CNS Pharmaceuticals(CNSP) - 2022 Q4 - Annual Report

Regulatory Approvals and Product Development - The company has not yet obtained any regulatory approvals for its drug candidates, including Berubicin, and has no products approved for sale[37] - The company is dependent on the success of Berubicin, as it has no other clinical-stage drug candidates in its portfolio[57] - The company may face increased expenses if required by the FDA to perform additional studies or trials beyond current expectations[60] - The company may experience delays in clinical trial enrollment and completion, which could increase product development costs and limit regulatory approval[91] - The company does not have agreements for supplies of Berubicin or other product candidates, which may affect commercialization if approvals are granted[97] - The company may seek collaborations with more experienced firms to manage the high costs associated with developing pharmaceutical products, conducting clinical trials, and obtaining regulatory approvals[99] Financial Performance and Condition - The company reported recurring losses from operations, raising substantial doubt about its ability to continue as a going concern[32] - The net loss for the year ended December 31, 2022, was $15,274,134, compared to a net loss of $14,495,200 for 2021, primarily due to decreased research and development costs[170] - The company has a history of negative cash flows from operations and expects to continue reporting such losses, raising substantial doubt about its ability to continue as a going concern[207] - Total operating expenses for the year ended December 31, 2022, were $15,267,107, an increase of 5.4% from $14,485,915 in 2021[215] - Net loss for the year ended December 31, 2022, was $15,274,134, compared to a net loss of $14,495,200 in 2021, representing an increase of 5.4%[218] Research and Development - Research and development expenses were $9,300,055 for the year ended December 31, 2022, a decrease from $9,805,075 in 2021, attributed to reduced manufacturing activity and a credit from WPD Pharmaceuticals[168] - Research and development expenses for the year ended December 31, 2021, were adjusted to $1,888,803 from $1,521,364, indicating an increase of about 24.2%[204] - The company plans to focus on completing a clinical trial for Berubicin, with expectations of increased research and development costs as the trial progresses[162] Capital and Funding - The company will require substantial additional capital to continue clinical development and commercialization activities, but the exact amount is uncertain[54] - The company intends to raise additional funds through equity or convertible debt securities, which could dilute existing stockholders' ownership[136] - The company plans to seek additional funding through equity offerings, debt financings, and other collaborations to support its operations[207] - The company estimates it will require additional financing of approximately $8 to $12 million to complete the Phase 2 trial for Berubicin, considering its cash on hand[162] Competition and Market Risks - The company faces intense competition from larger pharmaceutical companies with greater resources, which may hinder its ability to develop and commercialize its product candidates[72] - The expiration of U.S. patents in March 2020 may increase competition for the company's products, particularly for Berubicin, which has received Orphan Drug Designation[73] - The company faces competition from rivals that may offer more effective, safer, or cheaper products, which could hinder its commercial success[101] Legal and Compliance Risks - The company may be subject to litigation or product liability claims, which could divert significant resources[51] - The company may incur substantial costs due to litigation related to patent and intellectual property rights[102] - The company is not currently involved in any pending legal actions and has insurance policies covering potential losses[145] Internal Controls and Governance - The company has identified a material weakness in its internal controls over financial reporting, which has led to the correction of previously issued financial statements for multiple periods[113] - The company does not carry insurance for all categories of risk, which may expose it to significant liabilities[108] - The company is subject to the continued listing requirements of The Nasdaq Capital Market, including minimum stockholder's equity and market value of publicly-held shares[137] Stockholder Information - As of March 31, 2023, the company had approximately 10,000 stockholders of record, excluding beneficial owners[128] - The company has never declared or paid cash dividends on its capital stock and does not expect to do so in the foreseeable future[129] - The weighted average shares outstanding increased to 1,361,737 in 2022 from 878,443 in 2021, indicating potential dilution from equity financing[215] Cash Flow and Assets - Cash used in operating activities was $10,557,815 for the year ended December 31, 2022, compared to $13,538,309 for 2021, reflecting payments for drug development and other operational costs[163] - Cash and cash equivalents increased to $10,055,407 as of December 31, 2022, compared to $5,004,517 in 2021, representing a growth of about 100.5%[213] - The company reported a net change in cash and cash equivalents of $5,050,890 for the year ended December 31, 2022, compared to a decrease of $(9,034,976) in 2021, indicating a positive cash flow trend[218]