Cingulate Inc. — 2023 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a report solely for 2023 Q4. Cingulate is a pre-revenue biopharmaceutical company developing once-daily, precision-timed-release medicines, initially for ADHD and anxiety.
Business context and development
- CTx-1301: Dexmethylphenidate candidate for ADHD. The Phase 3 adult study, with 21 participants, did not meet its primary efficacy endpoint; the company reported a trend on PERMP scores and a statistically significant result on a secondary CGI-S endpoint. Two pediatric/adolescent Phase 3 studies had enrollment stopped following FDA feedback. Cingulate expects to submit an NDA under the 505(b)(2) pathway in the first half of 2025.
- CTx-1302: Dextroamphetamine candidate for ADHD. Clinical development was planned to begin as soon as 2025, dependent on additional capital.
- CTx-2103: Buspirone formulation candidate for anxiety. A small human formulation study showed a triple-release profile; clinical development was conditional on licensing and additional capital.
- The company has no approved products, internal sales infrastructure, or product revenue. Its lead candidate’s manufacturing is outsourced to Societal CDMO.
Financial results and liquidity
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $15.5 million | $9.0 million |
| General and administrative expense | $7.3 million | $8.5 million |
| Operating loss | $22.8 million | $17.5 million |
| Net loss | $23.5 million | $17.7 million |
| Net loss per share, basic and diluted | $26.00 | $29.35 |
| Net cash used in operating activities | $15.0 million | $15.9 million |
| Net cash used in investing activities | $0.2 million | $0.2 million |
| Net cash provided by financing activities | $10.0 million | $4.9 million |
- Margins are not meaningful because the company had no revenue.
- Cash and cash equivalents were only $52,416 at year-end, down from $5.36 million. Total current assets were $0.58 million, against current liabilities of $10.23 million; stockholders’ equity was negative $6.87 million.
- Year-end liabilities included a $3.0 million current related-party note payable to Werth Family Investment Associates (WFIA), plus $5.20 million of accounts payable and $1.65 million of accrued expenses. In January 2024, the remaining note principal and accrued interest were converted into pre-funded warrants; the note was reported paid in full after conversion.
- The independent auditor issued an unqualified opinion on the financial statements but included a going-concern explanatory paragraph. Management said year-end cash, together with subsequent financing, was expected to fund operations only through late Q2 2024. It estimated a further $9–11 million would be needed to reach the planned CTx-1301 NDA filing, with additional capital also required for other programs and commercialization.
Changes, outlook, and notable risks
- Net loss increased 33.1% year over year. R&D rose 72.2%, primarily due to CTx-1301 clinical activity and manufacturing; G&A fell 14.6%, mainly because directors’ and officers’ insurance costs declined. Operating cash use improved modestly, while financing inflows increased.
- During 2023, the company raised capital through offerings, ATM sales, a Lincoln Park equity facility, and the WFIA financing. After year-end it reported approximately $3.1 million net proceeds from ATM sales and $6.5 million net proceeds from a February 2024 public offering. The February offering included substantial warrant issuance; subsequent warrant exercises and the expanded ATM authorization may affect dilution.
- Management reported cost-cutting measures initiated in late 2023, including salary reductions and deferral of cash fees for non-management directors. Several executives and directors resigned in December 2023. A former executive’s asserted “good reason” termination and potential severance payment are disputed by the company.
- Nasdaq had granted an exception to demonstrate continued compliance with the $2.5 million minimum stockholders’ equity requirement through May 13, 2024. The company had regained compliance with the minimum bid-price requirement after a 1-for-20 reverse stock split. Continued listing remained uncertain.
- Management concluded disclosure controls were ineffective as of December 31, 2023 because a material weakness related to the lack of independent directors. The company said the weakness was remediated after three independent directors joined the board in February 2024; the auditor did not audit internal control effectiveness.
- Key risks include a short cash runway and dependence on new financing; the CTx-1301 primary-endpoint miss and uncertainty over FDA-required studies; reliance on third-party manufacturers and suppliers; regulatory and controlled-substance requirements for ADHD candidates; and the need for a partner or outsourced commercial capabilities.
Important facts for investors to verify
- Current cash runway, outstanding vendor obligations, and the timing and terms of any additional financing.
- FDA feedback underlying the CTx-1301 trial changes, whether further clinical studies are needed, and the evidence required for the planned NDA.
- CTx-1301 full trial data, including the primary endpoint result, secondary endpoints, safety findings, and completed or pending pediatric data.
- Manufacturing readiness and supply arrangements with Societal and API suppliers, including applicable FDA and DEA requirements.
- Nasdaq continued-listing status, potential dilution from outstanding or exercised warrants and equity facilities, and resolution of the former executive’s severance dispute.