Item 9A. Controls and Procedures
Item 9A.
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, including our chief executive officer,
who serves as our principal executive officer, and our chief financial officer, who serves as our principal financial officer, evaluated
the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under
the Exchange Act), as of the end of the period covered by this Form 10-K. Based on this evaluation, our chief executive officer and our
chief financial officer, concluded that as a result of the material weakness in our internal control over financial reporting discussed
below, our disclosure controls and procedures were not effective at ensuring that information required to be disclosed in the reports
we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities
and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our chief
executive officer and our chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding
disclosure.
Attestation Report of the Registered Public Accounting Firm
Our independent registered public accounting firm
will not be required to formally attest to the effectiveness of our internal controls over financial reporting for as long as we are an
“emerging growth company” pursuant to the provisions of the Jumpstart Our Business Startups Act.
Management’s Report on Internal Control Over Financial Reporting
Our chief executive officer and our chief financial
officer are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in
Exchange Act Rules 13a-15(f). Management conducted an assessment of the effectiveness of our internal control over financial reporting
as of December 31, 2023. In making this assessment, management used the criteria described in Internal Control-Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our management concluded that
our internal control over financial reporting were, and continue to be ineffective, as of December 31, 2023 due to a lack of segregation
of duties (resulting from the limited number of personnel available), limited access to timely and complete information regarding the
status of costs incurred in the activation of investigational sites and costs from treating patients in our study which is a result of
the use of a third-party Contract Research Organization (“CRO”) to manage the study, and the lack of formal documentation
of our control environment. Management is commencing actions to address the lack of formal documentation of our control environment, although
this will not address the lack of segregation of duties. Management is also working with the CRO to improve the timeliness and completeness
of the data reported to the Company to address this material weakness, as well as conducting increased analytical analysis of such data
to be performed by the Company.
A material weakness is a control deficiency (within
the meaning of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard 1305) or combination of control deficiencies
that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented
or detected.
60
It should be noted that any system of controls,
however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met.
In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because
of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions, regardless of how remote.
In light of the material weakness described above,
we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with
generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present,
in all material respects, our financial condition, results of operations and cash flows for the periods presented.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control
over financial reporting during our most recent calendar quarter that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.
Item 9B.
Other Information.
During the three months ended December 31, 2023,
no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading
arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
61
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated
by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days of the fiscal year ended December 31, 2023.
Our Board of Directors has adopted a written Code
of Business Conduct and Ethics applicable to all officers, directors and employees, which is available on our website (www.cnspharma.com)
under “Governance Documents” within the “Corporate Governance” section. We intend to satisfy the disclosure requirement
under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of this Code and by posting such information on the website
address and location specified above.
Item 11.
Executive Compensation
The information required by this item is incorporated
by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days of the fiscal year ended December 31, 2023.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated
by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days of the fiscal year ended December 31, 2025.
Securities Authorized for Issuance under Equity Compensation
Plans
The following table sets forth information regarding
our equity compensation plans at December 31, 2023:
Plan category
Number of securities to be issued upon exercise
of outstanding options,
warrants and rights
(a)
Weighted-average exercise price of
outstanding options, warrants and rights
(b)
Number of securities (by class) remaining available
for future issuance under equity compensation
plans (excluding securities reflected in column
(a))
(c)
Equity compensation plans approved by security holders (1)
364,478
$
18.55
545,610
Equity compensation plans not approved by security holders (2)
8,377
$
92.53
–
(1)
Represents shares of common stock issuable upon exercise of outstanding stock options and rights under our 2017 and 2020 Stock Plans.
(2)
Consists of warrants issued to the underwriter in our IPO and follow-on offerings and to consultants.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated
by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days of the fiscal year ended December 31, 2023.
Item 14.
Principal Accounting Fees and Services
The information required by this item is incorporated
by reference to our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days of the fiscal year ended December 31, 2023.
62
PART IV
Item 15.
Exhibits, Financial Statement Schedules
(a)
The following
documents are filed or furnished as part of this Form 10-K:
1.
Financial
Statements. Reference is made to the Index to Financial Statements under Item 8, Part II hereof.
2.
Financial
Statement Schedules. The Financial Statement Schedules have been omitted either because they are not required or because the information
has been included in the financial statements or the notes thereto included in this Annual Report on Form 10-K.
3.
Exhibits
EXHIBIT INDEX
Exhibit
Number
Description
of Document
3.1
Amended
and Restated Articles of Incorporation of CNS Pharmaceuticals, Inc. (filed
as exhibit 2.1 to the Company’s Form 1-A file no. 024-10855)
3.2
Certificate
of Amendment to the Amended and Restated Articles of Incorporation of CNS Pharmaceuticals, Inc., filed with the Secretary of State
of the State of Nevada (incorporated by reference
to Exhibit 3.1 to the Current Report on Form 8-K filed with the Commission on November 28, 2022)
3.3
Amended
and Restated Bylaws of CNS Pharmaceuticals, Inc. (filed
as exhibit 3.1 to the Company’s Form 8-K filed August 15, 2023)
4.1
Form
of warrant issued to convertible debt holders (filed
as exhibit 3.2 to the Company’s Form 1-A file no. 024-10855)
4.2
Form
of Underwriter Warrant (filed as exhibit 4.4
to the Company’s Form S-1 file no. 333-231443)
4.3
Description
of Securities of CNS Pharmaceuticals, Inc. (filed
as exhibit 4.3 to the Company’s Form 10-K/A filed April 30, 2021)
4.4
Form
of Warrant issued in January 2022 offering (incorporated
by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on January 6, 2022)
4.5
Form
of Pre-Funded Warrant issued in January 2022 offering (incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Commission on January 6, 2022)
4.6
Form
of Pre-Funded Warrant issued in November 2023 offering (filed
as exhibit 4.7 to the Company’s Form S-1 file no. 333-267975)
4.7
Form
of Common Warrant issued in November 2023 offering (filed
as exhibit 4.8 to the Company’s Form S-1 file no. 333-267975)
4.8
Form
of Placement Agent Warrant issued in November 2023 offering (filed
as exhibit 4.9 to the Company’s Form S-1 file no. 333-267975)
4.9
Form
of Inducement Warrant issued in October 2023 (incorporated
by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on October 17, 2023)
63
Exhibit
Number
Description
of Document
4.10
Form
of Series A Common Warrant issued January 2024 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed
with the Commission on February 2, 2024)
4.11
Form
of Series B Common Warrant issued January 2024 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed
with the Commission on February 2, 2024)
4.12
Form
of Pre-Funded Warrant issued January 2024 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with
the Commission on February 2, 2024)
10.1
Amended
And Restated Patent License Agreement effective as of December 28, 2017 between CNS Pharmaceuticals, Inc. and Houston Pharmaceuticals,
Inc. (filed as exhibit 6.1 to the Company’s
Form 1-A file no. 024-10855)
10.2
Collaboration
and Asset Purchase Agreement between CNS Pharmaceuticals, Inc. and Reata Pharmaceuticals, Inc. dated November 21, 2017
(filed as exhibit 6.2 to the Company’s Form 1-A file
no. 024-10855)
10.3 **
2017
Stock Plan of CNS Pharmaceuticals, Inc. (filed
as exhibit 6.3 to the Company’s Form 1-A file no. 024-10855)
10.4 **
Employment
Agreement between CNS Pharmaceuticals, Inc. and John M. Climaco dated September 1, 2017 (filed
as exhibit 6.4 to the Company’s Form 1-A file no. 024-10855)
10.5 **
Consulting
Agreement between CNS Pharmaceuticals, Inc. and Fresh Notion Financial Services dated July 27, 2017 (filed
as exhibit 6.5 to the Company’s Form 1-A file no. 024-10855)
10.6
Sublicense
Agreement between CNS Pharmaceuticals, Inc. and WPD Pharmaceuticals, Inc. dated August 30, 2018 (filed
as exhibit 6.6 to the Company’s Form 1-A Amendment file no. 024-10855)
10.7
Sublicense
Agreement between CNS Pharmaceuticals, Inc. and Animal Life Sciences, LLC. dated August 31, 2018 (filed
as exhibit 6.7 to the Company’s Form 1-A Amendment file no. 024-10855)
10.8 **
Employment
Letter between CNS Pharmaceuticals, Inc. and Donald Picker (filed
as exhibit 10.8 to the Company’s Form S-1 Amendment file no. 333-232443)
10.9 **
Employment
Letter between CNS Pharmaceuticals, Inc. and Sandra Silberman (filed
as exhibit 10.9 to the Company’s Form S-1 Amendment file no. 333-232443)
10.10 **
Employment
Agreement between CNS Pharmaceuticals, Inc. and Christopher Downs (filed
as exhibit 10.10 to the Company’s Form S-1 Amendment file no. 333-232443)
10.11 +
Patent
and Technology License 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. D. Anderson Cancer Center, dated January 10, 2020 (filed
as exhibit 10.11 to the Company’s Form 10-K filed March 12, 2020)
10.13
Development
Agreement between CNS Pharmaceuticals, Inc. and WPD Pharmaceuticals dated March 20, 2020 (filed
as exhibit 10.1 to the Company’s Form 8-K filed March 26, 2020)
10.14 **
2020
Stock Plan of CNS Pharmaceuticals, Inc. (as
amended) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on September
19, 2023)
10.15**
Amendment
to Employment Agreement between CNS Pharmaceuticals, Inc. and John Climaco dated September 1, 2020 (filed
as exhibit 99.1 to the Company’s Form 8-K filed September 4, 2020)
10.16
Capital
on Demand™ Sales Agreement with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia
Securities, LLC (filed as exhibit 1.1 to the Company’s Form 8-K filed February 12, 2021)
64
Exhibit
Number
Description
of Document
10.17
Form
of Registration Rights Agreement to investors in January 2022 offering (incorporated
by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on January 6, 2022)
10.18
Non-Employee
Director Compensation Policy effective July 15, 2021 (incorporated
by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Commission on August 12, 2022)
10.19
Form
of Placement Agent Agreement in November 2023 offering (filed
as exhibit 10.21 to the Company’s Form S-1 file no. 333-267975)
10.20
Form
of Inducement Letter entered into in October 2023 (incorporated
by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on October 17, 2023)
10.21
Form
of Securities Purchase Agreement in January 2024 (incorporated
by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on February 2, 2024)
10.22
Form
of Amendment to Common Stock Warrants (incorporated
by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on February 2, 2024)
10.23
Placement
Agent Agreement dated January 29, 2024 by and among CNS Pharmaceuticals, Inc., A.G.P./Alliance Global Partners and Maxim Group LLC
(incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed with the Commission on February 2, 2024)
23.1 *
Consent of MaloneBailey LLP
31.1 *
Certification of Principal Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended
31.2 *
Certification of Principal Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended
32.1 *
Certification of Principal Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 *
Certification of Principal Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97 *
CNS Pharmaceuticals, Inc. Restatement Recoupment Policy
101.INS
Inline XBRL Instance Document (the instance document
does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)**
101.SCH
Inline XBRL Taxonomy Extension Schema Document**
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
Document**
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
Document**
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document**
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
Document**
104
Cover Page Interactive Data File (embedded within the
Inline XBRL document)
*
Filed herewith.
**
Management contract or compensatory plan, contract or arrangement.
+
Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit.
Item 16.
10-K Summary
None.
65
SIGNATURES
Pursuant to the requirements of Section 13
or 15(d) Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto
duly authorized
CNS PHARMACEUTICALS, INC.
Date: April 1, 2024
By:
/s/ John Climaco
John Climaco
Chief Executive Officer and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on
the dates indicated.
Date: April 1, 2024
By:
/s/ John Climaco
John Climaco
Chief Executive Officer, President and Director
(Principal Executive Officer)
Date: April 1, 2024
/s/ Christopher Downs
Christopher Downs
Chief Financial Officer
(Principal Financial and Accounting Officer)
Date: April 1, 2024
/s/ Faith Charles
Faith Charles
Director
Date: April 1, 2024
/s/ Jerzy (George) Gumulka
Jerzy (George) Gumulka
Director
Date: April 1, 2024
/s/ Carl Evans
Carl Evans
Director
Date:April 1, 2024
/s/ Jeffry Keyes
Jeffry Keyes
Director
Date: April 1, 2024
/s/ Bettina Cockroft
Bettina Cockroft
Director
Date: April 1, 2024
/s/ Amy
Mahery
Amy
Mahery
Director
66
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.