Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.22.1
Equity
 3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
Equity

Note 4 – Equity

 

Common Stock

 

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 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 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) 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 the 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 were $11,497,385 resulting in net proceeds, after payment of commissions and expenses, received by the Company of $10,625,786.

 

Stock Options

 

In 2017, the Board of Directors of the Company approved the CNS Pharmaceuticals, Inc. 2017 Stock Plan (the “2017 Plan”). The 2017 Plan allows for the Board of Directors to grant various forms of incentive awards for up to 2,000,000 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.

 

In 2020, the Board of Directors of the Company approved the CNS Pharmaceuticals, Inc. 2020 Stock Plan (the “2020 Plan”). The 2020 Plan allows for the Board of Directors to grant various forms of incentive awards for up to 3,000,000 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 three months ended March 31, 2022 and 2021, the Company recognized $336,685 and $418,053 of stock-based compensation, respectively, related to outstanding stock options. At March 31, 2022, the Company had $2,222,762 of unrecognized expenses related to outstanding options.

 

The following table summarizes the stock option activity for the three months ended March 31, 2022:

           
   

 

Options

     Weighted-Average Exercise Price Per Share  
Outstanding, December 31, 2021     2,864,736     $ 2.25  
Granted     –       –  
Exercised     –       –  
Forfeited     –       –  
Expired     –       –  
Outstanding, March 31, 2022     2,864,736     $ 2.25  
Exercisable, March 31, 2022     1,727,486     $ 1.93  

 

As of March 31, 2022, the outstanding stock options have a weighted average remaining term of 7.52 years and the aggregate intrinsic value of options vested and outstanding were $81,400. As of March 31, 2022, 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.

 

Stock Warrants

 

During the three months ended March 31, 2022, the Company received $2,616 in cash proceeds from the exercise of 2,615,790 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, 2022 : 

               
   

 

 

Warrants

     Weighted-Average Exercise Price Per Share  
Outstanding, December 31, 2021     4,214,977     $ 4.76  
Granted     15,326,317       0.69  
Exercised     (2,615,790 )     0.001  
Forfeited     –       –  
Expired     –       –  
Outstanding, March 31, 2022     16,925,504     $ 1.81  
Exercisable, March 31, 2022     16,925,504     $ 1.81  

 

As of March 31, 2022, the outstanding and exercisable warrants have a weighted average remaining term of 4.26 years and have no aggregate intrinsic value.