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 June 30, 2022

☐	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 and posted on its corporate Web site, if any, 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 and post 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 August 4, 2022, 11,309,412 shares of the registrant’s common stock, $0.0001 par value, were issued and outstanding.

Cingulate Inc.

Form 10-Q for the Quarter Ended June 30, 2022

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	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	27

	PART II
Item 1	Legal Proceedings	28
Item 1A	Risk Factors	28
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3	Defaults Upon Senior Securities	28
Item 4	Mine Safety Disclosures	28
Item 5	Other Information	28
Item 6	Exhibit Index	29

Signatures		30

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. These statements are generally identified by the use of such words as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “forecast,” “estimate,” “expect,” “intend,” “plan,” “continue,” “outlook,” “will,” “potential” and similar statements of a future or forward-looking nature. These forward-looking statements speak only as of the date of filing this report with the SEC and include, without limitation, statements about the following:

	●	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 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 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 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 28, 2022, 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

Item 1. Financial Statements.

Cingulate Inc.

Consolidated Balance Sheets (unaudited)

	June 30,			December 31,
	2022			2021
ASSETS

Current assets:
Cash and cash equivalents	$	8,195,760		$	16,492,745
Short-term investments		-			933
Miscellaneous receivables		140,113			690,248
Prepaid expenses and other current assets		1,766,279			1,698,353
Total current assets		10,102,152			18,882,279

Property and equipment, net		2,952,920			3,145,378
Operating lease right-of-use assets		748,782			858,600

Total assets		13,803,854			22,886,257

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable		282,265			264,687
Accrued expenses		311,573			601,300
Current installments of obligations under finance leases		15,570			15,096
Other current liabilities		314,097			295,595
Total current liabilities		923,505			1,176,678

Long-term liabilities:
Obligations under finance leases		29,633			37,534
Operating lease liabilities		665,842			828,503

Total liabilities		1,618,980			2,042,715

Stockholders’ Equity
Common Stock, $0.0001 par value; 240,000,000 shares authorized and 11,309,412 shares issued and outstanding as of June 30, 2022 and December 31, 2021		1,131			1,131
Preferred Stock, $0.0001 par value; 10,000,000 shares authorized and 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021		-			-
Additional Paid-in-Capital		72,963,214			72,574,510
Accumulated other comprehensive income		(3,249	)		165
Accumulated deficit		(60,776,222	)		(51,732,264	)
Total stockholders’ equity		12,184,874			20,843,542

Total liabilities and stockholders’ equity	$	13,803,854		$	22,886,257

See notes to consolidated financial statements.

Cingulate Inc.

Consolidated Statements of Operations and Comprehensive Loss (unaudited)

	2022			2021			2022			2021
	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Operating expenses:
Research and development	$	2,178,226		$	793,587		$	4,940,510		$	1,356,106
General and administrative		1,870,591			629,032			4,117,651			1,396,677
Operating loss		(4,048,817	)		(1,422,619	)		(9,058,161	)		(2,752,783	)

Interest and other income (expense), net		8,370			(9,676	)		14,203			(13,435	)
Loss before income taxes		(4,040,447	)		(1,432,295	)		(9,043,958	)		(2,766,218	)
Income tax benefit (expense)		-			-			-			-

Net loss		(4,040,447	)		(1,432,295	)		(9,043,958	)		(2,766,218	)
Other comprehensive income (loss):
Change in unrealized loss on short-term investments		(466	)		-			(3,414	)		-
Comprehensive loss	$	(4,040,913	)	$	(1,432,295	)	$	(9,047,372	)	$	(2,766,218	)
Net loss per share of common stock, basic and diluted	$	(0.36	)		-		$	(0.80	)		-

Weighted average number of shares used in computing net loss per share of common stock, basic and diluted		11,309,412			-			11,309,412			-

See notes to consolidated financial statements.

Cingulate Inc.

Consolidated Statements of Stockholders’ Equity (unaudited)

	Shares		Amount		Paid-in-Capital		Capital		Deficit			Income			Equity
												Accumulated
	Common Stock				Additional		Members’		Accumulated			Other Comprehensive			Stockholders’
	Shares		Amount		Paid-in-Capital		Capital		Deficit			Income			Equity
Balance January 1, 2021		-		-	$	-		32,314,441	$	(31,022,336	)	$	165		$	1,292,270
Member contributions						-		1,385,688								1,385,688
Net loss		-		-		-				(1,333,923	)		-			(1,333,923	)
Balance March 31, 2021		-	$	-	$	-	$	33,700,129	$	(32,356,259	)	$	165		$	1,344,035
Activity for the three months to June 30, 2021:
Member contributions		-		-		-		1,987,640		-			-			1,987,640
Net loss		-		-		-		-		(1,432,295	)		-			(1,432,295	)
Balance June 30, 2021		-	$	-	$	-	$	35,687,769	$	(33,788,554	)	$	165		$	1,899,380

Balance January 1, 2022		11,309,412		1,131	$	72,574,510		-	$	(51,732,264	)	$	165		$	20,843,542
Activity for the three months to March 31, 2022:
Unrealized losses on available for sale investments		-		-		-		-		-			(2,948	)		(2,948	)
Stock-based compensation expense		-		-		181,518		-		-			-			181,518
Net loss		-		-		-		-		(5,003,511	)		-			(5,003,511	)
Balance March 31, 2022		11,309,412	$	1,131	$	72,756,028	$	-	$	(56,735,775	)	$	(2,783	)<

SEC Form 10-Q filed by Cingulate Inc.