Cingulate Inc.

Previous wording

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 December 31, 2023.

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, 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.

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 $23.5 million and $17.7 million for the years ended December 31, 2023 and 2022, respectively. See “Results of Operations” below for an explanation of the fluctuations in our net losses. As of December 31, 2023, we had an accumulated deficit of $92.9 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 $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.

Previous wording

As of December 31, 2023, we had cash and cash equivalents of $52,416. In January 2024, we sold shares of common stock pursuant to the At The Market Offering Agreement (“ATM Agreement”) with H.C. Wainwright & Co., LLC (“HCW”), as sales agent, for net proceeds of $3.1 million, and in February 2024, we completed a public offering which resulted in net proceeds of $6.5 million. Including the proceeds from these sales of common stock, we believe our cash will satisfy our capital needs through late in the second quarter of 2024 under our current business plan. In addition, in order to achieve the filing of our NDA for CTx-1301 in the first half of 2025 for potential FDA approval, we believe that we will need approximately $9-11 million of additional capital. We will also need additional capital to advance our other programs and commercialization efforts. See “Liquidity and Capital Resources” below.

Current 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.

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 $4.97 million (upon the terms and subject to the conditions and limitations set forth in the ATM Agreement). In the year ended December 31, 2023 we sold 82,410 shares of common stock under the ATM Agreement, for net proceeds of $1,696,407, after deducting $59,897 of compensation to HCW and other administration fees. Subsequent to December 31, 2023, we sold 283,800 shares of common stock under the ATM Agreement, for net proceeds of $3,115,303, after deducting $97,512 of compensation to HCW and other administration fees.

Current 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).

Previous wording

In April 2023, we entered into a purchase agreement (“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. In the year ended December 31, 2023, we sold 25,500 shares of common stock under the Lincoln Park Agreement, for net proceeds of $450,427. Subsequent to December 31, 2023, we did not sell any shares of common stock pursuant to the Lincoln Park Agreement.

Current 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.

Previous wording

On August 11, 2023, we entered into a Securities Purchase Agreement with WFIA (the “August 2023 Purchase Agreement”) and issued, in a private placement priced at the market under the Nasdaq Stock Market’s rules, 91,158 shares of our common stock at a purchase price per share of $10.97, resulting in gross proceeds to us of approximately $1.0 million (the “WFIA Private Placement”).

Current wording

On August 11, 2023, we entered into a Securities Purchase Agreement with WFIA (the “August 2023 Purchase Agreement”) and issued, in a private placement priced at the market under the Nasdaq Stock Market’s rules, 7,597 shares of our common stock at a purchase price per share of $131.64, resulting in gross proceeds to us of approximately $1.0 million (the “WFIA Private Placement”).

Previous wording

In August 2022, CTx, a wholly-owned subsidiary of Cingulate Inc. issued the Original Note to WFIA with a principal amount of $5.0 million (the “Original Principal Amount”), and in May 2023, CTx issued an Amended and Restated Promissory Note (the “WFIA Note”) increasing the principal amount under the Original Note by $3.0 million to $8.0 million (the “2023 WFIA Debt Financing”).

Current wording

In August 2022, CTx, a wholly-owned subsidiary of Cingulate Inc. issued a promissory note to WFIA with a principal amount of $5.0 million, and in May 2023, CTx issued an amended and restated promissory note (the “WFIA Note”) increasing the principal amount under the promissory note by $3.0 million to $8.0 million.

Previous wording

On September 8, 2023, Cingulate Inc. and CTx entered into a note conversion agreement with WFIA, pursuant to which WFIA agreed to convert the Original Principal Amount under the WFIA Note plus all accrued interest thereon, or $5,812,500, into pre-funded warrants (the “September WFIA Pre-Funded Warrants”) to purchase 341,912 shares of our common stock at a conversion price per September WFIA Pre-Funded Warrant of $17.00. The closing price of our common stock on Nasdaq on September 8, 2023 was $11.55 per share. The September WFIA Pre-Funded Warrants have no expiration date and are exercisable immediately at an exercise price of $0.002 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 our common stock.

Current wording

On September 8, 2023, Cingulate Inc. and CTx entered into a note conversion agreement with WFIA, pursuant to which WFIA agreed to convert $5.0 million of principal under the WFIA Note plus all accrued interest thereon, or $5,812,500, into pre-funded warrants (the “September WFIA Pre-Funded Warrants”) to purchase 28,493 shares of our common stock at a conversion price per September WFIA Pre-Funded Warrant of $204.00. The closing price of our common stock on Nasdaq on September 8, 2023 was $138.60 per share. The September WFIA Pre-Funded Warrants had no expiration date and were exercisable immediately at an exercise price of $0.024 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 our common stock.

Previous wording

On January 25, 2024, Cingulate Inc. and CTx entered into a Note Conversion Agreement (the “January 2024 Note Conversion Agreement”) with WFIA, pursuant to which WFIA agreed to convert the remaining $3.0 million of principal under the WFIA Note plus all accrued interest thereon, or $3,287,500, into pre-funded warrants (the “January WFIA Pre-Funded Warrants”) to purchase 687,043 shares of our common stock, at a conversion price per January WFIA Pre-Funded Warrant of $4.785. The closing price of the Common Stock on Nasdaq on January 24, 2024 was $4.35 per share. The January 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 our common stock. In March of 2024, we issued to WFIA an additional pre-funded warrant to purchase 7,053 shares of common stock as a result of an error in the interest calculation, on the same form and at the same conversion price as the January WFIA Pre-Funded Warrants.

Current wording

On January 25, 2024, Cingulate Inc. and CTx entered into a note conversion agreement with WFIA, pursuant to which WFIA agreed to convert the remaining $3.0 million of principal under the WFIA Note plus all accrued interest thereon, or $3,287,500, into pre-funded warrants (the “January WFIA Pre-Funded Warrants”) to purchase 57,254 shares of our common stock, at a conversion price per January WFIA Pre-Funded Warrant of $57.42. The closing price of the Common Stock on Nasdaq on January 24, 2024 was $52.20 per share. The January WFIA Pre-Funded Warrants had no expiration date and were exercisable immediately at an exercise price of $0.0012 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 our common stock. In March of 2024, we issued to WFIA an additional pre-funded warrant to purchase 588 shares of common stock as a result of an error in the interest calculation, on the same form and at the same conversion price as the January WFIA Pre-Funded Warrants.

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. WFIA had the right during the first five business days of each calendar quarter to demand payment of all outstanding principal and interest 120 days following notice to us. We were permitted prepay the WFIA Note, in whole or in part, without premium or penalty; provided, that no amount repaid was permitted to be reborrowed. 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. See “Liquidity and Capital Resources” below.

Current 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.

Previous wording

On September 11, 2023, we entered into a Securities Purchase Agreement with an institutional investor, pursuant to which we issued 86,000 shares of our common stock, pre-funded warrants to purchase up to an aggregate of 260,260 shares of our common stock, Series A warrants to purchase up to 346,260 shares of our common stock and Series B warrants to purchase up to 173,130 shares of our common stock (the “September 2023 Offering”). The September 2023 Offering closed on September 13, 2023. The combined purchase price per share of common stock and accompanying Series A and Series B warrants was $11.55. The combined purchase price per pre-funded warrant and accompanying Series A and Series B warrants was $11.55, which represents the public offering price per share of common stock and accompanying warrants less the $0.002 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 $11.55 per share, are exercisable beginning on November 3, 2023, the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants, and will expire five years after the initial exercise date, and the Series B warrants have an exercise price of $11.55 per share, are exercisable beginning on November 3, 2023, the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants and will expire two years after the initial exercise date. We received gross proceeds of approximately $4.0 million, before deducting $445,000 of placement agent’s fees and other offering expenses, pursuant to the September 2023 Offering. As of April 1, 2024, all of the pre-funded warrants issued in the September 2023 Offering had been exercised.

Current wording

On September 11, 2023, we entered into a Securities Purchase Agreement with an institutional investor, pursuant to which we issued 7,167 shares of our common stock, pre-funded warrants to purchase up to an aggregate of 21,688 shares of our common stock, Series A warrants to purchase up to 28,855 shares of our common stock and Series B warrants to purchase up to 14,428 shares of our common stock (the “September 2023 Offering”). The September 2023 Offering closed on September 13, 2023. The combined purchase price per share of common stock and accompanying Series A and Series B warrants was $138.62. The combined purchase price per pre-funded warrant and accompanying Series A and Series B warrants was $138.62 which represents the public offering price per share of common stock and accompanying warrants less the $0.024 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 and Series B had an original exercise price of $138.62 per share, were exercisable beginning on November 3, 2023, the effective date of stockholder approval of the issuance of the shares issuable upon exercise of the warrants, and had an original expiration date of five years and two years, respectively, after the initial exercise date. In connection with the waiver granted in March 2024 by the purchaser in the February 2024 Offering (defined below) to allow the Company to file a prospectus supplement to increase the maximum aggregate offering price of shares of the Company’s common stock issuable under the ATM Agreement, the exercise price of the Series A and Series B warrants was lowered from $138.62 to $13.56 per share and the term of the Series A warrants was extended to March 17, 2029 and the term of the Series B warrants was extended to March 17, 2026. We received gross proceeds of approximately $4.0 million, before deducting $445,000 of placement agent’s fees and other offering expenses, pursuant to the September 2023 Offering. As of December 31, 2024, all of the pre-funded warrants issued in the September 2023 Offering had been exercised.

Previous wording

On February 2, 2024, we entered into agreements, including a Securities Purchase Agreement, with investors, pursuant to which we issued 1,375,000 shares of our common stock, pre-funded warrants to purchase up to an aggregate of 2,375,000 shares of our common stock, Series A warrants to purchase up to 3,750,000 shares of our common stock and Series B warrants to purchase up to 3,750,000 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 $2.00. The combined purchase price per pre-funded warrant and accompanying Series A and Series B warrants was $1.9999, which represents the public offering price per share of common stock and accompanying warrants less the $0.0001 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 $2.00 per share, were exercisable immediately, and will expire five years after the issuance date, and the Series B warrants have an exercise price of $2.00 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 April 1, 2024, 2,177,000 of the pre-funded warrants issued in the February 2024 Offering 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. As of December 31, 2024, all pre-funded warrants had been exercised.

Previous wording

Interest and other income (expense), net consists of interest expense on our related party 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

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 and directors in 2023 and 2022. The options were granted with strike prices ranging from $12.83 to $30.57 in 2023 and $20.00 to $31.40 per share in 2022. 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 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.

Previous wording

We recorded stock-based compensation expense of $812,670 and $800,796 during the years ended December 31, 2023 and 2022, 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 $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.

Previous wording

See footnote 11 to our consolidated financial statements for the assumptions that were used to estimate the fair value of stock options granted using the Black-Scholes option pricing model.

Current wording

See Note 12 to our consolidated financial statements for the assumptions that were used to estimate the fair value of stock options granted using the Black-Scholes option pricing model.

Previous wording

Research and development (“R&D”) expenses were $15.5 million for the year ended December 31, 2023, an increase of $6.5 million or 72.2% from the year ended December 31, 2022. This change was primarily the result of increased clinical activity in 2023 as compared to 2022. During the third quarter of 2023, we initiated two Phase 3 studies for CTx-1301, the pediatric dose optimization onset and duration study and the fixed dose pediatric and adolescent safety and efficacy study. In addition, the Phase 3 adult dose-optimization study for CTx-1301 was completed in June 2023. Manufacturing for these Phase 3 studies also occurred during 2023.

Current 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.

Previous wording

Total interest and other income (expense), net in both 2023 and 2022 primarily relates to interest incurred on outstanding notes payable, offset by interest earned on invested balances. Interest expense was significantly higher in 2023 due to outstanding balance of the related party note payable to WFIA, the amount payable under which increased from $5.0 million to $8.0 million in August 2023.

Current 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.

Previous wording

Net cash used in operating activities was $15.9 million for the year ended December 31, 2022. 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 $17.6 million, prior to the effects of two significant noncash items, stock-based compensation expense of $0.8 million and depreciation expense of $0.4 million. Changes in operating assets and liabilities included a decrease in miscellaneous receivables of $0.5 million due to the collection of research and development and employee retention tax credits in 2022 as well as an increase in prepaid expenses of $.4 million due to deposits made to clinical and manufacturing vendors relating to the initiation of Phase 3 studies for CTx-1301 and deposits to our new CMO for manufacturing activity.

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 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.

Previous wording

Net cash provided by financing activities in the year ended December 31, 2023 was related to the issuance of 564,880 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.

Current 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.

Previous wording

Since our inception in 2012 through December 31, 2023, we have not generated any revenue and have incurred significant operating losses and negative cash flow from our operations. As of December 31, 2023, we had cash and cash equivalents of $52,416. In January 2024, we sold shares of common stock pursuant to the ATM Agreement for net proceeds of $3.1 million, and in February 2024, we completed the February 2024 Offering which resulted in net proceeds of $6.5 million. We believe our cash will satisfy our capital needs through late in the second quarter of 2024 under our current business plan. In addition, in order to achieve the filing of our NDA for CTx-1301 in the first half of 2025 for potential FDA approval, we believe that we will need approximately $9-11 million of additional capital. We will also need additional capital to advance our other programs and commercialization efforts. However, it is difficult to predict our spending for our product candidates prior to obtaining FDA approval. Moreover, 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.

Current wording

Since our inception in 2012 through December 31, 2024, we have not generated any revenue and have incurred significant operating losses and negative cash flow from our operations.

Previous wording

On February 6, 2024, we received gross proceeds of approximately $7.5 million, before deducting the placement agent’s fees and other offering expenses, in the February 2024 Offering.

Current wording

In February 2024, we received gross proceeds of approximately $7.5 million, before deducting $750,950 of placement agent’s fees and other offering expenses in the February 2024 Offering.

Previous wording

In the year ended December 31, 2023, we sold 82,410 shares of common stock under the ATM Agreement, for net proceeds of $1,696,407, after deducting $59,898 of compensation to HCW and other administration fees. Subsequent to December 31, 2023, we sold 283,800 shares of common stock under the ATM Agreement, for net proceeds of $3,115,303, after deducting $97,512 of compensation to HCW and other administration fees. As of the date of the filing of this Current Report on Form 10-K, we have sold the maximum amount available under the ATM Agreement. On March 18, 2024, we increased the maximum aggregate offering price of the shares of our common stock issuable under the ATM Agreement from $4,970,000 to $8,470,000 and filed a prospectus supplement for an aggregate of $3,500,000.

Current 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.

Previous wording

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, 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.

Previous wording

We expect to continue to incur substantial additional operating losses for at least the next several years as we continue to develop our product candidates 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 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.

Previous wording

If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available, would result in increased fixed payment obligations and may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Any debt financing or additional equity that we raise may contain terms, such as liquidation and other preferences that are not favorable to us or our existing stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to our technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. 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

Any debt financing or additional equity that we raise may contain terms, such as liquidation and other preferences that are not favorable to us or our existing stockholders. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish valuable rights to our technologies, future revenue streams or product candidates or to grant licenses on terms that may not be favorable to us. 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.

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, 2023 and 2022 and had accumulated losses of $92.9 million since inception to December 31, 2023. 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 IPO, the September 2023 Offering, the February 2024 Offering, sales of common stock under our ATM Agreement and Lincoln Park Agreement and the WFIA Debt Financing which was subsequently converted to equity. Additional financings will be needed by us to fund our operations, to complete development of and to commercially develop our 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, 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.