What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-03 compared with 2021-02-12 · 17 added, 226 removed, 6 unchanged (98% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock has been listed on the

NASDAQ Capital Market under the symbol “CNSP”

since November 8, 2019.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock has been listed on the NASDAQ

Capital Market under the symbol “CNSP” since November 8, 2019.

Holders of Common Equity

As of January 29, 2021, we had approximately

As of February 7, 2022, we had approximately

11,000 stockholders of record of our common stock.

This does not include beneficial owners of our common stock.

We have never declared or paid any cash

dividends on our capital stock.

We have never declared or paid any cash dividends

on our capital stock.

We currently intend to retain earnings, if any, to finance the growth and development of our business.

We do not expect to pay any cash dividends on our common stock in the foreseeable future.

Payment of future dividends, if any,

will be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital

requirements, restrictions contained in any financing instruments, provisions of applicable law and other factors the board deems

expect to pay any cash dividends on our common stock in the foreseeable future.

Payment of future dividends, if any, will be at the discretion

of our board of directors and will depend on our financial condition, results of operations, capital requirements, restrictions contained

in any financing instruments, provisions of applicable law and other factors the board deems relevant.

Recent Sales of Unregistered Securities

There have been no sales of unregistered

securities during the quarter ended December 31, 2020.

Purchases of Equity Securities by the Issuer and Affiliated

We did not repurchase any of our equity

securities during the year ended December 31, 2020.

There have been no sales of unregistered securities

during the quarter ended December 31, 2021.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any of our equity securities

during the year ended December 31, 2021.

Equity Compensation Plan Information

See Part III, Item 12 to this Form 10-K

for information relating to securities authorized for issuance under our equity compensation plans.

Selected Financial Data.

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion

and analysis of our financial condition and results of operations in conjunction with the financial statements and the related

notes appearing elsewhere in this Form 10-K.

This discussion contains forward-looking statements reflecting our current expectations

that involve risks and uncertainties, including those set forth under “Cautionary Statement About Forward-Looking Statements.”

Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking

statements as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A - “Risk

Factors.”

Actual results and the timing of events could differ materially from those discussed in our forward-looking statements

as a result of many factors, including those set forth under “Risk Factors”

and elsewhere in this Form 10-K.

We are a preclinical stage pharmaceutical

company organized as a Nevada corporation in July 2017 to focus on the development of anti-cancer drug candidates for the treatment

of brain and central nervous system tumors, based on intellectual property that we license under a license agreements with HPI

and The University of Texas M.D.

Anderson Cancer Center and own pursuant to a collaboration and asset purchase agreement with Reata.

We believe our lead drug candidate, Berubicin,

if approved by the FDA, may be a significant discovery in the treatment of glioblastoma.

Glioblastoma are tumors that arise from

astrocytes, which are star-shaped cells making up the supportive tissue of the brain.

These tumors are usually highly malignant

(cancerous) because the cells reproduce quickly, and they are supported by a large network of blood vessels.

Berubicin is an anthracycline,

which is a class of drugs that are among the most powerful chemotherapy drugs known.

Based on limited clinical data, we believe

Berubicin is the first anthracycline that appears to have crossed the Blood Brain Barrier and target brain cancer cells.

our current focus is solely on the development of Berubicin, we are also in the process of attempting to secure intellectual property

rights in additional compounds that may be developed into drugs to treat cancers.

Berubicin was discovered at MD Anderson

Waldemar Priebe, the founder of the Company.

Through a series of transactions, Berubicin was initially licensed to Reata.

Reata conducted a Phase I clinical trial on Berubicin but subsequently allowed their IND with the FDA to lapse for strategic reasons.

This will require us to obtain a new IND for Berubicin before beginning further clinical trials.

We do not have manufacturing facilities

and all manufacturing activities are contracted out to third parties.

Additionally, we do not have a sales organization.

On November 21, 2017, we entered into a

Collaboration and Asset Purchase Agreement with Reata (the “Reata Agreement”).

Pursuant to the Reata Agreement we purchased

all of Reata’s intellectual property and development data regarding Berubicin, including all trade secrets, knowhow, confidential

information and other intellectual property rights, which we refer to as the Reata Data.

On December 28, 2017, we obtained the rights

to a worldwide, exclusive royalty-bearing, license to the chemical compound commonly known as Berubicin from HPI in an agreement

we refer to as the HPI License.

Under the HPI License we obtained the exclusive right to develop certain patented chemical compounds

for use in the treatment of cancer anywhere in the world.

In the HPI License we agreed to pay HPI:

(i) development fees of $750,000

over a three-year period beginning November 2019;

(ii) a 2% royalty on net sales;

(iii) a $50,000 per year license fee;

(iv) milestone

payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon the approval of an NDA for Berubicin;

(v) 200,000 shares of our common stock.

With the Reata Agreement and the HPI License,

we believe we have obtained all rights and intellectual property necessary to develop Berubicin.

As stated earlier, it is our plan

to obtain additional intellectual property covering other compounds which, subject to the receipt of additional financing, may

be developed into drugs for brain and other cancers.

On January 10, 2020, we entered into a Patent

and Technology License Agreement (the “1244 Agreement”) with The Board of Regents of The University of Texas System,

an agency of the State of Texas, on behalf of The University of Texas M.

Anderson Cancer Center (“UTMDACC”).

to the 1244 Agreement, we obtained a royalty-bearing, worldwide, exclusive license to certain intellectual property rights, including

patent rights, related to our WP1244 drug technology.

In consideration, we must make payments to UTMDACC including an up-front

license fee, annual maintenance fee, milestone payments and royalty payments (including minimum annual royalties) for sales of

licensed products developed under the 1244 Agreement.

The term of the 1244 Agreement expires on the last to occur of:

(a) the expiration

of all patents subject to the 1244 Agreement, or (b) fifteen years after execution;

provided that UTMDACC has the right to terminate

the 1244 Agreement in the event that we fail to meet certain commercial diligence milestones.

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 paid and recorded $334,000 in 2020 related to this agreement in research and development expenses

in the Company’s Statements of Operations.

The remaining $720,000 will be paid in 2021, of which $400,000 was accrued at

December 31, 2020.

The principal investigator for this agreement is Dr.

Results of Operations for the Year Ended December 31, 2020

Compared to the Year Ended December 31, 2019

General and Administrative Expense

General and administrative expense was

$4,392,873 for the year ended December 31, 2020 compared to $1,978,643 for 2019.

The increase in general and administrative expense,

was mainly the result of closing our IPO in November 2019 which allowed us to substantially increase our operations.

of the change is attributable to an increase of approximately $480,000 for stock-based compensation, an increase of $667,000

in employee compensation and taxes, compensation to the Board of Directors of $180,000, an increase of $302,000 in professional

fees, an increase of $495,000 in insurance expenses, and an increase of $431,000 in other corporate expenses.

These changes were

offset by a decrease of $154,000 in recruiting fees in 2020.

Research and Development Expense

Research and development expense was $5,061,734

for the year ended December 31, 2020 compared to $1,854,334 for 2019.

The expenses incurred during the year were related to patent

maintenance cost and contract labor related to the preparation of our Phase II study.

We expect to incur increased research and

development costs in the future as our product development activities expand.

Interest Expense

Interest expense was $3,264 and $26,152

for the years ended December 31, 2020 and 2019, respectively.

The decrease in interest expense was mainly the result of the payoff

of our convertible notes payable issued in 2017 bearing interest at the rate of 10% per annum.

The net loss for the year ended December

31, 2020 was $9,457,871 compared to $3,877,211 for 2019.

The change in net loss is attributable to increased personnel and activity

associated with preparing for our clinical trials in 2020.

Liquidity and Capital Resources

On December 31, 2020, we had cash of $14,039,493

and we had working capital of $13,590,415.

We have historically funded our operations from proceeds from debt and equity sales.

On November 13, 2019, we closed our IPO

of 2,125,000 shares of common stock at a price to the public of $4.00 per share, followed shortly by the exercise of the over-allotment

option issued to the underwriter which resulted in an additional 318,750 shares of common stock being issued at the IPO price of

$4.00 per share.

On December 28, 2020, we closed a follow-on

offering of 5,750,000 shares of common stock at a price to the public of $2.00 per share (including a full over-allotment option).

Each share issued included 0.5 warrants to purchase a common share at a price of $2.20.

We believe that the proceeds from this

issuance and our cash on hand are sufficient to fund our planned operations through, but not beyond, 2021.

Our plan of operations is primarily focused

on using the proceeds from the follow-on offering to complete a Phase II clinical trial for Berubicin.

We estimate that we will

require additional financing, beyond the proceeds of the offering, of approximately $18 million to complete the trial, approximately

$2.0 million to support near-term WP1244 preclinical work, plus such additional working capital to fund our operations during the

pendency of the trial.

The timing and costs of clinical trials are difficult to predict and as such the foregoing estimates may

prove to be inaccurate.

We will need to raise additional capital

in order to meet our obligations and execute our business plan.

If we are unable to raise sufficient funds, we will be required

to develop and implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until

sufficient additional capital is raised to support further operations.

There can be no assurance that such a plan will be successful.

Summary of Cash Flows

Cash used in operating activities

Net cash used in operating activities was

$7,318,018 and $3,553,472 for the years ended December 31, 2020 and 2019, respectively, and mainly included payments made for clinical

trial preparation, officer compensation, marketing and professional fees to our consultants, attorneys and accountants.

Cash used in investing activities

Net cash used in operating activities was

$17,945 and $20,120 for the years ended December 31, 2020 and 2019 and included payments furniture and equipment.

Cash provided by financing activities

Net cash provided by financing activities

was $14,134,168 and $10,259,747 for the years ended December 31, 2020 and 2019.

We received net proceeds of $14,222,249 from

the issuance of common stock during the year ended December 31, 2020.

On November 13, 2019, we closed our IPO

of 2,125,000 shares of common stock at a price to the public of $4.00 per share, followed shortly by the exercise of the over-allotment

option issued to the underwriter which resulted in an additional 318,750 shares of common stock being issued at the IPO price of

$4.00 per share.

On December 28, 2020, we closed a follow-on

offering of 5,750,000 shares of common stock at a price to the public of $2.00 per share (including a full over-allotment option).

Each share issued included 0.5 warrants to purchase a common share at a price of $2.20.

Off-balance Sheet Arrangements

As of December 31, 2020, we did not have

any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance

or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually

narrow or limited purposes.

Purchase Commitments

We do not have any material commitments

for capital expenditures, although we are required to pay certain development fees to HPI as described in the section “Overview”

JOBS Act Accounting Election

The Jumpstart Our Business Startups Act

of 2012, or the JOBS Act, exempts an “emerging growth company”

such as us from being required to comply with new or

revised financial accounting standards until private companies are required to comply with the new or revised financial accounting

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements

that apply to non-emerging growth companies but any such election to opt out is irrevocable.

We elected not to opt out of such

extended transition period which means that when a standard is issued or revised and it has different application dates for public

or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt

the new or revised standard.

This may make comparison of our financial statements with another public company which is neither

an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult

or impossible because of the potential differences in accounting standards used.

Critical Accounting Policies and Estimates

The preparation of financial statements

in conformity with accounting principles generally accepted in the United States of America requires management to make estimates,

assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto.

critical accounting policies to be those that require more significant judgments and estimates in the preparation of our financial

statements, including the following:

long lived assets;

intangible assets valuations;

and income tax valuations.

Management relies

on historical experience and other assumptions believed to be reasonable in making its judgment and estimates.

Actual results could

differ materially from those estimates.

Management believes its application

of accounting policies, and the estimates inherently required therein, are reasonable.

These accounting policies and estimates

are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change.

Stock-based Compensation –

Employee and non-employee share-based compensation is measured at the grant date, based on the fair value of the award, and is

recognized as an expense over the requisite service period.

Research and Development Costs -

Research and development costs are expensed as incurred.

Quantitative and Qualitative Disclosure About Market

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

See Part III, Item 12 to this Form 10-K for information

relating to securities authorized for issuance under our equity compensation plans.

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-K

Item 5. Market for Registrant’s Common Equity