Quarterly report pursuant to Section 13 or 15(d)

3. Equity

v3.21.1
3. Equity
3 Months Ended
Mar. 31, 2021
Equity [Abstract]  
Equity

Note 3 – Equity

 

Common Stock

 

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. Upon signing the agreement, 6,250 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 three months ended March 31, 2021, the Company issued 6,250 common shares and recognized $12,625 of stock-based compensation related to the agreement. In April 2021, the Company issued 6,250 common shares and will issue the remaining shares over the service period.

 

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 three months ended March 31, 2021, the Company sold 43,083 shares of common stock to the Agent for net proceeds of $144,843.

 

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, 2021, the Board of Directors approved grants of 536,000 options to officers and employees. The exercise price of the options was $3.36 and the options expire ten-years following issuance. The total fair value of these option grants at issuance was $1,621,500. The issued options vest in four equal annual installments beginning on the first anniversary following issuance.

 

During the three months ended March 31, 2021 and 2020, the Company recognized $418,053 and $242,209 of stock-based compensation, respectively, related to outstanding stock options. At March 31, 2021, the Company had $3,461,948 of unrecognized expenses related to outstanding options.

 

The following table summarizes the stock option activity for the nine months ended March 31, 2021:

 

   

 

 

Options

    Weighted-Average Exercise Price Per Share  
Outstanding, December 31, 2020     2,200,736     $ 2.00  
Granted     536,000       3.36  
Exercised            
Forfeited            
Expired            
Outstanding, March 31, 2021     2,736,736     $ 2.26  

 

The following table discloses information regarding outstanding and exercisable options at March 31, 2021:

 

    Outstanding   Exercisable

 

Exercise Price

  Number of Option/Warrant Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (Years)   Number of Option Shares     Weighted Average Exercise Price
$4.00   300,000           8.61     75,000        
$3.36   536,000           9.85            
$2.47   186,236           9.20            
$2.21   175,000           8.95     100,000        
$2.06   75,000           9.45            
$2.00   789,500           8.25     197,375        
$1.50   400,000           7.17     350,022        
$0.045   275,000           6.64     256,250        
Total   2,736,736   $ 2.26     8.43     978,647     $ 1.48

 

As of March 31, 2021, the aggregate intrinsic value of options vested and outstanding were $1,007,402 and $1,365,030 respectively. As of March 31, 2021, there are no awards remaining to be issued under the 2017 Plan and 2,263,264 awards remaining to be issued under the 2020 Plan.

 

Stock Warrants

 

During the three months ended March 31, 2021, the Company received $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 1,580,140 warrants on a cashless basis resulting in issuance of 1,296,075 shares of common stock.

 

The following table summarizes the stock warrant activity for the nine months ended March 31, 2021:

 

     

 

 

Warrants

    Weighted-Average Exercise Price Per Share  
Outstanding, December 31, 2020       6,861,630     $ 3.24  
Granted              
Exercised       (1,731,390 )     0.88  
Forfeited              
Expired              
Outstanding, March 31, 2021       5,130,240     $ 4.04  

 

The following table discloses information regarding outstanding and exercisable warrants at March 31, 2021:

 

    Outstanding   Exercisable

 

Exercise Price

  Number of Option/Warrant Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (Years)   Number of Option Shares     Weighted Average Exercise Price
$11.00   1,206,059           1.39     1,206,059        
$4.00   148,750           3.61     148,750        
$2.20   2,723,750           4.75     2,723,750        
$2.00   2,500           3.18     2,500        
$1.75   100,000           3.05     100,000        
$1.50   14,000           2.20     14,000        
$0.70   935,181           2.75     935,181        
$Total   5,130,240   $ 4.04     3.52     5,130,240     $ 4.04

 

As of March 31, 2021 the aggregate intrinsic value of warrants vested and outstanding was $2,175,403.