What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-03-31 compared with 2022-03-03 · 658 added, 479 removed, 316 unchanged (78% of the section changed)

2 unchanged sentences

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered

Public Accounting Firm (PCAOB ID:

Balance Sheets as of December 31, 2022 and 2021

5 unchanged sentences

PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

CNS Pharmaceuticals, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance

sheets of CNS Pharmaceuticals, Inc.

(the “Company”) as of December 31, 2021 and 2020, and the related statements of operations,

stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company

as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting

principles generally accepted in the United States of America.

Going Concern Matter

The accompanying financial statements

have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the

Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern.

To the Shareholders

and Board of Directors of

CNS Pharmaceuticals,

on the Financial Statements

audited the accompanying balance sheets of CNS Pharmaceuticals, Inc.

(the “Company”) as of December 31, 2022 and 2021, and

the related statements of operations, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the

years then ended, in conformity with accounting principles generally accepted in the United States of America.

Concern Matter

The accompanying

financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the financial

statements, the Company has suffered recurring losses from operations and negative cash flows from operations that raise substantial

doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

The financial statements do not include any adjustments that

might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal

control over financial reporting.

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

These financial

statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not

required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we

are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that

respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ MaloneBailey, LLP

included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,

and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a

reasonable basis for our opinion.

/s/ MaloneBailey,

www.malonebailey.com

We have served as the Company's auditor

Houston, Texas

March 2, 2022

served as the Company's auditor since 2019.

CNS Pharmaceuticals, Inc.

Balance Sheets

December 31, 2021

December 31, 2020

Current Assets:

Cash and cash equivalents

Prepaid expenses

Prepaid expenses and other current assets

Total current assets

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Total Liabilities and Stockholders' Equity

See accompanying notes to the financial statements.

See accompanying notes to

the financial statements.

CNS Pharmaceuticals, Inc.

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$ ( 14,495,200 )

Loss per share - basic and diluted

Weighted average shares outstanding - basic and diluted

Loss per share - basic

Loss per share - diluted

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

See accompanying notes to

the financial statements.

Pharmaceuticals, Inc.

Statements of

Stockholders' Equity

For the years ended December 31, 2021 and 2020

CNS Pharmaceuticals, Inc.

Statements of Stockholders’

For the years ended December

31, 2022 and 2021

Stockholders'

1 unchanged sentence

$ ( 20,946,343 )

Common stock and warrants issued for cash, net

Common stock issued for deferred offering costs

Common stock issued for cash, net

Exercise of warrants

Stock-based compensation

1 unchanged sentence

( 14,495,200 )

Balance December 31, 2020

Balance December 31, 2021 - As revised

( 35,441,543 )

Common stock and warrants issued for cash, net

Common stock issued for cash, net

Exercise of warrants

8 unchanged sentences

Statements of Cash Flows

Year Ended December 31, 2021

Year Ended December 31, 2020

December 31, 2022

December 31, 2021

Cash Flows from Operating Activities:

3 unchanged sentences

Stock-based compensation

Write off of deferred offering cost

Loss on disposal of fixed assets

Changes in operating assets and liabilities:

Prepaid expenses

Prepaid expenses and other current assets

( 1,520,281 )

Accounts payable

Accounts payable and accrued expenses - related party

Accrued expenses

6 unchanged sentences

Cash Flows from Financing Activities:

Payment of deferred offering costs

Payments on notes payable

Proceeds from exercise of warrants

Proceeds from sale of common stock and warrants

Proceeds from sale of common stock

Net cash provided by financing activities

7 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities:

Common stock issued for deferred offering costs

Prepaid expenses financed with note payable

Deferred offering costs offset against additional paid in capital

Cashless exercise of warrants

Prepaid expense financed with note payable

See accompanying notes to

4 unchanged sentences

CNS Pharmaceuticals, Inc.

(“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.

(“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.

On August 25, 2022, the stockholders of the Company approved an amendment

to the Company’s amended and restated articles of incorporation (the “Amendment”) to effect the reverse stock split

at a ratio in the range of 1-for-2 to 1-for-30.

The reverse stock split became effective on November 28, 2022 on a 1-for-30 basis without

any change in the par value per share, which remained at $0.001.

The reverse stock split has been retroactively

adjusted throughout these financial statements and footnotes.

Note 2 – Correction of Previously Issued Financial Statements

In the course of preparing its fiscal year 2022 financial statements,

the Company identified errors in the financial statements for the year ended December 31, 2021 and its unaudited financial statements

for the periods ended March 31, 2022, June 30, 2022, and September 30, 2022.

The errors pertain to understatements in research and development

expenses and accrued expenses amounting to $458,622 for the year ended December 31, 2021 and $367,439 for the three months ended March

31, 2022, the six months ended June 30, 2022 and the nine months ended September 30, 2022 resulting from additional trial sites costs

which were not reported to the Company by our CRO.

The Company assessed the materiality of these misstatements on prior

periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) No.

99, Materiality, codified in

ASC 250 (“ASC 250”), Presentation of Financial Statements, and concluded that these misstatements were not material to any prior

annual or interim periods.

Accordingly, in accordance with ASC 250 (SAB No.

108, Considering the Effects of Prior Year Misstatements when

Quantifying Misstatements in Current Year Financial Statements), the Financial Statements as of December 31, 2021, and the year then ended,

which are presented herein, have been revised.

The following are selected line items from the Company's balance sheets, statements of

operations and statements of cash flows for the affected periods illustrating the effect of these corrections:

Schedule of restatements

Balance Sheet

As of December 31,

Accounts payable

Total current liabilities

Total liabilities

Accumulated deficit

( 34,982,921 )

( 35,441,543 )

Total stockholders' equity

Balance Sheet

As of March 31,

Accounts payable

Total current liabilities

Total liabilities

Accumulated deficit

( 37,767,260 )

( 38,593,321 )

Total stockholders' equity

Balance Sheet

As of June 30,

Accounts payable

Total current liabilities

Total liabilities

Accumulated deficit

( 41,333,212 )

( 42,159,273 )

Total stockholders' equity

Balance Sheet

As of September 30,

Accounts payable

Total current liabilities

Total liabilities

Accumulated deficit

( 44,752,765 )

( 45,578,826 )

Total stockholders' equity

Statement of Operations

For the year ended December 31,

Research and development

Total operating expenses

Loss from operations

( 14,027,293 )

( 14,485,915 )

( 14,036,578 )

( 14,495,200 )

Loss per share - basic and diluted

Statement of Operations

For the three months ended March 31,

Research and development

Total operating expenses

Loss from operations

( 2,781,773 )

( 3,149,212 )

( 2,784,339 )

( 3,151,778 )

Loss per share - basic and diluted

Statement of Operations

For the six months ended June 30,

Research and development

Total operating expenses

Loss from operations

Loss per share - basic and diluted

Statement of Operations

For the nine months ended September 30,

Research and development

Total operating expenses

Loss from operations

Loss per share - basic and diluted

Statement of Cash Flows

For the year ended December 31,

Cash Flows from Operating Activities:

$ ( 14,036,578 )

$ ( 458,622 )

$ ( 14,495,200 )

Accounts payable

Net cash used in operating activities

( 13,538,309 )

Statement of Cash Flows

For the three months ended March 31,

Cash Flows from Operating Activities:

$ ( 2,784,339 )

$ ( 367,439 )

$ ( 3,151,778 )

Accounts payable

( 1,033,107 )

Net cash used in operating activities

( 3,077,199 )

Statement of Cash Flows

For the six months ended June 30,

Cash Flows from Operating Activities:

$ ( 6,350,291 )

$ ( 367,439 )

$ ( 6,717,730 )

Accounts payable

( 1,031,937 )

Net cash used in operating activities

( 6,439,733 )

Statement of Cash Flows

For the nine months ended September 30,

Cash Flows from Operating Activities:

$ ( 9,769,844 )

$ ( 367,439 )

$ ( 10,137,283 )

Accounts payable

Net cash used in operating activities

( 8,252,492 )

Note 3 – Summary of Significant Accounting Policies

10 unchanged sentences

Actual results could differ from those estimates.

Liquidity and Going Concern - These financial statements have been prepared on a going concern basis, which

assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business.

The continuation

of the Company as a going concern is dependent upon the ability of the Company to obtain equity or debt financings to continue operations.

The Company has a history of and expects to continue to report negative cash flows from operations and a net loss.

Management believes

that the cash on hand at period end combined with the funds raised subsequent to year end is sufficient to fund its planned operations

into but not beyond the near term.

These factors raise substantial doubt regarding the Company’s ability to continue as a going

These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts

and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company may

seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization,

marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays

or a combination thereof.

Liquidity and Going Concern - These financial statements have been

prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the

normal course of business.

The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain equity

or debt financings to continue operations.

The Company has a history of and expects to continue to report negative cash flows from operations

and a net loss.

Management believes that the cash on hand at period end combined with the funds raised subsequent to year end is sufficient

to fund its planned operations into but not beyond the near term.

These factors raise substantial doubt regarding the Company’s

ability to continue as a going concern.

These financial statements do not include any adjustments to the recoverability and classification

of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going

The Company may seek additional funding through a combination of equity offerings, debt financings, government or other third-party

funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements

and delay planned cash outlays or a combination thereof.

Management cannot be certain that such events or a combination thereof can be

Cash and Cash Equivalents - The Company considers all highly

liquid accounts with original maturities of three months or less at the date of acquisition to be cash equivalents.

Periodically,

the Company may carry cash balances at financial institutions in excess of the federally insured limit of $ 250,000 .

The amount in excess

of the FDIC insurance at December 31, 2021 was $ 4,754,517 .

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.

and Equipment - Property and equipment is recorded at cost and depreciated over their estimated useful lives using

the straight-line depreciation method as follows:

and Cash Equivalents - The Company considers all highly liquid accounts with original maturities of three months or less

at the date of acquisition to be cash equivalents.

Periodically, the Company may carry cash balances at financial institutions in

excess of the federally insured limit of $ 250,000 .

The amount in excess of the FDIC insurance at December 31, 2022 was $ 9,805,407 .

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.

Property and Equipment - Property and equipment is recorded

at cost and depreciated over their estimated useful lives using the straight-line depreciation method as follows:

Schedule of estimated useful lives

5 unchanged sentences

Repairs and maintenance costs are expensed as incurred.

Impairment of Long-lived Asset - The Company evaluates

its long-lived tangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets

Impairment of Long-lived Assets - The Company evaluates its

long-lived tangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets

may not be recoverable.

3 unchanged sentences

of the asset exceeds its fair value.

Fair Value of Financial Instruments - The carrying value

of short-term instruments, including cash and cash equivalents, accounts payable and accrued expenses, and short-term notes approximate

fair value due to the relatively short period to maturity for these instruments.

Fair value is defined as the exchange price that would be received

for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in

an orderly transaction between market participants on the measurement date.

Fair Value of Financial Instruments - The carrying value of

short-term instruments, including cash and cash equivalents, accounts payable and accrued expenses, and short-term notes approximate fair

value due to the relatively short period to maturity for these instruments.

Fair value is defined as the exchange price that would be received for

an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an

orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value maximize the

4 unchanged sentences

for identical assets or liabilities in active markets.

Level 2 - inputs to the valuation methodology include quoted prices

for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly,

Level 2 - inputs to the valuation methodology include quoted prices for

similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly,

for substantially the full term of the financial instruments.

Level 3 - inputs to the valuation methodology are unobservable and

significant to the fair value.

The Company does not have any assets or liabilities that are required

to be measured and recorded at fair value on a recurring basis.

Related Parties - The Company follows

ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Income Taxes - The Company uses the asset and liability

method of accounting for income taxes.

Under this method, deferred tax assets and liabilities are determined based on the differences

between the financial reporting and the tax bases of reported assets and liabilities and are measured using the enacted tax rates and

laws that will be in effect when the differences are expected to reverse.

The Company must then assess the likelihood that the resulting

deferred tax assets will be realized.

A valuation allowance is provided when it is more likely than not that some portion or all of a

deferred tax asset will not be realized.

The Company accounts for uncertain tax positions in accordance with

the provisions of Accounting Standards Codification (ASC) 740-10 which prescribes a recognition threshold and measurement attribute for

financial statement disclosure of tax positions taken, or expected to be taken, on its tax return.

The Company evaluates and records any

uncertain tax positions based on the amount that management deems is more likely than not to be sustained upon examination and ultimate

settlement with the tax authorities in the tax jurisdictions in which it operates.

Level 3 - inputs to the valuation methodology are unobservable and significant

to the fair value.

The Company does not have any assets or liabilities that are required to

be measured and recorded at fair value on a recurring basis.

Related Parties - The Company

follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party

transactions.

Income Taxes - The Company uses the asset and liability method

of accounting for income taxes.

Under this method, deferred tax assets and liabilities are determined based on the differences between

the financial reporting and the tax bases of reported assets and liabilities and are measured using the enacted tax rates and laws that

will be in effect when the differences are expected to reverse.

The Company must then assess the likelihood that the resulting deferred

tax assets will be realized.

A valuation allowance is provided when it is more likely than not that some portion or all of a deferred

tax asset will not be realized.

The Company accounts for uncertain tax positions in accordance with the

provisions of Accounting Standards Codification (ASC) 740-10 which prescribes a recognition threshold and measurement attribute for financial

statement disclosure of tax positions taken, or expected to be taken, on its tax return.

The Company evaluates and records any uncertain

tax positions based on the amount that management deems is more likely than not to be sustained upon examination and ultimate settlement

with the tax authorities in the tax jurisdictions in which it operates.

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

Restricted Stock Units (“RSUs”) - Our RSUs vest over

four years from the date of grant.

The fair value of RSUs is the market price of our common stock at the date of grant.

Performance Units (“PUs”) - The PUs vest based on our

performance against predefined share price targets and the achievement of Positive Interim, Clinical Data as defined by the Board.

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

10 unchanged sentences

95,501 common shares.

Research and Development Costs - Research and development

costs are expensed as incurred.

Research and Development Costs - Research and development costs

are expensed as incurred.

The Company recognized the benefit of refundable research and development tax credits as a reduction of research

and development expenses when there is reasonable assurance that the amount claimed will be recovered.

Recent Accounting Pronouncements

5 unchanged sentences

Principal and interest payments

related to the note will be repaid over a 11-month period with the final payment due on September 30, 2022 .

related to the note will be repaid over a 11-month period with the final payment due on October 31, 2023 .

As of December 31, 2022, the

Company’s note payable balance was $ 409,968 .

During the year ended December 31, 2020, the Company entered into a

short-term note payable for an aggregate of $ 482,375 , bearing interest at 4.25 % per year to finance certain insurance policies.

and interest payments related to the note will be repaid over a 11-month period with the final payment due on September 30, 2021 .

December 31, 2020, the Company’s note payable balance was $ 439,294 .

During the year ended December 31, 2021, the Company repaid

the full balance of the note.

On November 8, 2021, the Company entered into a short-term note payable

for an aggregate of $ 425,990 , bearing interest at 3.3 % per year to finance certain insurance policies.

Principal and interest payments

related to the note will be repaid over a 11-month period with the final payment due on September 30, 2022 .

During the year ended December

31, 2022, the Company repaid the full balance of the note.

As of December 31, 2022 and 2021, the Company’s note payable balance

was $0 and $ 387,794 , respectively.

Note 5 – Equity

The Company has authorized 75,000,000 shares of common stock having

a par value of $ 0.001 per share.

In addition, the Company authorized 5,000,000 shares of preferred stock to be issued having a par value

The Company has authorized 75,000,000 shares of common stock having a par

value of $ 0.001 per share.

In addition, the Company authorized 5,000,000 shares of preferred stock to be issued having a par value of

The specific rights of the preferred stock shall be determined by the board of directors.

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.

On August 25, 2022, the stockholders of the Company

approved an amendment to the Company’s amended and restated articles of incorporation (the “Amendment”) to effect the

reverse stock split at a ratio in the range of 1-for-2 to 1-for-30, with such ratio to be determined in the discretion of the Company’s

board of directors and with such reverse stock split to be effected at such time and date, if at all, as determined by the Company’s

board of directors in its sole discretion prior to the one-year anniversary of the annual meeting.

Pursuant to such authority granted by the Company’s stockholders,

the Company’s board of directors approved a one-for-thirty

(1:30) reverse stock split of the Company’s common stock and the filing of the Amendment to effectuate the reverse

The reverse stock split became effective on November 28, 2022 on a 1-for-30 basis without any change in the par value

per share, which remained at $0.001.

The Company engaged H.C.

Wainwright & Co., LLC (“Wainwright”),

to act as placement agent related to the Securities Purchase Agreement described below.

The Company agreed to pay Wainwright an aggregate

fee equal to 7.0% of the gross proceeds received by the Company from the sale of the securities in the transaction.

The Company also issued

to Wainwright or its designees warrants to purchase up to 5.0% of the aggregate number of shares of Common Stock sold in the transactions

(the “Placement Agent Warrants”), or 20,176 Placement Agent Warrants.

The Placement Agent Warrants have substantially the

same terms as the Common Warrants, except that the Placement Agent Warrants have an exercise price equal to 125% of the offering price,

or $35.625 per share.

The Company also paid Wainwright $ 50,000 for non-accountable expenses and $ 10,000 for legal fees and expenses.

On January 5, 2022, the Company entered into a Securities Purchase Agreement

(the “Purchase Agreement”) with several institutional investors for the sale by the Company of (i) 316,316 shares (the “Shares”)

of the Company’s common stock, (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to an aggregate of

87,193 shares of common stock and (iii) warrants to purchase up to an aggregate of 403,509 shares of common stock (the “Common Warrants”

and, collectively with the Pre-Funded Warrants, the “Warrants”), in a private placement offering.

The combined purchase price

of one share of common stock (or one Pre-Funded Warrant) and the accompanying Common Warrant is $28.50.

Subject to certain ownership limitations, the Warrants are exercisable

upon issuance.

Each Pre-Funded Warrant is exercisable into one share of common stock at a price per share of $0.001 (as adjusted from

time to time in accordance with the terms thereof).

Each Common Warrant is exercisable into one share of common stock at a price per share

of $24.60 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth anniversary of the date of

The gross proceeds from the Purchase Agreement were $ 11,497,385 resulting in net proceeds, after payment of commissions and

expenses, received by the Company of $ 10,625,786 .

On November 30, 2022, the Company entered into a Securities Purchase Agreement

(the “Purchase Agreement”) with an institutional investor for the sale by the Company of (i) 147,000 shares (the “Shares”)

of the Company’s common stock, par value $0.001 per share (the “Common Stock”), (ii) pre-funded warrants (the “Pre-Funded

Warrants”) to purchase up to an aggregate of 1,742,764 shares of Common Stock and (iii) warrants to purchase up to an aggregate

of 1,889,764 shares of Common Stock (the “Common Warrants” and, collectively with the Pre-Funded Warrants, the “Warrants”),

in a public offering.

The combined purchase price of one share of Common Stock and accompanying Common Warrant is $3.175 and the combined

purchase price of one Pre-Funded Warrant and accompanying Common Warrant is $3.174.

Subject to certain ownership limitations, the Warrants are exercisable

upon issuance.

Each Pre-Funded Warrant is exercisable into one share of Common Stock at a price per share of $0.001 (as adjusted from

time to time in accordance with the terms thereof).

Each Common Warrant is exercisable into one share of Common Stock at a price per share

of $3.03 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth anniversary of the date of

Each Pre-Funded Warrant is exercisable into one share of Common Stock at a price per share of $0.001 (as adjusted from time

to time in accordance with the terms thereof).

The gross proceeds to the Company from the offering were $ 5.998 million, resulting in net

proceeds, after payment of commissions and expenses, received by the Company of $ 5,412,308 .

On November 30, 2022, in connection with the offering, the Company also

entered into a warrant amendment agreement (the “Warrant Amendment Agreement”) with the investor in the offering.

Warrant Amendment Agreement, the Company agreed to amend certain existing warrants (the “Existing Warrants”) to purchase up

to an aggregate of (i) 16,667 shares of common stock at an exercise price of $ 66.00 per share and an expiration date of December 28, 2025

and (ii) 210,527 shares of common stock at an exercise price of $ 24.60 per share and an expiration date of January 10, 2027, as follows:

(i) to lower the exercise price of the Existing Warrants to $3.03 per share, and (ii) to extend the expiration date of the Existing Warrants

to five years following the closing of the offering.

On November 30, 2022, the Company entered into a placement agency agreement with H.C.

Wainwright & Co., LLC (“Wainwright”)

and Brookline Capital Markets, a division of Arcadia Securities, LLC (“Brookline” and collectively with Wainright, the “Placement

Agents”) (the “Placement Agreement”), pursuant to which the Company has agreed to pay the Placement Agents an aggregate

fee equal to 7.0% of the gross proceeds received by the Company from the sale of the securities in the transaction.

Pursuant to the Placement

Agreement, the Company will also issue to the Placement Agents or their designees warrants to purchase up to 5.0% of the aggregate number

of shares of Common Stock issued in the offering and issuable upon the exercise of the pre-funded warrants issued in the offering (the

“Placement Agent Warrants”), or 94,488 Placement Agent Warrants.

The Placement Agent Warrants have substantially the same

terms as the Common Warrants, except that the Placement Agent Warrants have an exercise price equal to 125% of the offering price, or

$3.7875 per share, subject to adjustments.

The Company also agreed to reimburse certain expenses of Wainwright, including a non-accountable

expense allowance of $ 50,000 , legal fees and expenses in an amount up to $ 100,000 and clearing fees of $ 15,950 .

The Company also agreed

to pay Wainwright a tail fee equal to the cash compensation in this offering, if any investor, who was contacted or introduced to the

Company by Wainwright during the term of its engagement, provides the Company with capital in any public or private offering or other

financing or capital raising transaction during the nine-month period following expiration or termination of our engagement of Wainwright.

In addition, with certain exceptions, for a period of seven month following the closing of the offering, the Company has granted Wainwright

the right to act as sole book-runner, sole manager, sole placement agent or sole agent with respect to any financing or refinancing of

indebtedness;

and if the Company decides to raise funds by means of a public offering (including at-the-market facility) or a private

placement or any other capital-raising financing of equity, equity-linked or debt securities, the Company has granted Wainwright the right

to act as sole book-running manager, sole underwriter or sole placement agent for such financing.

As consideration for entering into a purchase agreement with Lincoln

Park Capital Fund, LLC in fiscal year 2020, the Company recorded as deferred offering costs of $440,902, on the balance sheet.

As of December

31, 2021, unamortized deferred offering costs totaled $334,138.

During the year ended December 31, 2022, the Company wrote off the remaining

$ 334,138 deferred offering costs to the statement of operations.

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

an investor relations firm that includes the issuance of 834 restricted shares of common stock.

Upon signing the agreement, 209 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 year ended December 31, 2021, the Company issued 25,000 common

shares and recognized $ 50,500

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

During the year ended December 31, 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 2021.

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

Demand™ Sales Agreement (the “Agreement”) with JonesTrading Institutional Services LLC and Brookline Capital

Markets, a division of Arcadia Securities, LLC (collectively, the “Agent”).

Pursuant to the terms of the Agreement, the

Company may sell from time 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 year ended December 31, 2021, the Company sold 2,063,059 shares

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

On September 15, 2020, Company entered into a purchase agreement (the

“Purchase Agreement”), and a registration rights agreement (the “Registration Rights Agreement”), with Lincoln

Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park has committed to purchase up to $15.0 million worth

of the Company’s common stock (the “Common Stock”).

Under the terms and subject to the conditions of the Purchase Agreement,

the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to $15.0 million

worth of shares of the Company’s Common Stock.

Such sales of Common Stock by the Company, if any, will be subject to certain limitations,

and may occur from time to time, at the Company’s sole discretion, over the 36-month period commencing on the date on which all

of conditions precedent are satisfied, the “Commencement Date”), including that a registration statement covering the resale

of shares of Common Stock that have been and may be issued under the Purchase Agreement has been declared effective by the SEC, a final

prospectus in connection therewith is filed and the other conditions set forth in the purchase agreement are satisfied.

Thereafter, under the Purchase Agreement, on any business day

selected by the Company that the closing sale price of the Common Stock equals or exceeds the threshold price set forth in the

Purchase Agreement, the Company may direct LPC to purchase up to 30,000 shares of Company Common Stock on such business day (each, a

“Regular Purchase”), provided, however, that (i) the Regular Purchase may be increased to up to 50,000 shares, provided

that the closing sale price of the Common Stock is not below $2.00 on the purchase date;

(ii) the Regular Purchase may be increased

to up to 75,000 shares, provided that the closing sale price of the Common Stock is not below $2.50 on the purchase date;

Regular Purchase may be increased to up to 100,000 shares, provided that the closing sale price of the Common Stock is not below

$3.00 on the purchase date;

and (iv) the Regular Purchase may be increased to up to 150,000 shares, provided that the closing sale

price of the Common Stock is not below $4.00 on the purchase date.

In each case, Lincoln Park’s maximum commitment in any

single Regular Purchase may not exceed $1,000,000.

In addition, after the Commencement Date, the Company may direct Lincoln Park to

purchase, on two separate occasions that must be at least 30 business days apart, $1,000,000 worth of Common Stock per such purchase

(each, a “Tranche Purchase”).

The purchase price per share for each Regular Purchase and each Tranche Purchase will be

based on prevailing market prices of the Common Stock immediately preceding the time of sale.

There are no upper limits on the price

per share that Lincoln Park must pay for shares of Common Stock under the Purchase Agreement.

In addition to Regular Purchases and

Tranche Purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases or as additional

accelerated purchases if the closing sale price of the Common Stock equals or exceeds the threshold price at the times set forth in

the Purchase Agreement.

The above-referenced share amount limitations and closing sale price thresholds are subject to adjustment

for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as

provided in the Purchase Agreement.

As consideration for entering into the purchase agreement, the Company

issued 201,991 shares of common stock to Lincoln Park as a commitment fee.

The shares were valued at approximately $ 395,902 and were recorded

as deferred offering costs on the balance sheet.

In addition to the commitment shares, the Company recorded $ 45,000 of due diligence expenses

and legal fees as deferred offering costs.

The deferred charges will be charged against paid-in capital upon future proceeds from the

sale of common stock under this agreement.

During the year ended December 31, 2020, $ 106,764 of deferred offering cost were charged against

paid-in capital.

As of December 31, 2020 and 2021, unamortized deferred offering costs totaled $ 334,138 .

During the year ended December 31, 2020, the Company sold 1,453,926

shares of common stock to Lincoln Park under the Purchase Agreement for net proceeds of $ 3,632,249 .

On December 22, 2020, the Company entered into an underwriting

agreement with A.G.P./Alliance Global Partners (the “Underwriters”), in connection with a public offering (the

“Offering”) of an aggregate of (i) 5,000,000 shares (the “Shares”) of the Company’s common stock, and

(ii) warrants to purchase 2,500,000 shares of common stock (the “Warrants”).

In addition, the Company granted the

Underwriter a 45-day option to purchase up to an additional 750,000 Shares and/or 375,000 Warrants to cover over-allotments, if any.

Each Share sold in the Offering was sold together with a Warrant to purchase 0.5 shares of common stock as a fixed combination.

Shares and accompanying Warrants were sold at a price to the public of $2.00, less underwriting discounts and commissions.

Warrants are exercisable immediately, will expire on December 28, 2025 and have an exercise price of $2.20 per share, subject to

anti-dilution and other adjustments for certain stock splits, stock dividends, or recapitalizations.

The Company used the

Black-Scholes option valuation model to estimate the fair value of the warrants with the following assumptions:

fair value of common

stock on December 28, 2020, the measurement date, $1.85, exercise price of $2.20, expected term of 5 years, volatility of 130.30%

and risk free interest rate of 0.38%.

As of December 31, 2020, the fair value of the 2,875,000 warrants

issued was $ 4,485,441 and

recorded to additional paid in capital as a cost of capital.

The Offering, including the full over-allotment securities, closed on

December 28, 2020 and the Company received net proceeds of $ 10,590,000 after

deducting underwriting discounts, commissions and underwriter expenses associated with the Offering.

vested immediately, and the remaining 625 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 year ended December 31, 2021, the Company issued

834 common shares and recognized $ 50,500 of stock-based compensation related to the agreement and will issue the remaining shares over

the service period.

During the year ended December 31, 2021, the Company

issued 2,500 shares of common stock and recognized $ 140,250 of expense for investor relations services for a four month period ending

September 2021.

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

Sales Agreement (the “Agreement”) with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of

Arcadia Securities, LLC (collectively, the “Agent”).

Pursuant to the terms of the Agreement, the Company may sell from time

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

year ended December 31, 2021, the Company sold 68,784 shares of common stock to the Agent for net proceeds of $ 4,653,821 .

Stock Options

3 unchanged sentences

awards for up to 66,667 shares of common stock.

No key employee may receive more than 500,000 shares of common stock (or options to

purchase more than 500,000 shares of common stock) in a single year.

No key employee may receive more than 16,667 shares of common stock (or options to purchase

more than 16,667 shares of common stock) in a single year.

In 2020, the Board of Directors of the Company approved the CNS Pharmaceuticals,

2 unchanged sentences

awards for up to 100,000 shares of common stock.

No key employee may receive more than 750,000 shares of common stock (or options to

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

During the year ended December 31, 2020, the Board of Directors approved

grants of 561,236 options to employees, Scientific Advisory Board members and members of the Board of Directors.

The exercise price of

the options ranges from $2.06 to $2.47 and expire ten-years following issuance.

The total fair value of these option grants at issuance

was $ 1,115,508 .

300,000 of the issued options vest in four equal annual installments beginning on the first anniversary following issuance.

261,236 of the issued options vest in one annual installment on the first anniversary of the grant date.

During the year ended December 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 to

the options expire ten-years following issuance.

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

Of the 739,000 options

issued, 128,000 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.

No key employee may receive more than 25,000 shares of common stock (or options to purchase

more than 25,000 shares of common stock) in a single year.

During the year ended December 31, 2021, the Board

of Directors approved grants of 24,633 options to officers, employees, board of directors and a consultant.

The exercise price of the

options ranges from $54.00 to $100.80 and the options expire ten-years following issuance.

The total fair value of these option

grants at issuance was $ 1,969,712 .

Of the 24,633 options issued, 4,267 options vest on the first anniversary date of issuance, 2,500 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 years ended December 31, 2022 and 2021, the Company recognized

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had $ 1,318,183 of unrecognized expenses related to options.

The following table summarizes the stock option activity for the year

ended December 31, 2021 and 2020:

The following table summarizes the stock option activity for the year ended

December 31, 2022 and 2021:

Schedule of Stock Option Activity

3 unchanged sentences

Outstanding, December 31, 2022

The aggregate fair value of the options measured during the years

ended December 31, 2021 and 2020 were calculated using the Black-Scholes option pricing model based on the following assumptions:

The aggregate fair value of the options measured during the year ended

December 31, 2021 were calculated using the Black-Scholes option pricing model based on the following assumptions:

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

December 31, 2021

December 31,2020

Fair value of common stock on measurement date

$54.00 to $100.80 per share

$2.06 to $2.47 per share

Risk free interest rate (1)

0.28 % to 1.28 %

0.33 % to 0.82 %

Volatility (2)

128.17 % to 130.72 %

122.79 % to 128.57 %

Dividend yield (3)

4 unchanged sentences

The Company does not expect to pay a dividend in the foreseeable future.

As of December 31, 2021, the outstanding stock

options have a weighted average remaining term of 7.77 years and the aggregate intrinsic value of options vested and outstanding were

As of December 31, 2021, there were 60,500 awards remaining to be issued under the 2017 Plan and 2,074,764 awards remaining

to be issued under the 2020 Plan.

As of December 31, 2022, the outstanding stock options have a weighted

average remaining term of 6.73 years and the aggregate intrinsic value of options vested and outstanding were $ 9,626 .

As of December 31,

2022, there were no awards remaining to be issued under the 2017 Plan and 35,580 awards remaining to be issued under the 2020 Plan.

Stock Warrants

The following table summarizes the stock warrant activity for the

years ended December 31, 2021 and 2020:

The following table summarizes the stock warrant activity for the years

ended December 31, 2022 and 2021:

Schedule of warrant activity

2 unchanged sentences

Outstanding, December 31, 2021

( 2,646,653 )

Outstanding, December 31, 2022

During the years ended December 31, 2020, the Company recognized $ 85,238

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

At December 31, 2020 and 2021, the Company had $ 0 of

unrecognized expenses related to warrants.

During the year ended December 31, 2022, the Company received $ 2,734

$ 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 2,495,403 warrants on a cashless basis resulting in the issuance of 1,756,307 shares of common stock.

As of December 31, 2021 the outstanding and exercisable warrants have

a weighted average remaining term of 2.93 years and have no intrinsic value.

in cash proceeds from the exercise of 204,957

warrants previously issued at an exercise price range of $0.01 to $0.03.

During the year ended December 31, 2021, the

Company received $ 332,750

in cash proceeds from the exercise of 5,041

warrants previously issued at an exercise price of $66.00.

In addition, the Company received notices to exercise 83,187

warrants on a cashless basis resulting in the issuance of 58,544

shares of common stock.

As of December 31, 2022 the outstanding and exercisable warrants have a

weighted average remaining term of 4.84 years and with an intrinsic value of $ 3,898,375 .

Restricted Stock Units

On April 28, 2022, the Compensation Committee approved cash bonuses totaling

$ 213,000 to the officers of the Company.

In addition, the officers and employees were awarded a total of 9,523 Restricted Stock Units

that partially vest over 4 years.

The Company valued the RSUs based on the stock price at grant which total $ 95,399 .

During the year ended December 31, 2022, the Company recognized $ 17,887

of stock-based compensation, related to outstanding stock RSUs.

At December 31, 2022, the Company had $ 77,512 of unrecognized expenses

related to outstanding RSUs.

The following table summarizes the RSUs activity for

the year ended December 31, 2022:

Schedule of RSU activity

Weighted-Average Grant Date Fair Value

Non-vested, December 31, 2021

Non-vested, December 31, 2022

Performance Units

On April 28, 2022, the Compensation Committee approved, the officers

and employees were awarded a total of 28,563 PUs.

For awards granted in 2022, they vest as follows:

(i) 9,521 of the PU grant will vest if within 24 months from issuance the average

the closing price of the Company’s common stock over a ten trading day period exceeds $60.00 (subject to pro rata adjustment

for stock splits or similar events), (ii) 9,521 of the PU grant will vest if within 36 months from issuance the average the closing

price of the Company’s common stock over a ten trading day period exceeds $120.00 (subject to pro rata adjustment for stock

splits or similar events) and (iii) 9,521 of the PU grant will vest if within 24 months from issuance the Company achieves

“Positive Interim, Clinical Data” as defined by the Board of Directors.

To the extent that the market and/or

“Positive Interim Clinical Data” conditions are not met, the applicable portions of the PUs will not vest and will be

The fair value at grant date of these performance units was $ 169,663 .

Compensation expense is recognized over the derived service period for the PUs with market conditions and over the requisite service

period for PUs with performance conditions on the date when achievement of such conditions are deemed probable.

The fair value of each performance unit with market conditions (vesting

terms (i) and (ii)) is estimated at the date of grant using a Monte Carlo simulation with the following assumptions:

underlying stock

price $10.02, hurdle prices ranging from $60.00 -$120.00, expected terms ranging from 2-3 years, cost of equity 18.7% and risk-free rate

During the year ended December 31, 2022, the Company recognized $ 21,928

for vesting term (i), $ 13,787 for vesting term (ii) and $ 0 for vesting term (iii), related to outstanding stock PUs.

At December 31, 2022,

the Company had $ 133,948 of unrecognized expenses related to PUs.

The following table summarizes the PUs activity for

the year ended December 31, 2022:

Schedule of performance units activity

Weighted-Average Grant Date Fair Value

Non-vested, December 31, 2021

Non-vested, December 31, 2022

Note 6 – Commitments and Contingencies

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Scientific Advisory Board

On 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

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

Each scientific advisory board member

shall receive annual cash compensation of $ 68,600 .

As of December 31, 2021, the Company has accrued $ 63,067 related to the

On July 15, 2021, our Board approved the following compensation policy

for the Scientific Advisory Board members.

The Scientific Advisory board consisted of Dr.

Waldemar Priebe, our founder and related party,

Each scientific advisory board member shall receive annual cash compensation of $68,600.

During the year ended December

31, 2022, the Company paid $ 76,087 related to the Scientific Advisory Board compensation.

As of August 25, 2022, Dr.

Waldemar Priebe is

no longer a member of the Scientific Advisory Board.

As of December 31, 2022, the Company has accrued $100,134 related to Mr.

Scientific Advisory Board compensation.

WP744 Portfolio (Berubicin)

On November 21, 2017, the Company entered into a Collaboration

and Asset Purchase Agreement with Reata Pharmaceuticals, Inc.

Through this agreement, the Company purchased all

of Reata’s rights, title, interest and previously conducted research and development results in the chemical compound commonly

known as Berubicin.

In exchange for these rights, the Company agreed to pay Reata an amount equal to 2.25% of the net sales of Berubicin

for a period of 10 years from the Company’s first commercial sale of Berubicin plus $10,000.

Reata also agreed to collaborate with

the Company on the development of Berubicin, from time to time.

On December 28, 2017, the Company entered into

a Technology Rights and Development Agreement with Houston Pharmaceuticals, Inc.

On November 21, 2017, the Company entered into a Collaboration and

Asset Purchase Agreement with Reata Pharmaceuticals, Inc.

Through this agreement, the Company purchased all of

Reata’s rights, title, interest and previously conducted research and development results in the chemical compound commonly known

as Berubicin.

In exchange for these rights, the Company agreed to pay Reata an amount equal to 2.25% of the net sales of Berubicin for

a period of 10 years from the Company’s first commercial sale of Berubicin plus $10,000.

Reata also agreed to collaborate with the

Company on the development of Berubicin, from time to time.

On December 28, 2017, the Company entered into a Technology Rights and

Development Agreement with Houston Pharmaceuticals, Inc.

HPI is affiliated with Dr.

Waldemar Priebe, our founder and significant shareholder.

Pursuant to this agreement, the Company obtained a worldwide exclusive

license to the chemical compound commonly known as WP744.

In exchange for these rights, the Company agreed to pay consideration to

HPI as follows:

(i) a royalty of 2% of net sales of any product utilizing WP744 for a period of ten years after the first commercial

sale of such;

and (ii) $100,000 upon beginning Phase II clinical trials (paid in 2021);

and (iii) $200,000 upon the approval by the

FDA of a New Drug Application for any product utilizing WP744;

and (iv) a series of quarterly development payments totaling $750,000

beginning immediately after the Company’s raise of $7,000,000 of investment capital.

In addition, the Company issued 200,000

shares of the Company’s common stock valued at $0.045 per share to HPI upon execution of the agreement.

On November 13, 2019,

the Company closed its IPO, thereby fulfilling all conditions precedent and completing the acquisition of the intellectual property

discussed in the HPI agreement.

During the year ended December 31, 2021 and 2020, the Company recognized $ 450,000

and $ 237,500 ,

respectively related to this agreement.

Waldemar Priebe, our founder.

Pursuant to this agreement, the Company obtained a worldwide exclusive license to the chemical compound commonly known as WP744.

for these rights, the Company agreed to pay consideration to HPI as follows:

(i) a royalty of 2% of net sales of any product utilizing

WP744 for a period of ten years after the first commercial sale of such;

and (ii) $100,000 upon beginning Phase II clinical trials (paid

and (iii) $200,000 upon the approval by the FDA of a New Drug Application for any product utilizing WP744;

and (iv) a series

of quarterly development payments totaling $750,000 beginning immediately after the Company’s raise of $7,000,000 of investment

In addition, the Company issued 6,667 shares of the Company’s common stock valued at $1.35 per share to HPI upon execution

of the agreement.

On November 13, 2019, the Company closed its IPO, thereby fulfilling all conditions precedent and completing the acquisition

of the intellectual property discussed in the HPI agreement.

During the years ended December 31, 2022 and 2021, the Company recognized

$ 275,000 and $ 450,000 related to this agreement, respectively.

Unrelated to this agreement, from time to time, the Company purchases pharmaceutical

products from HPI which are necessary for the manufacturing of Berubicin API and drug product in related party transactions which

are reviewed and approved by the Company’s audit committee based upon the standards of providing superior pricing and time to

delivery than that available from unrelated third parties.

During the year ended December 31, 2021 and 2020, the Company expensed

and $ 0 , respectively related to the purchase of pharmaceutical products from HPI of which $ 41,075

was included in Accounts Payable as of December 31, 2021.

Subsequent to December 31, 2021 the Company purchased an additional

$41,075 of pharmaceutical products from HPI.

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.

As of December 31, 2021, the Company has received reports of the WPD expenditures related

to this agreement, has conducted due inquiry into validating those expenditures, and has determined that WPD has exercised commercially

reasonable development efforts and has therefore fulfilled the terms of the agreement necessary to secure their rights under the sublicense

in perpetuity subject to the ongoing obligations of the sublicense.

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.

Priebe, our founder and largest shareholder.

On 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.

agreed to pay CNS the following payments:

(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.

products from HPI which are necessary for the manufacturing of Berubicin API and drug product in related party transactions which are

reviewed and approved by the Company’s audit committee based upon the standards of providing superior pricing and time to delivery

than that available from unrelated third parties.

During the years ended December 31, 2022 and 2021, the Company expensed $ 41,075 and

$ 441,075 respectively related to the purchase of pharmaceutical products from HPI.

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

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 agreement.

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.

As of December 31, 2021, the Company has received reports of the WPD expenditures related to this

agreement, has conducted due inquiry into validating those expenditures, and has determined that WPD has exercised commercially reasonable

development efforts and has therefore fulfilled the terms of the agreement necessary to secure their rights under the sublicense in perpetuity

subject to the ongoing obligations of the sublicense.

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.

Priebe, our founder.

On 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:

(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 December 31,

In addition, as of December 31, 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 WPD.

In addition, as of December 31, 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 due from

As of December 31, 2021, CNS has invoiced the three amounts plus pass through cost for a total of $ 656,938 .

As of December 31,

31, 2021, CNS has invoiced the three amounts plus pass through cost for a total of $656,938.

However, as of December 31, 2021, WPD

has not remitted payment for the invoices and, as such, we have not recorded a receivable due to the collectability issues.

Subsequent to December 31, 2021, the Company has received payment for the first amount due of $131,073.

The Company is continuing to

work with WPD to resolve this situation.

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

with Animal Life Sciences, LLC (“ALI”), a related party, pursuant to which we granted ALI an exclusive sublicense, even as

to us, for the patent rights we licensed pursuant to the HPI License solely for the treatment of cancer in non-human animals through any

type of administration.

2022, the Company has received payments for the first and second amounts due for a total of $ 393,182

and has entered into a settlement agreement whereby WPD agreed to return 168 vials (approximately 40% of the total) to us in

settlement of the final amount owed.

On October 24, 2022, the Company received confirmation from our third party depot service

provider that the vials had been transferred into our inventory.

As such, this matter is now fully resolved.

On November 21, 2022, CNS entered into an Investigational Medicinal

Product Supply Agreement with Pomeranian Medical University (“PUM”) in Szczecin, Poland.

CNS agreed to sell berubicin hydrochloride

drug product (and related reference standards) to PUM at a discount to the historical cost of manufacturing so that PUM may conduct an

investigator-initiated clinical trial of Berubicin in CNS lymphomas.

PUM agreed to pay CNS the following payments:

(i) PLN 5,870.27 upon

delivery of 2 vials each of berubicin and berubicinol reference standards, (ii) PLN 873,201.00 upon delivery of a first batch of 150 berubicin

drug product vials, and (iii) PLN 873,201.00 upon delivery of a second batch of 150 berubicin drug product vials.

As of December

31, 2022, the reference standards had been delivered and were recognized in Accounts Receivable and as a reduction to research & development

As of March 29, 2023, the first batch of berubicin drug product vials have been ordered but not yet delivered.

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

Animal Life Sciences, LLC (“ALI”), a related party, pursuant to which we granted ALI an exclusive sublicense, even as to us,

for the patent rights we licensed pursuant to the HPI License solely for the treatment of cancer in non-human animals through any type

of administration.

In consideration for the rights granted under the sublicense agreement, ALI agreed to issue us membership interests

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

Waldemar Priebe, our founder and largest shareholder, is also

the founder and a shareholder of ALI, holds 38% of the membership interests of ALI.

On June 10, 2020, the FDA granted Orphan Drug Designation

(“ODD”) for Berubicin for the treatment of malignant gliomas.

ODD from the FDA is available for drugs targeting diseases with

less than 200,000 cases per year.

Waldemar Priebe, our founder, is also the founder and a shareholder

of ALI, holds 38% of the membership interests of ALI.

On June 10, 2020, the FDA granted Orphan Drug Designation (“ODD”)

for Berubicin for the treatment of malignant gliomas.

ODD from the FDA is available for drugs targeting diseases with less than 200,000

cases per year.

ODD may enable market exclusivity of 7 years from the date of approval of a NDA in the United States.

During that period the FDA generally could not approve another product containing the same drug for the same designated indication.

drug exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same

active ingredient for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy

or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market

The ODD now constitutes our primary intellectual property protections although the Company is exploring if there are other patents

that could be filed related to Berubicin to extend additional protections.

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.

During that period

the FDA generally could not approve another product containing the same drug for the same designated indication.

Orphan drug exclusivity

will not bar approval of another product under certain circumstances, including if a subsequent product with the same active ingredient

for the same indication is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing

a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand.

The ODD now constitutes

our primary intellectual property protections although the Company is exploring if there are other patents that could be filed related

to Berubicin to extend additional protections.

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.

WP1244 Portfolio

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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 year ended December 31, 2021, the Company paid $ 48,668 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 years ended December 31, 2022 and 2021, the Company paid $ 58,222 and $ 48,668 , respectively.

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.

During the year ended December 31, 2020, the Company paid $ 334,000 and

accrued $ 400,000 related

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

During the year

ended December 31, 2021, the Company paid $ 800,000 to

UTMDACC related to this agreement.

During the year ended December 31, 2020,

the Company paid $ 334,000 and accrued $ 400,000 related to this agreement in research and development expenses in the Company’s Consolidated

Statements of Operations.

During the year ended December 31, 2021, the Company paid $ 800,000 to UTMDACC related to this agreement.

The Company has no further payment obligations as of December 31, 2021.

The principal

investigator for this agreement is Dr.

Waldemar Priebe, a significant shareholder.

This agreement was extended and now expires on March 31, 2023.

The principal investigator for this agreement is Dr.

Waldemar Priebe, our founder.

Anti-Viral Portfolio

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a company founded by Dr.

Waldemar Priebe, the founder and largest shareholder of the Company.

Pursuant to the Agreement, WPD agreed to

use its commercially reasonable efforts in good faith to develop and commercialize certain products that WPD had previously sublicensed,

solely in the field of pharmaceutical drug products for the treatment of any viral infection in humans, with a goal of eventual approval

of in certain territories consisting of:

Germany, Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine, Romania, Armenia, Azerbaijan,

Georgia, Slovakia, Czech Republic, Hungary, Uzbekistan, Kazakhstan, Greece, Austria, Russia, Netherlands, Turkey, Belgium, Switzerland,

Sweden, Portugal, Norway, Denmark, Ireland, Finland, Luxembourg, Iceland.

Pursuant to the Agreement, the Company agreed to pay WPD the following

(i) an upfront payment of $ 225,000 to WPD (paid in April 2020);

and (ii) within thirty days of the verified achievement

of the Phase II Milestone, (such verification shall be conducted by an independent third party mutually acceptable to the parties hereto),

the Company will make a payment of $ 775,000 to WPD.

WPD agreed to pay the Company a development fee of 50% of the net sales for any products

in the above territories;

provided that Poland shall not be included as a territory after WPD receives marketing approval for a product

in one-half of the countries included in the agreed upon territories or upon the payment by WPD to the Company of development fees of

$ 1.0 million.

Waldemar Priebe, the founder of the Company.

Pursuant to the Agreement, WPD agreed to use its commercially reasonable

efforts in good faith to develop and commercialize certain products that WPD had previously sublicensed, solely in the field of pharmaceutical

drug products for the treatment of any viral infection in humans, with a goal of eventual approval of in certain territories consisting

Germany, Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine, Romania, Armenia, Azerbaijan, Georgia, Slovakia, Czech Republic, Hungary,

Uzbekistan, Kazakhstan, Greece, Austria, Russia, Netherlands, Turkey, Belgium, Switzerland, Sweden, Portugal, Norway, Denmark, Ireland,

Finland, Luxembourg, Iceland.

Pursuant to the Agreement, the Company agreed to pay WPD the

following payments:

(i) an upfront payment of $ 225,000

to WPD (paid in April 2020);

and (ii) within thirty days of the verified achievement of the Phase II Milestone, (such verification

shall be conducted by an independent third party mutually acceptable to the parties hereto), the Company will make a payment of

$ 775,000 to WPD.

to pay the Company a development fee of 50% of the net sales for any products in the above territories;

provided that Poland shall

not be included as a territory after WPD receives marketing approval for a product in one-half of the countries included in the

agreed upon territories or upon the payment by WPD to the Company of development fees of $1.0

The term of the Agreement will expire on the expiration of the sublicense pursuant to which WPD has originally sublicensed

the products.

During the year ended December 31, 2020, the Company paid $ 225,000 related to this agreement.

Nasdaq Capital Markets Listing Qualifications

On February 18, 2022, the Company received a deficiency letter from the

Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that for the last 30 consecutive

business days the bid price for the Company’s common stock had closed below the minimum $1.00 per share requirement for continued

inclusion in Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).

The deficiency letter

does not result in the immediate delisting of the Company’s common stock from Nasdaq.

The Company was initially provided an initial period of 180 calendar days,

or until August 17, 2022, to regain compliance with the Bid Price Rule.

The Company was granted a second 180 calendar day period, or until

February 13, 2023, to regain compliance since it met the continued listing requirement for market value of publicly held shares and all

other initial listing standards required by Nasdaq, except for the minimum bid price requirement.

On November 28, 2022, the Company’s Board of Directors effected a

one-for-thirty (1:30) reverse stock split of the Company’s common stock pursuant to such

authority granted by the Company’s stockholders at the Company’s annual meeting of stockholders completed on August 25, 2022.

On December 13, 2022, the Company received a letter from Nasdaq notifying the Company that it had regained compliance with Bid Price Rule

5550(a)(2) as a result of the closing bid price of the Company’s common stock being at $1.00 per share or greater for the 10 consecutive

business days from November 29, 2022 through December 12, 2022.

Accordingly, the Company is in compliance with the Bid Price Rule and

Nasdaq considers the matter closed.

Note 7 – Income Taxes

The Company is subject to United States federal income taxes at an

approximate rate of 21 %.

The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s income

tax expense as reported is as follows:

The Company is subject to United States federal income taxes at an approximate

rate of 21 %.

The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company’s

income tax expense as reported is as follows:

Schedule of Effective Income Tax Rate Reconciliation

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Tax effect of:

Non-deductible expenses

True-ups and non-deductible expenses

Change in valuation allowance

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Provision for income taxes

Significant components of the Company’s deferred tax assets

and liabilities after applying enacted corporate income tax rates are as follows:

Significant components of the Company’s deferred tax assets and liabilities

after applying enacted corporate income tax rates are as follows:

Schedule of Deferred Tax Assets

8 unchanged sentences

Net deferred income tax assets

The Company has an operating loss carry forward of approximately $ 27,764,000 ,

As of December 31, 2022, the Company has an operating loss carry

forward of approximately $ 40,966,000 ,

which expires commencing in 2037.

Note 8 – Subsequent Events

Securities Purchase Agreement

Company engaged H.C.

Wainwright & Co., LLC (“Wainwright”), to act as placement agent related to the Securities Purchase

Agreement described below.

The Company agreed to pay Wainwright an aggregate fee equal to 7.0% of the gross proceeds received by the Company

from the sale of the securities in the transaction.

The Company will also issue to Wainwright or its designees warrants to purchase up

to 5.0% of the aggregate number of shares of Common Stock sold in the transactions (the “Placement Agent Warrants”), or 605,263

Placement Agent Warrants.

The Placement Agent Warrants have substantially the same terms as the Common Warrants, except that the Placement

Agent Warrants have an exercise price equal to 125% of the offering price, or $1.1875 per share.

The Company will also pay Wainwright

$50,000 for non-accountable expenses and $10,000 for legal fees and expenses.

On January 5, 2022, the Company entered into

a Securities Purchase Agreement (the “Purchase Agreement”) with several institutional investors for the sale by the Company

of (i) 9,489,474 shares (the “Shares”) of the Company’s common stock, (ii) pre-funded warrants (the “Pre-Funded

Warrants”) to purchase up to an aggregate of 2,615,790 shares of common stock and (iii) warrants to purchase up to an aggregate

of 12,105,264 shares of common stock (the “Common Warrants” and, collectively with the Pre-Funded Warrants, the “Warrants”),

in a private placement offering.

The combined purchase price of one share of common stock (or one Pre-Funded Warrant) and accompanying

Common Warrant is $0.95.

Subject to certain ownership limitations,

the Warrants are exercisable upon issuance.

Each Pre-Funded Warrant is exercisable into one share of common stock at a price per share

of $0.001 (as adjusted from time to time in accordance with the terms thereof).

Each Common Warrant is exercisable into one share of common

stock at a price per share of $0.82 (as adjusted from time to time in accordance with the terms thereof) and will expire on the fifth

anniversary of the date of issuance.

The gross proceeds from the Purchase Agreement was $11.5 million resulting in net proceeds, after

payment of commissions and expenses, received by the Company of $10.6 million.

On February 18, 2022, the Company received

a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) notifying

the Company that for the last 30 consecutive business days the bid price for the Company’s common stock had closed below the minimum

$1.00 per share requirement for continued inclusion in Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the

“Bid Price Rule”).

The deficiency letter does not result in the immediate delisting of the Company’s common stock from

The Company has been provided an initial period

of 180 calendar days, or until August 17, 2022, to regain compliance with the Bid Price Rule.

If the Company is not in compliance

with the Bid Price Rule by August 17, 2022, the Company may be afforded a second 180 calendar day period to regain compliance.

the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial

listing standards required by Nasdaq, except for the minimum bid price requirement.

The Company intends to monitor the closing

bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Bid Price Rule, which

could include effecting a reverse stock split.

However, there can be no assurance that the Company will be able to regain compliance with

the Bid Price Rule.

On March 1, 2022, the Company received $2,616 in cash proceeds from

the exercise of 2,615,790 Pre-Funded Warrants issued at an exercise price of $0.001.

Subsequent to December 31, 2022, a total of 609,000

Pre-Funded Warrants (exercisable into one share of common stock at a price per share of $0.001) were exercised by investors in the financing

completed on November 30, 2022.

On March 29, 2023, the Board of Directors approved,

based upon the recommendation of the Compensation Committee, cash bonuses totaling $550,750 to the officers of the Company.

the officers were awarded a total of 29,988 Options that partially vest over 4 years, partially vest upon the Company’s common stock

price exceeding various closing prices ranging from $6.00 - $24.00 per share.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.

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 8. Financial Statements and Supplementary Data