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Item 1. Financial Statements

2023-08-14 compared with 2023-05-15 · 171 added, 128 removed, 363 unchanged (45% of the section changed)

19 unchanged sentences

Stockholders' Equity:

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

issued and outstanding

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

Common stock, $ 0.001 par value, 75,000,000 shares authorized and 4,140,960 and

11 unchanged sentences

Three months ended

March 31, 2023

March 31, 2022

Six months ended

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Operating expenses:

5 unchanged sentences

( 3,564,341 )

Other expenses:

( 8,951,897 )

( 6,713,553 )

Other income (expenses):

Interest income

Interest expense

Total other expenses

Total other income (expense)

$ ( 4,021,234 )

$ ( 3,565,952 )

$ ( 8,953,181 )

$ ( 6,717,730 )

Loss per share - basic

2 unchanged sentences

Weighted average shares outstanding - diluted

See accompanying notes to the unaudited financial statements.

See accompanying notes to

the unaudited financial statements

Pharmaceuticals, Inc.

of Stockholders' Equity

For the three months ended March 31, 2023 and 2022

Statements of

Stockholders' Equity

For the six months ended June 30, 2023 and 2022

Stockholders'

7 unchanged sentences

( 55,647,624 )

Common stock issued for cash, net

Exercise of warrants

Stock-based compensation

( 4,021,234 )

Balance June 30, 2023

$ ( 59,668,858 )

Balance December 31, 2021

7 unchanged sentences

( 38,593,321 )

Stock-based compensation

( 3,565,952 )

Balance June 30, 2022

$ ( 42,159,273 )

See accompanying notes to the unaudited financial statements

1 unchanged sentence

Statements of Cash Flows

Three Months Ended

March 31, 2023

March 31, 2022

Six Months Ended

June 30, 2023

June 30, 2022

Cash Flows from Operating Activities:

3 unchanged sentences

Stock-based compensation

Loss of disposal of fixed assets

Changes in operating assets and liabilities:

5 unchanged sentences

( 6,439,733 )

Cash Flows from Investing Activities:

Purchase of property and equipment

Net cash used in investing activities

Cash Flows from Financing Activities:

2 unchanged sentences

Proceeds from sale of common stock

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

5 unchanged sentences

Cash paid for income taxes

See accompanying notes to the unaudited financial statements.

See accompanying notes to the unaudited financial

CNS Pharmaceuticals, Inc.

14 unchanged sentences

financial statements not misleading.

Operating results for the three months ended March 31, 2023 are not necessarily indicative of the

final results that may be expected for the year ending December 31, 2023.

For more complete financial information, these unaudited financial

statements should be read in conjunction with the audited financial statements for the period ended December 31, 2022 included in our

Form 10-K filed with the SEC on March 31, 2023 (“Form 10-K”).

Operating results for the three and six months ended June 30, 2023 are not necessarily indicative

of the final results that may be expected for the year ending December 31, 2023.

For more complete financial information, these unaudited

financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2022 included

in our Form 10-K filed with the SEC on March 31, 2023 (“Form 10-K”).

Notes to the financial statements which would substantially

22 unchanged sentences

The amount in excess of

the FDIC insurance as of March 31, 2023 was $ 4,860,531 .

the FDIC insurance as of June 30, 2023 was $ 4,029,251 .

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

14 unchanged sentences

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

As of March 31, 2023, the Company’s potentially

As of June 30, 2023, the Company’s potentially

dilutive shares and options, which were not included in the calculation of net loss per share, included warrants to purchase 2,268,827

common shares, and options for 128,588 common shares.

As of March 31, 2022, the Company’s potentially dilutive shares and options,

As of June 30, 2022, the Company’s potentially dilutive shares and options,

which were not included in the calculation of net loss per share, included warrants to purchase 564,205 common shares, and options for

95,501 common shares.

Recent Accounting Pronouncements - In June 2016, the FASB issued

Accounting Standards Update No.

2016-13, Financial Instruments-Credit Losses:

Accounting Pronouncements - In June 2016, the FASB issued Accounting Standards Update No.

2016-13, Financial

Instruments-Credit Losses:

Measurement of Credit Losses on Financial Instruments.

2016-13 requires measurement and recognition of expected credit losses for financial assets.

In April 2019, the FASB issued clarification

to ASU 2016-13 within ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives

and Hedging, and Topic 825, Financial Instruments, or ASU 2016-13.

ASU 2016-13 requires measurement and recognition

of expected credit losses for financial assets.

In April 2019, the FASB issued clarification to ASU 2016-13 within ASU 2019-04,

Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825,

Financial Instruments, or ASU 2016-13.

The guidance is effective for fiscal years beginning after December 15, 2022.

The Company adopted this standard on January 1, 2023, which had no material impact on the Company’s financial statements.

adopted this standard on January 1, 2023, which had no material impact on the Company’s financial statements.

Note 3 – Note Payable

3 unchanged sentences

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

As of March 31, 2023 and December

As of June 30, 2023 and December

31, 2022, the Company’s note payable balance was $ 166,396 and $ 409,968 , respectively.

4 unchanged sentences

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

Pursuant to the terms of the Capital on

Demand™ Sales Agreement with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia

Securities, LLC (collectively, the “Agent”), 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 quarter ended June 30, 2023, the

Company sold 659,677

shares of common stock to the Agent for net proceeds of $ 1,969,107 .

Stock Options

3 unchanged sentences

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

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 25,000 shares of common stock (or options to purchase

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

On December 30, 2022, the Board of Directors of the Company appointed

11 unchanged sentences

total fair value of these option grants at issuance was $ 25,820 .

During the three months ended March 31, 2023 and 2022, the Company

recognized $ 272,446 and $ 336,685 of stock-based compensation, respectively, related to outstanding stock options.

At March 31, 2023, the

Company had $ 1,169,948 of unrecognized expenses related to outstanding options.

On May 3, 2023, the Board of Directors of the Company appointed

Cockroft, M.D., M.B.A as an independent member of the Company’s Board of Directors.

Cockroft was granted a

ten-year option to purchase 2,099

shares of Company common stock at an exercise price of $ 1.67

vesting in 36 equal monthly installments succeeding the issuance date.

The total fair value of these option grants at issuance was

During the six months ended June 30, 2023 and 2022, the Company recognized

$ 544,248 and $ 605,657 of stock-based compensation, respectively, related to outstanding stock options.

At June 30, 2023, the Company had

$ 803,468 of unrecognized expenses related to outstanding options.

The following table summarizes the stock option

activity for the three months ended March 31, 2023:

activity for the six months ended June 30, 2023:

Schedule of Stock Option Activity

1 unchanged sentence

Outstanding, December 31, 2022

Outstanding, March 31, 2023

Exercisable, March 31, 2023

As of March 31, 2023, the outstanding stock options have a weighted

average remaining term of 7.41 years and no aggregate intrinsic value of options vested and outstanding.

As of March 31, 2023, there were

no awards remaining to be issued under the 2017 Plan and 2,092 awards remaining to be issued under the 2020 Plan.

Outstanding, June 30, 2023

Exercisable, June 30, 2023

As of June 30, 2023, the outstanding stock options have a weighted

average remaining term of 7.20

years and aggregate intrinsic value of options vested and outstanding of $ 8,133 and $ 46,248 , respectively.

As of June 30, 2023,

there were no awards remaining to be issued under the 2017 Plan or the 2020 Plan.

Stock Warrants

During the three months ended March 31, 2023, the Company received

$ 609 in cash proceeds from the exercise of 609,000 warrants previously issued at an exercise price of $ 0.001 .

During the six months ended June 30, 2023, the Company received

$ 725,668 in cash proceeds

from the exercise of 238,958 warrants previously issued at an exercise price of $3.03 and 1,625,000 warrants previously issued at an exercise price of $0.001.

The following table summarizes the stock warrant

activity for the three months ended March 31, 2023:

activity for the six months ended June 30, 2023:

Schedule of warrants activity

1 unchanged sentence

Outstanding, December 31, 2022

Outstanding, March 31, 2023

Exercisable, March 31, 2023

As of March 31, 2023, the outstanding and exercisable warrants have

a weighted average remaining term of 4.58 years and have aggregate intrinsic value of $ 1,014,984 .

( 1,863,958 )

Outstanding, June 30, 2023

Exercisable, June 30, 2023

As of June 30, 2023, the outstanding and exercisable warrants have

a weighted average remaining term of 2.75 years and had no aggregate intrinsic value.

Restricted Stock Units

During the three months ended March 31, 2023, the Company recognized

$ 5,962 of stock-based compensation, related to outstanding stock RSUs.

At March 31, 2023, the Company had $ 71,550 of unrecognized expenses

related to outstanding RSUs.

During the six months ended June 30, 2023, the Company recognized $ 11,925

of stock-based compensation, related to outstanding RSUs.

At June 30, 2023, the Company had $ 65,587 of unrecognized expenses related

to outstanding RSUs.

The following table summarizes the RSUs activity

for the three months ended March 31, 2023:

for the six months ended June 30, 2023:

Schedule of restricted stock units activity

1 unchanged sentence

Non-vested, December 31, 2022

Non-vested, March 31, 2023

Non-vested, June 30, 2023

Performance Units

During the three months ended March 31, 2023, the Company recognized

During the six months ended June 30, 2023, the Company recognized $ 23,810

related to outstanding stock PUs.

At March 31, 2023, the Company had $ 122,043 of unrecognized expenses related to PUs.

At June 30, 2023, the Company had $ 110,138 of unrecognized expenses related to PUs.

The following table summarizes the PUs activity

for the three months ended March 31, 2023:

for the six months ended June 30, 2023:

Schedule of performance units activity

1 unchanged sentence

Non-vested, December 31, 2022

Non-vested, March 31, 2023

Non-vested, June 30, 2023

Note 5 – Commitments and Contingencies

26 unchanged sentences

Climaco’s 2021 annual base salary

On June 28, 2019, our we entered into employment letters with Drs.

On June 28, 2019, we entered into employment letters with Drs.

Silberman and Picker.

9 unchanged sentences

member shall receive annual cash compensation of $68,600.

During the three months ended March 31, 2023 and 2022, the Company paid

During the six months ended June 30, 2023 and 2022, the Company paid $ 0 and

$ 65,834 related to the Scientific Advisory Board compensation.

As of March 31, 2023, the Company has accrued $ 117,284

related to Mr.

Hsu’s Scientific Advisory Board compensation.

As of June 30, 2023, the Company has accrued $ 134,434 related to Dr.

Scientific Advisory Board compensation.

WP744 Portfolio (Berubicin)

26 unchanged sentences

thereby fulfilling all conditions precedent and completing the acquisition of the intellectual property discussed in the HPI

During the three months ended March 31, 2023 and 2022, the Company recognized $ 12,500 and $ 87,500 ,respectively, related to this agreement.

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 three months ended March 31, 2023 and

2022, the Company expensed $ 0

During the six months ended June 30, 2023 and 2022, the Company recognized $ 25,000

and $ 175,000 ,

respectively, related to this agreement.

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 six months ended June 30, 2023 and 2022, the Company expensed

respectively related to the purchase of pharmaceutical products from HPI.

21 unchanged sentences

Priebe, our founder.

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

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

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

6 unchanged sentences

As of December 31, 2022,

the reference standards had been delivered and were recognized in Accounts Receivable and as a reduction to research and development expense.

As of March 31, 2023, the first batch of berubicin drug product vials have been ordered and delivered in April 2023.

the reference standards were delivered, and the Company recognized $ 1,302 in accounts receivable and as a reduction to research and development

In April 2023, the first batch of berubicin drug product vials were delivered, and the Company recognized $ 196,303

in accounts receivable and as a reduction to research and development expense.

As of June 30, 2023, the outstanding accounts receivable

balance was $ 197,605 , which was collected in full on July 6, 2023.

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

27 unchanged sentences

WP1244 Portfolio

On January 10, 2020, Company entered into a Patent and Technology License

Agreement (“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.

On January 10, 2020, Company entered into a Patent and Technology

License Agreement (“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”).

Pursuant to the Agreement, the Company obtained a royalty-bearing,

worldwide, exclusive license to certain intellectual property rights, including patent rights, related to the Company’s recently

announced WP1244 drug technology.

In consideration, the Company must make payments to UTMDACC including an up-front license fee, annual

maintenance fee, milestone payments and royalty payments (including minimum annual royalties) on sales of licensed products developed

under the Agreement.

Pursuant to the Agreement, the

Company obtained a royalty-bearing, worldwide, exclusive license to certain intellectual property rights, including patent rights,

related to the Company’s recently announced WP1244 drug technology.

In consideration, the Company must make payments to

UTMDACC including an up-front license fee, annual maintenance fee, milestone payments and royalty payments (including minimum annual

royalties) on sales of licensed products developed under the Agreement.

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

(a) the expiration of all patents subject to the Agreement,

or (b) fifteen years after execution;

provided that UTMDACC has the right to terminate this Agreement in the event that the Company fails

to meet certain commercial diligence milestones.

The commercial diligence milestones are as follows (i) initiated PC toxicology to support

filing of Investigational New Drug Application (“IND”) or New Drug Application (“NDA”) for the Licensed Product

within the eighteen (18) month period following the Effective Date (ii) file and IND for the Licensed Product within three (3) year period

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

the three months ended March 31, 2023 and 2022, the Company paid $ 11,744 and $ 44,424 , respectively.

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

provided that UTMDACC has the

right to terminate this Agreement in the event that the Company fails to meet certain commercial diligence milestones.

commercial diligence milestones are as follows (i) initiated PC toxicology to support filing of Investigational New Drug Application

(“IND”) or New Drug Application (“NDA”) for the Licensed Product within the eighteen (18) month period

following the Effective Date (ii) file and IND for the Licensed Product within three (3) year period following the Effective Date

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

The Company has not met the

commercial diligence milestones required as of the date hereof.

As such, UTMDACC has the right to terminate the Agreement upon

notice to the Company.

As of the date of this report, UTMDACC has not notified of the Company of its intention to terminate the

During the six months ended June 30, 2023 and 2022, the Company paid $ 27,341

and $ 44,424 ,

respectively.

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

20 unchanged sentences

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 .

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

the products.

Note 6 – Subsequent Events

Subsequent to March 31, 2023, a total of 1,016,000 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.

In addition, a total of 238,958 Investor Warrants (exercisable into one share of common stock at a price

per share of $3.03) were exercised by investors for net proceeds of $724,043 .

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 was required to make a

payment of $ 775,000

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

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 stated it would expire on the expiration

of the sublicense pursuant to which WPD has originally sublicensed the products.

In March 2023, the sublicense pursuant to which WPD originally

sublicensed the products was terminated.

As such, the Agreement has been terminated.

6 – Subsequent Events

Pursuant to the terms of the Capital on Demand™

2 unchanged sentences

aggregate sales price of up to $20.0 million.

On April 20, 2023, the Company sold 659,677 shares of common stock to the Agent

for net proceeds of $1,969,107.

On May 3, 2023, Bettina Cockroft, M.D., M.B.A joined our Board of Directors

as an independent director.

Cockroft has not been appointed to any Board committees at this time.

Cockroft will participate in

the Company’s standard compensation program for non-employee directors, which was filed as Exhibit 10.1 to the Company’s Form

10-Q for the quarter ended June 30, 2022.

In addition, Dr.

Cockroft was granted a ten-year option to purchase 8,300 shares of Company

common stock at an exercise price of $1.67 vesting in 36 equal monthly installments succeeding the grant date subject to continued service

on the Company's Board of Directors on each vesting date.

Subsequent to the quarter ended on June 30, 2023, the Company sold 58,591 shares

of common stock to the Agent for net proceeds of $124,279.

On August 4, 2023, the Board of Directors approved the issuance of

6,500 options to Dr.

The options have a ten-year term at an exercise price of $2.27 and vest in 36 equal monthly installments

succeeding the issuance date.

This grant is contingent upon shareholder approval of an amendment to our equity compensation

plan to increase the number of shares authorized under the plan to allow for the registration of the shares underlying the options

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

What changed 10-Q

Item 1. Financial Statements