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Morning Market Movers: FGI, AIHS, CNFR, WBTN See Big Swings
RTTNews· 2025-09-16 11:36
Core Viewpoint - Premarket trading is showing notable activity with significant price movements indicating potential investment opportunities before the market opens [1] Premarket Gainers - FGI Industries Ltd. (FGI) is up 278% at $15.02 [3] - Senmiao Technology Limited (AIHS) is up 96% at $4.22 [3] - Conifer Holdings, Inc. (CNFR) is up 86% at $2.11 [3] - WEBTOON Entertainment Inc. (WBTN) is up 39% at $20.81 [3] - Nukkleus Inc. (NUKK) is up 18% at $6.08 [3] - Tantech Holdings Ltd (TANH) is up 12% at $2.13 [3] - Check-Cap Ltd. (CHEK) is up 9% at $2.33 [3] - Ivanhoe Electric Inc. (IE) is up 8% at $9.71 [3] - Wolfspeed, Inc. (WOLF) is up 8% at $3.21 [3] - Bolt Projects Holdings, Inc. (BSLK) is up 5% at $3.95 [3] Premarket Losers - Envirotech Vehicles, Inc. (EVTV) is down 17% at $2.27 [4] - Dave & Buster's Entertainment, Inc. (PLAY) is down 15% at $20.40 [4] - NanoVibronix, Inc. (NAOV) is down 12% at $9.37 [4] - ADTRAN Holdings, Inc. (ADTN) is down 10% at $9.37 [4] - Rain Enhancement Technologies Holdco, Inc. (RAIN) is down 10% at $6.00 [4] - CNS Pharmaceuticals, Inc. (CNSP) is down 7% at $8.50 [4] - AVITA Medical, Inc. (RCEL) is down 7% at $6.22 [4] - Vince Holding Corp. (VNCE) is down 7% at $2.60 [4] - Monte Rosa Therapeutics, Inc. (GLUE) is down 6% at $6.50 [4] - Meiwu Technology Company Limited (WNW) is down 6% at $2.06 [4]
CNS Pharmaceuticals upgraded to Buy at Maxim on TPI-287 roadmap
Yahoo Finance· 2025-09-13 13:05
Group 1 - Maxim upgraded CNS Pharmaceuticals (CNSP) to Buy from Hold with a price target of $20 [1] - The company is focusing on its oncology asset TPI-287, which is a blood-brain barrier crossing taxane in development for recurrent glioblastoma [1] - CNS Pharma's roadmap for TPI-287, along with a potential path forward with Berubicin and cash runway extending into the second half of 2026, positions the stock for recovery [1]
CNS Pharmaceuticals (NasdaqCM:CNSP) FY Conference Transcript
2025-09-08 12:00
CNS Pharmaceuticals FY Conference Summary Company Overview - CNS Pharmaceuticals specializes in neuro-oncology treatments for primary and metastatic brain cancers, focusing on drugs that effectively cross the blood-brain barrier [2][4] - The company has a strong financial position with over $12 million in cash as of Q2 2025, sufficient to fund operations into the second half of 2026 [2][22] Core Products TPI-287 - TPI-287 is a late-stage, blood-brain barrier-penetrant abiotoxin from the taxane class, designed to treat glioblastoma multiforme (GBM) [3][12] - The drug has shown promising results in clinical trials, with a median overall survival of 13.4 months for second-line GBM patients, compared to 6-8 months for standard treatments [15][16] - TPI-287 has fast-track and orphan designations, and the company plans to initiate a Phase 2 study in the first half of 2026 [14][24] Berubicin - Berubicin is a novel blood-brain barrier-penetrant anthracycline, currently under evaluation after a pivotal study involving 252 patients [17][18] - Although it did not meet its primary endpoint, it is considered clinically relevant as it provides a potential third-line treatment option for GBM patients who have limited options [19][20] - The drug has shown no cardiotoxicity in patients, which could represent a significant breakthrough for the anthracycline class [21][22] Market Opportunity - The primary brain cancer market is valued in the multi-billion dollar range, despite being classified as orphan diseases with approximately 15,000 new GBM cases annually in the U.S. [5][6] - There is a significant unmet need for effective treatments, as current therapies are ineffective in 60% of GBM patients [10][11] - The company also sees potential in the metastatic brain cancer market, particularly for patients with triple-negative breast cancer, which has 45,000 cases of brain metastases annually [6][7] Clinical Development and Strategy - CNS Pharmaceuticals has established a global network of investigators and trial sites, enhancing the efficiency of its clinical trials [8][9] - The company emphasizes the importance of patient concierge services to facilitate participation in studies, recognizing the difficult decisions faced by patients and families [9][10] - The focus on well-understood drug classes (taxanes and anthracyclines) aids in clinician acceptance and regulatory engagement [10][13] Financial Position - CNS Pharmaceuticals has a market cap significantly discounted to its cash reserves, indicating potential undervaluation in the current biotech market [22][23] - The company is led by experienced executives with a history of successful drug development, enhancing confidence in its future prospects [23][24] Conclusion - CNS Pharmaceuticals is positioned to make a significant impact in the neuro-oncology space with its innovative drug candidates, strong financial backing, and strategic clinical development approach, addressing critical unmet needs in the treatment of GBM and metastatic brain cancers [2][24]
CNS Pharmaceuticals(CNSP) - 2025 Q2 - Quarterly Report
2025-08-14 20:02
[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This part provides the unaudited financial statements and management's discussion and analysis of CNS Pharmaceuticals, Inc.'s financial condition and results of operations [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited financial statements for CNS Pharmaceuticals, Inc., including balance sheets, statements of operations, stockholders' equity, and cash flows, along with accompanying notes detailing the company's business, accounting policies, debt, equity activities, commitments, and subsequent events [Balance Sheets](index=3&type=section&id=Balance%20Sheets%20as%20of%20June%2030%2C%202025%20and%20December%2031%2C%202024%20%28unaudited%29) Balance sheet data shows significant increases in cash, total assets, and stockholders' equity, alongside a decrease in total liabilities | Metric | June 30, 2025 | December 31, 2024 | Change (Absolute) | Change (%) | | :-------------------------- | :-------------- | :---------------- | :---------------- | :--------- | | Cash and cash equivalents | $12,129,873 | $6,461,378 | $5,668,495 | 87.73% | | Total current assets | $14,137,820 | $8,658,508 | $5,479,312 | 63.28% | | Total Assets | $14,507,875 | $8,700,943 | $5,806,932 | 66.74% | | Total current liabilities | $1,382,890 | $2,524,332 | $(1,141,442) | -45.22% | | Total Liabilities | $1,382,890 | $2,524,332 | $(1,141,442) | -45.22% | | Total Stockholders' Equity | $13,124,985 | $6,176,611 | $6,948,374 | 112.49% | [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20%28unaudited%29) Statements of operations detail operating expenses, net loss, and loss per share for the three and six months ended June 30, 2025 and 2024 | Operating Expense | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $1,242,340 | $1,411,573 | $2,337,095 | $2,526,015 | | Research and development | $1,167,045 | $1,116,562 | $4,409,950 | $3,546,974 | | Total operating expenses | $2,409,385 | $2,528,135 | $6,747,045 | $6,072,989 | | Net loss | $(2,374,961) | $(2,530,753) | $(6,676,281) | $(6,075,501) | | Loss per share - basic | $(6.42) | $(4,049.20) | $(22.35) | $(13,294.31) | [Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Statements%20of%20Stockholders%27%20Equity%20%28Deficit%29%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20%28unaudited%29) This section outlines changes in stockholders' equity, including common stock, additional paid-in capital, and accumulated deficit | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------- | :---------------- | :-------------- | | Common Stock Shares | 117,796 | 504,413 | | Common Stock Amount | $118 | $504 | | Additional Paid-in Capital | $90,601,197 | $104,225,466 | | Accumulated Deficit | $(84,424,704) | $(91,100,985) | | Total Stockholders' Equity | $6,176,611 | $13,124,985 | - During the six months ended June 30, 2025, the company issued **127,582 shares** of common stock for cash, net, contributing **$9,033,021** to equity, and **27,084 shares** for cash, net, contributing **$4,505,200**[14](index=14&type=chunk) - Stock-based compensation recognized during the six months ended June 30, 2025, totaled **$84,208**[14](index=14&type=chunk) [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202025%20and%202024%20%28unaudited%29) Cash flow statements summarize net cash used in operating activities and provided by financing activities for the six months ended June 30, 2025 and 2024 | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(6,676,281) | $(6,075,501) | | Net cash used in operating activities | $(8,585,167) | $(4,842,450) | | Net cash provided by financing activities | $14,253,662 | $5,785,288 | | Net change in cash and cash equivalents | $5,668,495 | $942,838 | | Cash and cash equivalents, at end of period | $12,129,873 | $1,491,559 | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements%20%28unaudited%29) This section provides detailed explanations and disclosures supporting the financial statements [Note 1 – Nature of Business](index=7&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20Business) CNS Pharmaceuticals, Inc. is a clinical pharmaceutical company focused on developing anti-cancer drug candidates, having undergone multiple reverse stock splits - CNS Pharmaceuticals, Inc. is a clinical pharmaceutical company focused on developing anti-cancer drug candidates[19](index=19&type=chunk) - The company effected a **1-for-50 reverse stock split** on June 4, 2024, and another **1-for-50 reverse stock split** on February 21, 2025[20](index=20&type=chunk)[21](index=21&type=chunk) - A **1-for-12 reverse stock split** was effected on July 22, 2025, reducing authorized common stock from **300,000,000 to 25,000,000 shares** and preferred stock from **5,000,000 to 416,667 shares**[22](index=22&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=7&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) The financial statements are prepared on a going concern basis, but the company's history of negative cash flows and net losses raises substantial doubt about its ability to continue as a going concern without additional equity financing - The company's financial statements are prepared on a going concern basis, but a history of negative cash flows and net losses raises substantial doubt about its ability to continue as a going concern, dependent on obtaining equity financings[24](index=24&type=chunk) - Cash and cash equivalents include highly liquid accounts with original maturities of three months or less. As of June 30, 2025, **$11,879,873** was held in excess of the federally insured limit[25](index=25&type=chunk) - Employee and non-employee share-based compensation is measured at fair value on the grant date and expensed over the service period. The company manages its operations as a single segment[26](index=26&type=chunk)[29](index=29&type=chunk) [Note 3 – Note Payable](index=8&type=section&id=Note%203%20%E2%80%93%20Note%20Payable) The company entered into a short-term note payable on November 18, 2024, for $326,072 at 9.24% interest to finance insurance policies, with a balance of $121,767 as of June 30, 2025 - A short-term note payable of **$326,072** was entered into on November 18, 2024, at **9.24% interest** for insurance financing[30](index=30&type=chunk) - As of June 30, 2025, the note payable balance was **$121,767**, with final payment due October 8, 2025[30](index=30&type=chunk) [Note 4 – Equity](index=8&type=section&id=Note%204%20%E2%80%93%20Equity) The company has authorized 25,000,000 shares of common stock and 416,667 shares of preferred stock, raised approximately $9 million in net proceeds from ATM sales and $4.5 million from a public offering, and engaged in stock-based compensation and warrant activities - Authorized shares: **25,000,000 common stock** (**$0.001 par value**) and **416,667 preferred stock** (**$0.001 par value**)[31](index=31&type=chunk) - Reverse stock splits: **1-for-50** on June 4, 2024; **1-for-50** on February 21, 2025; **1-for-12** on July 22, 2025[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - During the six months ended June 30, 2025, the company sold **127,582 common shares** via an ATM Sales Agreement for approximately **$9 million** net proceeds[35](index=35&type=chunk) - A public offering in May 2025 generated approximately **$5 million gross proceeds** (approx. **$4.5 million net**) from **27,084 common shares**, **302,298 pre-funded warrants**, and **329,381 common warrants**[36](index=36&type=chunk)[37](index=37&type=chunk) | Equity Instrument | Stock-based Compensation (6 months ended June 30, 2025) | Unrecognized Expenses (June 30, 2025) | | :---------------- | :------------------------------------------------------ | :------------------------------------ | | Stock Options | $53,138 | $42,451 | | Restricted Stock Units | $31,070 | $37,205 | | Performance Units | $0 | $0 | | Warrant Activity (6 months ended June 30, 2025) | Number of Warrants | Weighted Average Exercise Price Per Share | | :-------------------------------- | :----------------- | :---------------------------------------- | | Outstanding, December 31, 2024 | 5,032 | $15,781.20 | | Granted | 631,679 | $7.14 |\n| Exercised | (231,964) | $0.01 |\n| Outstanding, June 30, 2025 | 404,747 | $207.34 | [Note 5 – Commitments and Contingencies](index=11&type=section&id=Note%205%20%E2%80%93%20Commitments%20and%20Contingencies) The company has an employment agreement with CEO John Climaco, approved cash bonuses to officers, accrued compensation for a former Scientific Advisory Board member, and an exclusive license agreement with Cortice Biosciences, Inc. for TPI 287 involving potential milestone payments and royalties - CEO John Climaco's annual base salary was set to **$580,000**, retroactive to January 1, 2025[48](index=48&type=chunk) - Cash bonuses totaling **$631,243** were approved for company officers in March 2025[49](index=49&type=chunk) - The Scientific Advisory Board's cash compensation program was terminated on March 14, 2024, but **$177,309** is accrued for Mr. Hsu[50](index=50&type=chunk) - An exclusive license agreement with Cortice Biosciences, Inc. for TPI 287 includes issuing **956 shares** of common stock upon closing (July 29, 2024) and potential milestone payments up to **$100 million** (or equivalent shares) and royalties of **3.0%-7.5%** on sales[51](index=51&type=chunk) [Note 6 – Subsequent Events](index=12&type=section&id=Note%206%20%E2%80%93%20Subsequent%20Events) In July 2025, subsequent to the reporting period, the company received $844 in net cash proceeds from the exercise of 70,333 Pre-Funded Warrants - In July 2025, the company received **$844** in net cash proceeds from the exercise of **70,333 Pre-Funded Warrants**[52](index=52&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=13&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, highlighting its focus on anti-cancer drug development, the status of its drug candidates (TPI 287 and Berubicin), and a detailed comparison of financial performance for the three and six months ended June 30, 2025, versus 2024 [Cautionary Note Regarding Forward-Looking Statements](index=13&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section advises that the report contains forward-looking statements subject to risks and uncertainties, and readers should not place undue reliance on them - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and assumptions, which may cause actual results to differ materially[54](index=54&type=chunk) - Key forward-looking statements include the ability to maintain Nasdaq listing, obtain funding, secure regulatory approval, succeed in clinical trials, protect intellectual property, and attract key personnel[57](index=57&type=chunk)[62](index=62&type=chunk) - Readers are cautioned not to place undue reliance on these statements, and the company is not obligated to update them[58](index=58&type=chunk)[59](index=59&type=chunk) [Overview](index=14&type=section&id=Overview) CNS Pharmaceuticals is a clinical pharmaceutical company focused on developing anti-cancer drug candidates, TPI 287 and Berubicin, relying on third parties for manufacturing and holding intellectual property rights for its drug candidates - CNS Pharmaceuticals is a clinical pharmaceutical company focused on developing anti-cancer drug candidates, TPI 287 and Berubicin, for brain and central nervous system tumors[60](index=60&type=chunk)[61](index=61&type=chunk) - TPI 287, an abeotaxane, has Orphan Drug Designation (ODD) from the FDA, potentially offering **7 years of market exclusivity**. It is designed to cross the blood-brain barrier and has been studied in early-phase clinical trials for various cancers[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - Berubicin, an anthracycline, also has ODD for malignant gliomas. Topline data from its Phase II clinical trial for Glioblastoma Multiforme showed clinically relevant outcomes comparable to Lomustine but did not demonstrate a statistically significant difference in overall survival, prompting evaluation of future paths with the FDA[66](index=66&type=chunk)[67](index=67&type=chunk)[70](index=70&type=chunk) - The company relies on third parties for manufacturing and does not have a sales organization. It holds intellectual property rights for Berubicin through an asset purchase from Reata and a terminated license from HPI, and for TPI 287 through an exclusive license from Cortice Biosciences, Inc.[68](index=68&type=chunk)[69](index=69&type=chunk)[71](index=71&type=chunk) [Results of Operations (Three Months)](index=16&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202024) This section analyzes the company's financial performance for the three months ended June 30, 2025, compared to the same period in 2024, focusing on changes in general and administrative expenses, research and development expenses, and net loss [General and Administrative Expense](index=16&type=section&id=General%20and%20Administrative%20Expense%20%28Three%20Months%29) General and administrative expenses decreased by approximately $170,000 for the three months ended June 30, 2025, compared to the same period in 2024, primarily due to reductions in legal and professional expenses and stock-based compensation, partially offset by increases in compensation and insurance expenses | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :----------------- | :--------------------------- | :--------------------------- | :---------------- | :--------- | | G&A Expense | $1,242,000 | $1,412,000 | $(170,000) | -12.04% | - Decrease driven by: **$36,000** in legal and professional expenses, **$19,000** in travel expenses, and **$195,000** in stock-based compensation[72](index=72&type=chunk) - Offset by increases of: **$51,000** in compensation expense and **$29,000** in insurance expense[72](index=72&type=chunk) [Research and Development Expense](index=16&type=section&id=Research%20and%20Development%20Expense%20%28Three%20Months%29) Research and development expenses increased by approximately $50,000 for the three months ended June 30, 2025, compared to the same period in 2024, mainly attributed to expenditures for preparing a TPI 287 trial, including drug manufacturing, which offset declining costs from the Berubicin trial | Expense Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :----------------- | :--------------------------- | :--------------------------- | :---------------- | :--------- | | R&D Expense | $1,167,000 | $1,117,000 | $50,000 | 4.48% | - Increase primarily due to expenditures for preparing a TPI 287 trial, including drug manufacturing, offsetting declining Berubicin trial costs[73](index=73&type=chunk) [Net Loss](index=17&type=section&id=Net%20Loss%20%28Three%20Months%29) The net loss for the three months ended June 30, 2025, decreased by approximately $156,000 compared to the same period in 2024, primarily due to declining trial costs associated with the Berubicin trial | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :--------- | :--------------------------- | :--------------------------- | :---------------- | :--------- | | Net Loss | $(2,375,000) | $(2,531,000) | $156,000 | -6.16% | - The change in net loss is primarily attributable to declining trial costs on the Berubicin trial[74](index=74&type=chunk) [Results of Operations (Six Months)](index=17&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) This section analyzes the company's financial performance for the six months ended June 30, 2025, compared to the same period in 2024, focusing on changes in general and administrative expenses, research and development expenses, and net loss [General and Administrative Expense](index=17&type=section&id=General%20and%20Administrative%20Expense%20%28Six%20Months%29) General and administrative expenses decreased by approximately $189,000 for the six months ended June 30, 2025, compared to the same period in 2024, mainly driven by lower stock-based compensation and marketing expenses, partially offset by increases in legal and professional fees, travel, and compensation expenses | Expense Category | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :----------------- | :--------------------------- | :--------------------------- | :---------------- | :--------- | | G&A Expense | $2,337,000 | $2,526,000 | $(189,000) | -7.48% | - Decrease attributable to: **$316,000** in stock-based compensation and **$106,000** in marketing and advertising expenses[75](index=75&type=chunk) - Offset by increases of: **$40,000** in legal and professional expenses, **$62,000** in travel expenses, and **$105,000** in compensation expense[75](index=75&type=chunk) [Research and Development Expense](index=17&type=section&id=Research%20and%20Development%20Expense%20%28Six%20Months%29) Research and development expenses increased by approximately $863,000 for the six months ended June 30, 2025, compared to the same period in 2024, primarily due to the timing of trial costs related to the Berubicin trial | Expense Category | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :----------------- | :--------------------------- | :--------------------------- | :---------------- | :--------- | | R&D Expense | $4,410,000 | $3,547,000 | $863,000 | 24.33% | - Increase primarily attributable to the timing of trial costs on the Berubicin trial[76](index=76&type=chunk) [Net Loss](index=17&type=section&id=Net%20Loss%20%28Six%20Months%29) The net loss for the six months ended June 30, 2025, increased by approximately $600,000 compared to the same period in 2024, mainly due to the timing of Berubicin trial costs, partially offset by lower general and administrative expenses | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Absolute) | Change (%) | | :--------- | :--------------------------- | :--------------------------- | :---------------- | :--------- | | Net Loss | $(6,676,000) | $(6,076,000) | $(600,000) | 9.87% | - The change in net loss is primarily attributable to timing of trial costs on the Berubicin trial partially offset by lower G&A expenses[77](index=77&type=chunk) [Liquidity and Capital Resources](index=17&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, funding sources, and future financing needs | Metric | As of June 30, 2025 | | :---------------- | :------------------ | | Cash | $12,130,000 | | Working Capital | $12,755,000 | - The company funds operations primarily from equity sales. During the six months ended June 30, 2025, it sold **127,582 common shares** for approximately **$9 million** net proceeds via an ATM Sales Agreement[78](index=78&type=chunk)[79](index=79&type=chunk) - A public offering in May 2025 generated approximately **$4.5 million** in net proceeds from common stock and warrants[80](index=80&type=chunk) - Management estimates sufficient working capital into the second half of 2026, but significant additional financing will be required for TPI 287's regulatory approval, with no current commitments for such funding[81](index=81&type=chunk)[82](index=82&type=chunk) [Summary of Cash Flows](index=18&type=section&id=Summary%20of%20Cash%20Flows) This section summarizes the company's cash flow activities, distinguishing between operating and financing activities | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(8,585,000) | $(4,842,000) | | Net cash provided by financing activities | $14,254,000 | $5,785,000 | - Operating cash outflows were mainly for clinical trial costs, drug manufacturing, officer compensation, insurance, marketing, and professional fees[83](index=83&type=chunk) - Financing cash inflows were primarily from common stock sales and warrant exercises, offset by note payable repayments[84](index=84&type=chunk) [Off-balance Sheet Arrangements](index=18&type=section&id=Off-balance%20Sheet%20Arrangements) As of June 30, 2025, the company did not have any off-balance sheet arrangements with unconsolidated entities or financial partnerships - As of June 30, 2025, the company had no relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements[85](index=85&type=chunk) [Purchase Commitments](index=18&type=section&id=Purchase%20Commitments) The company has no material commitments for capital expenditures but is obligated to pay certain milestone fees under existing license agreements - The company does not have any material commitments for capital expenditures[86](index=86&type=chunk) - The company is required to pay certain milestone fees to Reata and Cortice as described in the 'Overview' section[86](index=86&type=chunk) [Critical Accounting Policies and Estimates](index=18&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management makes judgments and estimates in preparing financial statements in conformity with U.S. GAAP, but no critical accounting estimates were identified for the period - Management determined there were no critical accounting estimates for the period[87](index=87&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, CNS Pharmaceuticals, Inc. is not required to provide specific quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide information on market risk[88](index=88&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting](index=19&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures%20and%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) As of June 30, 2025, the company's disclosure controls and procedures were deemed ineffective due to material weaknesses, including a lack of segregation of duties, limited access to timely and complete cost information from its Contract Research Organization (CRO), and insufficient formal documentation of its control environment - As of June 30, 2025, disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting[91](index=91&type=chunk) - Material weaknesses include: lack of segregation of duties, limited access to timely and complete cost information from the third-party CRO, and lack of formal documentation of the control environment[91](index=91&type=chunk) - Management is commencing actions to address the lack of formal documentation and working with the CRO to improve data timeliness and completeness, alongside increased analytical analysis[91](index=91&type=chunk) - Despite weaknesses, management believes financial statements fairly present the company's condition. Future plans include hiring experienced personnel and upgrading accounting systems when economically feasible[92](index=92&type=chunk) [PART II - OTHER INFORMATION](index=20&type=section&id=PART%20II%20OTHER%20INFORMATION) This part includes legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, other information, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=20&type=section&id=Item%201.%20Legal%20Proceedings) CNS Pharmaceuticals, Inc. is not currently involved in any legal proceedings, though it acknowledges that litigation can be time-consuming and costly - The company is not currently involved in any legal proceedings[97](index=97&type=chunk) [ITEM 1A. RISK FACTORS](index=20&type=section&id=Item%201A.%20Risk%20Factors) This section incorporates by reference the risk factors from the company's 2024 Annual Report on Form 10-K and specifically highlights ongoing risks related to maintaining compliance with Nasdaq Capital Market listing requirements, particularly concerning the Minimum Bid Price and Stockholders' Equity - The company incorporates risk factors from its 2024 Annual Report on Form 10-K[98](index=98&type=chunk) - The company has previously been non-compliant with Nasdaq's Minimum Bid Price Requirement (**$1.00 per share**) and the minimum **$2,500,000 Stockholders' Equity Requirement**, but is currently in compliance[99](index=99&type=chunk)[100](index=100&type=chunk) - The company is subject to a Mandatory Panel Monitor until September 10, 2025, for the Equity Requirement and until March 31, 2026, for the Minimum Bid Price Requirement. Future non-compliance during these periods would not allow for a plan of compliance or additional time to regain compliance, potentially leading to delisting[101](index=101&type=chunk)[102](index=102&type=chunk) - Delisting from Nasdaq would adversely affect the company's ability to raise financing, investors' ability to trade securities, and the value and liquidity of common stock[103](index=103&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=21&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) CNS Pharmaceuticals, Inc. did not issue any unregistered equity securities during the quarter ended June 30, 2025 - No unregistered securities were issued during the quarter ended June 30, 2025[104](index=104&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=21&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - There were no defaults upon senior securities[105](index=105&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=21&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to CNS Pharmaceuticals, Inc - This item is not applicable[106](index=106&type=chunk) [ITEM 5. OTHER INFORMATION](index=21&type=section&id=Item%205.%20Other%20Information) During the reporting period, none of the company's directors or executive officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - None of the company's directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[107](index=107&type=chunk) [ITEM 6. EXHIBITS](index=22&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including certificates of change, warrant forms, securities purchase agreements, placement agent agreements, and certifications from principal officers - The report includes various exhibits such as Certificate of Change, forms of Series F Common Warrant and Pre-Funded Warrant, Securities Purchase Agreement, Placement Agent Agreement, and certifications from the Principal Executive Officer and Principal Financial Officer[109](index=109&type=chunk) [SIGNATURES](index=23&type=section&id=Signatures) The report is duly signed on behalf of CNS Pharmaceuticals, Inc. by its Chief Executive Officer and Director, John Climaco, and its Chief Financial Officer, Christopher Downs, both dated August 14, 2025 - The report is signed by John Climaco, Chief Executive Officer and Director, and Christopher Downs, Chief Financial Officer, on August 14, 2025[112](index=112&type=chunk)
CNS Pharmaceuticals(CNSP) - 2025 Q1 - Quarterly Report
2025-05-15 21:00
PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents CNS Pharmaceuticals' unaudited financial statements, detailing financial position, performance, and cash flows for Q1 2025 [Balance Sheets](index=3&type=section&id=Balance%20Sheets) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $13,047,592 | $6,461,378 | | Total current assets | $13,722,026 | $8,658,508 | | Total Assets | $13,749,315 | $8,700,943 | | Total current liabilities | $2,779,193 | $2,524,332 | | Total Liabilities | $2,779,193 | $2,524,332 | | Total Stockholders' Equity (Deficit) | $10,970,122 | $6,176,611 | - The company's cash and cash equivalents significantly increased from **$6.46 million** at December 31, 2024, to **$13.05 million** at March 31, 2025, representing a **102% increase**[7](index=7&type=chunk) - Total assets grew by approximately **58%** from **$8.70 million** to **$13.75 million**, while total stockholders' equity increased by approximately **78%** from **$6.18 million** to **$10.97 million** over the three-month period[7](index=7&type=chunk) [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) | Operating Expense | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------ | :-------------------------------- | :-------------------------------- | | General and administrative | $1,094,755 | $1,114,442 | | Research and development | $3,242,905 | $2,430,412 | | Total operating expenses | $4,337,660 | $3,544,854 | | Net loss | $(4,301,320) | $(3,544,748) | | Loss per share - basic | $(1.58) | $(1,020.48) | | Loss per share - diluted | $(1.58) | $(1,020.48) | - Net loss increased by approximately **21.3%** from **$(3.54 million)** in Q1 2024 to **$(4.30 million)** in Q1 2025[9](index=9&type=chunk) - Research and development expenses increased by approximately **33.4%** year-over-year, from **$2.43 million** to **$3.24 million**, primarily due to costs associated with data clean-up, preparation, and analysis for the Berubicin trial's topline primary data release[9](index=9&type=chunk)[70](index=70&type=chunk) - General and administrative expenses slightly decreased by **1.8%** from **$1.11 million** to **$1.09 million**[9](index=9&type=chunk)[69](index=69&type=chunk) [Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Statements%20of%20Stockholders'%20Equity%20(Deficit)) | Metric | December 31, 2024 | March 31, 2025 | | :-------------------------- | :---------------- | :------------- | | Common Stock Shares | 1,413,556 | 2,944,381 | | Common Stock Amount | $1,414 | $2,945 | | Additional Paid-in Capital | $90,599,901 | $99,693,201 | | Accumulated Deficit | $(84,424,704) | $(88,726,024) | | Total Stockholders' Equity | $6,176,611 | $10,970,122 | - The company issued **1,530,985 shares** of common stock for cash, net, contributing **$9,033,021** to additional paid-in capital during the three months ended March 31, 2025[12](index=12&type=chunk) - Stockholders' equity increased significantly from **$6.18 million** at December 31, 2024, to **$10.97 million** at March 31, 2025, primarily driven by common stock issuances[12](index=12&type=chunk) [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(3,241,907) | $(3,192,057) | | Net cash provided by financing activities | $9,828,121 | $3,458,562 | | Net change in cash and cash equivalents | $6,586,214 | $266,505 | | Cash and cash equivalents, at end of period | $13,047,592 | $815,226 | - Net cash provided by financing activities increased substantially from **$3.46 million** in Q1 2024 to **$9.83 million** in Q1 2025, primarily due to proceeds from equity issuance[15](index=15&type=chunk)[77](index=77&type=chunk) - Cash and cash equivalents at the end of the period surged from **$815,226** in Q1 2024 to **$13.05 million** in Q1 2025[15](index=15&type=chunk) [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations of the company's financial position, performance, and significant accounting policies [Note 1 – Nature of Business](index=7&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20Business) - CNS Pharmaceuticals, Inc. is a clinical pharmaceutical company focused on developing anti-cancer drug candidates, organized in Nevada on July 27, 2017[17](index=17&type=chunk) - The company effected two **1-for-50 reverse stock splits**, one on June 4, 2024, and another on February 21, 2025, with retroactive adjustments made throughout the financial statements[18](index=18&type=chunk)[19](index=19&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=7&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) - The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim information, and should be read in conjunction with the Form 10-K for the period ended December 31, 2024[20](index=20&type=chunk) - The company's continuation as a going concern is dependent on obtaining additional equity financing, as it has a history of negative cash flows and net losses, raising substantial doubt about its ability to continue operations[21](index=21&type=chunk) - As of March 31, 2025, the company held **$12,797,592** in cash balances at financial institutions in excess of the federally insured limit of **$250,000**[22](index=22&type=chunk) - The company manages its operations as a single segment, with the CEO acting as the Chief Operating Decision Maker[26](index=26&type=chunk) [Note 3 – Note Payable](index=8&type=section&id=Note%203%20%E2%80%93%20Note%20Payable) - As of March 31, 2025, the company's note payable balance was **$210,673**, down from **$326,072** at November 18, 2024, for a short-term note bearing **9.24% interest** to finance insurance policies, with final payment due October 8, 2025[27](index=27&type=chunk) [Note 4 – Equity](index=9&type=section&id=Note%204%20%E2%80%93%20Equity) - The company increased its authorized common stock from **75,000,000** to **300,000,000 shares** on May 2, 2024, and completed two **1-for-50 reverse stock splits** effective June 4, 2024, and February 21, 2025[28](index=28&type=chunk)[30](index=30&type=chunk)[32](index=32&type=chunk) - Through the AGP ATM Sales Agreement, the company sold **1,530,985 shares** of common stock for approximately **$9 million** in net proceeds during Q1 2025, bringing total sales under the agreement to **2,522,758 shares** for **$22.8 million** as of March 31, 2025[33](index=33&type=chunk) Stock-based Compensation Expense | Type | Three Months Ended March 31, 2025 | Three Months Ended March 31
CNS Pharmaceuticals(CNSP) - 2024 Q4 - Annual Report
2025-03-31 21:11
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C., 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 OR ☐ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ to ___________________ Commission File Number: 001-39126 CNS Pharmaceuticals, Inc. (Exact Name of Registrant as Specified in its Charter) (St ...
CNS Pharmaceuticals(CNSP) - 2024 Q3 - Quarterly Report
2024-11-14 22:00
```markdown [PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents CNS Pharmaceuticals, Inc.'s unaudited financial statements and notes, detailing financial position, performance, and cash flows [Balance Sheets](index=3&type=section&id=Balance%20Sheets) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :------------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $6,973,124 | $548,721 | | Total current assets | $7,388,098 | $1,591,170 | | Total Assets | $7,409,273 | $1,700,853 | | Total current liabilities | $4,056,929 | $6,132,968 | | Total Stockholders' Equity (Deficit) | $3,352,344 | $(4,432,115) | - The company's cash and cash equivalents increased significantly by over **1170%** from December 31, 2023, to September 30, 2024, primarily due to financing activities. Total stockholders' equity shifted from a deficit to a positive balance[4](index=4&type=chunk) [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) | Metric | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total operating expenses | $5,628,906 | $4,533,840 | $11,701,895 | $13,485,737 | | Loss from operations | $(5,628,906) | $(4,533,840) | $(11,701,895) | $(13,485,737) | | Net loss | $(5,605,934) | $(4,522,795) | $(11,681,435) | $(13,475,976) | | Loss per share - basic | $(0.25) | $(54.14) | $(1.54) | $(202.48) | | Weighted average shares outstanding - basic | 22,180,874 | 83,542 | 7,581,312 | 66,553 | - The net loss for the three months ended September 30, 2024, increased to **$5.6 million** from **$4.5 million** in the prior year. However, the net loss for the nine months ended September 30, 2024, decreased to **$11.7 million** from **$13.5 million** in the prior year, primarily due to reduced R&D expenses[5](index=5&type=chunk) [Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Statements%20of%20Stockholders'%20Equity%20(Deficit)) | Metric | Dec 31, 2023 | Sep 30, 2024 | | :------------------------------------- | :----------- | :----------- | | Common Stock (Amount) | $124 | $33,446 | | Additional Paid-in Capital | $65,134,664 | $84,567,236 | | Accumulated Deficit | $(69,566,903) | $(81,248,338) | | Total Stockholders' Equity (Deficit) | $(4,432,115) | $3,352,344 | - Total Stockholders' Equity (Deficit) improved from a deficit of **$(4,432,115)** at December 31, 2023, to a positive **$3,352,344** at September 30, 2024, largely driven by increases in common stock and additional paid-in capital from equity offerings[7](index=7&type=chunk) [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows) | Metric | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(11,642,440) | $(11,603,678) | | Net cash provided by financing activities | $18,066,843 | $2,459,562 | | Net change in cash and cash equivalents | $6,424,403 | $(9,145,860) | | Cash and cash equivalents, at end of period | $6,973,124 | $909,547 | - Net cash provided by financing activities increased significantly by **635%** to **$18.1 million** for the nine months ended September 30, 2024, compared to **$2.5 million** in the prior year, leading to a positive net change in cash[9](index=9&type=chunk) [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements) [Note 1 – Nature of Business](index=7&type=section&id=Note%201%20–%20Nature%20of%20Business) - CNS Pharmaceuticals, Inc. is a clinical pharmaceutical company focused on developing anti-cancer drug candidates, organized in **July 2017**[11](index=11&type=chunk) - The company effected two reverse stock splits: **1-for-30 on November 28, 2022**, and **1-for-50 on June 4, 2024**, both retroactively adjusted in financial statements[12](index=12&type=chunk)[13](index=13&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=7&type=section&id=Note%202%20–%20Summary%20of%20Significant%20Accounting%20Policies) - Financial statements are unaudited, prepared under U.S. GAAP for interim information, and should be read in conjunction with the Form 10-K for December 31, 2023[14](index=14&type=chunk) - The company's ability to continue as a going concern is dependent on obtaining equity financing due to a history of negative cash flows and net losses; current cash is sufficient only for the near term[15](index=15&type=chunk) - As of September 30, 2024, the company held **$6,723,124** in cash balances at financial institutions in excess of the federally insured limit of **$250,000**[17](index=17&type=chunk) - Stock-based compensation for employees and non-employees is measured at grant date fair value and recognized over the service period, including Restricted Stock Units (RSUs) and Performance Units (PUs)[18](index=18&type=chunk)[19](index=19&type=chunk) - Diluted loss per common share excludes common stock equivalents (warrants, RSUs, PUs, options) in periods of net loss as their inclusion would be anti-dilutive[20](index=20&type=chunk) [Note 3 – Note Payable](index=8&type=section&id=Note%203%20–%20Note%20Payable) - As of September 30, 2024, the company's note payable balance was **$31,187**, related to a short-term note for insurance policies entered into on November 28, 2023, with a final payment due on **October 8, 2024**[21](index=21&type=chunk) [Note 4 – Equity](index=8&type=section&id=Note%204%20–%20Equity) - The company increased its authorized common stock from **75,000,000** to **300,000,000 shares** on **May 2, 2024**[22](index=22&type=chunk) - Multiple equity offerings and private placements of common stock and warrants occurred in 2024, generating significant net proceeds, including **$3.33 million** in February, **$1.20 million** in June, **$1.22 million** in June, and approximately **$10.6 million** from an ATM Sales Agreement by September 30, 2024[29](index=29&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk) - On **July 29, 2024**, the company issued **573,368 shares** of common stock with a fair value of **$596,302** as part of an exclusive license agreement with Cortice Biosciences, Inc. for the compound TPI 287[39](index=39&type=chunk)[41](index=41&type=chunk) Stock Option Activity (9 Months Ended Sep 30, 2024) | Metric | Options | Weighted Average Exercise Price Per Share | | :---------------------------- | :------ | :---------------------------------------- | | Outstanding, Dec 31, 2023 | 6,598 | $1,020.47 | | Granted | 5,579 | $12.92 | | Outstanding, Sep 30, 2024 | 12,177 | $558.85 | | Exercisable, Sep 30, 2024 | 6,863 | $911.11 | - The company recognized **$571,705** in stock-based compensation related to stock options for the nine months ended September 30, 2024, with **$207,444** of unrecognized expenses remaining[46](index=46&type=chunk)[49](index=49&type=chunk) Stock Warrant Activity (9 Months Ended Sep 30, 2024) | Metric | Warrants | Weighted Average Exercise Price Per Share | | :---------------------------- | :------- | :---------------------------------------- | | Outstanding, Dec 31, 2023 | 84,832 | $151.65 | | Granted | 3,144,694 | $2.83 | | Exercised | (253,034) | $13.18 | | Outstanding, Sep 30, 2024 | 2,976,422 | $6.13 | | Exercisable, Sep 30, 2024 | 2,976,422 | $6.13 | - The company recognized **$36,990** in stock-based compensation for Restricted Stock Units (RSUs) and **$100,362** for Performance Units (PUs) during the nine months ended September 30, 2024[55](index=55&type=chunk)[57](index=57&type=chunk) [Note 5 – Commitments and Contingencies](index=14&type=section&id=Note%205%20–%20Commitments%20and%20Contingencies) - Cash bonuses totaling **$240,608** were approved for officers in March 2024, contingent on sufficient financing[63](index=63&type=chunk) - The cash compensation program for the Scientific Advisory Board was terminated on **March 14, 2024**, with **$177,309** accrued for Mr. Hsu's compensation as of September 30, 2024[64](index=64&type=chunk) - The company acquired rights to Berubicin from Reata Pharmaceuticals in **2017** and licensed WP744 from HPI, but provided notice to HPI to terminate the HPI License effective **July 14, 2024**[66](index=66&type=chunk)[67](index=67&type=chunk)[95](index=95&type=chunk) - Berubicin received Orphan Drug Designation (ODD) from the FDA on **June 10, 2020**, for malignant gliomas, potentially enabling **7 years** of market exclusivity, and Fast Track Designation on **July 24, 2021**[71](index=71&type=chunk)[72](index=72&type=chunk)[97](index=97&type=chunk) - The WP1244 License Agreement with UTMDACC was terminated on **May 25, 2024**, due to the company's failure to meet commercial diligence milestones and pay annual maintenance fees[73](index=73&type=chunk)[99](index=99&type=chunk) - The company received a Nasdaq notice on **September 12, 2024**, for non-compliance with the **$1.00 minimum bid price** requirement and was granted a temporary exception until **March 11, 2025**, but is not eligible for a standard compliance period due to prior reverse stock splits[74](index=74&type=chunk)[75](index=75&type=chunk)[134](index=134&type=chunk) - The company regained compliance with Nasdaq's **$2,500,000 stockholders' equity** requirement on **September 10, 2024**, but is subject to a **one-year Mandatory Panel Monitor**, meaning future non-compliance would lead to a delist determination without a cure period[136](index=136&type=chunk) [Note 6 – Subsequent Events](index=17&type=section&id=Note%206%20–%20Subsequent%20Events) - On **October 23, 2024**, the company completed a registered direct offering of common stock and pre-funded warrants, generating approximately **$3.0 million** in gross proceeds[77](index=77&type=chunk) - Subsequent to September 30, 2024, the company sold an additional **6,393,243 shares** through its ATM Sales Agreement for approximately **$1.6 million** in net proceeds[78](index=78&type=chunk) - A total of **13,947,060 pre-funded warrants** were exercised by investors subsequent to September 30, 2024[79](index=79&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operations, Berubicin's clinical progress, liquidity, capital resources, and accounting policies [Overview](index=19&type=section&id=Overview) - CNS Pharmaceuticals is a clinical pharmaceutical company focused on developing anti-cancer drug candidates for brain and central nervous system tumors, with Berubicin as its lead candidate for Glioblastoma[89](index=89&type=chunk)[91](index=91&type=chunk) - Berubicin is currently in a potentially pivotal Phase II clinical trial for Glioblastoma Multiforme, with overall survival (OS) as the primary endpoint, and an independent Data Safety Monitoring Board (DSMB) recommended continuing the study without modification after an interim futility analysis on **December 18, 2023**[92](index=92&type=chunk)[93](index=93&type=chunk) - The company relies on third parties for all manufacturing activities and does not have a sales organization[94](index=94&type=chunk) - The WP1244 Agreement with UTMDACC was terminated on **May 25, 2024**, due to unmet commercial diligence milestones and unpaid fees[99](index=99&type=chunk) [Results of Operations for the Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023](index=21&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030,%202024%20Compared%20to%20the%20Three%20Months%20Ended%20September%2030,%202023) | Metric | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | General and administrative expense | $1,384,000 | $1,123,000 | +$261,000 | | Research and development expense | $4,245,000 | $3,411,000 | +$834,000 | | Net loss | $(5,606,000) | $(4,523,000) | -$1,083,000 | - The increase in general and administrative expense was mainly due to increases in legal and professional expenses (**$269,000**) and stock-based compensation (**$63,000**)[100](index=100&type=chunk) - The increase in research and development expenses was mainly attributed to license expenses related to the Cortice Agreements[101](index=101&type=chunk) [Results of Operations for the Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023](index=22&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20September%2030,%202024%20Compared%20to%20the%20Nine%20Months%20Ended%20September%2030,%202023) | Metric | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :----- | | General and administrative expense | $3,910,000 | $3,662,000 | +$248,000 | | Research and development expense | $7,792,000 | $9,824,000 | -$2,032,000 | | Net loss | $(11,681,000) | $(13,476,000) | +$1,795,000 | - The decrease in research and development expenses was mainly attributed to the timing of Contract Research Organization (CRO) expenses related to the Phase II clinical trial, which are expected to continue to decline[104](index=104&type=chunk) - The net loss decreased by approximately **$1.8 million** year-over-year, primarily due to the reduction in CRO expenses and contract labor[105](index=105&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) - As of September 30, 2024, the company had approximately **$6,973,000** in cash and a working capital of approximately **$3,331,000**[106](index=106&type=chunk) - The company funded its operations through multiple equity sales and warrant exercises, including a public offering in **January 2024** (gross proceeds ~**$4.0M**), registered direct offerings in **June and July 2024** (net proceeds ~**$1.2M each**), and ATM sales (net proceeds ~**$10.6M** by Sep 30, 2024)[107](index=107&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - Subsequent to September 30, 2024, the company completed another registered direct offering (gross proceeds ~**$3.0M**) and additional ATM sales (net proceeds ~**$1.6M**)[112](index=112&type=chunk)[113](index=113&type=chunk) - Current cash on hand is expected to fund operations through the **first quarter of 2025**, with final top-line data for the Berubicin trial expected in the **first half of 2025**. An additional **$4.0 million** would be needed for TPI 287 clinical preparations[114](index=114&type=chunk) [Summary of Cash Flows](index=23&type=section&id=Summary%20of%20Cash%20Flows) | Metric | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :------------------------------------ | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(11,642,000) | $(11,604,000) | | Net cash provided by financing activities | $18,067,000 | $2,460,000 | - Net cash provided by financing activities increased significantly to approximately **$18,067,000** in 2024, primarily from the sale of common stock and exercise of warrants, compared to **$2,460,000** in 2023[115](index=115&type=chunk) [Off-balance Sheet Arrangements](index=24&type=section&id=Off-balance%20Sheet%20Arrangements) - As of September 30, 2024, the company did not have any relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements[117](index=117&type=chunk) [Purchase Commitments](index=24&type=section&id=Purchase%20Commitments) - The company does not have any material commitments for capital expenditures but is required to pay certain milestone fees to Reata and Cortice[118](index=118&type=chunk) [JOBS Act Accounting Election](index=24&type=section&id=JOBS%20Act%20Accounting%20Election) - As an emerging growth company, CNS Pharmaceuticals elected not to opt out of the extended transition period for complying with new or revised financial accounting standards under the JOBS Act[119](index=119&type=chunk) [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Management determined there were no critical accounting estimates for the period[120](index=120&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, CNS Pharmaceuticals, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide information on market risk[121](index=121&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Evaluates disclosure controls and procedures, identifying material weaknesses in internal control over financial reporting, and details corrective actions [Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting](index=24&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures%20and%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - As of September 30, 2024, the company's disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting[125](index=125&type=chunk) - Material weaknesses include a lack of segregation of duties (due to limited personnel), limited access to timely and complete information from the third-party Contract Research Organization (CRO), and a lack of formal documentation of the control environment[125](index=125&type=chunk) - Management is commencing actions to address the lack of formal documentation, working with the CRO to improve data timeliness, and conducting increased analytical analysis. Plans include hiring experienced personnel and upgrading the accounting system when economically feasible[125](index=125&type=chunk)[126](index=126&type=chunk) - Despite the material weaknesses, management believes the financial statements fairly present the company's financial condition, results of operations, and cash flows due to additional analysis and post-closing procedures[126](index=126&type=chunk) [PART II OTHER INFORMATION](index=26&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings, acknowledging the unpredictable and potentially costly nature of litigation - The company is not currently involved in any legal proceedings[130](index=130&type=chunk) - Litigation outcomes are inherently unpredictable and could be time-consuming and costly[129](index=129&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) This section highlights significant risks, primarily the company's ongoing challenge to maintain compliance with Nasdaq listing requirements, specifically the minimum bid price, and the implications of a mandatory panel monitor for its stockholders' equity requirement - The company received a Nasdaq notice on **September 12, 2024**, for non-compliance with the **$1.00 minimum bid price** requirement and was granted a temporary exception until **March 11, 2025**, but is not eligible for a standard compliance period due to prior reverse stock splits[134](index=134&type=chunk) - The company regained compliance with Nasdaq's **$2,500,000 stockholders' equity** requirement on **September 10, 2024**, but is subject to a **one-year Mandatory Panel Monitor**, meaning future non-compliance during this period would lead to a delist determination without a cure period[136](index=136&type=chunk) - Delisting from The Nasdaq Capital Market would adversely affect the company's ability to raise additional financing, impact investors' ability to trade securities, and negatively affect stock value and liquidity[137](index=137&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the quarter ended September 30, 2024, beyond what was previously disclosed - No unregistered securities were issued during the quarter ended September 30, 2024, except as previously disclosed on Form 8-K[138](index=138&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[138](index=138&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Mine Safety Disclosures are not applicable to the company[138](index=138&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) During the reporting period, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by the company's directors or executive officers - None of the company's directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[138](index=138&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed with Form 10-Q, including agreements, warrants, and certifications, often incorporated by reference - The exhibits include forms of common and pre-funded warrants, financial advisory agreements, securities purchase agreements, a sales agreement, and an exclusive license agreement[140](index=140&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer are included, along with Inline XBRL documents for financial data[140](index=140&type=chunk)[141](index=141&type=chunk) - Many exhibits are incorporated by reference to prior Form 8-K filings[140](index=140&type=chunk) [Signatures](index=28&type=section&id=Signatures) The Form 10-Q is signed by the CEO and CFO of CNS Pharmaceuticals, Inc. on November 14, 2024 - The report is signed by John Climaco, Chief Executive Officer, and Christopher Downs, Chief Financial Officer[143](index=143&type=chunk) - The signing date for the report is **November 14, 2024**[143](index=143&type=chunk) ```
CNS Pharmaceuticals(CNSP) - 2024 Q2 - Quarterly Report
2024-08-14 21:22
[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the unaudited interim financial statements, management's discussion, market risk disclosures, and controls and procedures for CNS Pharmaceuticals, Inc [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited interim financial statements, including Balance Sheets, Statements of Operations, Equity, Cash Flows, and comprehensive Notes, for periods ended June 30, 2024, and December 31, 2023 [Balance Sheets](index=4&type=section&id=Balance%20Sheets%20as%20of%20June%2030%2C%202024%20and%20December%2031%2C%202023%20%28unaudited%29) Presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2024, and December 31, 2023 **Balance Sheet Highlights:** | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,491,559 | $548,721 | | Total current assets | $2,145,396 | $1,591,170 | | Total assets | $2,469,269 | $1,700,853 | | Accounts payable and accrued expenses | $6,639,622 | $5,832,162 | | Notes payable | $123,248 | $300,806 | | Total current liabilities | $6,762,870 | $6,132,968 | | Total liabilities | $6,762,870 | $6,132,968 | | Total Stockholders' Equity (Deficit) | $(4,293,601) | $(4,432,115) | [Statements of Operations](index=5&type=section&id=Statements%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202024%20and%202023%20%28unaudited%29) Details the company's revenues, expenses, and net loss for the three and six months ended June 30, 2024, and 2023 **Statements of Operations Highlights:** | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | General and administrative | $1,411,573 | $1,179,833 | $2,526,015 | $2,538,585 | | Research and development | $1,116,562 | $2,845,553 | $3,546,974 | $6,413,312 | | Total operating expenses | $2,528,135 | $4,025,386 | $6,072,989 | $8,951,897 | | Loss from operations | $(2,528,135) | $(4,025,386) | $(6,072,989) | $(8,951,897) | | Net loss | $(2,530,753) | $(4,021,234) | $(6,075,501) | $(8,953,181) | | Loss per share - basic | $(6.72) | $(51.86) | $(22.08) | $(154.70) | | Loss per share - diluted | $(6.72) | $(51.86) | $(22.08) | $(154.70) | | Weighted average shares outstanding - basic | 376,643 | 77,547 | 275,113 | 57,874 | | Weighted average shares outstanding - diluted | 376,643 | 77,547 | 275,113 | 57,874 | [Statements of Stockholders' Equity (Deficit)](index=6&type=section&id=Statements%20of%20Stockholders%27%20Equity%20%28Deficit%29%20for%20the%20six%20months%20ended%20June%2030%2C%202024%20and%202023%20%28unaudited%29) Outlines changes in the company's equity, including common stock, additional paid-in capital, and accumulated deficit, for the six months ended June 30, 2024, and 2023 **Statements of Stockholders' Equity (Deficit) Highlights (Six Months Ended June 30, 2024):** | Item | Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Equity (Deficit) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance December 31, 2023 | 124,306 | $124 | $65,134,664 | $(69,566,903) | $(4,432,115) | | Common stock issued for cash, net | 44,314 | $44 | $3,330,954 | – | $3,330,998 | | Exercise of warrants, net | 44,774 | $45 | $12,360 | – | $12,405 | | Stock-based compensation | – | – | $202,933 | – | $202,933 | | Net loss | – | – | – | $(3,544,748) | $(3,544,748) | | Balance, March 31, 2024 | 213,394 | $213 | $68,680,911 | $(73,111,651) | $(4,430,527) | | Common stock issued for cash and warrants, net | 904,000 | $904 | $2,423,509 | – | $2,424,413 | | Exercise of warrants, net | 208,260 | $208 | $8,713 | – | $8,921 | | Stock-based compensation | – | – | $234,345 | – | $234,345 | | Adjustment related to reverse stock split | 117,620 | $118 | $(118) | – | – | | Net loss | – | – | – | $(2,530,753) | $(2,530,753) | | Balance, June 30, 2024 | 1,443,274 | $1,443 | $71,347,360 | $(75,642,404) | $(4,293,601) | [Statements of Cash Flows](index=7&type=section&id=Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202024%20and%202023%20%28unaudited%29) Reports the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2024, and 2023 **Statements of Cash Flows Highlights:** | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net loss | $(6,075,501) | $(8,953,181) | | Stock-based compensation | $437,278 | $579,983 | | Depreciation | $1,570 | $2,282 | | Prepaid expenses and other current assets (change) | $(13,067) | $823,073 | | Accounts payable and accrued expenses (change) | $807,460 | $(679,516) | | Net cash used in operating activities | $(4,842,450) | $(8,227,359) | | Payments of deferred offering costs | $(16,750) | – | | Payments on notes payable | $(177,558) | $(243,572) | | Proceeds from exercise of warrants | $21,326 | $725,668 | | Proceeds from sale of common stock and warrants, net | $5,958,270 | $1,969,107 | | Net cash provided by financing activities | $5,785,288 | $2,451,203 | | Net change in cash and cash equivalents | $942,838 | $(5,776,156) | | Cash and cash equivalents, at beginning of period | $548,721 | $10,055,407 | | Cash and cash equivalents, at end of period | $1,491,559 | $4,279,251 | | Cash paid for interest | $11,088 | $9,086 | | Cash paid for income taxes | – | – | | Reclassification of deferred offering costs to equity | $202,859 | – | [Notes to the Financial Statements](index=8&type=section&id=Notes%20to%20the%20Financial%20Statements%20%28unaudited%29) Provides detailed explanations of accounting policies, equity changes, commitments, and subsequent events supporting the financial statements [Note 1 – Nature of Business](index=8&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20Business) CNS Pharmaceuticals, Inc. is a clinical pharmaceutical company focused on developing anti-cancer drug candidates. The company underwent two reverse stock splits, one on November 28, 2022 (1-for-30) and another on June 4, 2024 (1-for-50), both retroactively adjusted in the financial statements - The Company is a clinical pharmaceutical company focused on the development of anti-cancer drug candidates[12](index=12&type=chunk) - A **1-for-30 reverse stock split** became effective on November 28, 2022, retroactively adjusted in financial statements[12](index=12&type=chunk) - A **1-for-50 reverse stock split** became effective on June 4, 2024, retroactively adjusted in financial statements[13](index=13&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=8&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's significant accounting policies, including the basis of presentation for unaudited interim financial statements, the going concern assumption, and policies for cash and cash equivalents, stock-based compensation (RSUs and PUs), and loss per common share. The company acknowledges substantial doubt about its ability to continue as a going concern due to historical negative cash flows and net losses, and its reliance on future equity financings [Basis of Presentation](index=8&type=section&id=Basis%20of%20Presentation) Describes the preparation of unaudited interim financial statements in accordance with U.S. GAAP - Unaudited financial statements are prepared in accordance with U.S. GAAP for interim financial information[14](index=14&type=chunk) - Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of the final results for the year ending December 31, 2024[14](index=14&type=chunk) [Liquidity and Going Concern](index=8&type=section&id=Liquidity%20and%20Going%20Concern) Addresses the company's ability to continue operations, highlighting reliance on financing and historical negative cash flows - The Company's continuation as a going concern is dependent upon obtaining equity financings to continue operations[15](index=15&type=chunk) - A history of negative cash flows from operations and net losses raises substantial doubt regarding the Company's ability to continue as a going concern[15](index=15&type=chunk) - Management believes cash on hand is sufficient to fund planned operations into but not beyond the near term[15](index=15&type=chunk) [Cash and Cash Equivalents](index=9&type=section&id=Cash%20and%20Cash%20Equivalents) Defines cash equivalents and notes the portion of cash balances exceeding federally insured limits - Cash equivalents include highly liquid accounts with original maturities of **three months or less**[17](index=17&type=chunk) - As of June 30, 2024, **$1,241,559** in cash balances at financial institutions exceeded the federally insured limit of $250,000[17](index=17&type=chunk) [Stock-based Compensation](index=9&type=section&id=Stock-based%20Compensation) Explains the accounting treatment for employee and non-employee share-based compensation - Employee and non-employee share-based compensation is measured at the grant date fair value and recognized as an expense over the requisite service period[17](index=17&type=chunk) [Restricted Stock Units (RSUs)](index=9&type=section&id=Restricted%20Stock%20Units%20%28%22RSUs%22%29) Details the vesting schedule and fair value measurement for Restricted Stock Units - RSUs vest over **four years** from the date of grant[17](index=17&type=chunk) - The fair value of RSUs is the market price of the common stock at the date of grant[17](index=17&type=chunk) [Performance Units (PUs)](index=9&type=section&id=Performance%20Units%20%28%22PUs%22%29) Describes the vesting conditions for Performance Units, tied to share price targets and clinical data - PUs vest based on performance against predefined share price targets and the achievement of Positive Interim, Clinical Data as defined by the Board[18](index=18&type=chunk) [Loss Per Common Share](index=9&type=section&id=Loss%20Per%20Common%20Share) Explains the calculation of basic and diluted loss per common share and lists potentially dilutive securities - Basic loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding[19](index=19&type=chunk) - Diluted loss per common share excludes common stock equivalents in periods of loss because their inclusion would be anti-dilutive[19](index=19&type=chunk) **Potentially Dilutive Shares (not included in EPS calculation):** | Item | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Warrants to purchase common shares | 1,551,422 | 45,399 | | Unvested restricted stock units | 5,475 | 193 | | Unvested performance units | 577 | 577 | | Options for common shares | 12,177 | 2,591 | [Note 3 – Note Payable](index=9&type=section&id=Note%203%20%E2%80%93%20Note%20Payable) The company entered into a short-term note payable of $329,571 on November 28, 2023, at 9.74% interest, for financing insurance policies. The note is to be repaid over 11 months, with the final payment due October 8, 2024. As of June 30, 2024, the outstanding balance was $123,248 - On November 28, 2023, the Company entered into a short-term note payable for **$329,571**, bearing interest at **9.74%** per year, to finance insurance policies[20](index=20&type=chunk) - The note is to be repaid over an **11-month period**, with the final payment due on October 8, 2024[20](index=20&type=chunk) - As of June 30, 2024, the Company's note payable balance was **$123,248**[20](index=20&type=chunk) [Note 4 – Equity](index=9&type=section&id=Note%204%20%E2%80%93%20Equity) This note details changes in the company's equity structure, including authorized shares, reverse stock splits, and activity related to common stock, stock options, stock warrants, restricted stock units (RSUs), and performance units (PUs). Significant events include an increase in authorized common stock to 300,000,000 shares, a 1-for-50 reverse stock split in June 2024, and various equity offerings and grants of stock-based compensation [Common Stock](index=9&type=section&id=Common%20Stock) Details changes in authorized common stock, reverse stock splits, and proceeds from equity offerings - On May 2, 2024, authorized common stock increased from **75,000,000 shares to 300,000,000 shares**[21](index=21&type=chunk) - A **one-for-fifty (1:50) reverse stock split** became effective on June 4, 2024[25](index=25&type=chunk) - In January 2024, a public offering of common stock and warrants generated net proceeds of **$3,331,000**[26](index=26&type=chunk) - In June 2024, a registered direct offering and private placement generated net proceeds of **$1,203,259**[28](index=28&type=chunk) - In late June 2024, another registered direct offering and private placement generated net proceeds of **$1,221,154**[31](index=31&type=chunk) [Stock Options](index=11&type=section&id=Stock%20Options) Describes amendments to the equity plan, stock-based compensation, and activity related to stock options - The 2020 Equity Plan was amended on April 30, 2024, increasing authorized shares for issuance by **70,000 to a total of 86,916 shares**[25](index=25&type=chunk) - During the six months ended June 30, 2024, the Company recognized **$412,749** of stock-based compensation related to options, with **$366,400** of unrecognized expenses remaining[34](index=34&type=chunk) **Stock Option Activity (Six Months Ended June 30, 2024):** | Metric | Options | Exercise Price Per Share | | :--- | :--- | :--- | | Outstanding, December 31, 2023 | 6,598 | $1,020.47 | | Granted | 5,579 | $12.92 | | Exercised | – | – | | Forfeited | – | – | | Expired | – | – | | Outstanding, June 30, 2024 | 12,177 | $558.85 | | Exercisable, June 30, 2024 | 2,495 | $2,355.92 | [Stock Warrants](index=12&type=section&id=Stock%20Warrants) Outlines amendments to existing warrants, proceeds from exercises, and warrant activity - Existing warrants to purchase **75,120 shares** were amended to reduce the exercise price from **$64.00 to $15.00** and extend the termination date to February 1, 2029[38](index=38&type=chunk) - During the six months ended June 30, 2024, the Company received **$21,326** from the exercise of **253,034 warrants**[38](index=38&type=chunk) **Stock Warrant Activity (Six Months Ended June 30, 2024):** | Metric | Warrants | Weighted-Average Exercise Price Per Share | | :--- | :--- | :--- | | Outstanding, December 31, 2023 | 84,832 | $151.65 | | Granted | 1,719,694 | $8.12 | | Exercised | (253,034) | $13.18 | | Forfeited | – | – | | Expired | (70) | $2,635.71 | | Outstanding, June 30, 2024 | 1,551,422 | $15.03 | | Exercisable, June 30, 2024 | 1,551,422 | $15.03 | [Restricted Stock Units](index=12&type=section&id=Restricted%20Stock%20Units) Reports on RSU grants, recognized compensation expense, and non-vested RSU activity - On April 7, 2024, **5,330 RSUs** were granted to officers, employees, and board members, valued at **$69,027**[39](index=39&type=chunk) - During the six months ended June 30, 2024, **$19,566** of stock-based compensation related to RSUs was recognized, with **$103,123** of unrecognized expenses remaining[39](index=39&type=chunk) **RSU Activity (Six Months Ended June 30, 2024):** | Metric | RSUs | Weighted-Average Grant Date Fair Value | | :--- | :--- | :--- | | Non-vested, December 31, 2023 | 145 | $501.00 | | Granted | 5,330 | $12.97 | | Vested | – | – | | Forfeited | – | – | | Non-vested, June 30, 2024 | 5,475 | $25.89 | [Performance Units](index=13&type=section&id=Performance%20Units) Explains vesting conditions, fair value estimation, and recognized compensation for Performance Units - PUs granted in 2022 vest based on share price targets (**$3,000, $6,000**) and achievement of 'Positive Interim, Clinical Data'[40](index=40&type=chunk) - The fair value of performance units with market conditions is estimated using a Monte Carlo simulation[41](index=41&type=chunk) - During the six months ended June 30, 2024, **$4,963** was recognized related to outstanding PUs, with **$95,399** of unrecognized expenses remaining[41](index=41&type=chunk) **PU Activity (Six Months Ended June 30, 2024):** | Metric | PUs | Weighted-Average Grant Date Fair Value | | :--- | :--- | :--- | | Non-vested, December 31, 2023 | 577 | $296.82 | | Granted | – | – | | Vested | – | – | | Forfeited | – | – | | Non-vested, June 30, 2024 | 577 | $296.82 | [Note 5 – Commitments and Contingencies](index=14&type=section&id=Note%205%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's various contractual commitments and potential liabilities, including executive employment agreements, Scientific Advisory Board compensation, and intellectual property agreements for its drug candidates Berubicin (WP744 Portfolio) and WP1244 Portfolio. It also addresses the company's Nasdaq listing qualifications status [Executive Employment Agreements](index=14&type=section&id=Executive%20Employment%20Agreements) Details CEO employment terms, severance benefits, and approved cash bonuses for officers - CEO John Climaco's employment agreement provides for annual extensions and severance benefits of **twelve months of base salary** upon termination without cause[45](index=45&type=chunk) - Mr. Climaco's 2021 annual base salary was set at **$525,000**[45](index=45&type=chunk) - In March 2024, cash bonuses totaling **$240,608** were approved for officers, payable upon completion of sufficient financing[46](index=46&type=chunk) [Scientific Advisory Board](index=14&type=section&id=Scientific%20Advisory%20Board) Reports the termination of the cash compensation program and accrued compensation for a board member - The cash compensation program for the Scientific Advisory Board was terminated on March 14, 2024[47](index=47&type=chunk) - As of June 30, 2024, the Company accrued **$177,309** related to Mr. Hsu's Scientific Advisory Board compensation[47](index=47&type=chunk) [WP744 Portfolio (Berubicin)](index=15&type=section&id=WP744%20Portfolio%20%28Berubicin%29) Covers agreements for Berubicin, including royalties, license termination notice, and FDA designations - The Company purchased all rights to Berubicin from Reata Pharmaceuticals, Inc. in 2017, agreeing to pay a **2.25% royalty** on net sales for **10 years**[49](index=49&type=chunk) - The Company obtained a worldwide exclusive license to WP744 from Houston Pharmaceuticals, Inc. (HPI) in 2017, with royalties, milestone payments, and development fees[50](index=50&type=chunk) - On May 14, 2024, the Company provided notice to HPI of its intent to terminate the HPI License effective on or about July 14, 2024[50](index=50&type=chunk) - FDA granted Orphan Drug Designation (ODD) for Berubicin for malignant gliomas on June 10, 2020, potentially enabling **7 years of market exclusivity**[54](index=54&type=chunk) - FDA granted Fast Track Designation for Berubicin on July 24, 2021[55](index=55&type=chunk) [WP1244 Portfolio](index=16&type=section&id=WP1244%20Portfolio) Discusses the license agreement for WP1244, its termination due to unmet milestones and unpaid fees - The Company obtained a royalty-bearing, worldwide, exclusive license to WP1244 drug technology from UTMDACC in January 2020[56](index=56&type=chunk) - On April 25, 2024, UTMDACC provided notice of intent to terminate the WP1244 Agreement due to unmet commercial diligence milestones and unpaid annual maintenance fees[56](index=56&type=chunk) - The WP1244 Agreement was terminated on May 25, 2024, with no termination penalty provisions[56](index=56&type=chunk) [Nasdaq Capital Markets Listing Qualifications](index=16&type=section&id=Nasdaq%20Capital%20Markets%20Listing%20Qualifications) Addresses non-compliance with Nasdaq's equity and bid price rules and subsequent compliance efforts - On August 17, 2023, the Company was notified of non-compliance with Nasdaq's minimum **$2,500,000 stockholders' equity requirement**[57](index=57&type=chunk) - On February 27, 2024, the Company was notified of non-compliance with Nasdaq's **$1.00 minimum bid price requirement**[57](index=57&type=chunk) - The Nasdaq Hearings Panel granted an extension until **August 12, 2024**, to demonstrate compliance with both listing rules[58](index=58&type=chunk) - On July 5, 2024, the Company regained compliance with the Bid Price Rule[60](index=60&type=chunk) - On August 7, 2024, the Company filed an 8-K indicating shareholders' equity was above the **$2.5 million requirement**[60](index=60&type=chunk) [Note 6 – Subsequent Events](index=17&type=section&id=Note%206%20%E2%80%93%20Subsequent%20Events) This note details significant events that occurred after the reporting period but before the filing of the 10-Q, including further equity offerings and a new exclusive license agreement for the TPI 287 compound - On July 3, 2024, the Company completed a registered direct offering and private placement, generating approximately **$1.98 million in gross proceeds**[62](index=62&type=chunk) - On July 26, 2024, the Company entered into an ATM Sales Agreement, increasing the aggregate sales price of common shares that may be sold to **$25.0 million**[63](index=63&type=chunk) - As of August 14, 2024, the Company sold **28,704,761 shares** under the ATM agreement for net proceeds of approximately **$10.5 million**[63](index=63&type=chunk) - On July 29, 2024, the Company entered into an exclusive license agreement with Cortice Biosciences, Inc. for TPI 287 intellectual property rights in the United States, Canada, Mexico, and Japan[64](index=64&type=chunk) - The Cortice Agreements involve issuing **573,368 shares** upon closing, **43,330 shares** upon shareholder approval, and potential milestone payments (up to **$90 million or 2,472,357 shares**) and royalties (**3.0%-7.5%**)[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, and capital resources, including an overview of operations, results analysis, and critical accounting policies [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=18&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) Warns that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially - Forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions, and actual results may differ materially[67](index=67&type=chunk) - Key forward-looking statements include the ability to maintain Nasdaq listing, obtain additional funding, achieve regulatory approval, and commercialize product candidates[69](index=69&type=chunk) - Investors are cautioned not to place undue reliance on these statements, which speak only as of the date of this Form 10-Q[71](index=71&type=chunk) [Overview](index=19&type=section&id=Overview) Provides a general description of CNS Pharmaceuticals, its lead drug candidate Berubicin, its clinical trial status, and FDA designations - CNS Pharmaceuticals is a clinical pharmaceutical company focused on developing anti-cancer drug candidates for brain and central nervous system tumors[73](index=73&type=chunk) - Berubicin, the lead drug candidate, is an anthracycline believed to cross the blood-brain barrier and is currently in a potentially pivotal Phase II clinical trial for Glioblastoma Multiforme[75](index=75&type=chunk)[76](index=76&type=chunk) - The Phase II trial compares Berubicin to Lomustine, with a **2:1 randomization of 252 patients**; an independent Data Safety Monitoring Board (DSMB) recommended continuing the study without modification after an interim futility analysis[77](index=77&type=chunk) - Berubicin has received Orphan Drug Designation (ODD) and Fast Track Designation from the FDA[81](index=81&type=chunk)[55](index=55&type=chunk) - The WP1244 Agreement with UTMDACC was terminated on May 25, 2024, due to unmet commercial diligence milestones and unpaid annual maintenance fees[83](index=83&type=chunk) [Results of Operations (Three Months Ended June 30, 2024 vs. 2023)](index=21&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202024%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202023) Compares the company's financial performance for the three months ended June 30, 2024, against the same period in 2023 [General and Administrative Expense](index=21&type=section&id=General%20and%20Administrative%20Expense) Analyzes changes in general and administrative expenses for the three-month period **General and Administrative Expense (Three Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $1,412,000 | | June 30, 2023 | $1,180,000 | | **Change** | **+$232,000** | - The increase was mainly attributable to approximately **$333,000 in legal and professional expenses**, offset by decreases in marketing, advertising, and other expenses[84](index=84&type=chunk) [Research and Development Expense](index=21&type=section&id=Research%20and%20Development%20Expense) Examines the decrease in research and development expenses, primarily due to CRO costs **Research and Development Expense (Three Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $1,117,000 | | June 30, 2023 | $2,846,000 | | **Change** | **-$1,729,000** | - The decrease was mainly attributed to the timing of Contract Research Organization (CRO) expenses related to the continued progress of the Phase II clinical trial of Berubicin, with expenditures expected to continue declining[85](index=85&type=chunk) [Net Loss](index=21&type=section&id=Net%20Loss) Discusses the reduction in net loss, attributed to lower CRO and legal/professional fees **Net Loss (Three Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $(2,531,000) | | June 30, 2023 | $(4,021,000) | | **Change** | **+$1,490,000 (reduction in loss)** | - The reduction in net loss is attributable to a decrease in CRO expenses related to the Berubicin clinical trial and decreases in legal and professional fees[86](index=86&type=chunk) [Results of Operations (Six Months Ended June 30, 2024 vs. 2023)](index=22&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202024%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202023) Compares the company's financial performance for the six months ended June 30, 2024, against the same period in 2023 [General and Administrative Expense](index=22&type=section&id=General%20and%20Administrative%20Expense) Analyzes the slight decrease in general and administrative expenses for the six-month period **General and Administrative Expense (Six Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $2,526,000 | | June 30, 2023 | $2,539,000 | | **Change** | **-$13,000** | - The slight decrease was mainly attributable to increases in legal and professional expenses, offset by decreases in stock-based compensation, marketing, advertising, and insurance expense[88](index=88&type=chunk) [Research and Development Expense](index=22&type=section&id=Research%20and%20Development%20Expense) Examines the decrease in research and development expenses over the six-month period **Research and Development Expense (Six Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $3,547,000 | | June 30, 2023 | $6,413,000 | | **Change** | **-$2,866,000** | - The decrease was mainly attributed to the timing of CRO expenses related to the continued progress of the Phase II clinical trial, with expenditures expected to continue declining[88](index=88&type=chunk) [Net Loss](index=22&type=section&id=Net%20Loss) Discusses the reduction in net loss for the six-month period, driven by lower CRO and legal fees **Net Loss (Six Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $(6,076,000) | | June 30, 2023 | $(8,953,000) | | **Change** | **+$2,877,000 (reduction in loss)** | - The reduction in net loss is attributable to a decrease in CRO expenses related to the Berubicin clinical trial and decreases in legal and professional fees[89](index=89&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash position, working capital, funding sources, and future capital needs **Liquidity Snapshot (June 30, 2024):** | Metric | Amount | | :--- | :--- | | Cash | $1,492,000 | | Working Capital Deficit | $(4,617,000) | - The Company funds its operations from proceeds from equity sales[90](index=90&type=chunk) - Current cash on hand is expected to fund operations through the **first quarter of 2025**[95](index=95&type=chunk) - Additional capital is needed in the near term to continue to meet Nasdaq minimum equity requirements and potentially fund TPI 287 clinical preparations[96](index=96&type=chunk)[95](index=95&type=chunk) - Failure to raise sufficient funds could lead to Nasdaq delisting or cessation of operations[96](index=96&type=chunk) [Summary of Cash Flows](index=23&type=section&id=Summary%20of%20Cash%20Flows) Provides an overview of cash flows from operating and financing activities for the six-month periods [Cash used in operating activities](index=23&type=section&id=Cash%20used%20in%20operating%20activities) Details the primary expenditures contributing to cash used in operating activities **Net Cash Used in Operating Activities (Six Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $(4,842,000) | | June 30, 2023 | $(8,227,000) | | **Change** | **+$3,385,000 (reduction in cash used)** | - Primarily included payments for clinical trial preparation, officer compensation, insurance, marketing, and professional fees[97](index=97&type=chunk) [Cash provided by financing activities](index=23&type=section&id=Cash%20provided%20by%20financing%20activities) Explains the sources of cash from financing activities, mainly equity sales **Net Cash Provided by Financing Activities (Six Months Ended June 30):** | Period | Amount | | :--- | :--- | | June 30, 2024 | $5,785,000 | | June 30, 2023 | $2,451,000 | | **Change** | **+$3,334,000** | - Primarily from the sale of common stock and exercise of warrants, offset by repayment of notes payable and payment of deferred offering costs[97](index=97&type=chunk) [Off-balance Sheet Arrangements](index=24&type=section&id=Off-balance%20Sheet%20Arrangements) States that the company has no material off-balance sheet arrangements as of June 30, 2024 - As of June 30, 2024, the Company did not have any relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements[99](index=99&type=chunk) [Purchase Commitments](index=24&type=section&id=Purchase%20Commitments) Notes the absence of material capital expenditure commitments, but highlights milestone fee obligations - The Company does not have any material commitments for capital expenditures, but is required to pay certain milestone fees to HPI, Reata, and Cortice[100](index=100&type=chunk) [JOBS Act Accounting Election](index=24&type=section&id=JOBS%20Act%20Accounting%20Election) Explains the company's election to use the extended transition period for new accounting standards - As an 'emerging growth company,' the Company elected not to opt out of the extended transition period for new or revised financial accounting standards[101](index=101&type=chunk) - This election allows the Company to adopt new standards at the same time as private companies, which may make financial statement comparisons difficult[101](index=101&type=chunk) [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) States that management identified no critical accounting estimates for the period - Management determined there were no critical accounting estimates[102](index=102&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, CNS Pharmaceuticals, Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide the information required under this item[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of June 30, 2024, due to material weaknesses, with remediation efforts underway [Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting](index=24&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures%20and%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Details the ineffectiveness of disclosure controls and material weaknesses identified as of June 30, 2024 - As of June 30, 2024, disclosure controls and procedures were concluded to be **ineffective**[107](index=107&type=chunk) - Material weaknesses include lack of segregation of duties, limited access to timely and complete information regarding CRO costs, and lack of formal documentation of the control environment[107](index=107&type=chunk) - Management is commencing actions to address the lack of formal documentation and working with the CRO to improve data timeliness and completeness[107](index=107&type=chunk) - Despite material weaknesses, management believes the financial statements fairly present the Company's financial condition, results of operations, and cash flows[108](index=108&type=chunk) [PART II OTHER INFORMATION](index=25&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, other information, and exhibits [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings. While litigation outcomes are unpredictable and can be costly, the company maintains insurance policies for potential losses where cost-effective - The Company is not currently involved in any legal proceedings[110](index=110&type=chunk) - The results of litigation are inherently unpredictable and can be time-consuming and costly[110](index=110&type=chunk) [Item 1A. Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) This section incorporates by reference the risk factors from the company's 2023 Annual Report on Form 10-K and highlights the critical risk of maintaining compliance with Nasdaq listing requirements. The company recently regained compliance with the bid price rule and reported sufficient shareholders' equity, but delisting remains a significant concern if compliance is not sustained - Risk factors from the 2023 Annual Report on Form 10-K are incorporated by reference[111](index=111&type=chunk) - Inability to maintain compliance with Nasdaq Capital Market listing requirements could have a material adverse effect[111](index=111&type=chunk) - The Company regained compliance with the Nasdaq Bid Price Rule on **July 5, 2024**[114](index=114&type=chunk) - On August 7, 2024, the Company filed an 8-K indicating shareholders' equity was above the **$2.5 million requirement**[116](index=116&type=chunk) - Delisting would adversely affect the ability to raise financing, trade securities, and negatively impact value and liquidity[116](index=116&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has not issued any unregistered securities during the quarter ended June 30, 2024, except as previously disclosed on Form 8-K - Except as previously disclosed on Form 8-K, no unregistered securities were issued during the quarter ended June 30, 2024[117](index=117&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[117](index=117&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable to the Company[117](index=117&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) During the reporting period, none of the company's directors or executive officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - None of the Company's directors or executive officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the period[118](index=118&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to articles of incorporation, forms of warrants, financial advisory agreements, securities purchase agreements, the amended 2020 Equity Plan, and certifications - Exhibits include Certificate of Amendment to Articles of Incorporation, forms of Common and Pre-Funded Warrants, Financial Advisory Agreements, Securities Purchase Agreements, and the 2020 Equity Plan[118](index=118&type=chunk)[121](index=121&type=chunk) - Also includes Inline XBRL Instance Document, Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents, and Cover Page Interactive Data File[119](index=119&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer are included pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350[121](index=121&type=chunk) [Signatures](index=29&type=section&id=Signatures) Confirms the report's authorization by the Chief Executive Officer and Chief Financial Officer - The report was signed by John Climaco, Chief Executive Officer and Director, and Christopher Downs, Chief Financial Officer, on **August 14, 2024**[123](index=123&type=chunk)
CNS Pharmaceuticals(CNSP) - 2024 Q1 - Quarterly Results
2024-05-16 14:56
[Form 8-K Filing Details](index=1&type=section&id=Form%208-K%20Filing%20Details) This section provides essential information regarding the Form 8-K filing, including registrant details and report date [Registrant and Filing Information](index=1&type=section&id=Registrant%20and%20Filing%20Information) This section identifies CNS Pharmaceuticals, Inc. as the registrant, details its incorporation state (Nevada), and confirms its status as an emerging growth company. The report date is May 16, 2024 - Registrant: **CNS Pharmaceuticals, Inc.**[1](index=1&type=chunk) - Incorporation State: **Nevada**[1](index=1&type=chunk) - Emerging Growth Company: **Yes**[3](index=3&type=chunk) - Date of Report (earliest event reported): **May 16, 2024**[1](index=1&type=chunk) [Securities Registration](index=1&type=section&id=Securities%20Registration) The company's common stock is registered on The NASDAQ Stock Market LLC under the trading symbol CNSP Securities Registered Pursuant to Section 12(b) of the Act | Title of each class | Trading Symbols(s) | Name of each exchange on which registered | | :------------------ | :----------------- | :---------------------------------------- | | Common stock, par value $0.001 per share | CNSP | The NASDAQ Stock Market LLC | [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition.) This section details the announcement of the company's financial results and operational highlights for the first quarter [Announcement of Financial Results](index=2&type=section&id=Announcement%20of%20Financial%20Results) CNS Pharmaceuticals, Inc. issued a press release on May 16, 2024, announcing its financial results for the first quarter ended March 31, 2024, along with recent operational highlights. This press release is incorporated by reference as Exhibit 99.1 - Company issued a press release on **May 16, 2024**[5](index=5&type=chunk) - The press release announced financial results for **Q1 ended March 31, 2024**, and recent operational highlights[5](index=5&type=chunk) - The press release is attached as **Exhibit 99.1** and incorporated by reference[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01.%20Financial%20Statements%20and%20Exhibits) This section lists all financial statements and exhibits filed as part of the Form 8-K report [Exhibits Filed](index=2&type=section&id=Exhibits%20Filed) This section lists the exhibits filed with the Form 8-K, including the press release (Exhibit 99.1) detailing Q1 2024 results and the Cover page Interactive Data File (Exhibit 104) List of Exhibits | Exhibit No. | Exhibit Description | | :---------- | :---------------------------------------------------------- | | 99.1 | Press release dated May 16, 2024 | | 104 | Cover page Interactive Data File (embedded within the Inline XBRL document) | [Signature](index=3&type=section&id=Signature) This section confirms the official signing and submission of the Form 8-K report [Report Signatory](index=3&type=section&id=Report%20Signatory) The report was duly signed on behalf of CNS Pharmaceuticals, Inc. by Chris Downs, Chief Financial Officer, on May 16, 2024 - Report signed by **Chris Downs, Chief Financial Officer**[10](index=10&type=chunk) - Signature Date: **May 16, 2024**[10](index=10&type=chunk)
CNS Pharmaceuticals(CNSP) - 2024 Q1 - Quarterly Report
2024-05-15 21:00
[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents CNS Pharmaceuticals, Inc.'s unaudited financial statements and related disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents CNS Pharmaceuticals, Inc.'s unaudited financial statements, including balance sheets, operations, equity, cash flows, and notes [Balance Sheets](index=3&type=section&id=Balance%20Sheets%20as%20of%20March%2031%2C%202024%20and%20December%2031%2C%202023%20%28unaudited%29) This section provides the unaudited balance sheets as of March 31, 2024, and December 31, 2023 | Metric (USD) | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $815,226 | $548,721 | | Total current assets | $1,601,276 | $1,591,170 | | Total Assets | $1,660,877 | $1,700,853 | | Total current liabilities | $6,091,402 | $6,132,968 | | Total Liabilities | $6,091,402 | $6,132,968 | | Total Stockholders' Equity | $(4,430,525) | $(4,432,115) | [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%202023%20%28unaudited%29) This section presents the unaudited statements of operations for the three months ended March 31, 2024, and 2023 | Metric | Three Months Ended March 31, 2024 (USD) | Three Months Ended March 31, 2023 (USD) | | :------------------------------ | :-------------------------------------- | :-------------------------------------- | | General and administrative | $1,114,442 | $1,358,752 | | Research and development | $2,430,412 | $3,567,759 | | Total operating expenses | $3,544,854 | $4,926,511 | | Net loss | $(3,544,748) | $(4,931,947) | | Loss per share - basic | $(0.41) | $(2.59) | | Loss per share - diluted | $(0.41) | $(2.59) | | Weighted average shares outstanding - basic (count) | 8,712,680 | 1,906,494 | | Weighted average shares outstanding - diluted (count) | 8,712,680 | 1,906,494 | [Statements of Stockholders' Equity (Deficit)](index=5&type=section&id=Statements%20of%20Stockholders'%20Equity%20%28Deficit%29%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%202023%20%28unaudited%29) This section details the unaudited statements of stockholders' equity (deficit) for the three months ended March 31, 2024, and 2023 | Metric | Balance Dec 31, 2023 (USD) | Common Stock Issued for Cash, Net (USD) | Exercise of Warrants, Net (USD) | Stock-based Compensation (USD) | Net Loss (USD) | Balance Mar 31, 2024 (USD) | | :----------------------------------- | :------------------------- | :-------------------------------------- | :------------------------------ | :----------------------------- | :------------- | :------------------------- | | Common Shares (count) | 6,214,598 | 2,215,667 | 2,238,667 | – | – | 10,668,932 | | Stock (USD) | 6,214 | 2,216 | 2,239 | – | – | 10,669 | | Additional Paid-in Capital (USD) | 65,128,574 | 3,328,784 | 10,166 | 202,933 | – | 68,670,457 | | Accumulated Deficit (USD) | (69,566,903) | – | – | – | (3,544,748) | (73,111,651) | | Total Stockholders' Equity (Deficit) | (4,432,115) | 3,331,000 | 12,405 | 202,933 | (3,544,748) | (4,430,525) | [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows%20for%20the%20three%20months%20ended%20March%2031%2C%202024%20and%202023%20%28unaudited%29) This section presents the unaudited statements of cash flows for the three months ended March 31, 2024, and 2023 | Metric | Three Months Ended March 31, 2024 (USD) | Three Months Ended March 31, 2023 (USD) | | :---------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net loss | $(3,544,748) | $(4,931,947) | | Stock-based compensation | $202,933 | $290,313 | | Net cash used in operating activities | $(3,192,057) | $(4,824,592) | | Payments on notes payable | $(87,702) | $(120,893) | | Proceeds from exercise of warrants | $12,405 | $609 | | Proceeds from sale of common stock | $3,533,859 | – | | Net cash provided by (used in) financing activities | $3,458,562 | $(120,284) | | Net change in cash and cash equivalents | $266,505 | $(4,944,876) | | Cash and cash equivalents, at end of period | $815,226 | $5,110,531 | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Financial%20Statements%20%28unaudited%29) This section provides detailed notes explaining the significant accounting policies, equity changes, commitments, contingencies, and subsequent events impacting the financial statements [Note 1 – Nature of Business](index=7&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20Business) This note describes CNS Pharmaceuticals, Inc.'s core business as a clinical pharmaceutical company focused on anti-cancer drug development - CNS Pharmaceuticals, Inc. is a clinical pharmaceutical company focused on developing anti-cancer drug candidates, organized in Nevada on July 27, 2017[146](index=146&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=7&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies, going concern considerations, and the impact of a reverse stock split on the financial statements - The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim information, and should be read in conjunction with the Form 10-K for the period ended December 31, 2023[39](index=39&type=chunk) - The company's ability to continue as a going concern is dependent on obtaining additional equity financings, as it has a history of negative cash flows and net losses, with current cash sufficient only for the near term[147](index=147&type=chunk) - A **1-for-30 reverse stock split** became effective on November 28, 2022, retroactively adjusted in the financial statements[8](index=8&type=chunk)[150](index=150&type=chunk) - As of March 31, 2024, **$565,226** of cash balances at financial institutions exceeded the federally insured limit of **$250,000**[9](index=9&type=chunk) [Note 3 – Note Payable](index=8&type=section&id=Note%203%20%E2%80%93%20Note%20Payable) This note details the company's note payable balance, interest rate, and final payment due date as of March 31, 2024 - As of March 31, 2024, the company had a note payable balance of **$213,104**, bearing interest at **9.74%** per year, with the final payment due on October 8, 2024[149](index=149&type=chunk) [Note 4 – Equity](index=8&type=section&id=Note%204%20%E2%80%93%20Equity) This note provides information on changes in authorized common stock, stock option and warrant activity, and stock-based compensation recognized during the period - On May 2, 2024, the company increased its authorized common stock from **75,000,000 shares** to **300,000,000 shares**[120](index=120&type=chunk) Stock Option Activity (Three Months Ended March 31, 2024) | Metric | Options (count) | Weighted Average Exercise Price Per Share (USD) | | :----------------------------------- | :-------------- | :---------------------------------------------- | | Outstanding, December 31, 2023 | 328,770 | $20.35 | | Granted | 12,420 | $0.25 | | Outstanding, March 31, 2024 | 341,190 | $19.62 | | Exercisable, March 31, 2024 | 99,920 | $58.39 | - The company recognized **$192,375** in stock-based compensation related to outstanding stock options for the three months ended March 31, 2024[152](index=152&type=chunk) Stock Warrant Activity (Three Months Ended March 31, 2024) | Metric | Warrants (count) | Weighted Average Exercise Per Share (USD) | | :----------------------------------- | :--------------- | :---------------------------------------- | | Outstanding, December 31, 2023 | 4,240,063 | $3.88 | | Granted | 37,784,335 | $0.30 | | Exercised | (2,238,667) | $0.30 | | Outstanding, March 31, 2024 | 39,785,731 | $0.59 | | Exercisable, March 31, 2024 | 39,785,731 | $0.59 | - On January 29, 2024, the company entered into a warrant amendment agreement to reduce the exercise price of certain existing warrants to **$0.30 per share**, subject to shareholder approval[16](index=16&type=chunk) - For the three months ended March 31, 2024, the company recognized **$5,962** of stock-based compensation related to outstanding RSUs and **$4,596** related to outstanding PUs[18](index=18&type=chunk)[50](index=50&type=chunk) [Note 5 – Commitments and Contingencies](index=12&type=section&id=Note%205%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's financial commitments, including approved bonuses, accrued compensation, and potential license terminations - The Board approved cash bonuses totaling **$240,608** for officers, payable upon completion of a sufficient financing round[52](index=52&type=chunk) - The cash compensation program for the Scientific Advisory Board was terminated on March 14, 2024, with **$185,884** accrued for Mr. Hsu's compensation[22](index=22&type=chunk) - The company provided notice on May 14, 2024, to Houston Pharmaceuticals, Inc. (HPI) of its intent to terminate the HPI License for WP744 (Berubicin) effective July 14, 2024, as the patents under the license expired in March 2020[23](index=23&type=chunk)[169](index=169&type=chunk)[184](index=184&type=chunk) - The University of Texas M. D. Anderson Cancer Center (UTMDACC) notified the company on April 25, 2024, of its intent to terminate the WP1244 Agreement if the annual maintenance fee of **$50,000** plus **$1,300** in expenses are not paid, as the company has not met commercial diligence milestones[25](index=25&type=chunk)[63](index=63&type=chunk)[75](index=75&type=chunk) [Note 6 – Subsequent Events](index=15&type=section&id=Note%206%20%E2%80%93%20Subsequent%20Events) This note describes significant events occurring after March 31, 2024, including warrant exercises, equity plan approvals, and Nasdaq listing compliance extensions - Subsequent to March 31, 2024, **1,183,000 warrants** were exercised by investors at an exercise price of **$0.001 per share**[80](index=80&type=chunk) - On April 30, 2024, stockholders approved an increase of **3,500,000 shares** for issuance under the 2020 Equity Plan, bringing the total to **4,345,800 shares**[164](index=164&type=chunk) - On April 7, 2024, equity grants for 2023 service were approved, totaling **179,000 Options** (vesting over 3 years) and **179,000 Restricted Stock Units** (vesting over 2 years)[57](index=57&type=chunk) - The Nasdaq Hearings Panel granted an extension until **July 15, 2024**, for the company to demonstrate compliance with listing rules 5550(a)(2) and 5550(b)[26](index=26&type=chunk)[181](index=181&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis covers financial condition, operations, liquidity, capital resources, and forward-looking statements [Cautionary Note Regarding Forward-Looking Statements](index=16&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This note advises readers that the report contains forward-looking statements subject to various risks and uncertainties, which may differ from actual results - The report contains forward-looking statements subject to known and unknown risks and uncertainties, including clinical trial success, regulatory approval, market acceptance, intellectual property protection, and the ability to obtain additional funding[16](index=16&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[187](index=187&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which speak only as of the filing date, and the company is under no duty to update them[83](index=83&type=chunk)[136](index=136&type=chunk)[167](index=167&type=chunk) [Overview](index=17&type=section&id=Overview) This section provides an overview of CNS Pharmaceuticals' business, focusing on its anti-cancer drug development and lead candidate, Berubicin - CNS Pharmaceuticals is a clinical pharmaceutical company focused on developing anti-cancer drug candidates for brain and central nervous system tumors, primarily based on licensed intellectual property[138](index=138&type=chunk)[146](index=146&type=chunk) - The lead drug candidate, Berubicin, is being evaluated in a Phase II clinical trial for Glioblastoma Multiforme, with an independent Data Safety Monitoring Board (DSMB) recommending continuation of the study without modification on December 18, 2023[31](index=31&type=chunk)[61](index=61&type=chunk)[84](index=84&type=chunk) - Berubicin has received **Orphan Drug Designation (ODD)** from the FDA on June 10, 2020, and **Fast Track Designation** on July 24, 2021, which may provide market exclusivity and expedited review[55](index=55&type=chunk)[85](index=85&type=chunk)[132](index=132&type=chunk) - The company does not have manufacturing facilities or a sales organization, relying on third parties for these activities[139](index=139&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202024%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031%2C%202023) This section compares the company's operating expenses and net loss for the three months ended March 31, 2024, and 2023 Operating Expenses and Net Loss (Three Months Ended March 31) | Metric | 2024 (USD) | 2023 (USD) | Change (USD) | Change (%) | | :------------------------------ | :------------ | :------------ | :------------ | :--------- | | General and administrative | $1,114,442 | $1,358,752 | $(244,310) | -18.0% | | Research and development | $2,430,412 | $3,567,759 | $(1,137,347) | -31.9% | | Net loss | $(3,544,748) | $(4,931,947) | $1,387,199 | -28.1% | - The decrease in general and administrative expense was mainly due to reductions in legal and professional expenses, insurance, stock compensation, and travel expenses[64](index=64&type=chunk) - The decrease in research and development expenses was primarily attributed to the timing of Contract Research Organization (CRO) expenses related to the Phase II clinical trial[87](index=87&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, working capital, and future capital requirements to sustain operations and clinical trials Cash Flow Summary (Three Months Ended March 31) | Metric | 2024 (USD) | 2023 (USD) | | :---------------------------------------- | :------------ | :------------ | | Net cash used in operating activities | $(3,192,057) | $(4,824,592) | | Net cash provided by (used in) financing activities | $3,458,562 | $(120,284) | | Cash and cash equivalents, at end of period | $815,226 | $5,110,531 | - As of March 31, 2024, the company had approximately **$815,000** in cash and a working capital deficit of approximately **$4,490,000**[191](index=191&type=chunk) - The company requires an additional **$13 to $15 million** to complete the Berubicin Phase 2 trial, plus **$4.5 to $5.0 million** annually for operations, and an extra **$5.0 million** for WP1244/WP1874 preclinical work[173](index=173&type=chunk) - Management believes current cash is sufficient only into the latter half of the second quarter of 2024, and significant additional capital is needed to avoid scaling back or ceasing operations[89](index=89&type=chunk)[173](index=173&type=chunk) [Critical Accounting Policies and Estimates](index=21&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses management's determination regarding critical accounting estimates and the inherent judgments in financial statement preparation - Management determined there were no critical accounting estimates for the period, but notes that financial statements require judgments and estimates that could differ from actual results[69](index=69&type=chunk) [Off-balance Sheet Arrangements](index=21&type=section&id=Off-balance%20Sheet%20Arrangements) This section confirms the absence of off-balance sheet arrangements as of March 31, 2024 - As of March 31, 2024, the company did not have any relationships with unconsolidated entities or financial partnerships for off-balance sheet arrangements[91](index=91&type=chunk) [JOBS Act Accounting Election](index=21&type=section&id=JOBS%20Act%20Accounting%20Election) This section explains the company's election as an 'emerging growth company' to utilize the extended transition period for new accounting standards - The company, as an 'emerging growth company,' elected not to opt out of the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[92](index=92&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, CNS Pharmaceuticals, Inc. is not required to provide the information typically required under this item - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[93](index=93&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were ineffective as of March 31, 2024, due to material weaknesses, and is implementing actions to address these issues [Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting](index=21&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures%20and%20Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section details the ineffectiveness of disclosure controls and procedures due to material weaknesses and outlines management's remediation efforts - As of March 31, 2024, the company's disclosure controls and procedures were deemed **ineffective** due to material weaknesses in internal control over financial reporting[71](index=71&type=chunk)[197](index=197&type=chunk) - Material weaknesses include a lack of segregation of duties, limited access to timely and complete information from the third-party Contract Research Organization (CRO), and a lack of formal documentation of the control environment[71](index=71&type=chunk) - Management is taking actions to address these weaknesses, including formalizing documentation, working with the CRO for improved data timeliness and completeness, and conducting increased analytical analysis[71](index=71&type=chunk) - Additional experienced personnel will be hired in accounting and finance, and the accounting system will be upgraded when economically feasible[178](index=178&type=chunk) [PART II OTHER INFORMATION](index=23&type=section&id=PART%20II%20OTHER%20INFORMATION) This section includes legal proceedings, risk factors, equity sales, defaults, mine safety, other disclosures, exhibits, and signatures [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) CNS Pharmaceuticals, Inc. is not currently involved in any material legal proceedings - The company is not currently involved in any legal proceedings[199](index=199&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its Nasdaq listing compliance, having received notifications of non-compliance with minimum stockholders' equity and bid price requirements, with a delisting risk if compliance is not met by July 15, 2024 - The company received notifications from Nasdaq for non-compliance with the minimum **$2,500,000** stockholders' equity requirement (August 17, 2023) and the **$1.00** minimum bid price requirement (February 27, 2024)[74](index=74&type=chunk)[163](index=163&type=chunk) - An extension has been granted until **July 15, 2024**, to demonstrate compliance with Nasdaq listing rules, but this plan requires significant, uncommitted financing[26](index=26&type=chunk)[181](index=181&type=chunk) - Failure to maintain Nasdaq listing compliance could result in delisting, adversely affecting the company's ability to raise financing, trade securities, and potentially impacting its value and liquidity[97](index=97&type=chunk)[98](index=98&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None to report for unregistered sales of equity securities and use of proceeds[182](index=182&type=chunk) [Item 3. Defaults Upon Senior Securities](index=24&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - None to report for defaults upon senior securities[202](index=202&type=chunk) [Item 4. Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to the company[183](index=183&type=chunk) [Item 5. Other Information](index=24&type=section&id=Item%205.%20Other%20Information) The company provided notice to terminate its HPI License for Berubicin, believing it will not impact development due to expired patents, and reported no Rule 10b5-1 trading arrangements by directors or executive officers - On May 14, 2024, the company provided notice to Houston Pharmaceuticals, Inc. (HPI) of its intent to terminate the HPI License effective July 14, 2024, believing it will not affect Berubicin development as the patents have expired[184](index=184&type=chunk) - No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by the company's directors or executive officers during the reporting period[203](index=203&type=chunk) [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various corporate documents, warrant forms, agreements, and certifications - The exhibits include a Certificate of Amendment to Articles of Incorporation, forms of Series A, Series B, and Pre-Funded Warrants, Placement Agent Agreement, Securities Purchase Agreement, Amendment to Common Stock Purchase Warrants, the 2020 Equity Plan, and certifications by the Principal Executive and Financial Officers[76](index=76&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) [Signatures](index=26&type=section&id=Signatures) The report was duly signed on behalf of CNS Pharmaceuticals, Inc. by its Chief Executive Officer and Chief Financial Officer on May 15, 2024 - The report was signed by John Climaco, Chief Executive Officer and Director, and Christopher Downs, Chief Financial Officer, on May 15, 2024[78](index=78&type=chunk)[101](index=101&type=chunk)[206](index=206&type=chunk)