What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-08-13 · 160 added, 160 removed, 321 unchanged (50% of the section changed)

2 unchanged sentences

Balance Sheets

September 30,

Current Assets:

Cash and cash equivalents

Subscription receivable

Other receivable - related party

Prepaid expenses

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Preferred stock, $ 0.001 par value, 5,000,000 shares authorized and 0 shares issued and outstanding

Common stock, $ 0.001 par value, 75,000,000 shares authorized and 27,379,485 and 23,856,151 shares issued and outstanding, respectively

Common stock, $ 0.001 par value, 75,000,000 shares authorized and 27,460,735 and

23,856,151 shares issued and outstanding, respectively

Additional paid-in capital

7 unchanged sentences

Statements of Operations

Three Months Ended June 30, 2021

Three Months Ended June 30, 2020

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

September 30,

Operating expenses:

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Stockholders' Equity

For the three and six months ended June 30, 2021 and 2020

Total Stockholders'

For the three and nine months ended September 30, 2021 and 2020

Stockholders'

Balance December 31, 2020

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( 28,373,420 )

Stock-based compensation

( 3,814,348 )

Balance September 30, 2021

$ ( 32,187,768 )

Balance December 31, 2019

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( 15,930,374 )

See accompanying notes to the unaudited financial statements.

Common stock issued for deferred offering costs

Stock-based compensation

( 2,011,064 )

Balance September 30, 2020

$ ( 17,941,438 )

See accompanying notes to the unaudited

financial statements.

CNS Pharmaceuticals, Inc.

Statements of Cash Flows

Six Months Ended June 30, 2021

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2021

Nine Months Ended September 30, 2020

Cash Flows from Operating Activities:

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Changes in operating assets and liabilities:

Related party receivable

Prepaid expenses

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Cash Flows from Financing Activities:

Payment of deferred offering cost

Payments on notes payable

1 unchanged sentence

Proceeds from sale of common stock, net

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net change in cash and cash equivalents

8 unchanged sentences

Cashless exercise of warrants

Common stock issued for subscription receivable

Common stock issued for deferred offering costs

See accompanying notes to the unaudited financial statements.

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CNS Pharmaceuticals, Inc.

“our”, the “Company”) is a clinical pharmaceutical company organized as a Nevada corporation on July 27,

2017 to focus on the development of anti-cancer drug candidates.

(“we”, “our”, the

“Company”) is a clinical pharmaceutical company organized as a Nevada corporation on July 27, 2017 to focus on the development

of anti-cancer drug candidates.

Note 2 – Summary of Significant Accounting Policies

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financial statements not misleading.

Operating results for the six months ended June 30, 2021 are not necessarily indicative of the final

results that may be expected for the year ending December 31, 2021.

For more complete financial information, these unaudited financial

statements should be read in conjunction with the audited financial statements for the period ended December 31, 2020 included in our

Form 10-K filed with the SEC on February 12, 2021 (“Form 10-K”).

Operating results for the nine months ended September 30, 2021 are not necessarily indicative of

the final results that may be expected for the year ending December 31, 2021.

For more complete financial information, these unaudited

financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2020 included

in our Form 10-K filed with the SEC on February 12, 2021 (“Form 10-K”).

Notes to the financial statements which would substantially

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The amount in excess

of the FDIC insurance at June 30, 2021 was $ 6,635,572 .

The Company has not experienced losses on these accounts and management believes,

based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

of the FDIC insurance as of September 30, 2021 was $ 8,076,223 .

The Company has not experienced losses on these accounts and management

believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Loss Per Common Share - Basic loss per common share is computed

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excludes common stock equivalents, because their inclusion would be anti-dilutive.

For the six months ended June 30, 2021, the Company’s

For the nine months ended September 30, 2021, the Company’s

potentially dilutive shares and options, which were not included in the calculation of net loss per share, included warrants to purchase

5,130,240 common shares, and options for 2,939,736 common shares.

For the six months ended June 30, 2020, the Company’s potentially

For the nine months ended September 30, 2020, the Company’s potentially

dilutive shares and options, which were not included in the calculation of net loss per share warrants to purchase 3,986,630 common shares,

1 unchanged sentence

Note 3 – Equity

In January 2021, the Company entered into a

twelve-month agreement with an investor relations firm that includes the issuance of 25,000

restricted shares of common stock.

Upon signing the agreement, 6,250

shares vested immediately, and the remaining 18,750

shares will vest quarterly over the remainder of the agreement.

The Company may terminate the agreement at any time during the

twelve-month period with a fifteen-day notice.

During the six months ended June 30, 2021, the Company issued 12,500

common shares and recognized $ 25,250

of stock-based compensation related to the agreement and will issue the remaining shares over the service period.

In July 2021, the

Company issued 6,250

common shares and will issue the remaining shares over the service period.

In January 2021, the Company entered into a twelve-month agreement with

an investor relations firm that includes the issuance of 25,000 restricted shares of common stock.

Upon signing the agreement, 6,250 shares

vested immediately, and the remaining 18,750 shares will vest quarterly over the remainder of the agreement.

The Company may terminate

the agreement at any time during the twelve-month period with a fifteen-day notice.

During the nine months ended September 30, 2021,

the Company issued 18,750 common shares and recognized $ 37,875 of stock-based compensation related to the agreement and will issue the

remaining shares over the service period.

During the nine months ended September 30, 2021, the Company issued

75,000 shares of common stock and recognized $ 140,250 of expense for investor relations services for a four month period ending September

On February 12, 2021, the Company entered into a Capital on Demand™

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to time, through the Agent, shares of the Company’s common stock with an aggregate sales price of up to $20.0 million.

During the six months ended June 30, 2021, the Company sold 2,063,509

shares of common stock to the Agent for net proceeds of $ 1,084,704 and recorded a subscription receivable of $ 3,569,117 .

The subscription

receivable was collected in full on July 1, 2021.

During the nine months ended September 30, 2021, the Company sold 2,063,059

shares of common stock to the Agent for net proceeds of $ 4,653,821 .

Stock Options

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purchase more than 750,000 shares of common stock) in a single year.

During the six months ended June 30, 2021,

the Board of Directors approved grants of 611,000

options to officers, employees and a consultant.

the nine months ended September 30, 2021, the Board of Directors approved grants of 739,000

options to officers, employees, board of directors and a consultant.

The exercise price of the options ranges from $ 1.80

and the options expire ten-years following issuance.

The total fair value of these option grants at issuance was $ 1,769,686 .

fair value of these option grants at issuance was $ 1,969,712 .

Of the 739,000 options issued, 128,000

options provided that 25% vested upon issuance, 50% vest upon the Board approving a business development acquisition and 25% vest

options vest on the first anniversary date of issuance, 75,000

options have a vesting term of 25% vest upon issuance, 50% vest upon Board approving a business development acquisition and 25% vest

over a three year period in equal installments on each of the succeeding three anniversary dates.

The remaining options issued vest

in four equal annual installments beginning on the first anniversary following issuance.

During the six months ended June 30, 2021

and 2020, the Company recognized $ 875,039

and $ 565,433

of stock-based compensation, respectively, related to outstanding stock options.

As of June 30, 2021, the Company had $ 3,071,647

of unrecognized expenses related to outstanding options.

The following

table summarizes the stock option activity for the six months ended June 30, 2021:

The remaining options issued vest in

four equal annual installments beginning on the first anniversary following issuance.

the nine months ended September 30, 2021 and 2020, the Company recognized $ 1,228,811 and $ 930,443 of stock-based compensation,

respectively, related to outstanding stock options.

At September 30, 2021, the Company had $ 2,999,404 of unrecognized expenses

related to outstanding options.

The following table summarizes the stock option activity for the nine

months ended September 30, 2021:

Schedule of Stock Option Activity

1 unchanged sentence

Outstanding, December 31, 2020

Outstanding, June 30, 2021

The following table discloses information regarding

outstanding and exercisable options at June 30, 2021:

Schedule of Options by exercise price

Exercise Price

Number of Option Shares

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Number of Option Shares

Weighted Average Exercise Price

As of June 30, 2021, the aggregate intrinsic value of options vested

and outstanding were $ 663,219 and $ 710,625 respectively.

As of June 30, 2021, there are no awards remaining to be issued under the 2017

Plan and 2,188,264 awards remaining to be issued under the 2020 Plan.

Outstanding, September 30, 2021

Exercisable, September 30, 2021

of September 30, 2021, the outstanding stock options have a weighted average remaining term of 8.04 years

and the aggregate intrinsic value of options vested and outstanding were $ 370,281 and

$ 397,375 respectively.

As of September 30, 2021, there are no awards

remaining to be issued under the 2017 Plan and 2,060,264 awards

remaining to be issued under the 2020 Plan.

Stock Warrants

During the six months ended June 30, 2021, the Company received $ 332,750

During the nine months ended September 30, 2021, the Company received

$ 332,750 in cash proceeds from the exercise of 151,250 warrants previously issued at an exercise price of $ 2.20 .

In addition, the Company received

notices to exercise 1,580,140 warrants on a cashless basis resulting in issuance of 1,296,075 shares of common stock.

The following table summarizes the stock warrant

activity for the six months ended June 30, 2021:

In addition, the Company

received notices to exercise 1,580,140 warrants on a cashless basis resulting in issuance of 1,296,075 shares of common stock.

The following table summarizes the stock warrant activity for the nine

months ended September 30, 2021:

Schedule of warrants activity

2 unchanged sentences

( 1,731,390 )

Outstanding, June 30, 2021

The following table discloses information regarding outstanding and

exercisable warrants at June 30, 2021:

Schedule of warrants by exercise price

Exercise Price

Number of Warrant Shares

Weighted Average Exercise Price

Weighted Average Remaining Life (Years)

Number of Warrant Shares

Weighted Average Exercise Price

As of June 30, 2021, the aggregate intrinsic value of warrants vested

and outstanding was $ 1,205,768 .

Outstanding, September 30, 2021

Exercisable, September 30, 2021

As of September 30, 2021 the outstanding and exercisable warrants have

a weighted average remaining term of 3.02 years and have an aggregate intrinsic value of $ 738,793 .

Note 4 – Commitments and Contingencies

45 unchanged sentences

Downs’ 2021 annual base salary

to $ 340,000 .

Scientific Advisory Board

July 15, 2021, our compensation committee recommended to our Board and our Board approved the following policy for the Scientific Advisory

Board members.

The Scientific Advisory board consists of Dr.

Priebe, a significant shareholder and related party, and Dr.

Each scientific advisory board member shall receive annual

cash compensation of $68,600.

As of September 30, 2021, the Company has accrued $ 28,767

related to the Scientific Advisory Board compensation.

WP744 Portfolio (Berubicin)

24 unchanged sentences

of the agreement.

The Company’s rights pursuant to the HPI License were contingent on us raising at least $7.0 million within 12

months from the effective date of the HPI License, a date which was extended by an additional 12 months by the payment of $40,000.

November 13, 2019, the Company closed its IPO and as a result completed the acquisition of the intellectual property discussed in the

HPI agreement.

Unrelated to this agreement, the Company purchased $385,000 of pharmaceutical products from HPI for the manufacturing of

Berubicin API in a related party transaction reviewed and approved by the Company’s audit committee.

During the six months

ended June 30, 2021 and 2020, the Company recognized $ 175,000 and $ 100,000 , respectively related to this agreement.

On August 30, 2018, we entered into a sublicense agreement with WPD

Pharmaceuticals, Inc.

Pursuant to the agreement, the Company granted WPD an exclusive sublicense, even as to us,

for the patent rights we licensed pursuant to the HPI License within the following countries:

Poland, Estonia, Latvia, Lithuania, Belarus,

Ukraine, Moldova, Romania, Bulgaria, Serbia, Macedonia, Albania, Armenia, Azerbaijan, Georgia, Montenegro, Bosnia, Croatia, Slovenia,

Slovakia, Czech Republic, Hungary, Chechnya, Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Greece, Austria, and Russia.

The sublicense agreement provides that WPD must use commercially reasonable development efforts to attempt to develop and commercialize

licensed products in the above mentioned territories, which means the expenditure of at least $2.0 million on the development, testing,

regulatory approval or commercialization of the licensed products during the three year period immediately following the date of the sublicense

In the event that WPD fails to use commercially reasonable development efforts by the foregoing three-year deadline, we have

the right to terminate this sublicense agreement.

In consideration for the rights granted under the sublicense agreement, to the extent

we are required to make any payments to HPI pursuant to the HPI License as a result of this sublicense agreement, WPD agreed to advance

us such payments, and to pay us a royalty equal to 1% of such payments.

WPD is a Polish corporation that is majority-owned by an entity

controlled by Dr.

Our rights pursuant to the HPI License are contingent on us raising at least $7.0 million within 12 months from the

effective date of the HPI License, a date which was extended by an additional 12 months by the payment of $40,000.

On November 13, 2019,

the Company closed its IPO and as a result completed the acquisition of the intellectual property discussed in the HPI agreement.

to this agreement, the Company purchased $385,000 of pharmaceutical products from HPI for the manufacturing of Berubicin API in a related

party transaction reviewed and approved by the Company’s audit committee.

During the nine months ended September 30, 2021 and

2020, the Company recognized $ 262,500 and $ 150,000 , respectively related to this agreement.

As of September 30, 2021, the Company accrued

$ 100,000 related to the beginning of Phase II clinical trials.

Subsequent to September 30, 2021, the Company committed to purchase additional

materials to be used in future drug manufacturing from HPI with an estimated cost of $85,000.

30, 2018, we entered into a sublicense agreement with WPD Pharmaceuticals, Inc.

Pursuant to the agreement, the Company

granted WPD an exclusive sublicense, even as to us, for the patent rights we licensed pursuant to the HPI License within the following

Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine, Moldova, Romania, Bulgaria, Serbia, Macedonia, Albania, Armenia, Azerbaijan,

Georgia, Montenegro, Bosnia, Croatia, Slovenia, Slovakia, Czech Republic, Hungary, Chechnya, Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan,

Turkmenistan, Greece, Austria, and Russia.

The sublicense agreement provides that WPD must use commercially reasonable development efforts

to attempt to develop and commercialize licensed products in the above mentioned territories, which means the expenditure of at least

$2.0 million on the development, testing, regulatory approval or commercialization of the licensed products during the three year period

immediately following the date of the sublicense agreement.

In the event that WPD fails to use commercially reasonable development efforts

by the foregoing three-year deadline, we have the right to terminate this sublicense agreement.

The Company is currently validating WPD

expenditures related to this agreement.

In consideration for the rights granted under the sublicense agreement, to the extent we are

required to make any payments to HPI pursuant to the HPI License as a result of this sublicense agreement, WPD agreed to advance us such

payments, and to pay us a royalty equal to 1% of such payments.

WPD is a Polish corporation that is majority-owned by an entity controlled

Priebe, our founder and largest shareholder.

On February 19, 2021, CNS entered into an Investigational Medicinal

Product Supply Agreement with WPD.

CNS agreed to sell the Berubicin drug product to WPD at historical cost of manufacturing without markup

so that WPD may conduct the clinical trials contemplated by the sublicense agreement.

February 19, 2021, CNS entered into an Investigational Medicinal Product Supply Agreement with WPD, a related party.

CNS agreed to

sell the Berubicin drug product to WPD at historical cost of manufacturing without markup so that WPD may conduct the clinical

trials contemplated by the sublicense agreement.

WPD agreed to pay CNS the following payments:

an upfront payment of $131,073 upon execution of the agreement, (ii), a payment of $262,145 upon final batch release and certification

performed by WPD's subcontractor, and (iii) a final payment of $262,145 upon Clinical Trial Application acceptance by the relevant regulatory

As of June 30, 2021, the upfront payment of $ 131,073 plus pass through costs of $ 1,575 are recorded in other receivable - related

(i) an upfront payment of $ 131,073 upon

execution of the agreement, (ii), a payment of $ 262,145 upon

final batch release and certification performed by WPD's subcontractor, and (iii) a final payment of $262,145 upon Clinical Trial

Application acceptance by the relevant regulatory authority.

All three milestones have been met as of September 30, 2021.

addition, as of September 30, 2021, the drug product with a cost of approximately $ 655,000 has

been delivered to WPD and is being held at a third party depot.

As such, the full amount of approximately $655,000 is now due from

As of September 30, 2021, CNS has invoiced the first of the three amounts plus pass through cost for a total of $132,648.

However, WPD has not remitted payment for that invoice and, as such we have not recorded a receivable for the second and third

milestones due to the collectability issues, and we have recorded a reserve against the related receivable resulting in an

increase to our research and development expense.

The Company is working with WPD to resolve this situation.

On August 31, 2018, the Company entered into a sublicense agreement

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following the Effective Date and (iii) Commencement of Phase I Study within the five (5) year period following the Effective Date.

the six months ended June 30, 2021, the Company paid $ 22,902 to UTMDACC related to this agreement.

On May 7, 2020, pursuant to the WP1244 Portfolio license agreement

described above, the Company entered into a Sponsored Research Agreement with UTMDACC to perform research relating to novel anticancer

agents targeting CNS malignancies.

The Company agreed to fund approximately $1,134,000 over a two-year period.

The Company recorded $ 734,000

in 2020 related to this agreement in research and development expenses in the Company’s Consolidated Statements of Operations.

remainder will be paid and recorded in 2021.

The principal investigator for this agreement is Dr.

Waldemar Priebe, who controls a majority

of the Company’s share.

During the six months ended June 30, 2021, the Company paid $ 200,000 and accrued an additional $400,000

to UTMDACC related to this agreement.

As of June 30, 2021, the Company has accrued $ 600,000 in research and development expenses to UTMDACC.

the nine months ended September 30, 2021, the Company paid $ 22,902 and accrued $ 25,766 to UTMDACC related to this agreement.

2020, pursuant to the WP1244 Portfolio license agreement described above, the Company entered into a Sponsored Research Agreement with

UTMDACC to perform research relating to novel anticancer agents targeting CNS malignancies.

The Company agreed to fund approximately $1,134,000

over a two-year period.

The Company recorded $ 734,000 in 2020 related to this agreement in research and development expenses in the Company’s

Consolidated Statements of Operations.

The remainder will be paid and recorded in 2021.

The principal investigator for this agreement

Waldemar Priebe, who controls a majority of the Company’s share.

During the nine months ended September 30, 2021, the Company

paid $ 200,000 and accrued an additional $400,000 to UTMDACC

related to this agreement.

As of September 30, 2021, the Company has accrued $ 600,000 in research and development expenses to UTMDACC.

Anti-Viral Portfolio

21 unchanged sentences

the products.

During the six months ended June 30, 2020, the Company paid $ 225,000 related to this agreement.

Note 5 – Subsequent Events

On July 15, 2021, our compensation committee recommended to our Board

and our Board approved the following policy for compensating non-employee members of the Board.

Each independent director shall receive

annual cash compensation of $40,000.

In addition, the chairperson of the Audit Committee, Compensation Committee and Nominating and Governance

Committee shall receive an annual compensation of $12,000, $7,700 and $5,500, respectively;

the other members of such committees shall

receive an annual compensation of $5,500, $4,000 and $3,500, respectively;

and the lead independent director shall receive annual compensation

In addition, the Board approved the issuance to each independent director of options to purchase 32,000 shares of the Company’s

common stock vesting on the earlier of the one-year anniversary of the date of the grant or the date of the 2022 annual meeting.

options have a 10-year term and an exercise equal to the closing price of the common stock on the date of the grant of $1.80.

On July 24, 2021, the Company received Fast Track Designation from

the FDA for Berubicin.

Fast Track Designation is designed to facilitate the development and expedite the review of drugs to treat

serious conditions and fill an unmet medical need.

In July 2021, the Company issued 75,000

shares of common stock for investor relations services for a four-month period ending September 2021.

The fair value of the shares

on the commitment date was $140,250.

During the nine months ended September 30, 2020, the Company paid $225,000 related to this agreement.

2021, the Company received Fast Track Designation from the FDA for Berubicin.

Fast Track Designation is designed to facilitate the

development and expedite the review of drugs to treat serious conditions and fill an unmet medical need.

– Subsequent Events

Subsequent to September 30, 2021, the Company

received a notice to exercise 915,263 warrants on a cashless basis resulting in issuance of 460,232 shares of common stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements