Cingulate Inc.

Previous wording

We are a biopharmaceutical company using our proprietary PTRTM 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 are initially focusing our efforts on the treatment of ADHD. Our PTR platform incorporates a proprietary 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.

Current wording

We are a biopharmaceutical company using our proprietary PTRTM 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 ADHD and anxiety, we are identifying and evaluating additional therapeutic areas where our PTR technology may be employed to develop future product candidates. Our PTR platform incorporates a proprietary 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 to better serve the needs of patients throughout their entire active-day.

Previous wording

Since inception in 2012, our operations have focused on developing our product candidates, primarily CTx-1301, 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 107.3 million as of December 31, 2024.

Current wording

Since inception in 2012, our operations have focused on developing our product candidates, primarily CTx-1301, organizing and staffing our company, business planning, raising capital and establishing our intellectual property portfolio. 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 $128.7 million as of December 31, 2025.

Previous wording

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 $15.5 million and $23.5 million for the years ended December 31, 2024 and 2023, respectively. See “Results of Operations” below for an explanation of the fluctuations in our net losses. As of December 31, 2024, we had an accumulated deficit of $108.5 million.

Current wording

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 $22.4 million and $16.6 million for the years ended December 31, 2025 and 2024, respectively. See “Results of Operations” below for an explanation of the fluctuations in our net losses. As of December 31, 2025, we had an accumulated deficit of $132.4 million.

Previous wording

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:

Current wording

We expect to continue to incur significant expenses and operating losses in the near term as we:

Previous wording

We are targeting to file our NDA submission for CTx-1301 in mid-2025 and believe our cash will satisfy our capital needs into the fourth quarter of 2025 under our current business plan. We will need additional capital to advance our other programs and commercialization efforts for CTx-1301. See “Liquidity and Capital Resources” below.

Current wording

We believe our cash will satisfy our capital needs late into the fourth quarter of 2026 under our current business plan, which primarily includes activities related to us seeking regulatory approval for CTx-1301 and pre-commercialization efforts for CTx-1301. We will also need additional capital to advance our other programs. See “Liquidity and Capital Resources” below.

Previous wording

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 equity, debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates.

Current wording

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 equity, debt financings, or other capital sources, including potential collaborations with other companies or other strategic transactions. Adequate funding may not be available to us on acceptable terms, or at all. If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, scale back or discontinue the development and commercialization of our product candidates. Our most advanced product candidate currently is CTx-1301, for which we submitted a NDA with the FDA in July 2025. On [DATE], the NDA submission was accepted by the FDA and a PDUFA target action date of May 31, 2026 was assigned. However, completing the process of obtaining FDA approval of the pending NDA for CTx-1301 still involves substantial risk. See “Risk Factors—We depend heavily on the success of CTx-1301. If we are unable to secure approval of CTx-1301, we will never be able to generate revenues from CTx-1301, and our ability to create stockholder value will be severely limited” for more information about the risks related to regulatory approval of CTx-1301.

Previous wording

We entered into the ATM Agreement with HCW, as sales agent, in January 2023 as amended in May 2023, pursuant to which we may offer and sell, from time to time through HCW, shares of our common stock for aggregate proceeds of up to $23.5 million (upon the terms and subject to the conditions and limitations set forth in the ATM Agreement).

Current wording

We entered into the At the Market Offering Agreement (“ATM Agreement”) with HCW, as sales agent, in January 2023 as amended in May 2023, pursuant to which we could offer and sell, from time to time through HCW, shares of our common stock for aggregate proceeds of up to $32.34 million (upon the terms and subject to the conditions and limitations set forth in the ATM Agreement). On March 16, 2026, we terminated the ATM Agreement, effective March 23, 2026.

Previous wording

During 2024, we sold 983,093 shares of common stock under the ATM Agreement, for net proceeds of $9,393,550, after deducting $298,498 of compensation to HCW and other administration fees. Subsequent to December 31, 2024, we sold 142,685 shares of common stock under the ATM Agreement, for net proceeds of $776,091, after deducting $25,756 of compensation to HCW and other administration fees.

Current wording

During 2025, we sold 785,784 shares of common stock under the ATM Agreement, for net proceeds of $3,574,574, after deducting $122,576 of compensation to HCW and other administration fees. Subsequent to December 31, 2025, we sold 210,158 shares of common stock under the ATM Agreement, for net proceeds of $1,304,011, after deducting $43,300 of compensation to HCW and other administration fees.

Previous wording

In April 2023, we entered into a purchase agreement (the “Lincoln Park Agreement”) with Lincoln Park Capital Fund LLC (“Lincoln Park”). Pursuant to the Lincoln Park Agreement, Lincoln Park has agreed to purchase from us up to an aggregate of $12.0 million of common stock (upon the terms and subject to the conditions and limitations set forth in the Lincoln Park Agreement) from time to time and at our sole discretion over the 36-month term of the Lincoln Park Agreement. During 2024, we sold 1,472,363 shares of common stock under the Lincoln Park Agreement, for net proceeds of $8,037,501. Subsequent to December 31, 2024, we sold 223,409 shares of common stock under the Lincoln Park Agreement, for net proceeds of $899,989.

Current wording

On July 21, 2025, we entered into a second purchase agreement with Lincoln Park (the “2025 LP Purchase Agreement”), pursuant to which Lincoln Park has agreed to purchase from us up to an aggregate of $25.0 million of common stock (subject to certain limitations and satisfaction of the conditions set forth in the 2025 LP Purchase Agreement) from time to time and at the Company’s sole discretion over the 36-month term of the 2025 LP Purchase Agreement. Pursuant to the terms of the 2025 LP Purchase Agreement, we issued 120,424 shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of common stock under the 2025 LP Purchase Agreement. During 2025, we sold 852,948 shares of common stock to Lincoln Park, under the 2025 LP Purchase Agreement, for net proceeds of $3,238,007. Subsequent to December 31, 2025, we sold 1,526,628 shares of common stock to Lincoln Park, under the 2025 LP Purchase Agreement, for net proceeds of $8,506,791. As of March 18, 2026, we had approximately $13.3 million of availability under the 2025 LP Purchase Agreement.

Previous wording

The WFIA Note was unsecured with interest accruing at 15% per annum. Outstanding principal and all accrued and unpaid interest was due and payable on August 8, 2025 unless accelerated due to an event of default. After the conversion of the remaining principal amount plus all accrued interest thereon and the issuance of the January WFIA Pre-Funded Warrants, the WFIA Note was paid in full and the Company has no further obligations under the WFIA Note. WFIA exercised all of its pre-funded warrants in April 2024.

Current wording

The WFIA Note was unsecured with interest accruing at 15% per annum. After the conversion of the remaining principal amount plus all accrued interest thereon and the issuance of the January WFIA Pre-Funded Warrants, the WFIA Note was paid in full and we have no further obligations under the WFIA Note. WFIA exercised all of its pre-funded warrants in April 2024.

Previous wording

On February 2, 2024, we entered into agreements, including a Securities Purchase Agreement, with investors, pursuant to which we issued 114,583 shares of our common stock, pre-funded warrants to purchase up to an aggregate of 197,917 shares of our common stock, Series A warrants to purchase up to 312,500 shares of our common stock and Series B warrants to purchase up to 312,500 shares of our common stock (the “February 2024 Offering”). The February 2024 Offering closed on February 6, 2024. The combined purchase price per share of common stock and accompanying Series A and Series B warrants was $24.00. The combined purchase price per pre-funded warrant and accompanying Series A and Series B warrants was $23.9988, which represents the public offering price per share of common stock and accompanying warrants less the $0.0012 per share exercise price for each pre-funded warrant. 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 Series A warrants have an exercise price of $24.00 per share, were exercisable immediately, and will expire five years after the issuance date, and the Series B warrants have an exercise price of $24.00 per share, were exercisable immediately, and will expire two years after the issuance date. We received gross proceeds of approximately $7.5 million, before deducting $750,950 of placement agent’s fees and other offering expenses, pursuant to the February 2024 Offering. As of December 31, 2024, all pre-funded warrants had been exercised.

Current wording

On February 2, 2024, we entered into agreements, including a Securities Purchase Agreement, with investors, pursuant to which we issued 114,583 shares of our common stock, pre-funded warrants to purchase up to an aggregate of 197,917 shares of our common stock, Series A warrants to purchase up to 312,500 shares of our common stock and Series B warrants to purchase up to 312,500 shares of our common stock (the “February 2024 Offering”). The February 2024 Offering closed on February 6, 2024. The combined purchase price per share of common stock and accompanying Series A and Series B warrants was $24.00. The combined purchase price per pre-funded warrant and accompanying Series A and Series B warrants was $23.9988, which represents the public offering price per share of common stock and accompanying warrants less the $0.0012 per share exercise price for each pre-funded warrant. 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 Series A warrants have an exercise price of $24.00 per share, were exercisable immediately, and will expire five years after the issuance date, and the Series B warrants have an exercise price of $24.00 per share, were exercisable immediately, and will expire two years after the issuance date. We received gross proceeds of approximately $7.5 million, before deducting $750,950 of placement agent’s fees and other offering expenses, pursuant to the February 2024 Offering. All pre-funded warrants were exercised during 2024.

Previous wording

On December 20, 2024, we entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (“Lender”), pursuant to which we issued and sold to Lender an unsecured promissory note (the “Promissory Note”) in the amount of $5,480,000. The principal amount includes an original issue discount of $450,000 and expenses payable by us of $30,000. In exchange for the Promissory Note, the Lender paid a purchase price of $5,000,000 in cash. The Promissory Note bears interest at a rate of 9% per annum and matures 18 months after its issuance date. Our wholly-owned subsidiaries Cingulate Therapeutics LLC and Cingulate Works, Inc., provided a guarantee of our obligations to the Lender under the Promissory Note and the other transaction documents. We intend to use the net proceeds from the sale of the Promissory Note for working capital and other general corporate purposes.

Current wording

On December 20, 2024, we entered into a Note Purchase Agreement (the “2024 Note Purchase Agreement”) with Streeterville Capital, LLC, a Utah limited liability company (“Lender”), pursuant to which we issued and sold to Lender an unsecured promissory note in the amount of $5,480,000 (the “2024 Note”). The principal amount included an original issue discount of $450,000 and expenses payable by us of $30,000. In exchange for the 2024 Note, Lender paid a purchase price of $5,000,000 in cash. The 2024 Note bore interest at a rate of 9% per annum and had a maturity 18 months after its issuance date. Our wholly-owned subsidiaries Cingulate Therapeutics LLC and Cingulate Works, Inc., provided a guarantee of our obligations to Lender under the 2024 Note and the other transaction documents. We used the net proceeds from the sale of the 2024 Note for working capital and other general corporate purposes.

Previous wording

From time to time, beginning on July 2, 2025, Lender may redeem a portion of the Promissory Note, not to exceed an amount of $550,000 per month. In the event the Promissory Note is outstanding on the 90-day anniversary of the effective date of the Promissory Note, we will be charged a monitoring fee equal to the outstanding balance on such date divided by 0.85 less the outstanding balance on such date. Subject to the terms and conditions set forth in the Promissory Note, we may prepay all or any portion of the outstanding balance of the Promissory Note at any time.

Current wording

From time to time, beginning on May 7, 2026, Avondale may redeem a portion of the 2025 Note, not to exceed an amount of $660,000 per month; and provided that we have not previously received a “complete response letter” from the FDA with respect to CTx-1301, we may defer up to two redemptions for up to thirty (30) days each. If we exercise our deferral right, the outstanding balance of the 2025 Note will be increased by 1% of the outstanding balance on the date of the deferral. We were charged a monitoring fee equal to the outstanding balance on the 90-day anniversary of the effective date of the 2025 Note divided by 0.85 less the outstanding balance on such date. Subject to the terms and conditions set forth in the 2025 Note, we may prepay all or any portion of the outstanding balance of the 2025 Note at any time.

Previous wording

Pursuant to the Note Purchase Agreement, while the Promissory Note is still outstanding, we will not enter into any arrangement that prohibits us from entering into a variable rate transaction, as defined in the Note Purchase Agreement, with Lender or its affiliates, or from issuing our securities to Lender or its affiliates. We are also prohibited from entering into a variable rate transaction until July 1, 2025, subject to certain exceptions. At any time while the Promissory Note is still outstanding, Lender will have the right, but not the obligation, with our consent, to reinvest up to an additional $5.0 million in one or more tranches on the same terms and conditions as the Promissory Note. Additionally, so long as the Promissory Note is outstanding, upon any issuance by us of any debt security with any economic term or condition more favorable to the holder of such security that was not provided to Lender pursuant to the Promissory Note, then, at Lender’s option, such additional term shall become part of the Promissory Note and related documents for the benefit of Lender. See Note 8 to our consolidated financial statements for additional information regarding the Promissory Note and the Note Purchase Agreement.

Current wording

Pursuant to the 2025 Note Purchase Agreement, while the 2025 Note is still outstanding, we will not enter into any arrangement that prohibits us from entering into a variable rate transaction, as defined in the 2025 Note Purchase Agreement, with Avondale or its affiliates, or from issuing our securities to Avondale or its affiliates. We are also prohibited from entering into a variable rate transaction while the 2025 Note is outstanding, subject to certain exceptions. At any time while the 2025 Note is still outstanding, Avondale will have the right, but not the obligation, with our consent, to reinvest up to an additional $5.0 million in one or more tranches on the same terms and conditions as the 2025 Note. Additionally, so long as the 2025 Note is outstanding, upon any issuance by us of any debt security with any economic term or condition more favorable to the holder of such security that was not provided to Avondale pursuant to the 2025 Note, then, at Avondale’s option, such additional term shall become part of the 2025 Note and related documents for the benefit of Avondale. See Note 8 to our consolidated financial statements for additional information regarding the 2025 Note and 2025 Note Purchase Agreement.

Previous wording

Research and development activities are central to our business model. We expect that our research and development expenses will continue to increase for the foreseeable future as we continue clinical development for our product candidates, as well as adding additional PTR product candidates to our pipeline. As products enter later stages of clinical development, they will generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Historically, our research and development costs have primarily related to the development of CTx-1301. As we advance CTx-1301, CTx-1302, and CTx-2103, as well as identify any other potential product candidates, we will continue to allocate our direct external research and development costs to the products. We expect to fund our research and development expenses from our current cash and cash equivalents and any future equity or debt financings, or other capital sources.

Current wording

Research and development activities are central to our business model. Subject to successful regulatory approval and commercialization of CTx-1301, we expect that our research and development expenses will continue to increase for the foreseeable future as we continue clinical development for our product candidates, as well as adding additional PTR product candidates to our pipeline. As products enter later stages of clinical development, they will generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. Historically, our research and development costs have primarily related to the development of CTx-1301. We expect to fund our research and development expenses from our current cash and cash equivalents and any future equity or debt financings, or other capital sources.

Previous wording

General and administrative expenses consist primarily of salaries and related costs for our employees in administrative, executive and finance functions. General and administrative expenses also include professional fees for legal, accounting, audit, tax and consulting services, insurance, office, and travel expenses.

Current wording

General and administrative expenses consist primarily of (i) professional fees for legal, accounting, audit, tax and consulting services, (ii) salaries and related costs for our employees in administrative, executive and finance functions and (iii) pre-commercialization expenses for CTx-1301. General and administrative expenses also include insurance, office, and travel expenses.

Previous wording

We expect that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our growing operations including the potential commercialization of our product candidates. We have experienced, and will continue to experience, increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services; director and officer insurance; and investor and public relations costs.

Current wording

We expect that our general and administrative expenses will increase in the future as we increase our general and administrative headcount to support our growing operations, including the potential commercialization of CTx-1301, and incur costs related to pre-commercialization activities. We have experienced, and will continue to experience, increased expenses associated with being a public company, including costs of accounting, audit, legal, regulatory and tax compliance services; director and officer insurance; and investor and public relations costs.

Previous wording

Interest and other income (expense), net

Current wording

Issuance cost and change in fair value of derivative and interest and other income (expense), net

Previous wording

Interest and other income (expense), net consists of interest expense on our notes payable and interest earned on our cash and cash equivalents, including money market funds. The primary objective of our investment policy is liquidity and capital preservation.

Current wording

Issuance cost and change in fair value of derivative relates to the consideration for Lincoln Park’s commitment to purchase shares under the 2025 LP Purchase Agreement and the change in fair value of the derivative asset or liability. Interest and other income (expense), net consists of interest expense on our notes payable and interest earned on our cash and cash equivalents, including money market funds. The primary objective of our investment policy is liquidity and capital preservation.

Previous wording

Under our 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), we granted non-qualified stock options to certain employees, directors and consultants in 2024 and 2023. The options were granted with strike prices ranging from $4.00 to $14.00 in 2024 and $153.96 to $366.84 per share in 2023. The term of these options is ten years with vesting periods ranging from immediate to four years.

Current wording

Under our 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), we granted non-qualified stock options to certain employees, directors and consultants in 2025 and 2024. The options were granted with strike prices ranging from $3.44 to $4.22 in 2025 and $3.46 to $13.34 per share in 2024. The term of these options is ten years with vesting periods ranging from immediate to four years.

Previous wording

We recorded stock-based compensation expense of $995,484 and $812,670 during the years ended December 31, 2024 and 2023, respectively, based on the grant-date fair value of the options granted. The fair value of each option grant was estimated as of the date of grant using the Black-Scholes option-pricing model. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.

Current wording

We recorded stock-based compensation expense of $1,427,159 and $995,484 during the years ended December 31, 2025 and 2024, respectively, based on the grant-date fair value of the options granted. The fair value of each option grant was estimated as of the date of grant using the Black-Scholes option-pricing model. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.

Previous wording

R&D expenses were $9.4 million for the year ended December 31, 2024, a decrease of $6.0 million or 39.0% from the year ended December 31, 2023. This change was primarily the result of decreased clinical activity in 2024 as compared to 2023. During 2023, 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. Enrollment in these two studies was closed in early 2024 and we are progressing with the remaining close-out and analytical activities required for an NDA submission. Manufacturing costs also decreased, as the activity in 2023 was more significant for the manufacture of clinical supply for the Phase 3 studies. In 2024, manufacturing activity included the completion of registration batches of CTx-1301. The decrease in personnel costs is the result of lower headcount and the cost containment measures, which were implemented in late 2023 in order to conserve cash, including salary reductions ranging from 5-55% for all employees. This decrease was offset by the reinstatement of 2023 base salaries for all employees in September 2024.

Current wording

R&D expenses were $9.8 million for the year ended December 31, 2025, an increase of $0.3 million or 3.5% from the year ended December 31, 2024. This change was primarily the result of an increase in personnel expenses, regulatory costs and manufacturing costs, partially offset by a decrease in clinical operations. Personnel expenses increased due to separation costs for an executive in August 2025, costs related to a contingent bonus plan, which were earned upon NDA submission of CTx-130l, and the reinstatement of base salaries in September 2024 following salary reduction measures which had been implemented in late 2023. Regulatory costs increased due to preparation for the pre-NDA meeting with the FDA and the NDA submission. The increase in manufacturing costs was due to the manufacturing of pre-process validation batches of CTx-1301. Clinical operations costs decreased due to more prior year costs related to the close-out and analytical activities related to the fixed dose pediatric and adolescent safety and efficacy study and the pediatric dose optimization and duration study compared to the current year.

Previous wording

The following table summarizes interest and other income (expense), net for the years ended December 31, 2024 and 2023:

Current wording

The following table summarizes issuance cost and change in fair value of derivative and interest and other income (expense), net for the years ended December 31, 2025 and 2024:

Previous wording

Total interest and other income (expense), net in 2023 primarily relates to interest incurred on outstanding notes payable, offset by interest earned on invested balances. The related party promissory note was converted to equity in September 2023 and January 2024. Total interest and other income (expense), net in 2024 primarily relates to interest earned on invested balances, resulting from the increase in the Company’s cash balance relating to capital raise activities.

Current wording

Issuance cost and change in fair value of derivative in 2025 and 2024 relates to the consideration for Lincoln Park’s commitment to purchase shares under the 2025 LP Purchase Agreement and the change in fair value of the derivative asset or liability. Interest and other income (expense), net in 2025 and 2024 relates to interest incurred on outstanding notes payable, offset by interest earned on invested balances. The increase in interest expense in 2025 is related to interest expense incurred on the 2024 Note which was executed in December 2024, including loss on debt extinguishments.

Previous wording

Net cash used in operating activities was $15.0 million for the year ended December 31, 2023. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $23.5 million, prior to the effects of two significant noncash items, stock-based compensation expense of $0.8 million and depreciation expense of $0.6 million. Changes in operating assets and liabilities included a decrease in prepaid expenses and other current assets of $1.8 million due to the recognition of expense relating to upfront deposits on clinical and manufacturing activity made at the start of the Phase 3 trials which were in process at December 31, 2023. In addition, there was an increase in trade accounts payable and accrued expenses of $5.2 million due to cash constraints and amounts due to vendors primarily relating to clinical development activity.

Current wording

Net cash used in operating activities was $17.2 million for the year ended December 31, 2025. Cash used in operating activities was primarily due to the use of funds in our operations to develop CTx-1301 resulting in a net loss of $22.4 million, prior to the effects of significant noncash items, including stock-based compensation expense of $1.5 million, issuance cost and change in fair value of derivative of $1.2 million, loss on debt extinguishment of $0.8 million, depreciation expense of $0.5 million and accretion of discount on note payable of $0.3 million. Changes in operating assets and liabilities included an increase in trade accounts payable and accrued expenses of $1.5 million primarily due to increases in accrued commercial costs and accrued interest on the outstanding note payable. These are partially offset by an increase in prepaid expenses and other current assets due to payments for manufacturing materials.

Previous wording

Net cash used in operating activities was $18.5 million for the year ended December 31, 2024. Cash used in operating activities was primarily due to the use of funds in our operations to develop our product candidates resulting in a net loss of $15.5 million, prior to the effects of two significant noncash items, stock-based compensation expense of $1.0 million and depreciation expense of $0.7 million. Changes in operating assets and liabilities included a decrease in trade accounts payable and accrued expenses of $4.5 million primarily due to the payment of vendor balances in the first quarter of 2024 with the cash proceeds from the issuance of common stock pursuant to our ATM Agreement in January 2024 and the issuance of equity in the February 2024 Offering.

Current wording

Net cash used in operating activities was $18.5 million for the year ended December 31, 2024. Cash used in operating activities was primarily due to the use of funds in our operations to develop CTx-1301 resulting in a net loss of $16.6 million, prior to the effects of significant noncash items including stock-based compensation expense of $1.0 million, issuance cost and change in fair value of derivative of $1.0 million and depreciation expense of $0.7 million. Changes in operating assets and liabilities included a decrease in trade accounts payable and accrued expenses of $4.5 million primarily due to the payment of vendor balances in the first quarter of 2024 with the cash proceeds from the issuance of common stock pursuant to our ATM Agreement in January 2024 and the issuance of equity in the February 2024 Offering.

Previous wording

Net cash provided by financing activities in the year ended December 31, 2023 was related to the issuance of 47,073 shares of common stock in connection with various equity transactions, including the September 2023 Offering, WFIA Private Placement and usage of the ATM Agreement and Lincoln Park Agreement, as well as the increase in the principal balance of the WFIA Note in May 2023.

Current wording

Net cash provided by financing activities in the year ended December 31, 2025 was related to the cash proceeds from the issuance of common stock pursuant to the ATM Agreement, the Original LP Purchase Agreement, the 2025 LP Purchase Agreement, as well as the issuance of the 2025 Note in November 2025.

Previous wording

Net cash provided by financing activities in the year ended December 31, 2024 was related to the cash proceeds from the issuance of common stock pursuant to the ATM Agreement, Lincoln Park Agreement, the February 2024 Offering and the June 2024 Warrant Inducement, as well as the issuance of the Promissory Note in December 2024.

Current wording

Net cash provided by financing activities in the year ended December 31, 2024 was related to the cash proceeds from the issuance of common stock pursuant to the ATM Agreement, Original LP Purchase Agreement, the February 2024 Offering and the June 2024 Warrant Inducement, as well as the issuance of the 2024 Note in December 2024.

Previous wording

During 2024, we sold 983,093 shares of common stock under the ATM Agreement, for net proceeds of $9,393,550, after deducting $298,498 of compensation to HCW and other administration fees. Subsequent to December 31, 2024, we sold 142,685 shares of common stock under the ATM Agreement, for net proceeds of $776,091, after deducting $25,756 of compensation to HCW and other administration fees. As of March 27, 2025, the aggregate offering price of shares of common stock available for issuance under the ATM Agreement was approximately $7.4 million.

Current wording

During 2025, we sold 785,784 shares of common stock under the ATM Agreement, for net proceeds of $3,574,574, after deducting $122,576 of compensation to HCW and other administration fees. Subsequent to December 31, 2025, we sold 210,158 shares of common stock under the ATM Agreement, for net proceeds of $1,304,011, after deducting $43,300 of compensation to HCW and other administration fees. On March 16, 2026, we terminated the ATM Agreement, effective March 23, 2026. We anticipate that we will enter into another at-the-market offering agreement with a different counterparty in the near future.

Previous wording

As of December 31, 2024, we had cash and cash equivalents of $12.2 million. We believe our cash will satisfy our capital needs into the fourth quarter of 2025 under our current business plan. We are targeting to file our NDA submission for CTx-1301 in mid-2025. We will need additional capital to advance our commercialization efforts for CTx-1301 as well as our other programs. Changing circumstances may cause us to expend cash significantly faster than we currently anticipate, and we may need to spend more cash than currently expected because of circumstances beyond our control. Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provide liquidity while producing a modest return on investment. Accordingly, our cash equivalents are invested primarily in money market funds which are currently providing only a minimal return given the current interest rate environment.

Current wording

As of December 31, 2025, we had cash and cash equivalents of $11.0 million. Taking into account the $12.0 million we received in the Private Placement, we believe our cash will satisfy our capital needs late into the fourth quarter of 2026 under our current business plan. Changing circumstances may cause us to expend cash significantly faster than we currently anticipate, and we may need to spend more cash than currently expected because of circumstances beyond our control. Our policy is to invest any cash in excess of our immediate requirements in investments designed to preserve the principal balance and provide liquidity while producing a modest return on investment. Accordingly, our cash equivalents are invested primarily in money market funds which are currently providing only a minimal return given the current interest rate environment.

Previous wording

We expect to continue to incur substantial additional operating losses for the near term as we continue to develop our product candidates, primarily CTx-1301, and seek marketing approval and, subject to obtaining such approval, the eventual commercialization of our product candidates. If we obtain marketing approval for our product candidates, we will incur significant sales, marketing and outsourced manufacturing expenses. In addition, we expect to incur additional expenses to add operational, financial and information systems and personnel, including personnel to support our planned product commercialization efforts. We also expect to incur significant costs to comply with corporate governance, internal controls and similar requirements applicable to us as a public company.

Current wording

We expect to continue to incur substantial additional operating losses for the near term as we seek marketing approval for CTx-1301 and conduct pre-commercialization activities. If we obtain marketing approval for CTx-1301, we will incur significant sales, marketing and outsourced manufacturing expenses. In addition, we expect to incur additional expenses to add operational, financial and information systems and personnel, including personnel to support our planned product commercialization efforts. We also expect to incur significant costs to comply with corporate governance, internal controls and similar requirements applicable to us as a public company.

Previous wording

To continue to grow our business over the longer term, we plan to commit substantial resources to research and development, including clinical trials of our product candidates, and other operations and potential product acquisitions and in-licensing. We have evaluated and expect to continue to evaluate a wide array of strategic transactions as part of our plan to acquire or in-license and develop additional products and product candidates to augment our internal development pipeline. Strategic transaction opportunities that we may pursue could materially affect our liquidity and capital resources and may require us to incur additional indebtedness, seek equity capital or both. In addition, we may pursue development, acquisition or in-licensing of approved or development products in new or existing therapeutic areas or continue the expansion of our existing operations. Accordingly, we expect to continue to opportunistically seek access to additional capital to license or acquire additional products, product candidates or companies to expand our operations, or for general corporate purposes. Strategic transactions may require us to raise additional capital through one or more public or private debt or equity financings or could be structured as a collaboration or partnering arrangement. We are actively seeking a strategic pharmaceutical partnership under which we would license CTx-1301 in the United States, internationally, or both. In March 2023, we entered into the Commercialization Agreement with Indegene. Should we be unable to identify an appropriate pharmaceutical partnership, if we receive FDA approval for CTx-1301, Indegene would provide commercialization services for CTx-1301, including marketing, sales, market access and distribution, on a fee for service basis.

Current wording

To continue to grow our business over the longer term, we plan to commit substantial resources to research and development, including clinical trials of our product candidates, and other operations and potential product acquisitions and in-licensing. We have evaluated and expect to continue to evaluate a wide array of strategic transactions as part of our plan to acquire or in-license and develop additional products and product candidates to augment our internal development pipeline. Strategic transaction opportunities that we may pursue could materially affect our liquidity and capital resources and may require us to incur additional indebtedness, seek equity capital or both. In addition, we may pursue development, acquisition or in-licensing of approved or development products in new or existing therapeutic areas or continue the expansion of our existing operations. Accordingly, we expect to continue to opportunistically seek access to additional capital to license or acquire additional products, product candidates or companies to expand our operations, or for general corporate purposes.

Previous wording

For example, pursuant to the Note Purchase Agreement, we are subject to certain restrictions on our ability to issue securities during the term of the Note. Specifically, we have agreed, among other things, to obtain Lender’s consent prior to issuing any debt securities or certain equity securities where the pricing of such equity securities is tied to the public trading price of our common stock and to refrain from entering into any agreement or covenant that locks up, restricts or otherwise prohibits us from entering into a variable rate transaction with Lender or any of its affiliates, or from issuing common stock or other equity or debt securities to Lender or any of its affiliates. If we are unable to obtain Lender’s consent prior to issuing any debt or certain equity securities, such issuance may be a breach of the Note Purchase Agreement, and we may be obligated to indemnify Lender for loss or damage arising as a result of any breach or alleged breach by us of the Note Purchase Agreement, which may affect our business operations and financial condition. Additionally, the Note provides that following an event of default under the Note, Lender has the right to seek and receive injunctive relief from a court or an arbitrator prohibiting us from issuing any of our common stock or preferred stock to any party unless fifty percent of the gross proceeds received by us in connection with such issuance are simultaneously used to make a payment under the Note. Lender also has the right to seek and receive injunctive relief from a court or arbitrator to prevent the consummation of any fundamental transaction, as defined in the Note, unless it contains a closing condition that the Note is paid in full upon consummation of the transaction or Lender has provided its written consent to such transaction.

Current wording

For example, pursuant to the 2025 Note Purchase Agreement with Avondale, we are subject to certain restrictions on our ability to issue securities during the term of the 2025 Note. Specifically, we have agreed, among other things, to refrain from entering into any agreement or covenant that locks up, restricts or otherwise prohibits us from entering into a variable rate transaction with the lenders or any of their affiliates, or from issuing common stock or other equity or debt securities to the lenders or any of their affiliates. If we breach the 2025 Note Purchase Agreement, we may be obligated to indemnify Avondale for loss or damage arising as a result of any breach or alleged breach by us of the 2025 Note Purchase Agreement, which may affect our business operations and financial condition. Additionally, the 2025 Note provides that following an event of default under the 2025 Note, Avondale has the right to seek and receive injunctive relief from a court or an arbitrator prohibiting us from issuing any of our common stock or preferred stock to any party unless fifty percent of the gross proceeds received by us in connection with such issuance are simultaneously used to make a payment under the 2025 Note. Avondale also has the right to seek and receive injunctive relief from a court or arbitrator to prevent the consummation of any fundamental transaction, as defined in the 2025 Note, unless it contains a closing condition that the 2025 Note are paid in full upon consummation of the transaction or Avondale has provided its written consent to such transaction.

Previous wording

We entered into a patent and know-how licensing agreement with BDD Pharma Limited in August 2018. See “Item 1. Business – Material Agreements” for a description of this agreement. We are required to pay BDD Pharma certain amounts in connection with clinical trial and regulatory milestones. The first milestone payment of $250,000 became due in February 2022 upon dosing of the first patient in the Phase 3 adult onset and duration study for CTx-1301. Additional payments will become due upon completion of certain milestones as defined in the agreement.

Current wording

We entered into a patent and know-how licensing agreement with BDD Pharma Limited in August 2018. See “Item 1. Business – Material Agreements” for a description of this agreement. We are required to pay BDD certain amounts in connection with clinical trial and regulatory milestones. The final milestone payment of $250,000 will be due to BDD upon FDA approval of CTx-1301. Additional royalty payments will become due upon potential sales of CTx-1301 pursuant to the terms of the agreement.

Previous wording

Since inception we have been engaged in organizational activities, including raising capital and research and development activities. We have not generated revenues and have not yet achieved profitable operations, nor have we ever generated positive cash flow from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. We are subject to those risks associated with any pre-clinical stage pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that our research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, we operate in an environment of rapid technological change that is largely dependent on the services of our employees and consultants. Further, our future operations are dependent on the success of our efforts to raise additional capital. These uncertainties raise substantial doubt about our ability to continue as a going concern for one year after the issuance date of our financial statements. The accompanying consolidated financial statements have been prepared on a going concern basis. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the company to continue as a going concern, which contemplates the continuation of operations, realization of assets and liquidation of liabilities in the ordinary course of business. We have incurred a net loss for the years ended December 31, 2024 and 2023 and had accumulated losses of $108.5 million since inception to December 31, 2024. We anticipate incurring additional losses until such time, if ever, that we can generate significant revenue from our product candidates currently in development. Our sources of capital have included private capital raises in various classes of units of CTx prior to the Reorganization Merger, the issuance of equity securities in connection with our initial public offering (IPO), public offerings, including the September 2023 Offering and the February 2024 Offering, sales of common stock under our ATM Agreement and Lincoln Park Agreement, a private placement with WFIA, the WFIA Note, which was subsequently converted to equity, the June 2024 Warrant Inducement and the issuance of the Promissory Note in December 2024. Additional financings will be needed by us to fund our operations, to complete development of and to commercially develop CTx-1301 and our other product candidates. There is no assurance that such financing will be available when needed or on acceptable terms.

Current wording

Since inception we have been engaged in organizational activities, including raising capital and research and development activities. We have not generated revenues and have not yet achieved profitable operations, nor have we ever generated positive cash flow from operations. There is no assurance that profitable operations, if achieved, could be sustained on a continuing basis. We are subject to those risks associated with any pre-clinical stage pharmaceutical company that has substantial expenditures for research and development. There can be no assurance that our research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, we operate in an environment of rapid technological change that is largely dependent on the services of our employees and consultants. Further, our future operations are dependent on the success of our efforts to raise additional capital. These uncertainties raise substantial doubt about our ability to continue as a going concern for one year after the issuance date of our financial statements. The accompanying consolidated financial statements have been prepared on a going concern basis. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the company to continue as a going concern, which contemplates the continuation of operations, realization of assets and liquidation of liabilities in the ordinary course of business. We have incurred a net loss for the years ended December 31, 2025 and 2024 and had accumulated losses of $132.4 million since inception to December 31, 2025. We anticipate incurring additional losses until such time, if ever, that we can generate significant revenue from our product candidates currently in development. Our sources of capital have included private capital raises in various classes of units of CTx prior to the Reorganization Merger, the issuance of equity securities in connection with our initial public offering (IPO), follow-on public offerings in September 2023 and February 2024, sales of common stock under the ATM Agreement, Original LP Purchase Agreement and 2025 LP Purchase Agreement, a private placement with WFIA, the WFIA Note, which was subsequently converted to equity, the June 2024 warrant inducement, the issuance of the promissory notes in December 2024 and November 2025 and the Private Placement in February 2026. Additional financings will be needed by us to fund our operations, to complete development of and to commercially develop CTx-1301 and our other product candidates. There is no assurance that such financing will be available when needed or on acceptable terms.