Cingulate(CING) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements show a net loss of $8.6 million for the six months ended June 30, 2025, highlighting the company's pre-revenue status and going concern uncertainty Consolidated Balance Sheet Highlights (unaudited) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $8,900,183 | $12,211,321 | | Total assets | $13,468,208 | $14,864,489 | | Total liabilities | $7,956,334 | $7,408,984 | | Total stockholders' equity | $5,511,874 | $7,455,505 | Consolidated Statements of Operations Highlights (unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2,700,939 | $1,881,093 | $4,923,565 | $3,688,078 | | General and administrative | $1,949,035 | $1,325,087 | $3,432,444 | $2,466,319 | | Operating loss | $(4,649,974) | $(3,206,180) | $(8,356,009) | $(6,154,397) | | Net loss | $(4,788,735) | $(3,209,677) | $(8,591,426) | $(6,182,154) | | Net loss per share | $(1.09) | $(5.47) | $(2.14) | $(12.28) | Consolidated Statements of Cash Flows Highlights (unaudited) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(9,403,539) | $(10,488,400) | | Net cash used in investing activities | $(5,925) | $(154,133) | | Net cash provided by financing activities | $6,098,326 | $10,971,045 | | Net (decrease) increase in cash | $(3,311,138) | $328,512 | Notes to Consolidated Financial Statements - The company is a pre-revenue biopharmaceutical firm that has incurred losses since inception, and its ability to continue as a going concern is in substantial doubt[23][25] - On December 20, 2024, the company issued an unsecured promissory note for $5,480,000 to Streeterville Capital, LLC, with an outstanding balance of $5,747,984 as of June 30, 2025[40][44] - The company submitted the New Drug Application (NDA) for its lead candidate, CTx-1301, to the FDA on July 31, 2025[71] - Subsequent to the quarter end, significant management changes occurred, including placing the CEO on administrative leave and terminating the COO's employment[71][72] - After the quarter, the company entered a new purchase agreement with Lincoln Park for up to $25.0 million of common stock and exchanged $1,225,000 of its promissory note for shares[69][70] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the NDA submission for CTx-1301, a Q2 2025 net loss of $4.8 million, and the substantial doubt about its going concern status due to limited cash reserves - The company is a biopharmaceutical firm using its Precision Timed Release (PTR) drug delivery platform, with an initial focus on ADHD and anxiety treatments[76] - The New Drug Application (NDA) for the lead product candidate, CTx-1301, was submitted to the FDA on July 31, 2025[86] - Significant management changes occurred in August 2025, including placing CEO Shane Schaffer on administrative leave and appointing CFO Jennifer Callahan as interim CEO[81][82] - The company believes its current cash will fund operations into late 2025 and will need to raise an additional $1.5 million to advance commercialization efforts into early 2026[79][122] Results of Operations The net loss increased to $4.8 million for the quarter and $8.6 million for the six-month period, driven by higher R&D and G&A expenses related to the CTx-1301 NDA submission Comparison of Operating Results (Three Months Ended June 30) | (in thousands) | 2025 | 2024 | Increase | % Increase | | :--- | :--- | :--- | :--- | :--- | | Research and development | $2,701 | $1,881 | $820 | 43.6% | | General and administrative | $1,949 | $1,325 | $624 | 47.1% | | Net Loss | $(4,789) | $(3,209) | $1,580 | 49.2% | Comparison of Operating Results (Six Months Ended June 30) | (in thousands) | 2025 | 2024 | Increase | % Increase | | :--- | :--- | :--- | :--- | :--- | | Research and development | $4,924 | $3,688 | $1,236 | 33.5% | | General and administrative | $3,432 | $2,466 | $966 | 39.2% | | Net Loss | $(8,592) | $(6,182) | $2,410 | 39.0% | Liquidity and Capital Resources The company holds $8.9 million in cash, sufficient until late 2025, but requires an additional $1.5 million to advance commercialization, raising substantial doubt about its going concern status - The company had cash and cash equivalents of $8.9 million as of June 30, 2025[122] - Capital is being raised through an At-the-Market (ATM) agreement and a Lincoln Park Capital purchase agreement, which raised net proceeds of $4.2 million in Q2 2025[120][121] - The company's history of losses and need for additional capital raise substantial doubt about its ability to continue as a going concern[133] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company indicates it has no significant market risk exposure requiring quantitative and qualitative disclosure - The company has determined that quantitative and qualitative disclosures about market risk are not applicable[136] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[137] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[138] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company recorded no loss contingencies for legal proceedings but disclosed a reasonably possible contingent bonus plan of $722,824 - The company had no accrued loss contingencies for legal proceedings as of June 30, 2025[38][139] - A contingent bonus plan estimated at $722,824 exists to repay employees for previous salary reductions, but it has not been accrued as payment was not deemed probable[39] Item 1A. Risk Factors The company highlights an expanded risk related to retaining key management following recent executive changes, with no other material changes to previously disclosed risks - The company highlights the risk of failing to attract and retain key management personnel, citing recent executive changes in August 2025[142] - Except for the expanded risk factor on key personnel, there were no other material changes to the risk factors previously disclosed in the Form 10-K[141] Item 5. Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025[147] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including governance documents, material agreements, and required certifications - The report lists exhibits filed, including corporate bylaws, material agreements, and required officer certifications[148]