Cingulate Inc

This proposal asks shareholders to approve, for purposes of Nasdaq Listing Rule 5635(b), the issuance of common stock upon conversion of the newly issued Series A Convertible Preferred Stock and/or upon exercise of warrants issued in the January 27, 2026 private placement. Management is seeking approval because the conversion and exercise would otherwise be restricted under Nasdaq rules (and by the Purchase Agreement) until shareholder consent is obtained; without approval the Preferred Stock will remain outstanding and the warrants will not be exercisable. The private placement provided the Company with approximately $12.0 million of gross proceeds and included participation by the Lead Investor and certain affiliates and insiders, and the conversion/exercise would enable receipt of potential additional proceeds (approximately $9.4 million if warrants are exercised), improve liquidity, and eliminate the Preferred Stock’s dividend and liquidation preference upon conversion. The Purchase Agreement also grants the Lead Investor certain director designation rights and includes lock-up, standstill, and beneficial ownership limits, which could affect governance and control dynamics if the securities are converted or exercised; Falcon Creek Purchasers would hold significant ownership on an as-converted basis and obtain continued director designation rights, increasing their influence. Management emphasizes that approval is necessary to avoid repeated special meetings (held quarterly until approval), additional costs and management distraction, and increasing accrued dividends on the Preferred Stock that compound dilution over time. If approved, conversion occurs automatically without further action and holders may exercise warrants beginning on the effective date of approval; if not approved, the Preferred Stock remains outstanding with a 12% cumulative dividend and liquidation preference that could materially affect common stockholders in a liquidation scenario. The Board recommends FOR approval, arguing the capital and elimination of junior rights for the Preferred Stock upon conversion outweigh the dilution and governance transfer implications, while also highlighting the company’s intention to use proceeds for working capital and general corporate purposes. The proposal therefore balances near-term financing benefits against potential dilution and committee/board composition changes, and shareholders should weigh the value of immediate capital and registration obligations against the increased representation and economic stake of the Lead Investor and affiliated purchasers.

This management proposal asks shareholders to authorize the Board to adjourn the Special Meeting to a later date or dates if there are insufficient votes to approve the Issuance Proposal, so the Company can solicit additional proxies. The adjournment mechanism is a common procedural backstop that permits the company to reconvene and try to obtain the requisite shareholder approval without having to seek emergency or alternative remedies; approval requires a majority of votes cast. Management frames the adjournment as necessary only if the Issuance Proposal lacks sufficient support and notes that notice will be provided if any adjournment exceeds thirty days. The Board’s recommendation to vote FOR the Adjournment Proposal is pragmatic: without the ability to adjourn, the Company could be forced to call repeated meetings or face prolonged uncertainty and increased costs if insufficient votes are received. The adjournment does not itself change corporate rights or terms of the transaction; rather it facilitates completing the shareholder approval process for the Issuance Proposal, which is the substantive matter. From a governance perspective, investors should view the adjournment vote as enabling management to pursue the previously disclosed financing and conversion/exercise approvals rather than as an independent substantive transfer of rights. The potential for repeated special meetings and compounded dividends on the Preferred Stock (if Issuance is not approved) strengthens management’s argument for approving adjournment to avoid further shareholder dilution and distraction. Overall, the adjournment proposal is procedural, carries limited intrinsic economic consequence on its own, and is recommended by the Board solely to allow orderly completion of the proxy solicitation for the Issuance Proposal.