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, 2023

☐	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 10, 2023, 18,740,006 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, 2023

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	31
Item 4	Controls and Procedures	31

	PART II
Item 1	Legal Proceedings	32
Item 1A	Risk Factors	32
Item 6	Exhibits	34

Signatures		35

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 (the “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 Capital Market;

	●	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 Jumpstart Our Business Startups Act of 2012 (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 this report, our other SEC filings and our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 10, 2023, 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)

	September 30,			December 31,
	2023			2022
ASSETS

Current assets:
Cash and cash equivalents	$	1,986,313		$	5,356,276
Miscellaneous receivables		5,836			234,432
Prepaid expenses and other current assets		910,286			2,278,944
Total current assets		2,902,435			7,869,652

Property and equipment, net		2,531,330			2,904,787
Operating lease right-of-use assets		436,493			630,618

Total assets		5,870,258			11,405,057

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable		1,670,436			762,357
Accrued expenses		692,008			894,635
Note payable		3,000,000			5,000,000
Finance lease liability, current		16,805			16,053
Operating lease liability, current		353,183			339,755
Total current liabilities		5,732,432			7,012,800

Long-term liabilities:
Finance lease liability, net of current		8,792			21,487
Operating lease liability, net of current		225,368			488,748
Total long-term liabilities		234,160			510,235
Total liabilities		5,966,592			7,523,035

Stockholders’ Equity
Common Stock, $0.0001 par value; 240,000,000 shares authorized and 17,378,798 and 11,309,412 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		1,738			1,131
Preferred Stock, $0.0001 par value; 10,000,000 shares authorized and 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022		-			-
Additional Paid-in-Capital		85,910,674			73,289,387
Accumulated deficit		(86,008,746	)		(69,408,496	)
Total stockholders’ equity		(96,334	)		3,882,022

Total liabilities and stockholders’ equity	$	5,870,258		$	11,405,057

See notes to consolidated financial statements.

Cingulate Inc.

Consolidated Statements of Operations and Comprehensive Loss (unaudited)

	2023			2022			2023			2022
	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Operating expenses:
Research and development	$	3,923,852		$	2,123,114		$	10,508,395		$	7,063,626
General and administrative		1,825,822			1,845,248			5,453,643			5,963,067
Operating loss		(5,749,674	)		(3,968,362	)		(15,962,038	)		(13,026,693	)

Interest and other income (expense), net		(229,380	)		(58,885	)		(638,212	)		(44,512	)
Loss before income taxes		(5,979,054	)		(4,027,247	)		(16,600,250	)		(13,071,205	)
Income tax benefit (expense)		-			-			-			-

Net loss		(5,979,054	)		(4,027,247	)		(16,600,250	)		(13,071,205	)
Other comprehensive income (loss):
Change in unrealized loss on short-term investments		-			3,249			-			(166	)
Comprehensive loss	$	(5,979,054	)	$	(4,023,998	)	$	(16,600,250	)	$	(13,071,371	)
Net loss per share of common stock, basic and diluted	$	(0.30	)	$	(0.36	)	$	(1.16	)	$	(1.16	)

Weighted average number of shares used in computing net loss per share of common stock, basic and diluted		19,766,654			11,309,412			14,287,942			11,309,412

See notes to consolidated financial statements.

Cingulate Inc.

Consolidated Statements of Stockholders’ Equity (unaudited)

	Shares		Amount		Paid-in-Capital		Deficit			Income			Equity
	Common Stock				Additional		Accumulated			Accumulated Other Comprehensive			Stockholders’
	Shares		Amount		Paid-in-Capital		Deficit			Income			Equity

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	)	$	16,018,601
Activity for the three months to June 30, 2022:
Unrealized losses on available for sale investments		-		-		-		-			(466	)		(466	)
Stock-based compensation expense		-		-		207,186		-			-			207,186
Net loss		-		-		-		(4,040,447	)		-			(4,040,447	)
Balance June 30, 2022		11,309,412	$	1,131	$	72,963,214	$	(60,776,222	)	$	(3,249	)	$	12,184,874
Activity for the three months to September 30, 2022:
Unrealized losses on available for sale investments		-		-		-		-			3,249			3,249
Stock-based compensation expense		-		-		205,656		-			-			205,656
Net loss		-		-		-		(4,027,247	)		-			(4,027,247	)
Balance September 30, 2022		11,309,412	$	1,131	$	73,168,870	$	(64,803,469	)	$	-		$	8,366,532

Balance January 1, 2023		11,309,412		1,131	$	73,289,387	$	(69,408,496	)	$	-		$	3,882,022
Activity for the three months to March 31, 2023:
Stock-based compensation expense		-		-		204,479		-			-			204,479
Net loss		-		-		-		(4,004,887	)		-			(4,004,887	)
Balance March 31, 2023		11,309,412	$	1,131	$	73,493,866	$	(73,413,383	)	$	-		$	81,614
Activity for the three months to June 30, 2023:
Issuance of common stock in connection with At the Market Offering and Purchase Agreement, net of fees		747,376		75		218,723								218,798
Stock-based compensation expense		-		-		217,376		-			-			217,376
Net loss		-		-		-		(6,616,309	)		-			(6,616,309	)
Balance June 30, 2023		12,056,788	$	1,206	$	73,929,965	$	(80,029,692	)	$	-		$	(6,098,521	)
Balance		12,056,788	$	1,206	$	73,929,965	$	(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		1,778,855		178	$	1,621,761								1,621,939
Issuance of common stock in connection with private placement with WFIA		1,823,155		182	$	999,818								1,000,000
Issuance of common stock and pre-funded warrants sold for cash in public offering, net of fees		1,720,000		172		3,310,379								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		17,378,798	$	1,738	$	85,910,674	$	(86,008,746	)	$	-		$	(96,334	)
Balance		17,378,798	$	1,738	$	85,910,674	$	(86,008,746	)	$	-		$	(96,334	)

See notes to consolidated financial statements

Cingulate Inc.

Consolidated Statements of Cash Flows (unaudited)

	2023			2022
	Nine Months Ended September 30,
	2023			2022
Operating activities:
Net loss	$	(16,600,250	)	$	(13,071,205	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		410,593			304,287
Stock-based compensation		658,106			594,360
Changes in operating assets and liabilities:
Miscellaneous receivables		228,596			642,899
Prepaid expenses and other current assets		1,368,658			(293,140	)
Operating lease right-of-use assets		194,125			167,828
Trade accounts payable and accrued expenses		1,517,952			197,462
Other current liabilities		13,428			31,147
Operating lease liabilities		(263,380	)		(249,952	)
Net cash used in operating activities		(12,472,172	)		(11,676,314	)

Investing activities:
Purchase of property and equipment		(37,136	)		(10,400	)
Proceeds from sale of short-term investments		-			933
Other		-			(165	)
Net cash used in investing activities		(37,136	)		(9,632	)

Financing Activities:
Proceeds from issuance of common stock and pre-funded common stock purchase warrants, net of fees		6,151,288			-
Proceeds from note payable		3,000,000			5,000,000
Principal payments on finance lease obligations		(11,943	)		(11,229	)
Net cash provided by financing activities		9,139,345			4,988,771

Cash and cash equivalents:
Net decrease in cash and cash equivalents		(3,369,963	)		(6,697,175	)
Cash and cash equivalents at beginning of year		5,356,276			16,492,745
Cash and cash equivalents at end of period	$	1,986,313		$	9,795,570

Cash payments:
Interest paid	$	10,266		$	10,291

See notes to consolidated financial statements

CINGULATE INC.

Notes to Consolidated Financial Statements (unaudited)

(1) Nature of the Business and Liquidity

Organization

Cingulate Inc. 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 completed its first Phase 3 clinical trial for CTx-1301 with two additional Phase 3 trials in process. In addition, the Company has a third product to treat anxiety, CTx-2103, in a formulation stage.

On November 14, 2012, Cingulate Therapeutics LLC (CTx), a Delaware limited liability company, was formed. On May 10, 2021, Cingulate Inc. (Cingulate, or the Company), a Delaware corporation and wholly-owned subsidiary of CTx, was formed to serve as a holding company, in anticipation of the Company becoming publicly traded. Through a Reorganization Merger which occurred in the third quarter of 2021, Cingulate effectively acquired CTx and all outstanding units of CTx were converted into shares of Cingulate common stock. CTx remains the entity through which the Company conducts operations.

The consolidated financial statements and notes for the periods ended September 30, 2023 and 2022, represent the full consolidation of Cingulate and its subsidiaries, including CTx and all references to the Company represent this full consolidation.

Liquidity

The Company has incurred 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. The initial public offering, which was completed in December 2021, provided approximately $20.4 million in net proceeds. In addition, the Company received proceeds of $5.0 million from a promissory note in August 2022 and an additional $3.0 million when the promissory note was amended and restated in May 2023, a portion of which was subsequently converted to equity, as further described in Note 7. The Company has utilized its At-the-Market Agreement with H.C. Wainwright and Purchase Agreement with Lincoln Park Capital LLC in 2023, providing a total of approximately $2.1 million in net proceeds through September 30, 2023. Additional capital raised in the third quarter of 2023 included the issuance and sale of common stock and pre-funded common stock warrants in connection with a public offering, which provided approximately $3.3 million in net proceeds and the issuance and sale of common stock in connection with a $1 million private placement, as further described in Note 9. 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 sheet as of September 30, 2023, the consolidated statements of operations and comprehensive loss for the three and nine-month periods ended September 30, 2023 and 2022, the consolidated statements of stockholders’ equity for the three and nine-month periods ended September 30, 2023 and 2022, the consolidated statements of cash flows for the nine-month periods ended September 30, 2023 and 2022, 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 audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2022.

(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) Miscellaneous Receivables

Miscellaneous receivables as of December 31, 2022, primarily consisted of employee retention tax credits for payroll costs incurred in 2020 and research and development tax credits. The Company analogized to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, in accounting for these receivables. As of December 31, 2022, the Company determined that there was no allowance necessary relating to these receivables. As of September 30, 2023, all employee retention tax credits and research and development tax credits had been collected.

(e) 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 three or nine-month periods ended September 30, 2023 or 2022.

(f) 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 11.

(3) Prepaid Expenses

Prepaid expenses consisted of the following at September 30, 2023 and December 31, 2022:

Schedule of Prepaid Expenses

	September 30,		December 31,
	2023		2022
Research and development	$	413,431	$	1,377,391
Insurance		339,676		472,152
Active pharmaceutical ingredients		77,422		209,156
Deferred capital raise costs		-		100,339
Professional fees		20,775		61,524
Dues and subscriptions		38,284		37,684
Other		20,698		20,698
Total prepaid expenses	$	910,286	$	2,278,944

(4) Property and Equipment

Property and equipment, net consisted of the following at September 30, 2023 and December 31, 2022:

Schedule of Property and Equipment


	Estimated
	Useful Life		September 30,			December 31,
	(in years)		2023			2022
Equipment		2-7	$	4,342,832		$	2,565,997
Furniture and fixtures		7		145,754			145,754
Computer equipment		5		41,898			41,898
Leasehold improvements		5		471,505			471,505
Construction-in-process- equipment		-		-			1,739,699
Property and equipment, gross				5,001,989			4,964,853
Less: accumulated depreciation				(2,470,659	)		(2,060,066	)
Property and equipment, net			$	2,531,330		$	2,904,787

Depreciation expense for the nine months ended September 30, 2023 was $410,593 and for the nine months ended September 30, 2022 was $304,287. Depreciation expense for the three months ended September 30, 2023 was $154,663 and for the three months ended September 30, 2022 was $101,429.

(5) Accrued Expenses

Accrued expenses consisted of the following at September 30, 2023 and December 31, 2022:

Schedule of Accrued Expenses

	September 30,		December 31,
	2023		2022
Interest	$	157,339	$	292,339
Research and development		253,524		-
Professional fees		15,000		314,446
Employee bonuses		175,625		175,625
Active pharmaceutical ingredients		62,393		-
Other		28,127		112,225
Accrued expenses	$	692,008	$	894,635

(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 consolidated financial statements.

(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, 2023, is 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 (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 (WFIA Pre-Funded Warrants) to purchase 6,838,235 shares of the Company’s common stock at a conversion price per WFIA Pre-Funded Warrant of $0.85. The closing price of the Company’s common stock on Nasdaq on September 8, 2023, was $0.5776 per share. The WFIA Pre-Funded Warrants have no expiration date and are exercisable immediately at an exercise price of $0.0001 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.

The Company considered ASC 470-60, Troubled Debt Restructurings by Debtors, in accounting for this debt conversion. The difference between the fair value of the pre-funded warrants issued and the carrying value of the debt settled in the transaction was recognized as a capital contribution of $1,862,735 in the Statement of Stockholders’ Equity.

The remaining outstanding principal of the note of $3.0 million and all accrued and unpaid interest are due and payable on August 8, 2025, or 120 days following written demand made by WFIA during the first five business days of a calendar quarter. WFIA has not demanded payment on the note. The Company may prepay the note, in whole or in part, without premium or penalty; provided, that no amount repaid may be reborrowed.

As of September 30, 2023 and December 31, 2022, $3.0 million and $5.0 million, respectively, of principal were outstanding on the note.

During the three months ended September 30, 2023, the Company recognized $237,500 of interest expense relating to the note. During the nine months ended September 30, 2023, the Company recognized $677,500 of interest expense relating to the note. All interest expense relating to the note is included in accrued expenses on the consolidated balance sheet.

(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, 2023, and December 31, 2022, of which 17,378,798 and 11,309,412 shares of common stock were issued and outstanding as of September 30, 2023 and December 31, 2022, 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.

(9) Sale of Securities

Private Placement

On August 11, 2023, the Company entered into a Securities Purchase Agreement with WFIA and issued, in a private placement priced at the market under Nasdaq rules, 1,823,155 shares of its common stock at a purchase price per share of $0.5485, resulting in gross proceeds to the Company of approximately $1.0 million. Peter Werth, a member of the Company’s Board of Directors, is the manager of WFIA.

Public Offering

On September 11, 2023, the Company entered into a Securities Purchase Agreement with an institutional investor (September 2023 Offering) pursuant to which the Company issued 1,720,000 shares of its common stock at a combined price of $0.5776 per share and accompanying Series A and Series B warrants and pre-funded warrants (Pre-Funded Warrants) to purchase up to an aggregate of 5,205,208 shares of its common stock at a combined purchase price of $0.5775 per Pre-Funded Warrant, and accompanying Series A and Series B warrants, which represents the public offering price for the common stock less the $0.0001 per share exercise price per share for each Pre-Funded Warrant. The September 2023 Offering closed on September 13, 2023. The Pre-Funded Warrants are exercisable at any time after the date of issuance and have no expiration date. The holder 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. The September 2023 Offering resulted in gross proceeds to the Company of $3,999,480 before deducting $688,929 of placement agent fees and other offering expenses. See Note 10 for a description of Series A and Series B warrants issued in the September 2023 Offering.

Conversion of Related Party Note

On September 8, 2023, the Company issued WFIA Pre-Funded Warrants to purchase 6,838,235 shares of the Company’s common stock as part of the Note Conversion Agreement, as described in Note 7. The WFIA Pre-Funded Warrants have no expiration date and are exercisable immediately at an exercise price of $0.0001 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.

Purchase Agreement with Lincoln Park

In April 2023, the Company entered into a purchase agreement (LP Purchase Agreement) and a registration rights agreement (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 a registration statement to register for resale under the Securities Act 4.5 million shares of common stock that have been or may be issued to Lincoln Park under the LP Purchase Agreement.

Pursuant to the terms of the LP Purchase Agreement, at the time the Company signed the LP Purchase Agreement and the Registration Rights Agreement, the Company issued 368,023 shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of common stock under the LP Purchase Agreement. The commitment shares were valued at $400,409 and recorded as an addition to equity for the issuance of the common stock and treated as a reduction to equity as a cost of capital to be raised under the LP Purchase Agreement.

During the quarter ended September 30, 2023, the Company sold 240,000 shares of common stock under the LP Purchase Agreement, for net proceeds of $196,167. During the nine months ended September 30, 2023, the Company sold 510,000 shares of common stock under the LP Purchase Agreement, for net proceeds of $450,427.

At the Market Offering

In January 2023, the Company entered into an At The Market Offering Agreement (ATM Agreement) with H.C. Wainwright & Co., LLC (HCW) pursuant to which the Company may 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 will act as sales agent and will be paid a 3% commission on each sale under the ATM Agreement. The Company’s common stock will be sold at prevailing market prices at the time of the sale, and, as a result, prices will vary. During the quarter ended September 30, 2023, the Company sold 1,538,855 shares of common stock under the ATM Agreement, for net proceeds of $1,595,429. During the nine months ended September 30, 2023, the Company sold 1,648,208 shares of common stock under the ATM agreement, for net proceeds of $1,696,407.

(10) Common Stock Purchase Warrants

In addition to the 6,925,208 shares of common stock and Pre-Funded Warrants issued in the September 2023 Offering, the Company issued Series A warrants to purchase up to 6,925,208 shares of common stock and Series B warrants to purchase up to 3,462,604 shares of common stock. The Series A and Series B warrants have an exercise price of $0.5776 per share and are 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.

The Company evaluated the Pre-Funded 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 5,205,208 shares of common stock based on their issuance date fair value of $3,006,008. As of September 30, 2023, none of the Pre-Funded Warrants had been exercised.

In connection with the September 2023 Offering, the Company issued placement agent warrants to purchase up to 346,260 shares of common stock. The placement agent warrants have an exercise price of $0.722 per share. These warrants have a five-year term ending September 11, 2028.

The Series A, Series B and placement agent warrants issued in the September 2023 Offering were valued using a Black-Scholes model with a risk-free rate of 4.5%-5.3%, the respective terms of five and two years, and a volatility of 1.29-1.32. 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.

The following table summarizes the Company’s outstanding common stock purchase warrants as of September 30, 2023:

					Issuance Date		Issuance Date
	Number of		Exercise		Fair Value		Fair Value
	Warrants		Price		per Warrant		Total
December 2021 Initial Public Offering		4,791,665	$	6.00	$	4.77	$	22,856,242
December 2021 Underwriter Warrants		208,333	$	7.50	$	4.64		966,665
September 2023 WFIA Pre-funded Warrants		6,838,235	$	0.0001	$	0.85		5,812,500
September 2023 Public Offering Pre-funded Warrants		5,205,208	$	0.0001	$	0.5775		3,006,008
September 2023 Public Offering Series A Warrants		6,925,208	$	0.58	$	0.540		3,739,612
September 2023 Public Offering Series B Warrants		3,462,604	$	0.58	$	0.420		1,454,294
September 2023 Placement Agent Warrants		346,260	$	0.72	$	0.530		183,518
Balance- September 30, 2023		27,777,513					$	38,018,839

The Company has accounted for these warrants as equity-classified instruments under ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as they are indexed to the Company’s common stock, and they meet all other conditions as defined in ASU 2020-06 for equity classification. The gross proceeds of the September 2023 public offering was allocated to the common stock/pre-funded warrants 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.

			Percent
	Fair		of Total			Amount
	Value		Fair Value			Allocated

Common Stock and Pre-Funded Warrants	$	3,999,480		42.7	%	$	1,707,778
Series A, B and Placement Agent Warrants		5,377,424		57.3	%		2,291,702
Total	$	9,376,904		100	%	$	3,999,480

(11) Stock-Based Compensation

In September 2021, the Company’s board of directors and stockholders adopted the 2021 Equity Incentive Plan (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.

The maximum number of shares of common stock available for issuance in connection with options and other awards granted under the 2021 Plan is 2,786,310 and as of September 30, 2023, 1,333,565 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 $658,105 during the nine months ended September 30, 2023 and $594,363 during the nine months ended September 30, 2022. The Company recorded stock-based compensation expense of $236,251 during the three months ended September 30, 2023 and $205,656 during the three months ended September 30, 2022, all relating to options issued during 2021, 2022 and 2023. As of September 30, 2023 and December 31, 2022, there was $2,133,614 and $2,637,895, 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 months ended September 30, 2023 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, 2023		861,019
Granted		384,500		$	1.75		9.92
Exercised		-
Forfeitures or expirations		(5,615	)
Outstanding at March 31, 2023		1,239,904		$	3.16		9.01
Granted		127,758		$	0.96		9.98
Exercised		-
Forfeitures or expirations		(17,983	)
Outstanding at June 30, 2023		1,349,679		$	3.16		9.01
Granted		104,066		$	0.61		9.89
Exercised		-
Forfeitures or expirations		(1,000	)
Outstanding at September 30, 2023		1,452,745		$	2.99		8.84	$	10,607

Vested and expected to vest at September 30, 2023		1,452,745

Exercisable at September 30, 2023		336,310

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, 2023, were as follows, shown on a weighted average basis:

Schedule of Fair Value Assumption


Risk-free interest rate	4.073	%
Expected term (in years)	5.9
Expected volatility	1.27
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, 2023, ranged from $0.51 to $0.64, and the grant date fair value of the options granted during the nine months ended September 30, 2023, ranged from ranged from $0.51 to $1.53

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 $0.71 as of September 30, 2023, and $1.00 as of December 31, 2022, based upon the closing price of our common stock on the Nasdaq Capital Market on those dates.

(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, 2023, and 2022 or the nine-month periods ended September 30, 2023 and 2022, 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, 2023			Three Months Ended September 30, 2022			Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022
Federal income tax benefit at statutory rate	$	(1,255,601	)	$	(845,722	)	$	(3,486,052	)	$	(2,733,779	)
State income tax benefit		(330,642	)		(222,707	)		(917,994	)		(719,896	)
Permanent differences		6,154			3,157			14,457			11,920
Change in valuation allowance		2,218,188			1,132,895			5,089,875			3,572,189
Prior period adjustment to actual		(620,630	)		-			(620,630	)		-
Other		(17,469	)		(67,623	)		(79,656	)		(130,434	)
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 $10,988,821 as of September 30, 2023, and $5,580,595 at December 31, 2022, 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 Company is 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, 2023 or December 31, 2022.

	September 30, 2023			December 31, 2022
Deferred income tax assets:
Current:
Research and development costs	$	723,577		$	343,087
Other		59,126			59,018
Non-current:
Net operating losses		5,862,906			3,381,215
Research and development costs		3,645,038			1,762,716
Research and development tax credit		756,122			-
Unvested stock options		405,739			204,380
Patents		99,118			92,417
Right-of-use assets		45,265			63,563
Gross deferred income tax assets		11,596,891			5,906,396
Less: valuation allowance		(10,988,821	)		(5,580,595	)
Net deferred income tax asset		608,070			325,801

Deferred income tax liabilities:
Current:
Accrual to cash		-			(11,228	)
Non-current
Property and equipment		(608,070	)		(314,573	)
Gross deferred income tax liabilities		(608,070	)		(325,801	)

Net deferred tax asset (liability)	$	-		$	-

(13) Net Loss Per Share

Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of common shares and pre-funded warrants outstanding during the period. The pre-funded warrants are included in the calculation of the weighted-average number of shares outstanding because their exercise requires only nominal consideration for the delivery of shares. The following table sets forth the computation of the basic and diluted net loss per share for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30, 2023			Three Months Ended September 30, 2022			Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022
Numerator:
Net loss	$	(5,979,054	)	$	(4,027,247	)	$	(16,600,250	)	$	(13,071,205	)
Denominator:
Weighted average shares outstanding		19,766,654			11,309,412			14,287,942			11,309,412
Net loss per share, basic and diluted	$	(0.30	)	$	(0.36	)	$	(1.16	)	$	(1.16	)

Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows for the three and nine-month periods ended September 30, 2023 and September 30, 2022:


	September 30, 2023		September 30, 2022
Stock options issued under the 2021 Equity Incentive Plan		1,452,745		883,801
Common stock purchase warrants outstanding		15,734,070		4,999,998
Total		17,186,815		5,883,799
Antidilutive securities		17,186,815		5,883,799

(14) License Agreement

CTx has a licensing agreement with a company related to the patents and licensed know-how for use in the development of CTx-1301, CTx-1302, and CTx-2103. Payments are to be made upon the occurrence of the following milestone events:

	●	$250,000 Milestone payment upon dosing of first patient in a Phase 3 Clinical Trial for each product in the field, payable on a per product basis.
	●	$250,000 Milestone payment upon licensee filing of new drug application for each product in the field, payable on a per product basis.
	●	$250,000 Milestone payment for CTx-1301 and CTx-1302 and $500,000 Milestone payment for CTx-2103 upon receipt of first marketing approval from the FDA, payable on a per product basis.
	●	$250,000 Milestone payment for CTx-2103 upon receipt of first marketing approval from the EMA (European Medicines Agency)

As of December 31, 2022, the $250,000 milestone for CTx-1301 relating to the dosing of first patient in a Phase 3 Clinical Trial was accrued as management deemed the milestone probable of occurring. In early 2023, the Company paid this amount as the first patient in a CTx-1301 Phase 3 Clinical Trial was dosed. The Company has not recorded any expense relating to the other milestones for any other product as it has not deemed them probable of occurring as of September 30, 2023.

(15) Related Party Transactions

The general counsel of the Company is a partner with a law firm providing office facilities space that is leased by the Company. Rental expense incurred by the Company to the law firm was $27,000 for both the nine months ended September 30, 2023 and 2022 and $9,000 for both the three months ended September 30, 2023 and 2022, which approximates fair value. As of September 30, 2023 and December 31, 2022, the Company had no outstanding amounts payable under this lease.

A member of the Company’s Board of Directors, Peter Werth, is the manager of WFIA, the entity which provided $8.0 million in debt financing to the Company, $5.0 million of which was converted to equity in September 2023, as described in Note 7. The remaining principal balance of $3.0 million was outstanding as of September 30, 2023 and the initial principal balance of $5.0 million was outstanding as of December 31, 2022. Interest expense of $237,500 and $104,838 was recognized during the three months ended September 30, 2023 and September 30, 2022, respectively. Interest expense of $677,500 and $104,838 was recognized during the nine months ended September 30, 2023 and September 30, 2022, respectively. $157,339 and $292,339 of accrued interest relating to this note was outstanding as of September 30, 2023 and December 31, 2022.

(16) Subsequent Events

Management evaluated events that occurred subsequent to September 30, 2023, through November 13, 2023, which is the date the interim financial statements were issued.

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, 2022 (Form 10-K) and in this report, as well as disclosures in this report and our other reports filed with the Securities and Exchange Commission (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. We initially focused on the treatment of Attention Deficit/Hyperactivity Disorder (ADHD); however, we have expanded our pipeline to include a product candidate for the treatment of anxiety. 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 $79.0 million as of September 30, 2023.

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 $6.0 million and $4.0 million for the three-month periods ended September 30, 2023 and 2022, respectively, and $16.6 million and $13.1 million for the nine-month periods ended September 30, 2023 and 2022, respectively. See “Results of Operations” below for an explanation of the fluctuations in our net losses. As of September 30, 2023, we had an accumulated deficit of $86.0 million.

We expect to continue to incur significant expenses and increasing operating losses in the near term. We expect our expenses will increase substantially in connection with our ongoing activities, as we:

	●	seek regulatory approval for CTx-1301;

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

	●	manufacture supplies for our development studies and clinical trials, primarily for CTx-1301;

	●	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 e

SEC Form 10-Q filed by Cingulate Inc.