for the nine-month periods ended September 30, 2024 and 2023, and the related interim disclosures are unaudited. These unaudited consolidated financial statements include all adjustments necessary, consisting of only normal recurring adjustments, to fairly state the financial position and the results of operations and cash flows for interim periods in accordance with U.S. GAAP. Interim period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying consolidated financial statements should be read in conjunction with the Company’s 2023 audited consolidated financial statements and the notes thereto.

(c) Concentration of Credit Risk

The Company maintains cash equivalent deposits, which at various times throughout the fiscal year exceeded the amounts insured by the Federal Deposit Insurance Corporation limit of $250,000 (without regard to reconciling items). Management monitors the soundness of these financial institutions and does not believe the Company is subject to any material credit risk relative to the uninsured portion of the deposits.

(d) Impairment of Long-lived Assets

The Company assesses the carrying value of its long-lived assets, including property and equipment, as well as lease right of use (ROU) assets, when events or circumstances indicate that the carrying value of such assets may not be recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted cash flows expected to be generated by the assets. If the sum of the expected future cash flows is less than the carrying amount, the Company would recognize an impairment loss. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived asset groups. No impairment was recognized during the nine-month periods ended September 30, 2024 or 2023.

(e) Stock-Based Compensation

The Company measures employee and director stock-based compensation expense for all stock-based awards based on their grant date fair value using the Black-Scholes option-pricing model. For stock-based awards with service conditions, stock-based compensation expense is recognized over the requisite service period using the straight-line method. Forfeitures are recognized as they occur. See additional information in Note 10.

(3) Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following at September 30, 2024 and December 31, 2023:

	September 30,		December 31,
	2024		2023
Research and development	$	1,088,696	$	183,452
Insurance		128,941		31,302
Active pharmaceutical ingredients		29,025		97,324
Dues and subscriptions		20,092		-
Deferred capital raise costs		13,763		178,780
Other		20,698		20,698
	$	1,301,215	$	511,556

(4) Property and Equipment

Property and equipment, net consisted of the following at September 30, 2024 and December 31, 2023:

Schedule of Property and Equipment

	Estimated
	Useful Life	September 30,			December 31,
	(in years)	2024			2023
Equipment	2-7	$	4,358,260		$	4,321,816
Furniture and fixtures	7		145,754			145,754
Computer equipment	5		46,994			41,897
Leasehold improvements	5		474,462			471,505
Construction-in-process- equipment	-		176,816			207,976
Property and equipment, gross			5,202,286			5,188,948
Less: accumulated depreciation			(3,135,771	)		(2,642,983	)
Property and equipment, net		$	2,066,515		$	2,545,965

Depreciation expense was $492,788 and $410,593, respectively, for the nine-month periods ended September 30, 2024 and 2023. Depreciation expense was $165,406 and $154,663, respectively, for the three-month periods ended September 30, 2024 and 2023.

(5) Accrued Expenses

Accrued expenses consisted of the following at September 30, 2024 and December 31, 2023:

Schedule of Accrued Expenses

	September 30,		December 31,
	2024		2023
Research and development	$	202,741	$	155,220
Professional fees		91,961		213,922
State franchise taxes		80,000		120,570
Employee compensation		-		593,022
Interest		-		290,000
CIP- Equipment		-		155,800
Insurance		-		56,088
Other		27,450		66,896
Total accrued expenses	$	402,152	$	1,651,518

(6) Contingencies

The Company may, from time to time, be subject to legal proceedings and claims arising in the ordinary course of business and otherwise. A substantial legal liability against us could have an adverse effect on our business, financial condition and results of operations.

The Company records legal costs associated with loss contingencies as incurred and establishes reserves when those matters present material loss contingencies that management determines to be both probable and reasonably estimable in accordance with ASC 450, Contingencies. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range. These amounts are not reduced by amounts that may be recovered under insurance or claims against third parties, but undiscounted receivables from insurers or other third parties may be accrued separately if recovery is considered probable. Management’s judgment is required related to loss contingencies because the outcomes are difficult to predict, and the ultimate resolution may differ from our current analysis. The Company revises accruals in light of new information. While it is not possible to predict the outcome of loss contingencies with certainty, management is of the opinion that adequate provision for potential losses associated with any such matters has been made in the financial statements. No accruals for loss contingencies were recorded in the consolidated balance sheets as of September 30, 2024 or 2023.

(7) Related Party Note Payable

In August 2022, the Company received $5.0 million of debt financing from Werth Family Investment Associates LLC (WFIA). Peter Werth, manager of WFIA, is a member of the Company’s Board of Directors. The promissory note, dated August 9, 2022, was unsecured with interest accruing at 15% per annum. In May 2023, the Company received an additional $3.0 million of debt financing from WFIA by amending and restating the note to increase the principal amount to $8.0 million. All other terms of the note remained the same.

On September 8, 2023, the Company and CTx entered into a note conversion agreement with WFIA, pursuant to which WFIA agreed to convert the original principal amount of $5.0 million under the note plus all accrued interest on the original principal, or $5,812,500, by issuing pre-funded warrants to purchase 28,493 shares of the Company’s common stock at a conversion price per pre-funded warrant of $204.00. The closing price of the Company’s common stock on Nasdaq on September 8, 2023, was $138.60 per share. The pre-funded warrants had no expiration date and were exercisable immediately at an exercise price of $0.0024 per share, to the extent that after giving effect to such exercise, WFIA and its affiliates would beneficially own, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), no more than 19.99% of the outstanding shares of common stock of the Company.

On January 25, 2024, the Company and CTx entered into another note conversion agreement with WFIA, pursuant to which WFIA agreed to convert the remaining principal amount of the note payable of $3.0 million plus all accrued interest, or $3,287,500 by issuing pre-funded warrants to purchase 57,254 shares of the Company’s common stock at a conversion price per pre-funded warrant of $57.42. The closing price of the Company’s common stock on Nasdaq on January 24, 2024, was $52.20 per share. The pre-funded warrants had no expiration date and were exercisable immediately at an exercise price of $0.0012 per share, to the extent that after giving effect to such exercise, WFIA and its affiliates would beneficially own, for purposes of Section 13(d) of the Exchange Act, no more than 19.99% of the outstanding shares of common stock of the Company. In March of 2024, the Company issued to WFIA an additional pre-funded warrant to purchase 588 shares of common stock as a result of an error in the interest calculation, on the same form and at the same conversion price as the January pre-funded warrants.

WFIA exercised all of its pre-funded warrants in April 2024, as described in Note 9.

The Company considered ASC 470-60, Troubled Debt Restructurings by Debtors, in accounting for the debt conversions. The difference between the fair value of the pre-funded warrants issued and the carrying value of the debt and accrued interest settled in each transaction was recognized as a capital contribution in the Statement of Stockholders’ Equity based on the related party nature of the counterparty

(8) Stockholders’ Equity

The Company has authorized 240,000,000 shares of $0.0001 par value common stock and 10,000,000 shares of $0.0001 par value preferred stock at September 30, 2024 and December 31, 2023, of which 3,044,165 and 97,293 shares of common stock were issued and outstanding, respectively. The Company has not issued any shares of preferred stock.

The holders of common stock are entitled to one vote for each share of common stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after the payment or provision for payment of all debts and liabilities of the Company, the holders of common stock shall be entitled to share in the remaining assets of the Company available for distribution, if any. Holders of the shares of common stock are entitled to dividends when, as and if declared by the Board of Directors.

Reverse Stock Splits

On November 30, 2023, the Company completed a one-for-twenty reverse stock split (2023 Reverse Stock Split), which reduced the number of shares of the Company’s common stock that were issued and outstanding immediately prior to the effectiveness of the 2023 Reverse Stock Split. The number of shares of the Company’s authorized common stock was not affected by the 2023 Reverse Stock Split and the par value of the Company’s common stock remained unchanged at $0.0001 per share. No fractional shares were issued in connection with the 2023 Reverse Stock Split.

On August 9, 2024, the Company completed a one-for-twelve reverse stock split (2024 Reverse Stock Split), which reduced the number of shares of the Company’s common stock that were issued and outstanding immediately prior to the effectiveness of the 2024 Reverse Stock Split. The number of shares of the Company’s authorized common stock was not affected by the 2024 Reverse Stock Split and the par value of the Company’s common stock remained unchanged at $0.0001 per share. No fractional shares were issued in connection with the 2024 Reverse Stock Split.

Except where disclosed, all amounts related to number of shares and per share amounts have been retrospectively restated in these financial statements to reflect the 2023 Reverse Stock Split and the 2024 Reverse Stock Split.

(9) Securities Issuances

At the Market Offering

In January 2023, the Company entered into the At-the-Market Agreement (ATM Agreement) with H.C. Wainwright & Co., LLC (HCW) pursuant to which the Company could issue and sell, from time to time, shares of the Company’s common stock having an aggregate offering price of up to $4.97 million in at-the-market offerings sales. HCW acts as sales agent and is paid a 3% commission on each sale under the ATM Agreement. The Company’s common stock is sold at prevailing market prices at the time of the sale, and, as a result, prices will vary.

On March 18, 2024, the Company increased the maximum aggregate offering price of the shares of the Company’s common stock issuable under the ATM Agreement from $4.97 million to $8.47 million and filed a prospectus supplement for an aggregate of $3.5 million. In connection with the filing of the prospectus supplement, on March 17, 2024, the Company received a waiver from the purchaser in the February 2024 Offering (as defined below) under the securities purchase agreement, dated February 2, 2024, by and between the Company and such purchaser. In consideration of the waiver set forth therein, the Company agreed to lower the exercise price of the Series A Warrants to purchase up to an aggregate of 28,855 shares of common stock and Series B Warrants to purchase up to an aggregate of 14,428 shares of common stock to $13.56, which warrants were previously issued by the Company to such purchaser on September 13, 2023 and to extend the exercise term of the Series A Warrants to March 17, 2029 and the term of the Series B Warrants to March 17, 2026. The modifications to the warrants had no impact on the consolidated financial statements.

On August 19, 2024, the Company increased the maximum aggregate offering price of the shares of the Company’s common stock issuable under the ATM Agreement from $8.47 million to $11.33 million and filed a prospectus supplement for an aggregate of $2.86 million.

On September 3, 2024, the Company increased the maximum aggregate offering price of the shares of the Company’s common stock issuable under the ATM Agreement from $11.33 million to $15.2 million and filed a prospectus supplement for an aggregate of $3.87 million.

During the three months ended March 31, 2024, the Company sold 23,650 shares of common stock under the ATM Agreement, for net proceeds of $3,115,284. During the three months ended June 30, 2024, the Company sold 31,858 shares of common stock under the ATM Agreement, for net proceeds of $354,259. During the three months ended September 30, 2024, the Company sold 902,300 shares of common stock under the ATM Agreement, for net proceeds of $5,804,393.

Purchase Agreement with Lincoln Park

On April 24, 2023, the Company entered into a purchase agreement (the LP Purchase Agreement) and a registration rights agreement (the Registration Rights Agreement) with Lincoln Park Capital Fund, LLC (Lincoln Park). Pursuant to the terms of the LP Purchase Agreement, Lincoln Park has agreed to purchase from the Company up to $12 million of the Company’s common stock subject to certain limitations and satisfaction of the conditions set forth in the LP Purchase Agreement. Pursuant to the terms of the Registration Rights Agreement, the Company filed with the SEC registration statements to register for resale under the Securities Act 2,685,417 shares of common stock that have been or may be issued to Lincoln Park under the LP Purchase Agreement.

During the three months ended March 31, 2024, the Company sold 89,420 shares of common stock under the LP Purchase Agreement, for net proceeds of $755,703. No shares of common stock were sold under the LP Purchase Agreement during the three months ended June 30, 2024. During the three months ended September 30, 2024, the Company sold 1,092,337 shares of common stock under the LP Purchase Agreement, for net proceeds of $6,081,814.

Public Offering

On February 2, 2024, the Company completed a public offering (the February 2024 Offering) pursuant to which the Company issued 114,583 shares of its common stock and accompanying Series A and Series B warrants at a combined price of $24.00 per share, and pre-funded warrants to purchase up to an aggregate of 197,917 shares of its common stock and accompanying Series A and Series B warrants at a combined purchase price of $23.988 per pre-funded warrant, which represents the public offering price for the common stock less the $0.0012 per share exercise price per share for each pre-funded warrant. The pre-funded warrants were exercisable at any time after the date of issuance and have no expiration date. The holders of pre-funded warrants may not exercise the warrants if the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to such exercise. Each share of common stock and each pre-funded warrant were sold along with one Series A and 0.5 Series B warrants. The February 2024 Offering resulted in gross proceeds to the Company of $7.5 million before deducting $750,950 of placement agent fees and other offering expenses. As of September 30, 2024, all of the pre-funded warrants had been exercised.

Warrant Inducement

On June 28, 2024, the Company entered into an inducement offer letter agreement (the June 2024 Warrant Inducement), in which certain holders (Holders) of certain of its existing warrants to purchase 265,625 shares of the Company’s common stock issued to the Holders in connection with the February 2024 Offering (the February 2024 Warrants) agreed to exercise for cash their February 2024 Warrants at a reduced exercise price of $7.02 per share. In consideration for the exercise of the February 2024 Warrants, the Holders received, in addition to the reduced exercise price, new Series C common stock purchase warrants to purchase an aggregate of 354,167 shares of the Company’s common stock and new Series D common stock purchase warrants to purchase an aggregate of 177,083 shares of the Company’s common stock. The June 2024 Warrant Inducement is considered a modification of the existing warrants under ASC Subtopic 815-40, Derivatives and Hedging, Contracts in Entity’s Own Equity. This modification is consistent with the equity issuance classification under ASC Subtopic 815-40 as the reason for the modification was to induce the holders of the existing warrants to exercise their warrants, which raised equity capital and generated net proceeds to the Company of approximately $1.6 million, after deducting the placement agent fees and other offering expenses payable by the Company. The modified warrants were classified as equity instruments before and after the modification, and the modification is directly attributable to an equity offering. The Company recognized the effect of modification of approximately $2.0 million as an equity issuance cost and accounting effect of the inducement is recognized in the Statement of Stockholders’ Equity. The Company received net proceeds of $1.6 million on the closing of the June 2024 Warrant Inducement, which occurred on July 1, 2024.

10) Stock-Based Compensation

In September 2021, the Company’s board of directors and stockholders adopted the 2021 Equity Incentive Plan (the 2021 Plan), which provides for the grant of incentive stock options and non-qualified stock options to purchase shares of the Company’s common stock, stock appreciation rights, restricted stock units, restricted or unrestricted shares of common stock, performance shares, performance units, incentive bonus awards, other stock-based awards and other cash-based awards. No awards may be made under the 2021 Plan on or after September 24, 2031, but the 2021 Plan will continue thereafter while previously granted awards remain outstanding.

At the Company’s June 2024 annual meeting, shareholders approved an amendment to the 2021 Plan to increase the number of shares of common stock authorized for issuance thereunder by 104,167 shares to 125,577. As of September 30, 2024, 34,352 shares of common stock were available for issuance under the 2021 Plan. The number of shares of common stock available for issuance under the 2021 Plan will automatically increase on January 1st of each year until the expiration of the 2021 Plan, in an amount equal to 5% percent of the total number of shares of our common stock outstanding on December 31st of the preceding calendar year, on a fully diluted basis, unless the board of directors takes action prior thereto to provide that there will not be an increase in the share reserve for such year or that the increase in the share reserve for such year will be of a lesser number of shares of common stock than would otherwise occur. The shares of common stock underlying any awards that are forfeited, cancelled, held back upon exercise or settlement of an award to satisfy the exercise price or tax withholding, repurchased or are otherwise terminated by the Company under the 2021 Plan will be added back to the shares of common stock available for issuance under the 2021 Plan.

The Company recorded stock-based compensation expense of $812,691 and $658,105 during the nine months ended September 30, 2024 and 2023, respectively. The Company recorded stock-based compensation expense of $393,786 and $235,251 during the three months ended September 30, 2024 and September 30, 2023, respectively. As of September 30, 2024 and December 31, 2023, there was $1,219,737 and $1,278,981, respectively, of unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the 2021 Plan, which is expected to be recognized over the next one to four years.

A summary of option activity under the Plan during the three and nine-month periods ended September 30, 2024 is as follows:

Summary of Option Activity

						Weighted-Average		Aggregate
				Weighted-Average		Remaining Contractual		Intrinsic
	Shares			Exercise Price		Term (years)		Value
Outstanding at January 1, 2024		4,821
Granted		15,994		$	14.15		9.93		-
Exercised		-
Forfeitures or expirations		(628	)
Outstanding at March 31, 2024		20,187
Granted		69,038			13.44		9.95		-
Exercised		-
Forfeitures or expirations		-
Outstanding at June 30, 2024		89,225
Granted		2,000			5.04		10.0		-
Exercised		-
Forfeitures or expirations		-
Outstanding at September 30, 2024		91,225

Vested and expected to vest at September 30, 2024		91,225
Exercisable at September 30, 2024		40,677

The Company’s stock options issued qualify for equity accounting treatment under ASC 718, Compensation- Stock Compensation, and are measured at fair value as of their grant date accordingly. The fair value of the options were estimated using a Black-Scholes model. The assumptions that the Company used to estimate the grant-date fair value of stock options granted to employees during the nine-month period ending September 30, 2024 were as follows, shown on a weighted average basis:

Schedule of Fair Value Assumption

	September 30,
	2024
Risk-free interest rate		4.26	%
Expected term (in years)		5.45
Expected volatility		1.46
Expected dividend yield		0	%

Risk-Free Interest Rate: The Company based the risk-free interest rate over the expected term of the options based on the constant maturity of U.S. Treasury securities with similar maturities as of the date of grant.

Expected Term: The expected term represents the period that the options granted are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting dates and the end of the contractual term.)

Expected Volatility: The Company uses an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry that were deemed to be representative of future stock price trends as the Company does not have sufficient trading history for its common stock. The Company will continue to apply this process until a sufficient amount of historical information regarding volatility of its own stock price becomes available.

Expected Dividend Yield: The Company has not paid and does not anticipate paying any dividends in the near future. Therefore, the expected dividend yield was zero.

The grant-date fair value of options granted during the three months ended September 30, 2024 was $5.04 and the grant date fair value of the options granted during the nine months ended September 30, 2024 ranged from $4.00 to $14.00.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock. The fair value per share of common stock was $5.04 as of September 30, 2024, and $91.80 as of December 31, 2023, based upon the closing price of our common stock on the Nasdaq Capital Market on those dates or the last trading date prior to those dates if those dates were not a trading date.

(11) Common Stock Purchase Warrants

For the 312,500 shares of common stock and pre-funded warrants issued in the February 2024 Offering, the Company issued Series A warrants to purchase up to 312,500 shares of common stock and Series B warrants to purchase up to 156,250 shares of common stock. The Series A and Series B warrants have an exercise price of $24.00 per share and became exercisable on the effective date of stockholder approval of the shares issuable pursuant to the warrants. The Series A warrants have a five-year term and the Series B warrants have a two-year term from the initial exercise date of February 5, 2024.

The Company evaluated the pre-funded warrants and the Series A and B warrants for liability or equity classification in accordance with the provisions of ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815, Derivatives and Hedging, and determined that equity treatment was appropriate. The Company valued the pre-funded warrants to purchase 197,917 shares of common stock based on their issuance date fair value of $24.00. As of September 30, 2024, all of the pre-funded warrants had been exercised.

In connection with the February 2024 Offering, the Company issued placement agent warrants to purchase up to 12,500 shares of common stock. The placement agent warrants have an exercise price of $30.00 per share. These warrants have a five-year term ending February 2, 2029.

The Series A, Series B and placement agent warrants issued in the February 2024 Offering were valued using a Black-Scholes model with a risk-free rate of 4.0%-5.0%, the respective terms of five and two years, and a volatility of 1.56-1.83. The estimated volatility of the Company’s common stock at the date of measurement is based on an average historical stock price volatility of comparable public companies within the biotechnology and pharmaceutical industry that were deemed to be representative of future stock price trends as the Company does not have sufficient trading history for its common stock. The risk-free rate is based on the expected term of the warrants based on the constant maturity of U.S. Treasury securities with similar maturities as of the date of grant. The expected term has been estimated using the contractual term of the warrants.

			Percent
	Fair		of Total			Amount
	Value		Fair Value			Allocated
Common Stock	$	2,750,000		26.50	%	$	1,987,500
Pre-Funded Warrants		4,750,000		45.77	%		3,432,750
Series A, B and Placement Agent Warrants		2,878,126		27.73	%		2,079,750
Total	$	10,378,126		100.00	%	$	7,500,000

Certain of the Series A and Series B warrants issued in connection with the February 2024 Offering were exercised as part of the June 2024 Warrant Inducement as described in Note 9. In addition, Series C and Series D warrants were issued as part of the June 2024 Warrant Inducement. The June 2024 Warrant Inducement closed on July 1, 2024, on which date the shares relating to the exercise of the Series A and B warrants and the Series C and D warrants were settled. The Company evaluated the Series C and D warrants for liability or equity classification in accordance with the provisions of ASC Topic 480, and ASC Topic 815, and determined that equity treatment was appropriate.

The following table summarizes the Company’s outstanding common stock purchase warrants as of September 30, 2024 :

					Issuance Date		Issuance Date
	Number of		Exercise		Fair Value		Fair Value
	Warrants		Price		per Warrant		Total
December 2021 Initial Public Offering Warrants		19,965	$	1,440.00	$	1,144.80	$	22,855,932
December 2021 Placement Agent Warrants		868	$	1,800.00	$	1,113.48		966,501
September 2023 Public Offering Series A Warrants		28,855	$	13.56	$	129.84		3,746,533
September 2023 Public Offering Series B Warrants		14,428	$	13.56	$	101.04		1,457,805
September 2023 Placement Agent Warrants		1,443	$	172.80	$	127.56		184,069
February 2024 Public Offering Series A Warrants		135,417	$	24.00	$	14.04		1,901,255
February 2024 Public Offering Series B Warrants		67,708	$	24.00	$	11.88		804,371
February 2024 Placement Agent Warrants		12,500	$	30.00	$	13.80		172,500
June 2024 Series C Warrants		354,167	$	7.020	$	3.24		1,147,501
June 2024 Series D Warrants		177,083	$	7.020	$	2.40		424,999
July 2024 Placement Agent Warrants		21,250	$	8.780	$	2.23		47,388
Balance- September 30, 2024		833,684					$	33,708,854

The Company has accounted for these warrants as equity-classified instruments under ASC Subtopic 815-40, as they are indexed to the Company’s common stock, and they meet all other conditions for equity classification. The gross proceeds of the February 2024 Offering was allocated to the common stock and common stock purchase warrants using the relative fair value method shown as follows. Fair value of the warrants was recorded to Additional Paid-in-Capital on the Company’s balance sheet.

(12) Income Taxes

Cingulate Inc. is taxed as a C corporation under the Internal Revenue Code. Cingulate Inc. records deferred income taxes to reflect the impact of temporary differences between the recorded amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. CTx is a wholly-owned disregarded entity of Cingulate Inc., and all of the activity for CTx, along with its wholly-owned subsidiary Cingulate Works Inc., is included in the calculation of the current and deferred tax assets and liabilities for Cingulate Inc. No deferred income tax benefit or expense was recorded for the three-month periods ended September 30, 2024 and 2023 or the nine-month periods ended September 30, 2024 and 2023, for federal or state income taxes.

Income tax expense differed from the expected expense computed by applying the U.S. Federal income tax rate as follows:

	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023			Nine Months Ended September 30, 2024			Nine Months Ended September 30, 2023
Federal income tax benefit at statutory rate	$	(678,639	)	$	(1,255,601	)	$	(1,976,891	)	$	(3,486,052	)
State income tax benefit		(233,562	)		(330,642	)		(579,614	)		(917,994	)
Permanent differences		3,233			6,154			9,307			14,457
Change in valuation allowance		1,832,122			2,218,188			3,500,000			5,089,875
Research and development tax credits		(972,372	)		(620,630	)		(972,372	)		(620,630	)
Other		49,218			(17,469	)		19,570			(79,656	)
Total income tax expense	$	-		$	-		$	-		$	-

Evaluating the need for, and amount of, a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence on a jurisdiction-by-jurisdiction basis. Such judgments require the Company to interpret existing tax law and other published guidance as applied to its circumstances. As part of this assessment, the Company considers both positive and negative evidence about its profitability and tax situation. A valuation allowance is provided if, based on available evidence, it is more likely than not that all or some portion of a deferred tax asset will not be realized. The Company determined that it was more likely than not that it would not realize its deferred tax assets, based on historical levels of income and future forecasts of taxable income, among other items. The Company recorded a valuation allowance of its net deferred tax assets totaling $16,121,058 as of September 30, 2024 and $12,631,033 at December 31, 2023, the current year portion which was recorded as a component of income tax expense on the accompanying consolidated statements of operations and other comprehensive loss.

The Company files income tax returns in the U.S. federal and various state jurisdictions. The Companies are not subject to U.S. federal and state income tax examinations by tax authorities for years before 2018.

The Company follows the provisions of FASB ASC 740, Income Taxes, to evaluate uncertain tax positions. This topic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company has not identified any material uncertain tax positions requiring recognition in the consolidated financial statements as of September 30, 2024 or December 31, 2023.

(13) Subsequent Events

Management evaluated events that occurred subsequent to September 30, 2024, through November 7, 2024, which is the date the interim financial statements were issued.

Subsequent to September 30, 2024, the Company sold 213,522 shares of common stock under the LP Purchase Agreement, for net proceeds of $899,991.

On October 15, 2024, the Company increased the maximum aggregate offering price of the shares of the Company’s common stock issuable under the ATM Agreement from $15.2 million to $19.7 and filed a prospectus supplement for an aggregate of $8.34 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report. Some of the information contained in this discussion and analysis or set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2023 (Form 10-K) and in this report, as well as disclosures in this report and our other reports filed with the SEC, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a biopharmaceutical company using our proprietary Precision Timed Release^TM (PTR^TM) drug delivery platform technology to build and advance a pipeline of next-generation pharmaceutical products designed to improve the lives of patients suffering from frequently diagnosed conditions characterized by burdensome daily dosing regimens and suboptimal treatment outcomes. With an initial focus on the treatment of Attention Deficit/Hyperactivity Disorder (ADHD) and anxiety, we are identifying and evaluating additional therapeutic areas where our PTR technology may be employed to develop future product candidates. Our PTR platform incorporates a proprietary Erosion Barrier Layer (EBL) designed to allow for the release of drug substance at specific, pre-defined time intervals, unlocking the potential for once-daily, multi-dose tablets. We believe there remains a significant, unmet need within the current treatment paradigm for true once-daily ADHD stimulant medications with lasting duration and a superior side effect profile to better serve the needs of patients throughout their entire active-day.

Since inception in 2012, our operations have focused on developing our product candidates, organizing and staffing our company, business planning, raising capital, establishing our intellectual property portfolio and conducting clinical trials. We do not have any product candidates approved for sale and have not generated any revenue. We have funded our operations through public and private capital raised. Cumulative capital raised from these sources, including debt financing, was approximately $106.4 million as of September 30, 2024.

We have incurred significant losses since our inception. Our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and commercialization of one or more of our product candidates. Our net losses were $3.2 million and $6.0 million for the three months ended September 30, 2024 and 2023, respectively. See “Results of Operations” below for an explanation of the fluctuations in our net losses. As of September 30, 2024, we had an accumulated deficit of $102.4 million.

We expect to continue to incur significant expenses and operating losses in the near term, as we:

	●	seek regulatory approval for CTx-1301;

	●	continue research and development activities for our existing and new product candidates, primarily for CTx-1301;

	●	continue manufacturing activities, primarily relating to CTx-1301;

	●	seek licensing partners and/or outsource commercial infrastructure to support sales and marketing for CTx-1301; and

	●	operate as a public company.

Our ability to generate product revenue will depend on the successful development, regulatory approval and eventual commercialization of one or more of our product candidates. Until such time as we can generate significant revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

2024 Reverse Stock Split

On August 9, 2024, we completed a one-for-twelve reverse stock split (2024 Reverse Stock Split), which reduced the number of shares of our common stock that were issued and outstanding immediately prior to the effectiveness of the 2024 Reverse Stock Split. The number of shares of our authorized common stock was not affected by the 2024 Reverse Stock Split and the par value of our common stock remained unchanged at $0.0001 per share. No fractional shares were issued in connection with the 2024 Reverse Stock Split. All share and per share amounts in this report have been adjusted to reflect the 2024 Reverse Stock Split.

Clinical, Manufacturing and Business Update

CTx-1301: We have designed our clinical program for CTx-1301 (dexmethylphenidate), our lead investigational product candidate for the treatment of ADHD, based on U.S. Food and Drug Administration (FDA) feedback regarding our CTx-1301 clinical plan, and longstanding guidance on the streamlined approval pathway under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act.

We initiated two CTx-1301 Phase 3 clinical studies in pediatric and adolescent patients- a fixed dose study and a dose-optimized onset and duration study in a laboratory classroom setting in the third quarter of 2023. Based upon written communication with the FDA that further conduct of these pediatric and adolescent studies is not required for the submission of an NDA, we closed enrollment on both Phase 3 trials. We are performing the data consolidation and analytical activities for these trials. In addition, per FDA guidance, we initiated a food effect study utilizing CTx-1301’s highest dosage strength, 50-mg, in September 2024 and is expected to be completed by the end of 2024. Appropriate data will be included in the NDA, targeted for a mid-2025 submission.

We were issued a European patent for CTx-1301 for the treatment of ADHD on August 14, 2024. The patent application includes up to 30 European territories, including the United Kingdom.

CTx-2103: We have embarked on a program to develop CTx-2103 (buspirone), for the treatment of anxiety, which is one of the most common mental health concerns in the United States. We completed a formulation study in which the pharmacokinetics were evaluated for this trimodal tablet providing three precisely timed doses of buspirone versus one immediate release dose. In addition, scintigraphic imaging visualized transit of the tablets through the gastrointestinal tract to confirm both the site and onset of release, which will then be correlated with pharmacokinetic data to establish the full release profile of the CTx-2103 formulation. Based on the pharmacokinetic profile seen in the data, CTx-2103 achieved a triple release of buspirone. These results provided the critical information required to allow us to request a Pre-IND meeting with the FDA to discuss the design of our clinical and regulatory program for CTx-2103 which occurred in the fourth quarter of 2023. We received input from the FDA regarding the regulatory pathway for CTx-2103, and the design of clinical studies for filing of an IND. Based on this FDA feedback, we believe that we can seek and win approval of CTx-2103 under the 505(b)(2) pathway, which typically requires less time and resources than the 505(b)(1) full NDA pathway. Additional resources will be required to complete the development of this product candidate.

SEC Form 10-Q filed by Cingulate Inc.