Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock began trading on the Nasdaq Global Market under the symbol “CGTX” on October 8, 2021. Prior to that time, there was no public market for our common stock.
Holders
As of March 23, 2022, there were approximately 22,578,584 shares of our common stock outstanding held by approximately 118 holders of record. The actual number of holders of our common stock is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or held by other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Dividend Policy
We have never declared or paid any cash dividends on our common stock, and we do not currently intend to pay any cash dividends on our common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our business. Any future determination to pay dividends will be made at the discretion of our board of directors subject to applicable laws and will depend upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements. Our future ability to pay cash dividends on our common stock may be limited by any future debt instruments or preferred securities.
Recent Sales of Unregistered Securities: Purchases of Equity Securities by the Issuer or Affiliated Purchaser
From January 1, 2021 through December 31, 2021, we sold and issued the following unregistered securities, which share numbers have been adjusted, as appropriate, to reflect the 1-for-3.2345 reverse stock split which became effective on October 1, 2021:
● we granted stock options to employees, directors, and consultants covering an aggregate of 67,232 shares of common stock, at a weighted-average exercise price of $2.25 per share;
● we issued an aggregate of 24,465 shares of common stock to employees for cash consideration in the aggregate amount of $20 pursuant to stock option exercises;
● we issued an aggregate of 52,333 shares of common stock to consultants pursuant to exercise of the common stock warrants; and
● in May 2021, we issued an aggregate of 10,926,089 shares of Series B-1 convertible preferred stock at a conversion price per share of $1.385. In connection with the completion of our IPO, all shares of Series B-1 convertible preferred-stock automatically converted into 3,377,925 shares of our common stock.
The sales and issuances of the securities described in this Item 5 were deemed to be exempt from registration under the Securities Act under either (i) Rule 701 promulgated under the Securities Act as offers and sale of securities pursuant to certain compensatory benefit plans and contracts relating to compensation in compliance with Rule 701 or (ii) Section 4(a)(2) of the Securities Act (and Regulation D or Regulation S promulgated thereunder) as transactions by an issuer not involving any public offering.
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Use of Proceeds from our Initial Public Offering of Common Stock
On October 13, 2021, we completed our IPO. Our registration statements on Form S-1 (File Nos. 333- 257999 and 333-260128), each relating to the IPO were declared effective by the SEC on October 7, 2021. We issued 3,768,116 shares of our common stock at a price of $12.00 per share for aggregate net cash proceeds of $37.9 million, after deducting underwriting discounts and commissions and other offering related costs. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to their associates, or to our affiliates. B. Riley Securities, Inc., or the Representative, acted as lead book running manager of the offering and as representative of the underwriters.
On November 10, 2021, the Representative provided notice to us that it had elected to exercise its over-allotment option in full to purchase 565,217 shares of our common stock. The Representative’s exercise of the over-allotment option closed on November 12, 2021, resulting in net proceeds of $6.3 million to us, after deducting underwriting discounts and commissions and other offering related expenses.
There has been no material change in the planned use of proceeds from our IPO as described in our final prospectus, or the Prospectus, for our IPO, dated October 7, 2021, filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act.
Item 6. [Reserved].
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.