Filed
Pursuant to Rule 424(b)(4)
Registration
No. 333-273405
PROSPECTUS
1,720,000 Shares of Common Stock
6,925,208 Series A Warrants to Purchase
up to 6,925,208 Shares of Common Stock
3,462,604 Series B Warrants to Purchase
up to 3,462,604 Shares of Common Stock
5,205,208 Pre-Funded Warrants to
Purchase up to 5,205,208 Shares of Common Stock
15,593,020 Shares of Common
Stock Underlying the Series A Warrants, Series B Warrants and Pre-Funded Warrants
346,260 Placement Agent Warrants
to Purchase up to 346,260 Shares of Common Stock
346,260 Shares of Common Stock
Underlying the Placement Agent Warrants
![](https://www.sec.gov/Archives/edgar/data/1862150/000149315223032349/form424b4_001.jpg)
Cingulate
Inc.
We
are offering 1,720,000 shares of common stock, par value $0.0001 per share, together with Series A warrants to purchase up to
6,925,208 shares of common stock, which we refer to as the “Series A warrants,” and Series B warrants to purchase
up to 3,462,604 shares of common stock, which we refer to as the “Series B warrants,” at a combined public
offering price of $0.5776 per share and accompanying warrants. The Series A warrants and the Series B warrants are hereinafter
referred to as the “warrants.” Each share of our common stock is being sold together with one Series A warrant to purchase
one share of common stock and one Series B warrant to purchase one-half of a share of common stock. The Series A warrants will have
an exercise price of $0.5776 per share and will be exercisable beginning on the effective date (the “Initial Exercise
Date”) of stockholder approval of the issuance of the shares upon exercise of the warrants (“Warrant Stockholder Approval”).
The Series A warrants will expire on the five year anniversary of the Initial Exercise Date. The Series B warrants will have an exercise
price of $0.5776 per share and will be exercisable beginning on the Initial Exercise Date. The
Series B warrants will expire on the two year anniversary of the Initial Exercise Date. This prospectus also relates to the offering
of the shares of common stock issuable upon exercise of the Series A warrants and Series B warrants.
We are also offering pre-funded warrants to purchase up to 5,205,208 shares of common stock
to those investors whose purchase of shares of our common stock in this offering would result in such investor, together with
its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the investor, 9.99%) of our outstanding
common stock following the consummation of this offering, the opportunity to purchase, in lieu of the common stock that would otherwise
result in the investor’s beneficial ownership exceeding 4.99% (or, at the election of the investor, 9.99%), pre-funded warrants
each to purchase one share of our common stock at an exercise price of $0.0001, which we refer to as the “pre-funded warrants.”
Each pre-funded warrant will be exercisable upon issuance and will expire when exercised in full. Each pre-funded warrant is being sold
together with one Series A warrant to purchase one share of common stock and one Series B warrant to purchase one-half of a share
of common stock. The public offering price for each pre-funded warrant and the accompanying warrants is equal to the price per share
of common stock and the accompanying warrants being sold to the public in this offering, minus $0.0001. This prospectus also relates
to the offering of the shares of common stock issuable upon exercise of the pre-funded warrants.
The shares of common stock and/or
pre-funded warrants and the accompanying warrants can only be purchased together in this offering but will be issued separately and will
be immediately separable upon issuance.
We
have engaged H.C. Wainwright & Co., LLC, or the placement agent, to act as our exclusive placement agent in connection with
this offering. The placement agent has agreed to use its reasonable best efforts to arrange for the sale of the securities offered by
this prospectus. The placement agent is not purchasing or selling any of the securities we are offering and the placement agent is not
required to arrange the purchase or sale of any specific number or dollar amount of securities. We have agreed to pay to the placement
agent the placement agent fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus.
Since we will deliver the securities to be issued in this offering upon our receipt of investor funds, there is no arrangement for funds
to be received in escrow, trust or similar arrangement. There is no minimum offering requirement as a condition of closing of this offering.
Because there is no minimum offering amount required as a condition to closing this offering, we may sell fewer than all of the securities
offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive
a refund in the event that we do not sell an amount of securities sufficient to pursue our business goals described in this prospectus.
In addition, because there is no escrow account and no minimum offering amount, investors could be in a position where they have invested
in our company, but we are unable to fulfill all of our contemplated objectives due to a lack of interest in this offering. Further,
any proceeds from the sale of securities offered by us will be available for our immediate use, despite uncertainty about whether we
would be able to use such funds to effectively implement our business plan. See the section entitled “Risk Factors” for more
information. We will bear all costs associated with the offering. See “Plan of Distribution” on page 17 of this prospectus
for more information regarding these arrangements.
Our
common stock is listed on the Nasdaq Capital Market under the symbol “CING.” The closing price of our common stock on Nasdaq
on September 8, 2023 was $0.5776 per share. There is no established public trading market for the pre-funded warrants,
Series A warrants or Series B warrants, and we do not expect such a market to develop. We do not intend to apply to list the pre-funded
warrants, Series A warrants or Series B warrants on any securities exchange or other nationally recognized trading system. Without an
active trading market, the liquidity of the pre-funded warrants, Series A warrants and Series B Warrants will be limited.
We
are an “emerging growth company” under applicable Securities and Exchange Commission rules and will be subject to reduced
public company reporting requirements.
Investing
in our securities is highly speculative and involves a high degree of risk. See “Risk Factors” beginning on page 5
of this prospectus and in the documents incorporated by reference into this prospectus for a discussion of information that should be
considered in connection with an investment in our securities.
| |
Per Share and Accompanying Warrants | | |
Per Pre-Funded Warrant and Accompanying
Warrants | | |
Total | |
Public offering price | |
$ | 0.5776 | | |
| 0.5775 | | |
$ | 3,999,479.62 | |
Placement agent fees(1) | |
$ | 0.0404 | | |
| 0.0404 | | |
$ | 280,000.01 | |
Proceeds to us, before expenses (2) | |
$ | 0.5372 | | |
| 0.5371 | | |
$ | 3,719,479.61 | |
(1) |
We
have agreed to pay the placement agent a cash fee equal to 7.0% of the gross proceeds raised in this offering. We have also agreed
to reimburse the placement agent for certain of its offering related expenses, including reimbursement for non-accountable expenses
in an amount up to $50,000, legal fees and expenses in the amount of up to $100,000, and for its clearing expenses in the amount
of $15,950. In addition, we have agreed to issue the placement agent or its designees warrants to purchase a number of shares of
common stock equal to 5.0% of the shares of common stock sold in this offering (including the shares of common stock issuable upon
the exercise of the pre-funded warrants), at an exercise price of $0.722 per share, which represents
125% of the public offering price per share and accompanying warrant. For a description of compensation to be received by the placement
agent, see “Plan of Distribution” for more information. |
(2) |
Because
there is no minimum number of securities or amount of proceeds required as a condition to
closing in this offering, the actual public offering amount, placement agent fees, and proceeds
to us, if any, are not presently determinable and may be substantially less than the total
maximum offering amounts set forth above. For more information, see “Plan of Distribution.” |
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Delivery
of the securities offered hereby is expected to be made on or about September 13,
2023, subject to satisfaction of customary closing conditions.
H.C.
Wainwright & Co.
The
date of this prospectus is September 11, 2023.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
We
incorporate by reference important information into this prospectus. You may obtain the information incorporated by reference without
charge by following the instructions under “Where You Can Find More Information.” You should carefully read this prospectus
as well as additional information described under “Incorporation of Certain Information By Reference,” before deciding
to invest in our securities.
We
have not, and the placement agent and its affiliates have not, authorized anyone to provide you with any information or to make
any representation not contained or incorporated by reference in this prospectus or any related free writing prospectus. We do not, and
the placement agent and its affiliates do not, take any responsibility for, and can provide no assurance as to the reliability
of, any information that others may provide to you. This prospectus is not an offer to sell or an offer to buy securities in any jurisdiction
where offers and sales are not permitted. The information in this prospectus is accurate only as of its date, regardless of the time
of delivery of this prospectus or any sale of securities. You should also read and consider the information in the documents to which
we have referred you under the caption “Where You Can Find More Information” in the prospectus.
Neither
we nor the placement agent have done anything that would permit a public offering of the securities or possession or distribution
of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the
United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the
offering of the securities and the distribution of this prospectus outside of the United States.
The
information incorporated by reference or provided in this prospectus contains statistical data and estimates, including those relating
to market size and competitive position of the markets in which we participate, that we obtained from our own internal estimates and
research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Industry publications,
studies and surveys generally state that they have been obtained from sources believed to be reliable. While we believe our internal
company research is reliable and the definitions of our market and industry are appropriate, neither this research nor these definitions
have been verified by any independent source.
PROSPECTUS
SUMMARY
This
summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider
before making your investment decision. Before investing in our securities, you should carefully read this entire prospectus and the
documents incorporated by reference herein, including the “Risk Factors” section in this prospectus and under similar captions
in the documents incorporated by reference into this prospectus. If any of the risks materialize, our business, financial condition,
operating results, and prospects could be materially and adversely affected. In that event, the price of our securities could decline,
and you could lose part or all of your investment. Unless we state otherwise or the context otherwise requires, the terms “we,”
“us,” “our,” “our business,” “the Company” and “Cingulate” refer to and similar
references refer: (1) on or following the consummation of the Reorganization Merger (as defined below), including our initial public
offering, to Cingulate Inc. and its consolidated subsidiaries, including Cingulate Therapeutics LLC, or CTx, and (2) prior to the consummation
of the Reorganization Merger, including our initial public offering, to CTx and its consolidated subsidiaries.
Overview
We
are a biopharmaceutical company using our proprietary Precision Timed ReleaseTM (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 Attention Deficit/Hyperactivity Disorder (ADHD), we are identifying and evaluating additional therapeutic areas
where our PTR technology may be employed to develop future product candidates, such as anxiety disorders. Our PTR platform incorporates
a proprietary Erosion Barrier Layer (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
are targeting the ADHD stimulant-based treatment market, with an estimated US market size of $18 billion as of September 2022. Stimulants
are the most commonly prescribed class of medications for ADHD and account for more than 90% of all ADHD medication prescriptions in
the United States, where approximately 80 million stimulant prescriptions were written during the 12-months ended September 2022. By
contrast, non-stimulant medications are typically employed only in the second-line or adjunctive therapy setting and account for 10%
of all ADHD medication prescriptions. Extended-release, or long-acting, dosage forms of stimulant medications are most frequently deployed
as the first-line treatment for ADHD and constitute approximately 59% of ADHD stimulant prescriptions by volume and nearly 83% of the
dollars. Most of these extended-release dosage forms are approved for once-daily dosing in the morning and were designed to eliminate
the need for re-dosing during the day. However, with the current ‘once-daily’ extended-release dosage forms, most patients
still receive a second or “booster” dose for administration later in the day (typically in the early afternoon) to achieve
entire active-day coverage and suffer from a multitude of unwanted side effects as a result. We believe there is a significant, unmet
need within the current treatment paradigm for true once-daily ADHD stimulant medications with lasting duration and superior side effect
profiles to better serve the needs of patients throughout their entire active-day.
Our
two proprietary, first-line stimulant medications: CTx-1301 (dexmethylphenidate) and CTx-1302 (dextroamphetamine), are being developed
for the treatment of ADHD in the three main patient segments: children (ages 6 -12), adolescents (ages 13-17), and adults (ages18+).
Both CTx-1301 and CTx-1302 are designed to address the key shortcomings of currently approved stimulant therapies by: providing an immediate
onset of action (within 30 minutes); offering ‘entire active-day’ duration; eliminating the need for a ‘booster/recovery’
dose of short-acting stimulant medications; minimizing or eliminating the rebound/crash symptoms associated with early medication ‘wear-off;’
and providing favorable tolerability with a controlled descent of drug blood levels. Furthermore, by eliminating the ‘booster’
dose used by up to 60% of ADHD patients in conjunction with their primary medication, we believe our product candidates will provide
important societal and economic benefits: reducing the abuse and diversion associated with short-acting stimulant medications; allowing
physicians to prescribe one medication versus two; allowing patients to pay for one medication versus two; and allowing payers to reimburse
one medication versus two.
Recent
Developments
Phase 3 CTx-1301-022
study
Our
Phase 3 CTx-1301-022 study (NCT05631626), which assessed efficacy and safety along with onset and duration of CTx-1301 in 21 adults
(age range: 18-55 years) with ADHD in an adult laboratory classroom setting did not achieve statistical significance on the primary efficacy
endpoint but demonstrated a trend towards significance despite its modest sample size in improving ADHD symptoms with a rapid onset of
action and entire active-day duration. After a 5-week dose optimization period, subjects were either randomized to their optimized dose
of CTx-1301 or placebo.
The
overall Permanent Product Measure of Performance (PERMP) data showed a trend toward significance with a p-value of 0.089 despite
the modest sample size. A meta-analysis conducted by Faraone and Glatt (Clinical Psychiatry 71:6 June 2010) using 11 published studies
with long-acting stimulants in adults demonstrated the average effect size to be 0.73 (approximate range 0.5 to 0.9). In this trial subjects
randomized to CTx-1301 demonstrated an effect size of 1.41 at 30 minutes and an effect size of 0.98 at 16 hours with an average effect
size of 1.79 (range 0.88 to 2.60). Effect size represents the magnitude of a change in an outcome or the strength of a relationship,
the practical significance. Effect size measures the magnitude of differences in outcomes between two groups in a study.
In
addition, the secondary outcome using the Clinical Global Impression (CGI) Scale for severity of illness was associated with a decrease
in the severity of illness in subjects randomized to CTx-1301 compared to placebo. This is noteworthy as the purpose of this study was
to obtain estimates of effect size and it was not anticipated that significant treatment differences would be observed. CTx-1301 was
well tolerated; 9% (n=1) of the subjects that were randomized to CTx-1301 experienced treatment emergent adverse events (TEAEs), while
30% (n=3) of subjects that were randomized to placebo experienced TEAEs. Patient reported outcomes on the overall satisfaction with CTx-1301
compared to subject’s prior ADHD medication was favorable.
ATM and Equity Line Sales
During the period beginning
July 1, 2023 and ending on the date of this prospectus, we sold 1,538,855 shares of common stock pursuant to an At The Market Offering
Agreement with H.C. Wainwright & Co., LLC (the “ATM Agreement”), for net proceeds of $1,595,429.
During the period beginning
July 1, 2023 and ending on the date of this prospectus, we sold 240,000 shares of common stock pursuant to a purchase agreement
with Lincoln Park Capital Fund, LLC (the “LP Purchase Agreement”), for net proceeds of $196,167.
Private Placement with WFIA
On August 11, 2023, we entered into a Securities Purchase Agreement with Werth Family Investment
Associates LLC (“WFIA”) and issued, in a private placement priced at the market under Nasdaq rules, 1,823,155 shares of common
stock at a purchase price per share of $0.5485 (the “Private Placement”). Peter J. Werth, a member of our Board of Directors
is the manager of WFIA.
Our
Organizational Structure
Cingulate
Inc. is a Delaware corporation that was formed to serve as a holding company. In connection with our initial public offering, we effected
certain organizational transactions. On September 29, 2021, Cingulate acquired Cingulate Therapeutics LLC, or CTx, through the merger
of a wholly-owned acquisition subsidiary of Cingulate with and into CTx (the “Reorganization Merger”). As a result of the
Reorganization Merger, CTx became a wholly-owned subsidiary of Cingulate. Unless otherwise stated or the context otherwise requires,
all information in this prospectus reflects the consummation of the Reorganization Merger.
Corporate
Information
Our
primary executive offices are located at 1901 West 47th Place, Kansas City, Kansas 66205 and our telephone number is (913)
942-2300. Our website address is www.cingulate.com. The information contained on, or that can be accessed through, our website
is not part of this prospectus and should not be considered as part of this prospectus or in deciding whether to purchase our securities.
Cingulate,
PTR, Cingulate Therapeutics, Enfoqis, Enfoqus, Trodesca, Ivoqus, Taylerza, Tymprezi, Accomplish, Mastery and our logo are some of our
trademarks used in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of other
organizations. Solely for convenience, our trademarks and tradenames referred to in this prospectus may appear without the ® and
™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under
applicable law, our rights or the right of the applicable licensor to these trademarks and tradenames.
Implications
of Being an Emerging Growth Company
As
a company with less than $1.235 billion in revenue during our most recently completed fiscal year, we qualify as an “emerging growth
company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage
of relief from certain reporting requirements and other burdens that are otherwise applicable generally to public companies. These provisions
include:
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reduced
obligations with respect to financial data, including presenting only two years of audited financial statements and only two years
of selected financial data in this prospectus; |
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an
exception from compliance with the auditor attestation requirement of Section 404 of the Sarbanes-Oxley Act of 2002, as amended,
or the Sarbanes-Oxley Act; |
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reduced
disclosure about our executive compensation arrangements in our periodic reports, proxy statements and registration statements; and |
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exemptions
from the requirements of holding non-binding advisory votes on executive compensation or golden parachute arrangements. |
We
may take advantage of exemptions for up to five years or such earlier time that we are no longer an emerging growth company. Accordingly,
the information contained herein may be different than the information you receive from other public companies in which you hold stock.
We would cease to be an emerging growth company upon the earliest to occur of: (1) the last day of the fiscal year in which we have more
than $1.235 billion in annual gross revenue, (2) December 31, 2026, (3) the date we are deemed to be a “large accelerated filer”
as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act, and (4) the date on which we have during the previous
three-year period issued more than $1.0 billion in non-convertible debt securities.
The
JOBS Act also permits us, as an emerging growth company, to take advantage of an extended transition period to comply with the new or
revised accounting standards applicable to public companies and thereby allow us to delay the adoption of those standards until those
standards would apply to private companies. We have irrevocably elected to avail ourselves of this exemption and therefore, we will not
be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
THE
OFFERING
The
following summary contains basic information about this offering. The summary is not intended to be complete. You should read the full
text and more specific details contained elsewhere in this prospectus and in the documents incorporated by reference.
Common
Stock Offered |
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1,720,000 shares. |
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Pre-Funded Warrants Offered |
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We are also offering pre-funded warrants to purchase up
to 5,205,208 shares of common stock to those investors whose purchase of shares of our common stock in this offering would
result in such investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the
election of the investor, 9.99%) of our outstanding common stock following the consummation of this offering, the opportunity to
purchase, in lieu of the common stock that would otherwise result in the investor’s beneficial ownership exceeding 4.99% (or,
at the election of the purchaser, 9.99%), pre-funded warrants each to purchase one share of our common stock at an exercise price of
$0.0001, which we refer to as pre-funded warrants. Each
pre-funded warrant is being sold together with one Series A warrant to purchase one share of common stock and one Series B
warrant to purchase one-half of a share of common stock. The combined public offering price for each pre-funded warrant and
accompanying warrants is equal to the combined public offering price per share of common stock and accompanying warrants being sold
in this offering, minus $0.0001. For each pre-funded warrant we sell, the number of shares of common stock we sell will be decreased
on a one-for-one basis. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the
pre-funded warrants. See “Description of Securities We Are Offering” for additional information. |
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Warrants Offered |
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Each
share of common stock or pre-funded warrant is being offered together with one Series A
warrant to purchase one share of common stock and one Series B warrant to purchase one-half
of a share of common stock. The Series A warrants will have an exercise price of $0.5776
per share and will be exercisable beginning on the effective date of the Warrant Stockholder
Approval. The Series A warrants will expire on the five year anniversary of the Initial Exercise
Date. The Series B warrants will have an exercise price of $0.5776 per
share and will be exercisable beginning on the Initial Exercise Date. The Series B warrants
will expire on the two year anniversary of the Initial Exercise Date. See “Description
of Securities We Are Offering” for additional information.
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Common
Stock Outstanding prior to this Offering (1) |
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15,658,798
shares. |
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Common
Stock Outstanding after this Offering (1) |
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22,584,006
shares, assuming all of the pre-funded
warrants offered hereby are exercised and no exercise of the warrants offered hereby. |
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Use
of Proceeds |
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We
estimate that the net proceeds of this offering assuming no exercise of the warrants, after deducting placement agent fees and estimated
offering expenses, will be approximately $3.3 million, assuming no exercise of the warrants. We intend to use all of the net proceeds we receive from this offering for continued research
and development and commercialization activities of CTx-1301, and for working capital, capital expenditures and general corporate
purposes, including investing further in research and development efforts. See “Use of Proceeds.” |
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Nasdaq
Capital Markets Symbol |
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Our
common stock is listed on the Nasdaq Capital Market under the symbol “CING.”
We do not intend to apply to list the pre-funded warrants, Series A warrants or Series
B warrants on any securities exchange or other nationally recognized trading system. Without
an active trading market, the liquidity of the pre-funded warrants, Series A warrants and
Series B warrants will be limited. |
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Lock-up |
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All
of our directors and executive officers have agreed subject to certain exceptions, not to sell, transfer or dispose of, directly
or indirectly, any of our common stock or securities convertible into or exercisable or exchangeable for our common stock for a period
of 90 days after the closing of this offering. See “Plan of Distribution” for more information. |
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Placement
Agent Warrants |
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We
have agreed to issue to the placement agent or its designees, warrants, or the placement agent warrants, to purchase
up to 5.0% of the aggregate number of shares of common stock sold in this offering (including the shares of
common stock issuable upon the exercise of the pre-funded Warrants) at an exercise price equal to 125% of the public
offering price per share and accompanying warrants to be sold in this offering. The placement agent warrants will be exercisable
upon issuance and will expire five years from the commencement of sales under this offering. See “Plan of Distribution”
for additional information. |
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Risk
Factors |
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Investment
in our securities involves a high degree of risk and could result in a loss of your entire investment. See “Risk Factors”
beginning on page 5, and the other information included and incorporated by reference in this prospectus for a discussion
of the factors you should consider carefully before deciding to invest in our securities. |
(1)
The number of shares of our common stock to be outstanding immediately after this offering is based on 15,658,798 shares of our common
stock outstanding as of September 11, 2023 and excludes, as of such date, the following:
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1,424,995
shares of our common stock issuable upon exercise
of outstanding stock options issued under our 2021 Equity Incentive Plan (the “2021 Plan”), with a weighted average exercise
price of $3.03 per share; |
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1,361,315
shares of our common stock that are available
for future issuance under the 2021 Plan; |
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4,999,998
shares of common stock issuable upon the exercise of warrants with a weighted average exercise price of $6.06 per share; and |
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6,838,235 shares of common stock
issuable upon the exercise of pre-funded warrants with a weighted average exercise price of $0.0001 per share. |
Unless expressly indicated or the context requires
otherwise, all information in this prospectus assumes (i) we issue no pre-funded warrants and (ii) no exercise of the warrants
offered hereby.
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Before deciding whether to purchase our securities, including the shares
of common stock offered by this prospectus, you should carefully consider the risks and uncertainties described under “Risk Factors”
in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, any subsequent Quarterly Report on Form 10-Q and our other
filings with the SEC, all of which are incorporated by reference herein. If any of these risks actually occur, our business, financial
condition and results of operations could be materially and adversely affected and we may not be able to achieve our goals, the value
of our securities could decline and you could lose some or all of your investment. Additional risks not presently known to us or that
we currently believe are immaterial may also significantly impair our business operations. If any of these risks occur, our business,
results of operations or financial condition and prospects could be harmed. In that event, the market price of our common stock and the
value of the warrants could decline, and you could lose all or part of your investment.
Risks
Related to Our Financial Position and Need for Capital
Following
this offering, we will need to raise additional capital to complete the development and commercialization efforts for CTx-1301, CTx-1302
and/or CTx-2103. If we are unable to raise capital when needed, we could be forced to delay, reduce or terminate certain of our development
programs or other operations.
Following
this offering, we will need to raise additional capital to fund our operations and continue to support our planned development and commercialization
activities. The amount and timing of our future funding requirements will depend on many factors, including:
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the
timing, rate of progress and cost of any clinical trials and other manufacturing/product development activities for our current and
any future product candidates that we develop, in-license or acquire; |
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the
results of the clinical trials for our product candidates in the United States and any foreign countries; |
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the
timing of, and the costs involved in, FDA approval and any foreign regulatory approval of our product candidates, if at all; |
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the
number and characteristics of any additional future product candidates we develop or acquire; |
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our
ability to establish and maintain strategic collaborations, licensing, co-promotion or other arrangements and the terms and timing
of such arrangements; |
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the
cost of commercialization activities if our current or any future product candidates are approved for sale, including manufacturing,
marketing, sales and distribution costs; |
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the
degree and rate of market acceptance of any approved products; |
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costs
under our third-party manufacturing and supply arrangements for our current and any future product candidates and any products we
commercialize; |
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costs
and timing of completion of any additional outsourced commercial manufacturing or supply arrangements that we may establish; |
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costs
of preparing, filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights
associated with our product candidates; |
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costs
associated with prosecuting or defending any litigation that we are or may become involved in and any damages payable by us that
result from such litigation; |
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costs
associated with any product recall that could occur; |
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costs
of operating as a public company; |
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the
holder of our $8.0 million amended and restated promissory note not demanding payment prior to maturity; |
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the
emergence, approval, availability, perceived advantages, relative cost, relative safety and relative efficacy of alternative and
competing products or treatments; |
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costs
associated with any acquisition or in-license of products and product candidates, technologies or businesses; and |
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personnel,
facilities and equipment requirements. |
We
cannot be certain that additional funding will be available on acceptable terms, or at all. In addition, future debt financing into which
we may enter may impose upon us covenants that restrict our operations, including limitations on our ability to incur liens or additional
debt, pay dividends, redeem our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions.
If
we are unable to raise additional capital when required or on acceptable terms, we may be required to significantly delay, scale back
or discontinue the development or commercialization of one or more of our product candidates, restrict our operations or obtain funds
by entering into agreements on unattractive terms, which would likely have a material adverse effect on our business, stock price and
our relationships with third parties with whom we have business relationships, at least until additional funding is obtained. If we do
not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that would
likely result in our securityholders losing some or all of their investment in us. In addition, our ability to achieve profitability
or to respond to competitive pressures would be significantly limited.
In
addition, if we are unable to secure sufficient capital to fund our operations, we may have to enter into strategic collaborations that
could require us to share commercial rights to CTx-1301, CTx-1302, and/or CTx-2103 with third parties in ways that we currently do not
intend or on terms that may not be favorable to us or our securityholders.
We have incurred a history of operating
losses and expect to continue to incur substantial costs for the foreseeable future. We are not currently profitable, and we may never
achieve or sustain profitability. Our financial situation creates doubt whether we will continue as a going concern.
We have never generated
revenue from operations, are unlikely to generate revenues for several years, and are currently operating at a loss and expect our operating
costs will increase significantly as we incur costs related to formulation/manufacturing development, the clinical trials for our drug
candidates and operating as a public company. We expect to incur expenses without corresponding revenues unless and until we are able
to obtain regulatory approval and successfully commercialize our lead product candidates, CTx-1301 and CTx-1302, and our third asset
CTx-2103. We may never be able to obtain regulatory approval for the marketing of our drug candidates in any indication in the United
States or internationally. Even if we obtain regulatory approval for CTx-1301, CTx-1302 and/or CTx-2103, development expenses will continue
to increase for any future assets. As CTx-1301 advances to Phase 3 clinical trials and pursuit of FDA approval, we will incur additional
clinical development expenses. We have incurred recurring losses since inception and had an accumulated deficit of approximately $80.0
million as of June 30, 2023. These conditions raise substantial doubt about our ability to continue as a going concern, meaning that
we may be unable to continue operations for the foreseeable future or realize assets and discharge liabilities in the ordinary course
of operations. If we are unable to obtain funding, we will be forced to delay, reduce or eliminate some or all of our research and development
programs, product portfolio expansion or commercialization efforts, or we may be unable to continue operations. Although we continue
to pursue these plans, there can be no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us
to fund continuing operations, if at all.
We will continue to expend
substantial cash resources for the foreseeable future for the clinical development of our product candidates and development of any other
indications and product candidates we may choose to pursue. These expenditures will include costs associated with manufacturing and clinical
development, such as conducting clinical trials, manufacturing operations and product candidate supply, as well as marketing and selling
any products approved for sale. In particular, our Phase 3 trials in the United States will require substantial funds to complete. Because
the conduct and results of any clinical trial are highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully
complete the development and commercialization of our current and any future product candidates.
This offering is being made
on a best efforts basis and we may sell fewer than all of the securities offered hereby and may receive significantly less in net proceeds
from this offering. We believe that the net proceeds from this offering, together with our cash on hand, will satisfy our capital
needs until early November under our current business plan. Following this offering, we will need to raise additional capital
to fund our operations and continue to support our planned development and commercialization activities.
Risks
Related to This Offering and Ownership of Our Common Stock
Because
management has broad discretion as to the use of the net proceeds from this offering, you may not agree with how we use them, and such
proceeds may not be applied successfully.
Our
management will have considerable discretion over the use of proceeds from this offering. We currently intend to use the net proceeds
from this offering for continued research and development and commercialization activities for CTx-1301, and for working capital, capital
expenditures, and general corporate purposes, including investing further in research and development efforts. However, our management
will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not
necessarily improve our operating results or enhance the value of our securities, or that you otherwise do not agree with. You will be
relying on the judgment of our management concerning these uses and you will not have the opportunity, as part of your investment decision,
to assess whether the proceeds are being used appropriately. The failure of our management to apply these funds effectively could, among
other things, result in unfavorable returns and uncertainty about our prospects, each of which could cause the price of our securities
to decline.
If
you purchase securities in this offering, you will suffer immediate dilution of your investment.
You
will incur immediate and substantial dilution as a result of this offering. The public offering price per share of common stock and accompanying
warrants and the public offering price per pre-funded warrant and accompanying warrants will be substantially higher than the as adjusted
net tangible book value per share of our common stock after giving effect to this offering. Therefore, if you purchase securities in
this offering, you will pay a price per share of common stock you acquire that substantially exceeds our pro forma net tangible book
value per share after this offering. Based on the offering price of $0.5776 per share of common stock and accompanying
warrants and our pro forma net tangible book deficit as of June 30, 2023, you will experience immediate dilution of $0.58 per
share, representing the difference between our as adjusted net tangible book value per share after giving effect to this offering and
the public offering price.
There is no public market for the pre-funded
warrants or warrants offered by us.
There is no established
public trading market for the pre-funded warrants or warrants, and we do not expect such a market to develop. In addition, we do not
intend to apply to list the pre-funded warrants or warrants on any national securities exchange or other nationally recognized trading
system. Without an active trading market, the liquidity of the pre-funded warrants and warrants will be limited.
Holders of pre-funded warrants and warrants
purchased in this offering will have no rights as common stockholders until such holders exercise their pre-funded warrants or warrants
and acquire our common stock.
Until holders of the pre-funded
warrants and warrants acquire shares of our common stock upon exercise thereof, such holders will have no rights with respect to the
shares of our common stock underlying the pre-funded warrants and warrants. Upon exercise of the pre-funded warrants and warrants, the
holders will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the
exercise date.
The warrants are speculative in nature.
The warrants do not confer
any rights of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent
the right to acquire shares of common stock at a fixed price for a limited period of time. Moreover, following this offering, the market
value of the warrants, if any, will be uncertain and there can be no assurance that the market value of the warrants will equal or exceed
their imputed offering price. The warrants will not be listed or quoted for trading on any market or exchange. There can be no assurance
that the market price of our common stock will ever equal or exceed the exercise price of the warrants, and consequently, the warrants
may expire valueless.
The warrants are not exercisable until stockholder
approval.
The Series A warrants will
have an exercise price of $0.5776 per share and will be exercisable beginning on the effective date of the Warrant
Stockholder Approval. The Series A warrants will expire on the five year anniversary of the Initial Exercise Date. The Series B
warrants will have an exercise price of $0.5776 per share and will be exercisable beginning on the Initial Exercise Date. The
Series B warrants will expire on the two year anniversary of the Initial Exercise Date. While we intend to promptly seek Warrant
Stockholder Approval, there is no guarantee that the Warrant Stockholder Approval will ever be obtained. If we are unable to obtain
the Warrant Stockholder Approval, the warrants may have no value.
Purchasers
who purchase our securities in this offering pursuant to a securities purchase agreement may have rights not available to purchasers
that purchase without the benefit of a securities purchase agreement.
In
addition to rights and remedies available to all purchasers in this offering under federal securities and state law, the purchasers that
enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue
a claim for breach of contract provides those investors with the means to enforce the covenants uniquely available to them under the
securities purchase agreement including: (i) timely delivery of shares; (ii) agreement to not enter into variable rate financings for
one year from closing, subject to certain exceptions; (iii) agreement to not enter into any financings for 60 days from closing;
and (iv) indemnification for breach of contract.
This
is a best efforts offering, with no minimum amount of securities is required to be sold, and we may not raise the amount of capital we
believe is required for our business plans, including our near-term business plans.
The
placement agent has agreed to use its reasonable best efforts to solicit offers to purchase the securities in this offering. The placement
agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar
amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering.
Because there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement
agent fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth above.
We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and
investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our
continued operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required
for our operations in the short-term and may need to raise additional funds, which may not be available or available on terms acceptable
to us.
Because
there is no minimum required for the offering to close, investors in this offering will not receive a refund in the event that we do
not sell an amount of securities sufficient to pursue the business goals outlined in this prospectus.
We
have not specified a minimum offering amount nor have or will we establish an escrow account in connection with this offering. Because
there is no escrow account and no minimum offering amount, investors could be in a position where they have invested in our company,
but we are unable to fulfill our objectives due to a lack of interest in this offering. Further, because there is no escrow account in
operation and no minimum investment amount, any proceeds from the sale of securities offered by us will be available for our immediate
use, despite uncertainty about whether we would be able to use such funds to effectively implement our business plan. Investor funds
will not be returned under any circumstances whether during or after the offering.
If
securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price
and trading volume could decline.
The
trading market for our common stock and warrants will depend in part on the research and reports that securities or industry analysts
publish about us or our business. We currently have limited research coverage by securities and industry analysts. If we fail to maintain
adequate coverage by securities or industry analysts, the trading price for our stock would be negatively impacted. If one or more of
the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would
likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock
could decrease, which could cause our stock price and trading volume to decline.
Future
sales of our common stock, warrants, or securities convertible into our common stock may depress our stock price.
The
price of our common stock or warrants could decline as a result of sales of a large number of shares of our common stock or warrants
or the perception that these sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult
for us to sell equity securities in the future at a time and at a price that we deem appropriate.
In
addition, in the future, we may issue additional shares of common stock, warrants or other equity or debt securities convertible into
common stock in connection with a financing, acquisition, litigation settlement, employee arrangements or otherwise. We may also issue
additional shares of common stock to satisfy our outstanding promissory note in favor of Werth Family Investment Associates LLC, an entity
controlled by Peter Werth, a member of our Board of Directors. Any such issuances could result in substantial dilution to
our existing stockholders and could cause the price of our common stock or warrants to decline.
We
do not anticipate paying any cash dividends on our common stock in the foreseeable future.
We
do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain any future earnings
to finance the operation and expansion of our business, and we do not expect to declare or pay any dividends in the foreseeable future.
Consequently, stockholders must rely on sales of their common stock after price appreciation, which may never occur, as the only way
to realize any future gains on their investment. There is no guarantee that shares of our common stock will appreciate in value or even
maintain the price at which stockholders have purchased their shares.
If
we fail to regain compliance with the continued listing requirements of Nasdaq, our common stock and/or warrants may be
delisted and the price of our common stock and/or warrants and our ability to access the capital markets could be negatively impacted.
Our
common stock and warrants are currently listed for trading on Nasdaq. On May 16, 2023, we received a notice from Nasdaq stating
that we no longer comply with the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1) for
continued listing. We submitted a plan of compliance to Nasdaq on June 30, 2023. On July 28, 2023, Nasdaq notified us that that it
granted an extension until November 13, 2023 to regain compliance with the minimum stockholders’ equity requirement, conditioned
upon achievement of certain milestones included in the plan of compliance previously submitted to Nasdaq, including a plan to raise additional
capital. If we fail to evidence compliance upon filing our periodic report for the quarter ending September 30, 2023 by
November 13, 2023, we may be subject to delisting. If Nasdaq determines to delist our securities, we will have the right to appeal
to a Nasdaq hearings panel. There can be no assurance that we will be able to regain compliance with the applicable Nasdaq
listing requirements.
In
addition, on July 28, 2023, we received notice from Nasdaq indicating that we are not in compliance with the requirement to maintain
a minimum bid price of $1.00 per share for continued listing on Nasdaq. We were provided a compliance period of 180 calendar days
from the date of the notice, or until January 24, 2024, to regain compliance with the minimum closing bid requirement, pursuant to Nasdaq
Listing Rule 5810(c)(3)(A). We may be eligible for an additional 180 calendar day compliance period. There can be no assurance that we
will regain compliance with the minimum closing bid requirement during the 180-day compliance period, secure a second period of 180 days
to regain compliance or maintain compliance with the other Nasdaq listing requirements.
We
will continue to monitor the closing bid price of our common stock and may, if appropriate, consider available options, including implementation
of a reverse stock split of our common stock, to regain compliance with the minimum closing bid requirement. If we seek to implement
a reverse stock split in order to remain listed on Nasdaq, the announcement or implementation of such a reverse stock split could negatively
affect the price of our common stock and/or warrants.
We
must satisfy Nasdaq’s continued listing requirements, including, among other things, a minimum stockholders’ equity of $2.5
million and a minimum closing bid price of $1.00 per share or risk delisting, which could have a material adverse effect on our business.
If our common stock and warrants are delisted from
Nasdaq, it could materially reduce the liquidity of our common stock and warrants and result in a corresponding material reduction
in the price of our common stock and warrants as a result of the loss of market efficiencies associated with Nasdaq and the loss of
federal preemption of state securities laws. In addition, delisting could harm our ability to raise capital through alternative financing
sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and
employees and fewer business development opportunities. If our common stock and warrants are delisted, it could be more difficult
to buy or sell our common stock and warrants or to obtain accurate quotations, and the price of our common stock and warrants
could suffer a material decline. Delisting could also impair our ability to raise capital on acceptable terms, if at all.
CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
This
prospectus and any documents we incorporate by reference contain forward-looking statements that involve substantial risks and uncertainties.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,”
“expect,” “plan,” “anticipate,” “could,” “intend,” “target,”
“project,” “estimate,” “believe,” “estimate,” “predict,” “potential”
or “continue” or the negative of these terms or other similar expressions intended to identify statements about the future.
These statements speak only as of the date of this prospectus and involve known and unknown risks, uncertainties and other important
factors that may cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements. We have based these forward-looking statements largely on our
current expectations and projections about future events and financial trends that we believe may affect our business, financial condition
and results of operations. These forward-looking statements include, without limitation, statements about the following:
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our ability to maintain compliance with the continued
listing requirements of the Nasdaq Capital Market; |
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our
lack of operating history and need for additional capital; |
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our
plans to develop and commercialize our product candidates; |
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the
timing of our planned clinical trials for CTx-1301, CTx-1302, and CTx-2103; |
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the
timing of our New Drug Application (NDA) submissions for CTx-1301, CTx-1302, and CTx-2103; |
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the
timing of and our ability to obtain and maintain regulatory approvals for CTx-1301, CTx-1302, CTx-2103, or any other future product
candidate; |
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the
clinical utility of our product candidates; |
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our
commercialization, marketing and manufacturing capabilities and strategy; |
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our
expected use of cash;
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our
competitive position and projections relating to our competitors or our industry; |
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our
ability to identify, recruit, and retain key personnel; |
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the
impact of laws and regulations; |
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our
expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act
of 2012 (the “JOBS Act”); |
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our
plans to identify additional product candidates with significant commercial potential that are consistent with our commercial objectives;
and |
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our
estimates regarding future revenue and expenses. |
Because
forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some
of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events
and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially
from those projected in the forward-looking statements. You should refer to the “Risk Factors” section of this prospectus
and the documents we incorporate by reference for a discussion of important factors that may cause our actual results to differ materially
from those expressed or implied by our forward-looking statements. Moreover, we operate in an evolving environment. New risk factors
and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
As a result of these factors, we cannot assure you that the forward-looking statements in this prospectus and the documents we incorporate
by reference will prove to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking
statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. You should,
however, review the factors and risks and other information we describe in the reports we will file from time to time with the SEC after
the date of this prospectus.
You
should read this prospectus and the documents that we incorporate by reference in this prospectus and have filed as exhibits to the registration
statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different
from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
USE
OF PROCEEDS
We
estimate that the net proceeds from this offering will be approximately $3.3 million after deducting placement agent fees and
estimated offering expenses payable by us and assuming no sale of any pre-funded warrants and no exercise of the warrants. However, because
this is a best efforts offering with no minimum number of securities or amount of proceeds as a condition to closing, the actual offering
amount, the placement agent’s fees and net proceeds to us are not presently determinable and may be substantially less than the
maximum amounts set forth on the cover page of this prospectus, and we may not sell all or any of the securities we are offering. As
a result, we may receive significantly less in net proceeds.
We
intend to use all of the net proceeds we receive from this offering for continued research and development and commercialization activities
of CTx-1301, and for working capital, capital expenditures and general corporate purposes, including investing further in research and
development efforts.
Although
we currently anticipate that we will use the net proceeds from this offering as described above, there may be circumstances where a reallocation
of funds is necessary. The amounts and timing of our actual expenditures will depend upon numerous factors, including our sales and marketing
and commercialization efforts, demand for our products, our operating costs and the other factors described under “Risk Factors”
in this prospectus and the documents incorporated by reference herein. Accordingly, our management will have flexibility in applying
the net proceeds from this offering. An investor will not have the opportunity to evaluate the economic, financial or other information
on which we base our decisions on how to use the proceeds.
Pending
our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments,
including short-term, investment-grade, interest-bearing instruments and U.S. government securities.
DILUTION
If
you invest in our securities in this offering, your ownership interest will be immediately diluted to the extent of the difference
between the combined public offering price per share and accompanying warrants and the as adjusted net tangible book value
per share of our common stock immediately after this offering.
As
of June 30, 2023, we had a net tangible book deficit of approximately $(6.1 million), or approximately $(0.51)
per share of common stock. Our net tangible book deficit per share represents our total tangible assets less total
liabilities, divided by the number of shares of our common stock outstanding as of June 30, 2023.
After giving effect to the
sale of shares pursuant to the ATM Agreement, the LP Purchase Agreement and the Private Placement, our pro forma tangible net book deficit
as of June 30, 2023 would have been approximately $(3.3 million), or approximately $(0.21) per share of common stock, an increase of
approximately $0.30 per share of common stock.
After
giving effect to the sale of 1,720,000 shares of common stock and accompanying warrants at an offering price of $0.5776
per share and accompanying warrants and pre-funded warrants to purchase up to 5,205,208 shares of common stock and accompanying warrants
an offering price of $0.5775 per pre-funded warrant and accompanying warrants in this offering, and after deducting placement agent
fees and estimated offering expenses payable by us, and assuming all of the pre-funded warrants offered in this offering
are exercised, no exercise of the warrants being offered in this offering, that no value is attributed to such warrants
and that such warrants are classified as and accounted for as equity, our pro forma as adjusted net tangible book value as of June 30,
2023 would have been approximately $35,000, or approximately $0.00 per share of common stock. This amount represents an
immediate increase in pro forma as adjusted net tangible book value of $0.21 per share to our existing stockholders and an immediate
dilution of $0.58 per share to investors participating in this offering. We determine dilution per share to investors participating
in this offering by subtracting the pro forma as adjusted net tangible book value per share after giving effect to this offering from
the public offering price per share and accompanying warrants paid by investors participating in this offering. The following table illustrates
this dilution:
Public offering price per share and accompanying
warrants | |
| |
| | $ |
0.5776 |
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Historical
net tangible book deficit per share of
common stock as of June 30, 2023 | |
$ | (0.51 |
) | |
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|
Increase in net tangible book deficit attributable to
the sale of shares pursuant to the ATM Agreement, the LP Purchase Agreement and the Private Placement | |
$ | 0.30 |
| |
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|
Pro forma net tangible book deficit after giving effect to the sale
of shares pursuant to the ATM Agreement, the LP Purchase Agreement and the Private Placement | |
$ | (0.21 |
) | |
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|
Increase
in pro forma net tangible book deficit per share attributable to this offering | |
$ | 0.21 |
| |
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Pro
forma adjusted net tangible book value per
share after this offering | |
| |
| | $ |
0.00 |
|
Dilution per share to new
investors purchasing shares in this offering | |
| |
| | $ |
0.58 |
|
The
table and discussion above are based on 12,056,788 shares of our common stock outstanding as June 30, 2023 (15,658,798
shares of common stock on a pro forma basis after giving effect to the sale of shares pursuant to the ATM Agreement, the LP Purchase
Agreement and the Private Placement), and excludes, as of such date, the following:
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1,349,679
shares of our common stock issuable upon exercise
of outstanding stock options issued under the 2021 Plan with a weighted average exercise price of $3.16 per share; |
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1,436,631
shares of our common stock that are available
for future issuance under the 2021 Plan; and |
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4,999,998
shares of common stock issuable upon the exercise of outstanding warrants with a weighted average exercise price of $6.06 per
share |
The
information discussed above is illustrative only and will adjust based on the actual public offering price and other terms of this offering
determined at pricing.
DESCRIPTION
OF CAPITAL STOCK
The
following description summarizes the most important terms of our securities. Because it is only a summary, it does not contain all the
information that may be important to you. For a complete description, you should refer to our amended and restated certificate of incorporation
and restated bylaws, copies of which are filed as exhibits to the registration statement of which this prospectus forms a part, which
are incorporated by reference herein.
Authorized
Capitalization
We
have 250,000,000 shares of capital stock authorized under our amended and restated certificate of incorporation, consisting of 240,000,000
shares of common stock with a par value of $0.0001 per share and 10,000,000 shares of preferred stock with a par value of $0.0001 per
share.
As
of August 11, 2023, there were 15,658,798 shares of common stock outstanding, and no shares of preferred stock outstanding.
Common
Stock
Holders
of our common stock are entitled to such dividends as may be declared by our board of directors out of funds legally available for such
purpose. The shares of common stock are neither redeemable nor convertible. Holders of common stock have no preemptive or subscription
rights to purchase any of our securities.
Each
holder of our common stock is entitled to one vote for each such share outstanding in the holder’s name. No holder of common stock
is entitled to cumulate votes in voting for directors.
In
the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive a pro rata share of
our assets, which are legally available for distribution, after payments of all debts and other liabilities. All of the outstanding shares
of our common stock are fully paid and non-assessable.
Preferred
Stock
Our
board of directors has the authority, without further action by our stockholders, to issue up to 10,000,000 shares of preferred stock
in one or more classes or series and to fix the designations, rights, preferences, privileges and restrictions thereof, without further
vote or action by the stockholders. These rights, preferences and privileges could include dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting, or the designation of,
such class or series, any or all of which may be greater than the rights of common stock. The issuance of our preferred stock could adversely
affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon
our liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing a change in
control of our company or other corporate action. No shares of preferred stock are outstanding, and we have no present plan to issue
any shares of preferred stock.
Anti-Takeover
Effects of Delaware law and Our Certificate of Incorporation and Bylaws
The
provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws described below
may have the effect of delaying, deferring or discouraging another party from acquiring control of us.
Section
203 of the Delaware General Corporation Law
We
are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business
combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder,
with the following exceptions:
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before
such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in
the stockholder becoming an interested stockholder; |
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upon
completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining
the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by
persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
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on
or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting
of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that
is not owned by the interested stockholder. |
In
general, Section 203 defines business combination to include the following:
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any
merger or consolidation involving the corporation and the interested stockholder; |
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any
sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; |
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subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder; |
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any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series
of the corporation beneficially owned by the interested stockholder; or |
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the
receipt by the interested stockholder of the benefit of any loss, advances, guarantees, pledges or other financial benefits by or
through the corporation. |
In
general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates
and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own,
15% or more of the outstanding voting stock of the corporation.
Certificate
of Incorporation and Bylaws
Our
amended and restated certificate of incorporation and amended and restated bylaws provide for:
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classifying
our board of directors into three classes; |
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authorizing
the issuance of “blank check” preferred stock, the terms of which may be established and shares of which may be issued
without stockholder approval; |
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limiting
the removal of directors by the stockholders; |
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requiring
a supermajority vote of stockholders to amend our bylaws or certain provisions our certificate of incorporation; |
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prohibiting
stockholder action by written consent, thereby requiring all stockholder actions to be taken at a meeting of our stockholders; |
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eliminating
the ability of stockholders to call a special meeting of stockholders; |
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establishing
advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon
at stockholder meetings; and |
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establishing
Delaware as the exclusive jurisdiction for certain stockholder litigation against us. |
Potential
Effects of Authorized but Unissued Stock
Pursuant
to our amended and restated certificate of incorporation, we have shares of common stock and preferred stock available for future issuance
without stockholder approval. We may utilize these additional shares for a variety of corporate purposes, including future public offerings
to raise additional capital, to facilitate corporate acquisitions or payment as a dividend on the capital stock.
The
existence of unissued and unreserved common stock and preferred stock may enable our board of directors to issue shares to persons friendly
to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to
obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management.
In addition, the board of directors has the discretion to determine designations, rights, preferences, privileges and restrictions, including
voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock,
all to the fullest extent permissible under the Delaware General Corporation Law and subject to any limitations set forth in our certificate
of incorporation. The purpose of authorizing the board of directors to issue preferred stock and to determine the rights and preferences
applicable to such preferred stock is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred
stock, while providing desirable flexibility in connection with possible financings, acquisitions and other corporate purposes, could
have the effect of making it more difficult for a third-party to acquire, or could discourage a third-party from acquiring, a majority
of our outstanding voting stock.
Choice
of Forum
Unless
we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and
exclusive forum for any stockholder to bring (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action
asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of the Company or the Company’s stockholders,
(iii) any action asserting a claim against the Company or any director or officer of the Company arising pursuant to, or a claim against
the Company or any director or officer of the Company, with respect to the interpretation or application of any provision of the DGCL,
our certificate of incorporation or bylaws, or (iv) any action asserting a claim governed by the internal affairs doctrine, except for,
in each of the aforementioned actions, any claims to which the Court of Chancery of the State of Delaware determines it lacks jurisdiction.
This provision will not apply to claims arising under the Exchange Act, or for any other federal securities laws which provide for exclusive
federal jurisdiction. However, the exclusive forum provision provides that unless we consent in writing to the selection of an alternative
forum, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting
a cause of action arising under the Securities Act. Therefore, this provision could apply to a suit that falls within one or more of
the categories enumerated in the exclusive forum provision and that asserts claims under the Securities Act, inasmuch as Section 22 of
the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability
created by the Securities Act or the rules and regulations thereunder. There is uncertainty as to whether a court would enforce such
an exclusive forum provision with respect to claims under the Securities Act.
We
note that there is uncertainty as to whether a court would enforce the provision and that investors cannot waive compliance with the
federal securities laws and the rules and regulations thereunder. Although we believe this provision benefits us by providing increased
consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging
lawsuits against our directors and officers.
Transfer
Agent
The
transfer agent of our common stock is Computershare Trust Company, N.A.
DESCRIPTION
OF SECURITIES WE ARE OFFERING
We are offering 1,720,000
shares of our common stock at a combined public offering price of $0.5776 per share and accompanying warrants. We are
also offering pre-funded warrants to purchase up to 5,205,208 shares of common stock to those purchasers whose purchase of shares of our common stock in this offering would result
in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election
of the purchaser, 9.99%) of our outstanding shares of common stock following the consummation of this offering in lieu of the shares
of common stocks that would result in such excess ownership. Each share of our common stock or pre-funded warrant is being sold
together with one Series A warrant to purchase one share of common stock and one Series B warrant to purchase one-half of a share of
common stock. The shares of our common stock and/or pre-funded warrants and related warrants will be issued separately. We are also registering
the shares of our common stock issuable from time to time upon exercise of the pre-funded warrants and warrants offered hereby.
Common
Stock
The
material terms and provisions of our common stock are described under the caption “Description of Capital Stock” in this
prospectus.
Warrants
The
following summary of certain terms and provisions of the Series A warrants and Series B warrants that are being offered hereby is not
complete and is subject to, and qualified in its entirety by, the provisions of warrants, the forms of which are filed as exhibits to
the registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions
of the forms of warrant for a complete description of the terms and conditions of the warrants.
Duration
and Exercise Price
The
Series A warrants will have an exercise price of $0.5776 per share and will be exercisable beginning on the effective date of
the Warrant Stockholder Approval. The Series A warrants will expire on the five year anniversary of the Initial Exercise Date. The Series
B warrants will have an exercise price of $0.5776 per
share and will be exercisable beginning
on the Initial Exercise Date. The Series B warrants will expire on the two year anniversary of the Initial Exercise Date. The exercise
price and number of shares of common stock issuable upon exercise of the warrants is subject to appropriate adjustment in the event of
stock dividends, stock splits, reorganizations or similar events affecting our common stock and the exercise price. The warrants will
be issued separately from the common stock and pre-funded warrants and may be transferred separately immediately thereafter. The warrants
will be issued in certificated form only.
Exercisability
The
warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice
accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless
exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of such holder’s warrants to
the extent that the holder would own more than 4.99% of the outstanding common stock immediately after exercise, except that upon at
least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising
the holder’s warrants up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance with the terms of the warrants.
Cashless
Exercise
If,
at the time a holder exercises its warrants, a registration statement registering the issuance or resale of the shares of common stock
underlying the warrants under the Securities Act is not then effective or available for the issuance of such shares, then in lieu of
making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder
may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according
to a formula set forth in the warrant.
Fundamental
Transactions
In
the event of a fundamental transaction, as described in the warrants and generally including any reorganization, recapitalization or
reclassification of our shares of common stock, the sale, transfer or other disposition of all or substantially all of our
properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of the voting power
represented by our outstanding shares of capital stock, any person or group becoming the beneficial owner of more than 50% of the
voting power represented by our outstanding shares of capital stock, any merger with or into another entity or a tender offer or
exchange offer approved by more than 50% of the voting power represented by our outstanding shares of capital, then upon any
subsequent exercise of a warrant, the holder will have the right to receive as alternative consideration, for each share of our
common stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction,
the number of shares of common stock of the successor or acquiring corporation or of our company, if it is the surviving
corporation, and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares
of our common stock for which the warrant is exercisable immediately prior to such event. Notwithstanding the foregoing, in the
event of a fundamental transaction, the holders of the warrants have the right to require us or a successor entity to redeem the
warrants for cash in the amount of the Black-Scholes Value (as defined in each warrant) of the unexercised portion of the warrants
concurrently with or within 30 days following the consummation of a fundamental transaction.
However,
in the event of a fundamental transaction which is not in our control, including a fundamental transaction not approved by our board
of directors, the holders of the warrants will only be entitled to receive from us or our successor entity, as of the date of consummation
of such fundamental transaction the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the
unexercised portion of the warrant that is being offered and paid to the holders of our common stock in connection with the fundamental
transaction, whether that consideration is in the form of cash, stock or any combination of cash and stock, or whether the holders of
our common stock are given the choice to receive alternative forms of consideration in connection with the fundamental transaction.
Transferability
Subject
to applicable laws, a warrant may be transferred at the option of the holder upon surrender of the warrant to us together with the appropriate
instruments of transfer.
Fractional
Shares
No
fractional shares of common stock will be issued upon the exercise of the warrants. Rather, the number of shares of common stock to be
issued will, at our election, either be rounded up to the next whole share or we will pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the exercise price.
Trading
Market
There
is no established trading market for the warrants, and we do not expect such a market to develop. We do not intend to apply to list the
warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of
the warrants will be extremely limited.
Right
as a Stockholder
Except
as otherwise provided in the warrants or by virtue of the holder’s ownership of shares of our common stock, such holder of warrants
does not have the rights or privileges of a holder of our common stock, including any voting rights, until such holder exercises such
holder’s warrants. The warrants will provide that the holders of the warrants have the right to participate in distributions or
dividends paid on our shares of common stock.
Waivers
and Amendments
The
warrants may be modified or amended or the provisions of such warrants waived with our consent and the consent of the holders of at least
a majority of the outstanding warrants.
Pre-funded
Warrants
The
following summary of certain terms and provisions of the pre-funded warrants that are being offered hereby is not complete and is subject
to, and qualified in its entirety by, the provisions of the pre-funded warrant, the form of which will be filed as an exhibit to the
registration statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions
of the form of pre-funded warrant for a complete description of the terms and conditions of the pre-funded warrants.
Duration
and Exercise Price
Each
pre-funded warrant offered hereby will have an initial exercise price per share of common stock equal to $0.0001. The pre-funded warrants
will be immediately exercisable and will expire when exercised in full. The exercise price and number of shares of common stock issuable
upon exercise is subject to appropriate adjustment in the event of share dividends, share splits, reorganizations or similar events affecting
our shares of common stock and the exercise price.
Exercisability
The
pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of common stock purchased upon such exercise (except in the case of a
cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of the pre-funded warrant
to the extent that the holder would own more than 4.99% of the outstanding shares of common stock immediately after exercise, except
that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of beneficial ownership of outstanding
shares after exercising the holder’s pre-funded warrants up to 9.99% of the number of our shares of common stock outstanding immediately
after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the pre-funded warrants.
Purchasers of pre-funded warrants in this offering may also elect prior to the issuance of the pre-funded warrants to have the initial
exercise limitation set at 9.99% of our outstanding shares of common stock.
Cashless
Exercise
In
lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price,
the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined
according to a formula set forth in the pre-funded warrants.
Fractional
Shares
No
fractional shares of common stock will be issued upon the exercise of the pre-funded warrants. Rather, at the Company’s election,
the number of shares of common stock to be issued will be rounded up to the next whole share or the Company will pay a cash adjustment
in an amount equal to such fraction multiplied by the exercise price.
Transferability
Subject
to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrants to
us together with the appropriate instruments of transfer.
Trading
Market
There
is no established trading market for the warrants, and we do not expect such a market to develop. We do not intend to apply to list the
pre-funded warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity
of the pre-funded warrants will be extremely limited.
Right
as a Shareholder
Except
as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of shares of common stock, the holders
of the pre-funded warrants do not have the rights or privileges of holders of our shares of common stock, including any voting rights,
until they exercise their pre-funded warrants. The pre-funded warrants will provide that the holders of the pre-funded warrants have
the right to participate in distributions or dividends paid on our shares of common stock.
Fundamental
Transaction
In the event of a fundamental transaction, as described in the pre-funded
warrants and generally including any reorganization, recapitalization or reclassification of our shares of common stock, the sale, transfer
or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person,
the acquisition of more than 50% of the voting power represented by our outstanding shares of capital stock, any person or group becoming
the beneficial owner of more than 50% of the voting power represented by our outstanding shares of capital stock, any merger with or into
another entity or a tender offer or exchange offer approved by more than 50% of the voting power represented by our outstanding shares
of capital, then upon any subsequent exercise of a pre-funded warrant, the holder will have the right to receive as alternative consideration,
for each share of our common stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental
transaction, the number of shares of common stock of the successor or acquiring corporation or of our company, if it is the surviving
corporation, and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of
our common stock for which the pre-funded warrant is exercisable immediately prior to such event.
Placement Agent Warrants
We
have also agreed to issue to the placement agent (or its designees) placement agent warrants to purchase up to 346,260 shares
of common stock. The placement agent warrants will be exercisable immediately and will have substantially the same terms as the warrants
described above, except that the placement agent warrants will have an exercise price of $0.722
per share (representing 125% of the offering price per share and accompanying warrants) and a termination date that will be five
years from the commencement of the sales pursuant to this offering. See “Plan of Distribution” below.
PLAN
OF DISTRIBUTION
Pursuant
to an engagement agreement, dated August 27, 2023, we have engaged H.C. Wainwright & Co., LLC, or the placement agent,
to act as our exclusive placement agent to solicit offers to purchase the securities offered pursuant to this prospectus on a reasonable
best efforts basis. The engagement agreement does not give rise to any commitment by the placement agent to purchase any of our securities,
and the placement agent will have no authority to bind us by virtue of the engagement agreement. The placement agent is not purchasing
or selling any of the securities offered by us under this prospectus, nor is it required to arrange for the purchase or sale of any specific
number or dollar amount of securities. This is a best efforts offering and there is no minimum offering amount required as a condition
to the closing of this offering. The placement agent has agreed to use reasonable best efforts to arrange for the sale of the securities
by us. Therefore, we may not sell all of the shares of common stock, pre-funded warrants and warrants being offered. The terms of this
offering are subject to market conditions and negotiations between us, the placement agent and prospective investors. The placement agent
does not guarantee that it will be able to raise new capital in any prospective offering. The placement agent may engage sub-agents or
selected dealers to assist with the offering.
Investors
purchasing securities offered hereby will have the option to execute a securities purchase agreement with us. In addition to rights and
remedies available to all purchasers in this offering under federal securities and state law, the purchasers which enter into a securities
purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue a claim for breach of contract
is material to larger purchasers in this offering as a means to enforce the following covenants uniquely available to them under the
securities purchase agreement: (i) a covenant to not enter into variable rate financings for a period of one year following the closing
of the offering, subject to certain exceptions; and (ii) a covenant to not enter into any equity financings 60 for days from closing
of the offering, subject to certain exceptions. The nature of the representations, warranties and covenants in the securities purchase
agreements shall include:
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issuer representations and warranties on matters such as organization, qualification, authorization,
no conflict, no governmental filings required, current in SEC filings, no litigation, labor
or other compliance issues, environmental, intellectual property and title matters and compliance
with various laws such as the Foreign Corrupt Practices Act; and |
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regarding matters such as registration of warrant shares, no integration with other offerings,
no stockholder rights plans, no material nonpublic information, use of proceeds, indemnification
of purchasers, reservation and listing of shares of common stock, and no subsequent equity
sales for 60 days. |
We
will deliver the securities being issued to the investors upon receipt of investor funds for the purchase of the securities offered pursuant
to this prospectus. We expect to deliver the securities being offered pursuant to this prospectus on or about September 13, 2023. There is
no minimum number of securities or amount of proceeds that is a condition to closing of this offering.
Fees
and Expenses
We
have agreed to pay the placement agent a total cash fee equal to 7.0% of the aggregate gross proceeds raised in the offering. We will
reimburse the placement agent a nonaccountable expense allowance of $50,000, its legal fees and expenses in an amount up to $100,000
and its clearing expense in an amount up to $15,950 in connection with this offering. We estimate the total offering
expenses of this offering that will be payable by us, excluding the placement agent fees and expenses, will be approximately
$212,000.
Placement
Agent Warrants
In
addition, we have agreed to issue to the placement agent or its designees warrants, or the placement agent warrants, to purchase up to
5% of the aggregate number of shares of common stock sold in this offering (including shares underlying any pre-funded warrants), at
an exercise price equal to 125 % of the public offering price per share and accompanying warrants to be sold in this offering. The placement
agent warrants will be exercisable upon issuance and will expire five years from the commencement of sales under this offering.
If
at the time of exercise there is no effective registration statement registering, or the prospectus contained therein is not available
for the resale of warrant shares by the holders of the placement agent warrants, then the placement agent warrants may be exercised,
in whole or in part, at such time by means of a “cashless exercise” in which the holders shall be entitled to receive a number
of warrant shares as calculated in the placement agent warrants.
The
placement agent warrants provide for customary anti-dilution provisions (for share dividends, splits and recapitalizations and the like)
consistent with FINRA Rule 5110.
Tail
In
the event that any investors that were contacted by the placement agent or were introduced to the Company by the placement agent during
the term of our engagement agreement with the placement agent provide any capital to us in a public or private offering or capital-raising
transaction within 12 months following the termination or expiration of our engagement agreement with the placement agent, we shall pay
the placement agent the cash and warrant compensation provided above on the gross proceeds from such investors. The placement agent will
only be entitled to such fee to the extent that the parties are directly introduced to us by the placement agent, in accordance with
FINRA Rule 2010.
Right
of First Refusal
Subject to consummation
of the offering, we have granted a right of first refusal to the placement agent pursuant to which it has the right to act as the sole
book-running manager, underwriter or placement agent, as applicable, if we decide to raise capital through a public offering (including
an at-the-market facility) or private placement or any other capital-raising financing of equity, equity-linked or debt securities pursuant
to which we engage an investment bank or broker/dealer at any time prior to the twelve (12) months following the consummation of this
offering.
Lock-Up
Agreements
Our
officers and directors have agreed with the placement agent to be subject to a lock-up period of 90 days following the closing of this
offering. This means that, during the applicable lock-up period, such persons may not offer for sale, contract to sell, sell, distribute,
grant any option, right or warrant to purchase, pledge, hypothecate or otherwise dispose of, directly or indirectly, any shares of our
common stock or any securities convertible into, or exercisable or exchangeable for, shares of our common stock. Certain limited transfers
are permitted during the lock-up period if the transferee agrees to these lock-up restrictions. We have also agreed to similar lock-up
restrictions on the issuance and sale of our securities for 60 days following the closing of this offering, subject to certain exceptions.
The placement agent may, in its sole discretion and without notice, waive the terms of any of these lock-up agreements.
In
addition, subject to certain exceptions, we have agreed to not issue any securities that are subject to a price reset based on the trading
prices of our common stock or upon a specified or contingent event in the future, or enter into any agreement to issue securities at
a future determined price for a period of one year following the closing date of this offering.
Indemnification
We
have agreed to indemnify the placement agent against certain liabilities, including certain liabilities under the Securities
Act, or to contribute to payments that the placement agent may be required to make in respect of those liabilities.
In
addition, we will indemnify the purchasers of securities in this offering against liabilities arising out of or relating to (i) any breach
of any of the representations, warranties, covenants or agreements made by us in the securities purchase agreement or related documents
or (ii) any action instituted against a purchaser by a third party (other than a third party who is affiliated with such purchaser) with
respect to the securities purchase agreement or related documents and the transactions contemplated thereby, subject to certain exceptions
Regulation
M Compliance
The
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any fees received
by it and any profit realized on the sale of our securities offered hereby by it while acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. The placement agent will be required to comply with the requirements of the Securities
Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations
may limit the timing of purchases and sales of our securities by the placement agent. Under these rules and regulations, the placement
agent may not (i) engage in any stabilization activity in connection with our securities; and (ii) bid for or purchase any of our securities
or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until they have completed
their participation in the distribution.
Other
Relationships
The
placement agent and its affiliates have engaged, and may in the future engage, in investment banking transactions and other commercial
dealings in the ordinary course of business with us or our affiliates. The placement agent has received, or may in the future receive,
customary fees and commissions for these transactions.
In
addition, in the ordinary course of their business
activities, the placement agent and its affiliates may make or hold a broad array of investments and actively trade debt and equity
securities (or related derivative securities) for their own account and for the accounts of their customers. Such investments
and securities activities may involve securities and/or instruments of ours or our affiliates. The placement agent and its affiliates
may also make investment recommendations and/or publish or express independent research views in respect of such securities or
financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities
and instruments.
The
placement agent serves as the placement agent pursuant to our at-the-market offering. In connection with the ATM Agreement, the placement
agent is entitled to a commission of 3.0% of the gross proceeds from each sale of shares of our common stock pursuant to such agreement.
In connection with entering into the ATM Agreement, we reimbursed the placement agent $50,000 for its expenses. In addition, we agreed
to reimburse the placement agent up to $2,500 per due diligence update session for expenses of its counsel and any incidental expenses.
Electronic
Distribution
A
prospectus in electronic format may be made available on a website maintained by the placement agent and the placement agent may distribute
prospectuses electronically. Other than the prospectus in electronic format, the information on these websites is not part of this prospectus
or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the placement agent
and should not be relied upon by investors.
Transfer
Agent
The
transfer agent and registrar for our common stock is Computershare Trust Company, N.A.
Nasdaq
listing
Our
shares of common stock are listed on Nasdaq under the symbol “CING.”
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will be passed upon for us by Lowenstein Sandler LLP, New York, New York. Ellenoff
Grossman & Schole LLP, New York, New York, is counsel for the placement agent in connection with this offering.
EXPERTS
Our
consolidated financial statements as of December 31, 2022 and 2021, and for each of the years in the two-year period ended December 31,
2022, have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The audit report covering
the December 31, 2022 and 2021 consolidated financial statements contains an explanatory paragraph that states that our recurring losses
from operations and net capital deficiency raise substantial doubt about the entity’s ability to continue as a going concern. The
consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
following documents filed with the SEC are incorporated by reference into this prospectus:
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our
Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 10, 2023; |
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our
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 and June 30, 2023, filed on May 10,
2023 and August 14, 2023, respectively; |
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our
Current Reports on Form 8-K, filed on January
3, 2023, January
9, 2023, March
13, 2023, April
25, 2023, May
3, 2023, May
5, 2023, May
10, 2023, May
19, 2023, June
8, 2023, June
16, 2023, June
29, 2023, July
11, 2023, August
1, 2023, August
14, 2023 and September 11, 2023 (other than any portions thereof deemed furnished and not filed); |
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our
Definitive Proxy Statement on Schedule 14A, filed on May 5, 2023 (other than any portions thereof deemed furnished and not filed);
and |
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the
description of our common stock contained in our Registration Statement on Form 8-A, filed with the SEC on December 3, 2021, including
any amendments thereto or reports filed for the purposes of updating this description, including Exhibit 4.5 to our Annual Report
on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 28, 2022. |
We
also incorporate by reference all documents we file pursuant to Section 13(a), 13(c), 14 or 15 of the Exchange Act (other than any portions
of filings that are furnished rather than filed pursuant to Items 2.02 and 7.01 of a Current Report on Form 8-K) after the date of the
initial registration statement of which this prospectus is a part and prior to effectiveness of such registration statement. All documents
we file in the future pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to
the termination of the offering are also incorporated by reference and are an important part of this prospectus.
Any
statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this registration statement to the extent that a statement contained herein or in any other subsequently filed document
which also is or deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part of this registration statement.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus is part of a registration statement we filed with the SEC. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities
we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the
registration statement. You should rely only on the information contained in this prospectus or incorporated by reference into this prospectus.
We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any jurisdiction
where the offer is not permitted. You should assume that the information contained in this prospectus, or any document incorporated by
reference in this prospectus, is accurate only as of the date of those respective documents, regardless of the time of delivery of this
prospectus or any sale of our securities.
We
are subject to the informational requirements of the Exchange Act and in accordance therewith we file annual, quarterly, and other reports,
proxy statements and other information with the Commission under the Exchange Act. Such reports, proxy statements and other information,
including the Registration Statement, and exhibits and schedules thereto, are available to the public through the Commission’s
website at www.sec.gov.
We
make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended, as soon as reasonably practicable after we electronically file such material with or otherwise furnish it to the Commission.
The registration statement and the documents referred to under “Incorporation of Certain Information by Reference”
are also available on our website cingulate.com.
We
have not incorporated by reference into this prospectus the information on our website, and you should not consider it to be a part of
this prospectus.
1,720,000 Shares of Common Stock
6,925,208 Series A Warrants to Purchase
up to 6,925,208 Shares of Common Stock
3,462,604 Series B Warrants to Purchase
up to 3,462,604 Shares of Common Stock
5,205,208 Pre-Funded Warrants to
Purchase up to 5,205,208 Shares of Common Stock
15,593,020 Shares of Common
Stock Underlying the Series A Warrants, Series B Warrants and Pre-Funded Warrants
346,260
Placement Agent Warrants to Purchase up to
346,260 Shares of Common Stock
346,260 Shares of Common Stock Underlying
the Placement Agent Warrants
![](https://www.sec.gov/Archives/edgar/data/1862150/000149315223032349/form424b4_001.jpg)
H.C.
Wainwright & Co
PROSPECTUS
September 11,
2023
Cingulate (NASDAQ:CING)
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