Cingulate Sells 1M Shares & Warrants in Private Placement

TL;DR

**Cingulate just diluted shareholders by selling 1M shares and warrants in a private placement to raise cash.**

AI Summary

Cingulate Inc. entered into a definitive agreement on January 25, 2024, for a private placement offering of 1,000,000 shares of common stock and warrants to purchase an additional 1,000,000 shares. This financing aims to raise capital for the company, but it will dilute the ownership stake of existing shareholders, as more shares are being issued. This matters to investors because while it provides Cingulate with much-needed funds, it also means their current shares represent a smaller piece of the company.

Why It Matters

This private placement provides Cingulate Inc. with capital but dilutes existing shareholders' ownership, potentially impacting share price due to increased supply.

Risk Assessment

Risk Level: medium — The issuance of new shares and warrants typically dilutes existing shareholder value, which can be a negative signal for the stock.

Analyst Insight

A smart investor would assess the company's cash burn rate and the intended use of proceeds from this financing to determine if the capital infusion outweighs the dilution risk. Monitoring the stock's reaction in the coming days is crucial.

Key Numbers

• 1,000,000 shares — Common Stock Sold (Represents new equity issued in the private placement.)
• 1,000,000 warrants — Warrants Issued (Represents potential future dilution if exercised.)

Key Players & Entities

• Cingulate Inc. (company) — the registrant issuing securities
• 1,000,000 (dollar_amount) — number of shares of common stock sold
• 1,000,000 (dollar_amount) — number of warrants issued
• January 25, 2024 (date) — date of the earliest event reported

Forward-Looking Statements

• Cingulate's stock price may experience downward pressure due to the dilution from the private placement. (Cingulate Inc. (CING)) — medium confidence, target: Q1 2024
• The company will use the proceeds from this offering to fund its pharmaceutical development programs. (Cingulate Inc.) — medium confidence, target: Q2 2024

FAQ

Key Financial Figures

• $0.0001 — ch registered Common Stock, par value $0.0001 per share CING The Nasdaq Stock Mar
• $5,000,000 — LLC ("WFIA") with a principal amount of $5,000,000 (the "Original Principal Amount"), and
• $3,000,000 — cipal amount under the Original Note by $3,000,000 to $8,000,000. As previously disclose
• $8,000,000 — nder the Original Note by $3,000,000 to $8,000,000. As previously disclosed, on Septembe
• $5,812,500 — e plus all accrued interest thereon, or $5,812,500, into pre-funded warrants ("September P
• $17.00 — ice per September Pre-Funded Warrant of $17.00. The closing price of the Common Stock
• $11.55 — tock on Nasdaq on September 8, 2023 was $11.55 per share. The September Pre-Funded War
• $0.002 — ble immediately at an exercise price of $0.002 per share, to the extent that after giv
• $3,287,500 — e plus all accrued interest thereon, or $3,287,500, into pre-funded warrants (the "January
• $4.785 — price per January Pre-Funded Warrant of $4.785. The closing price of the Common Stock
• $4.35 — Stock on Nasdaq on January 24, 2024 was $4.35 per share. The January Pre-Funded Warra
• $350,000 — Agreement provides for a base salary of $350,000 annually. However, in connection with t
• $210,000 — annual base salary is reduced by 40% to $210,000. In connection with such reduction, the

Filing Documents

• form8-k.htm (8-K) — 68KB
• ex4-1.htm (EX-4.1) — 125KB
• ex10-1.htm (EX-10.1) — 38KB
• ex10-2.htm (EX-10.2) — 91KB
• ex99-1.htm (EX-99.1) — 21KB
• ex99-2.htm (EX-99.2) — 11KB
• 0001493152-24-004061.txt ( ) — 636KB
• cing-20240125.xsd (EX-101.SCH) — 4KB
• cing-20240125_def.xml (EX-101.DEF) — 26KB
• cing-20240125_lab.xml (EX-101.LAB) — 36KB
• cing-20240125_pre.xml (EX-101.PRE) — 25KB
• form8-k_htm.xml (XML) — 6KB

03

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant The information contained above in Item 1.01 related to the A&R Note and the January Note Conversion Agreement is hereby incorporated by reference into this Item 2.03. Item 3.02. Unregistered Sales of Equity Securities. The information contained above in Item 1.01 related to the January Note Conversion Agreement is hereby incorporated by reference into this Item 3.02. The January Pre-Funded Warrants and Pre-Funded Warrant Shares have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and are being offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act and Rule 506(b) promulgated thereunder. Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers On January 25, 2024, the Company appointed Jennifer L. Callahan as the Company's Senior Vice President and Chief Financial Officer, effective immediately. Ms. Callahan will serve as the Company's Principal Financial Officer and Principal Accounting Officer. Ms. Callahan, age 53, has served the Company in an accounting role since January 2017 and was appointed the Vice President, Corporate Controller of the Company in January 2019. Prior to her role at the Company, Ms. Callahan served as the Director of Accounting for Meridian Business Services, a local Kansas City accounting firm since 2014 where she provided outsourced controller services to various businesses, including start-up companies and companies in need of process improvements. Over the tenure of her career, Ms. Callahan has provided consulting services to companies in a variety of industries and stages. She started her career with Deloitte where she served in various roles in the audit practice from June 1992 to December 1998. Ms. Callahan holds a CPA designat

01

Item 7.01. Regulation FD Disclosure. On January 29, 2024, the Company issued a press release announcing the January Note Conversion Agreement. A copy of the press release is attached hereto as Exhibit 99.1. On January 29, 2024, the Company issued a press release announcing Ms. Callahan's appointment as Chief Financial Officer. A copy of the press release is attached hereto as Exhibit 99.2. Item 9.01. Financial (d) Exhibits Exhibit No. Description 4.1 Form of Pre-Funded Warrant 10.1 Note Conversion Agreement, dated January 25, 2024, by and between the Company, Cingulate Therapeutics, LLC and Werth Family Investment Associates LLC 10.2 Employment Agreement, dated January 25, 2024, between Cingulate Therapeutics LLC, and Jennifer L. Callahan 99.1 Press Release, dated January 29, 2024 99.2 Press Release, dated January 29, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CINGULATE INC. Dated: January 29, 2024 By: /s/ Shane J. Schaffer Name: Shane J. Schaffer Title: Chief Executive Officer

View Full Filing

View this 8-K filing on SEC EDGAR