CNS Pharmaceuticals(CNSP) - 2023 Q2 - Quarterly Report

Financial Instruments and Capital - The company entered into a short-term note payable for an aggregate of $449,874, bearing interest at 5.88% per year, with a balance of $166,396 as of June 30, 2023[41]. - The company sold 659,677 shares of common stock for net proceeds of $1,969,107 during the quarter ended June 30, 2023[43]. - The company sold 58,591 shares of common stock for net proceeds of $124,279 under the Capital on Demand™ Sales Agreement, with a total sales price of up to $20.0 million[69]. - The company has authorized 75,000,000 shares of common stock and 5,000,000 shares of preferred stock[42]. Stock-Based Compensation - The company recognized $544,248 of stock-based compensation related to outstanding stock options for the six months ended June 30, 2023[56]. - The company has a weighted average remaining term of 7.20 years for outstanding stock options as of June 30, 2023[48]. - The Board of Directors approved the issuance of 6,500 options to Dr. Cockroft at an exercise price of $2.27, contingent upon shareholder approval[70]. Research and Development - The company has committed to fund approximately $1,134,000 over a two-year period for research related to novel anticancer agents targeting CNS malignancies[66]. - The company is exploring additional patent protections related to Berubicin to extend intellectual property protections[62]. - The company received Fast Track Designation from the FDA for Berubicin, facilitating its development and review[63]. - The Company agreed to pay WPD an upfront payment of $225,000 and a subsequent payment of $775,000 upon the verified achievement of the Phase II Milestone[68]. Internal Controls and Compliance - As of June 30, 2023, the Company's disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting[131]. - Management is addressing the lack of formal documentation in the control environment and is working with a third-party CRO to improve data reporting timeliness and completeness[131]. Legal and Risk Factors - The Company is involved in legal proceedings, but cannot estimate potential losses from these matters[133]. - The Company has insurance policies covering potential losses where such coverage is cost-effective[133]. - The Company faces additional risks and uncertainties that may adversely affect its business and financial condition, as discussed in the "Risk Factors" section of the 2022 Annual Report[134]. Executive Compensation - The company approved cash bonuses totaling $550,750 to the officers on March 29, 2023[52].