Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.21.2
Equity
6 Months Ended
Jun. 30, 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 six months ended June 30, 2021, the Company issued 12,500 common shares and recognized $25,250 of stock-based compensation related to the agreement and will issue the remaining shares over the service period. In July 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 six months ended June 30, 2021, the Company sold 2,063,509 shares of common stock to the Agent for net proceeds of $1,084,704 and recorded a subscription receivable of $3,569,117. The subscription receivable was collected in full on July 1, 2021.

 

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 six months ended June 30, 2021, the Board of Directors approved grants of 611,000 options to officers, employees and a consultant. The exercise price of the options ranges from $2.35 to $3.36 and the options expire ten-years following issuance. The total fair value of these option grants at issuance was $1,769,686. Of the 611,000 options issued, 75,000 options provided that 25% vested upon issuance, 50% vest upon the 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 six months ended June 30, 2021 and 2020, the Company recognized $875,039 and $565,433 of stock-based compensation, respectively, related to outstanding stock options. As of June 30, 2021, the Company had $3,071,647 of unrecognized expenses related to outstanding options.

 

The following table summarizes the stock option activity for the six months ended June 30, 2021:  

               
   

 

 

Options

    Weighted-Average Exercise Price Per Share  
Outstanding, December 31, 2020     2,200,736     $ 2.00  
Granted     611,000     $ 3.24  
Exercised         $  
Forfeited         $  
Expired         $  
Outstanding, June 30, 2021     2,811,736     $ 2.27  

 

The following table discloses information regarding outstanding and exercisable options at June 30, 2021: 

                             
    Outstanding   Exercisable

 

Exercise Price

  Number of Option Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (Years)   Number of Option Shares     Weighted Average Exercise Price
$4.00   300,000           8.36     75,000        
$3.36   536,000           9.61            
$2.47   186,236           8.95     186,236        
$2.35   75,000           9.69     33,750        
$2.21   175,000            8.70     100,000        
$2.06   75,000           9.20            
$2.00   789,500           8.00     394,750        
$1.50   400,000           6.92     375,000        
$0.045   275,000           6.39     256,250        
Total   2,811,736   $ 2.27     8.22     1,420,986     $ 1.71

 

As of June 30, 2021, the aggregate intrinsic value of options vested and outstanding were $663,219 and $710,625 respectively. As of June 30, 2021, there are no awards remaining to be issued under the 2017 Plan and 2,188,264 awards remaining to be issued under the 2020 Plan.

 

Stock Warrants

 

During the six months ended June 30, 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 six months ended June 30, 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, June 30, 2021     5,130,240     $ 4.04  

 

 

The following table discloses information regarding outstanding and exercisable warrants at June 30, 2021: 

                             
    Outstanding   Exercisable

 

Exercise Price

  Number of Warrant Shares   Weighted Average Exercise Price   Weighted Average Remaining Life (Years)   Number of Warrant Shares     Weighted Average Exercise Price
$11.00   1,206,059           1.14     1,206,059        
$4.00   148,750           3.36     148,750        
$2.20   2,723,750           4.50     2,723,750        
$2.00   2,500           2.93     2,500        
$1.75   100,000           2.79     100,000        
$1.50   14,000           1.95     14,000        
$0.70   935,181           2.50     935,181        
$Total   5,130,240   $ 4.04     3.27     5,130,240     $ 4.04

 

As of June 30, 2021, the aggregate intrinsic value of warrants vested and outstanding was $1,205,768.