v3.26.1
Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2026
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation

(a) Basis of Presentation and Principles of Consolidation

 

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The consolidated financial statements include the accounts of Cingulate and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.

 

 
Unaudited Interim Financial Information

(b) Unaudited Interim Financial Information

 

The accompanying consolidated balance sheets as of June 30, 2026 and December 31, 2025, the consolidated statements of operations and comprehensive loss for the three and six-month periods ended June 30, 2026 and 2025, the consolidated statements of stockholders’ equity for the three and six-month periods ended June 30, 2026 and 2025, the consolidated statements of cash flows for the six-month periods ended June 30, 2026 and 2025, and the related interim disclosures are unaudited. These unaudited consolidated financial statements include all adjustments necessary, consisting of only normal recurring adjustments, to fairly state the financial position and the results of operations and cash flows for interim periods in accordance with U.S. GAAP. Interim period results are not necessarily indicative of results of operations or cash flows for a full year or any subsequent interim period. The accompanying consolidated financial statements should be read in conjunction with the Company’s 2025 audited consolidated financial statements and the notes thereto.

 
Concentration of Credit Risk

(c) Concentration of Credit Risk

 

The Company maintains cash equivalent deposits, which at various times throughout the fiscal year exceeded the amounts insured by the Federal Deposit Insurance Corporation limit of $250,000 (without regard to reconciling items). Management monitors the soundness of these financial institutions and does not believe the Company is subject to any material credit risk relative to the uninsured portion of the deposits.

 
Impairment of Long-lived Assets

(d) Impairment of Long-lived Assets

 

The Company assesses the carrying value of its long-lived assets, including property and equipment, as well as lease right of use (ROU) assets, when events or circumstances indicate that the carrying value of such assets may not be recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted cash flows expected to be generated by the assets. If the sum of the expected future cash flows is less than the carrying amount, the Company would recognize an impairment loss. An impairment loss would be measured by comparing the amount by which the carrying value exceeds the fair value of the long-lived asset groups. No impairment was recognized during the six-month periods ended June 30, 2026 or 2025.

 
Stock-Based Compensation

(e) Stock-Based Compensation

 

The Company measures employee and director stock-based compensation expense for all stock-based awards based on their grant date fair value using the Black-Scholes option-pricing model. For stock-based awards with service conditions, stock-based compensation expense is recognized over the requisite service period using the straight-line method. Forfeitures are recognized as they occur. See additional information in Note 10.

 
Derivative Instruments

(f) Derivative Instruments

 

The Company evaluates all financial instruments, including certain equity-linked contracts, to determine if such instruments or any embedded components qualify as derivatives under ASC 815, Derivatives and Hedging.

 

The Company evaluated the 2025 LP Purchase Agreement (as defined in Note 9) that includes the right to require Lincoln Park (as defined in Note 9) to purchase shares of common stock in the future (“purchased put right”) considering the guidance in ASC 815-40, Derivatives and Hedging, and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting as a derivative asset (liability). The Company has analyzed the terms of the purchased put right and has concluded that it had insignificant value as of June 30, 2026.

 

 
Reclassifications

(g) Reclassifications

 

In connection with the preparation of the interim financial statements as of and for the three and nine months ended September 30, 2025, the Company identified certain errors in its accounting for the Original LP Purchase Agreement in previously issued consolidated financial statements. Accordingly, the comparative financial statements included in this report differ from our previously filed Quarterly Report on Form 10-Q as of and for the three and six months ended June 30, 2025, reflecting the error correction for the misclassification of the commitment shares issued on the Original LP Purchase Agreement and change in fair value of the derivative initially recorded as a deduction to additional paid-in-capital on the consolidated statements of stockholders’ equity and now expensed through change in fair value of derivative on the consolidated statements of operations and comprehensive loss. The correction of this error resulted in an increase in change in fair value of derivative and net loss and net comprehensive loss; however, no change to total stockholders’ equity or net cash used in operating activities on the consolidated statements of cash flows. In evaluating whether the Company’s previously issued consolidated financial statements were materially misstated, the Company performed an analysis of quantitative and qualitative factors in accordance with Staff Accounting Bulletin (SAB) No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and considered the guidance in ASC Topic 250, Accounting Changes and Error Corrections. The Company believes the adjustments recorded for correction of the error are immaterial to the previously issued consolidated financial statements either individually or in the aggregate for each of the respective comparative periods.

 

The corrections to the Company’s consolidated statements of operations and comprehensive loss were as follows:

 

   As Reported   As Corrected   As Reported   As Corrected 
   Three Months Ended June 30, 2025   Six Months Ended June 30, 2025 
   As Reported   As Corrected   As Reported   As Corrected 
Change in fair value of derivative   -    (194,526)   -    (244,513)
                     
Net loss and comprehensive loss  $(4,788,735)  $(4,983,261)  $(8,591,426)  $(8,835,939)
                     
Net loss per share of common stock, basic and diluted  $(1.09)  $(1.14)  $(2.14)  $(2.20)

 

The corrections to the Company’s statement of stockholders’ equity were as follows:

 

   As Reported   As Corrected   As Reported   As Corrected   As Reported   As Corrected 
   Additional Paid-in-Capital   Accumulated Deficit   Stockholders’ Equity 
   As Reported   As Corrected   As Reported   As Corrected   As Reported   As Corrected 
Balance January 1, 2025  $115,944,345   $117,380,285   $(108,489,180)  $(109,925,120)  $7,455,505   $7,455,505 
Activity for the three months to March 31, 2025:                              
Change in fair value of derivative   -    49,987    -    -    -    49,987 
Net loss   -    -    (3,802,691)   (3,852,678)   (3,802,691)   (3,852,678)
Balance March 31, 2025  $118,222,309   $119,708,236   $(112,291,871)  $(113,777,798)  $5,930,820   $5,930,820 
Activity for the three months to June 30, 2025:                              
Change in fair value of derivative   -    194,526    -    -    -    194,526 
Net loss   -    -    (4,788,735)   (4,983,261)   (4,788,735)   (4,983,261)
Balance June 30, 2025  $122,591,992   $124,272,445   $(117,080,606)  $(118,761,059)  $5,511,874   $5,511,874 

 

 

The corrections of the Company’s statement of cash flows were as follows:

 

   As Reported   As Corrected 
   Six Months Ended June 30, 2025 
   As Reported   As Corrected 
Operating activities:          
Net loss  $(8,591,426)  $(8,835,939)
Adjustments to reconcile net loss to net cash used in operating activities:          
Change in fair value of derivative   -    244,513 
Net cash used in operating activities   (9,403,539)   (9,403,539)

 
Segments

(h) Segments

 

Operating segments are defined as components of an enterprise for which discrete financial information is available and regularly reviewed by the chief operating decision maker (CODM) in deciding how to allocate resources and in assessing performance. The Company manages its business activities on a consolidated basis and operates as a 1single operating segment dedicated to the research and development and manufacturing of its product candidates. The Company’s CODM is its Chief Executive Officer. The CODM uses net loss, as reported in the Company’s Consolidated Statements of Operations and Comprehensive Loss, in evaluating performance of its segment and determining how to allocate resources of the Company as a whole, including investing in its research and development activities.

 

The measure used by the CODM for segment assets is reported in the Consolidated Balance Sheets as total consolidated assets.

 

The following table presents the operating results of the Company’s segment:

 

Operating expenses:  2026   2025   2026   2025 
   Three Months Ended June 30,   Six Months Ended June 30, 
Operating expenses:  2026   2025   2026   2025 
Research and development                    
Clinical operations  $36,619   $763,860   $90,397   $1,871,334 
Drug manufacturing   909,471    1,110,084    2,076,208    1,490,437 
Personnel   585,096    409,220    1,356,528    970,554 
Regulatory   (44,361)   417,775    148,010    591,240 
Total research and development   1,486,825    2,700,939    3,671,143    4,923,565 
Selling, general and administrative                    
Pre-commercialization costs   1,687,919    98,850    5,213,238    110,850 
Personnel   868,974    459,336    1,985,184    1,030,866 
Legal and professional fees   1,039,172    968,987    1,708,102    1,474,487 
Occupancy   46,536    88,359    140,380    149,986 
Insurance   149,506    174,449    299,012    370,045 
Other   136,043    159,054    321,138    296,210 
Total selling, general and administrative   3,928,150    1,949,035    9,667,054    3,432,444 
Operating loss   (5,414,975)   (4,649,974)   (13,338,197)   (8,356,009)
                     
Change in fair value of derivative   (314,013)   (194,526)   (1,166,043)   (244,513)
Interest and income (expense), net   (141,276)   (138,761)   (678,113)   (235,417)
                     
Loss before income taxes   (5,870,264)   (4,983,261)   (15,182,353)   (8,835,939)
                     
Income tax benefit (expense)   -    -    -    - 
                     
Net loss and comprehensive loss  $(5,870,264)  $(4,983,261)  $(15,182,353)  $(8,835,939)