Cingulate Reports First Quarter 2024 Financial Results and Provides Clinical and Business Update

Rhea-AI Summary

Cingulate Inc. reported its first quarter 2024 financial results, showing positive trends with $10 million increase in stockholders' equity and capital raising efforts totaling $10.7 million. The company is on track to file for Marketing Approval with the FDA for CTx-1301 in the first half of 2025. R&D expenses decreased, and total stockholders' equity saw a $10 million increase from the end of 2023.

Positive

• Positive financial results with a $10 million increase in stockholders' equity.

• Successful capital raising efforts totaling $10.7 million in the first quarter.

• CTx-1301 on track to file for Marketing Approval with the FDA in 1H 2025.

Negative

• Net loss of $3.0 million for the three months ended March 31, 2024.

• Significant costs incurred during the first quarter for two Phase 3 studies for CTx-1301, impacting financial performance.

Insights

Financial Analyst

The report presents a multi-faceted financial landscape for Cingulate Inc., indicating both strengths and opportunities for improvement. Most notably, the conversion of $3.3 million of debt into equity is a strategic move that benefits the company's balance sheet by reducing its liability exposure. The successful capital raises, totaling $10.7 million, show investor confidence, vital for ongoing clinical trials and operational funding. However, the company's cash position of $1.1 million may concern investors considering the burn rate in relation to R&D expenses, which, although reduced from the previous year, still signify significant outflows. This cash position necessitates careful monitoring of the company's capital access strategy moving forward. The decrease in net loss reflects tighter expense management, yet poses the question of how these reductions will influence the company's ability to scale operations to meet its clinical development goals. Overall, the reduction in liabilities and net loss, juxtaposed with the modest cash reserves, paints a picture of a company at a critical juncture, needing to balance fiscal prudence with the necessary investment in its pipeline.

Medical Research Analyst

From a medical research perspective, the update on the progress of CTx-1301 is a pivotal factor. The advancement towards an NDA filing with the FDA is a key milestone for any biopharmaceutical firm. It indicates the product's transition from research and development into a phase where market entry is being considered. The costs associated with the two Phase 3 studies, while substantial, are an expected part of the development cycle for novel pharmaceutical products. However, the current cash position may not be sufficient to cover these expenses long-term, which raises questions about the company's planning for subsequent funding rounds or partnership deals. For investors, the clinical success of CTx-1301 and its eventual market approval hold substantial weight, as these events can significantly impact the stock's value. The progress in clinical development is a positive sign, but the financial underpinning of these efforts must be robust to ensure that the product reaches its market potential without undue dilution or financial strain on the company.

CTx-1301 on track to file for Marketing Approval with FDA in 1H 2025

Increase of $10 Million in Stockholders’ Equity

KANSAS CITY, Kan., May 08, 2024 (GLOBE NEWSWIRE) -- Cingulate Inc. (NASDAQ: CING), a biopharmaceutical company utilizing its proprietary Precision Timed Release™ (PTR™) drug delivery platform technology to build and advance a pipeline of next-generation pharmaceutical products, today announced its financial results for the three months ended March 31, 2024, and provided a clinical and business update.

“As Cingulate continues to meet with potential partners for the licensing of CTx-1301, we expect to complete all remaining requirements for the filing of an NDA in the first half of 2025,” said Cingulate Chairman and CEO Shane J. Schaffer. “We are pleased with our ability to support our business operations, including the advancement of CTx-1301, through our capital raising efforts during the first quarter.”

$10.7 Million of Capital Raised and $3.3 Million of Debt Converted to Equity in 2024      

Since January 1, 2024, the Company sold shares of common stock under its At the Market Offering Agreement with H.C. Wainwright & Co., LLC for gross proceeds of $3.2 million. In February 2024, the Company closed a $7.5 million public offering of its common stock (or pre-funded warrants in lieu thereof) and Series A and Series B warrants to purchase shares of common stock, at a public offering price of $2.00 per share (or common stock equivalent in lieu thereof) and accompanying warrants. Additionally, in January 2024, Werth Family Investment Associates, LLC , the manager of which is Peter J. Werth, a member of the Cingulate board of directors, converted at a 10 percent premium to market the remaining $3.3 million of outstanding debt plus accrued interest into pre-funded warrants to purchase shares of common stock.

First Quarter Results
Cash Position: As of March 31, 2024, Cingulate had $1.1 million in cash and cash equivalents. Management intends to seek opportunities to access additional capital as needed.

Liabilities: As of March 31, 2024, total liabilities were $2.3 million, a decrease from December 31, 2023 of $8.1 million, including the conversion of the related party note payable in the amount of $3.3 million.

Stockholders’ Equity: As of March 31, 2024, total stockholders’ equity was $3.2 million, an increase of $10 million from the end of 2023.

R&D Expenses: R&D expenses were $1.8 million for the three months ended March 31, 2024, a decrease of $0.3 million from the three months ended March 31, 2023. This change was primarily the result of increased clinical activity in the three months ended March 31, 2024 as compared to the same period in 2023, offset by decreased manufacturing activity and personnel expenses in the three months ended March 31, 2024 as compared to the same period in 2023. During the first quarter of 2024, we incurred significant costs relating to two Phase 3 studies for CTx-1301, the fixed dose pediatric and adolescent safety and efficacy study and the pediatric dose optimization and duration study. In the first quarter of 2023, we incurred costs for the manufacturing of clinical supply for these two studies. The decrease in personnel costs is the result of lower headcount and the cost containment measures, which we implemented in late 2023 in order to conserve cash, which included salary reductions ranging from 5-55% for all employees.

G&A Expenses: Total G&A expenses were $1.1 million for the three months ended March 31, 2024, a decrease of $0.6 million from the three months ended March 31, 2023. This change is primarily the result of a decrease in personnel expenses and insurance expense. The decrease in personnel expenses is the result of lower headcount and the cost containment measures discussed above, which we implemented in late 2023. In addition, there was a decrease in the annual directors’ and officers’ insurance premium from 2023 to 2024.

Net Loss: Net loss was $3.0 million for the three months ended March 31, 2024, compared to $4.0 million for the same period in 2023. The decrease in the net loss primarily relates to a decrease in R&D and G&A expenses described above.

Cingulate Inc.
Consolidated Balance Sheet Data
		March 31,				December 31,
			2024				2023
Cash, cash equivalents and short-term investments		$	1,113,830			$	52,416
Total assets		$	5,494,515			$	3,491,436
Total liabilities		$	2,278,396			$	10,360,865
Accumulated deficit		$	(95,915,920	)		$	(92,943,443	)
Total stockholders' equity		$	3,216,119			$	(6,869,429	)

Cingulate Inc.
Consolidated Statements of Operations
		Three Months Ended March 31,
			2024				2023
Operating expenses:
Research and development		$	1,806,985			$	2,128,616
General and administrative			1,141,232				1,721,379
Operating loss			(2,948,217	)			(3,849,995	)
Interest and other income (expense), net			(24,260	)			(154,892	)
Loss before income taxes			(2,972,477	)			(4,004,887	)
Income tax benefit (expense)			-				-
Net loss			(2,972,477	)			(4,004,887	)
Net loss per share of common stock, basic and diluted		$	(0.60	)		$	(7.08	)

About Cingulate^®
Cingulate Inc. is a biopharmaceutical company utilizing its proprietary Precision Timed Release™ (PTR™) 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), Cingulate is identifying and evaluating additional therapeutic areas where its PTR technology may be employed to develop future product candidates, such as anxiety disorders.

Cingulate is headquartered in Kansas City, KS. For more information visit Cingulate.com.

Forward-Looking Statements 
This press release 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 forward-looking statements include all statements, other than statements of historical fact, regarding our current views and assumptions with respect to future events regarding our business, including statements with respect to our plans, assumptions, expectations, beliefs and objectives with respect to product development, clinical studies, clinical and regulatory timelines, market opportunity, competitive position, business strategies, potential growth opportunities and other statements that are predictive in nature. 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. Readers are cautioned that any forward-looking information provided by us or on our behalf is not a guarantee of future performance. Actual results may differ materially from those contained in these forward-looking statements as a result of various factors disclosed in our filings with the Securities and Exchange Commission (SEC), including the “Risk Factors” section of our Annual Report on Form 10-K filed with the SEC on April 1, 2024. All forward-looking statements speak only as of the date on which they are made, and we undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.

Investor & Public Relations:
Thomas Dalton
Vice President, Investor & Public Relations, Cingulate
tdalton@cingulate.com
(913) 942-2301

Matt Kreps
Darrow Associates
mkreps@darrowir.com
(214) 597-8200

FAQ

What financial results did Cingulate Inc. report for the first quarter of 2024?

Cingulate Inc. reported a $10 million increase in stockholders' equity.

What is the status of CTx-1301 filing for Marketing Approval with the FDA?

CTx-1301 is on track to file for Marketing Approval with the FDA in the first half of 2025.

How much capital was raised by Cingulate Inc. in 2024?

Cingulate Inc. raised $10.7 million in capital in 2024 through various sources.

What were the R&D expenses for the three months ended March 31, 2024?

R&D expenses were $1.8 million for the three months ended March 31, 2024, a decrease of $0.3 million from the same period in 2023.

What was the net loss for Cingulate Inc. for the three months ended March 31, 2024?

The net loss was $3.0 million for the three months ended March 31, 2024, compared to $4.0 million for the same period in 2023.