Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.21.2
Equity
9 Months Ended
Sep. 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 nine months ended September 30, 2021, the Company issued 18,750 common shares and recognized $37,875 of stock-based compensation related to the agreement and will issue the remaining shares over the service period.

 

During the nine months ended September 30, 2021, the Company issued 75,000 shares of common stock and recognized $140,250 of expense for investor relations services for a four month period ending September 2021.

 

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 nine months ended September 30, 2021, the Company sold 2,063,059 shares of common stock to the Agent for net proceeds of $4,653,821.

 

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 nine months ended September 30, 2021, the Board of Directors approved grants of 739,000 options to officers, employees, board of directors and a consultant. The exercise price of the options ranges from $1.80 to $3.36 and the options expire ten-years following issuance. The total fair value of these option grants at issuance was $1,969,712. Of the 739,000 options issued, 128,000 options vest on the first anniversary date of issuance, 75,000 options have a vesting term of 25% vest upon issuance, 50% vest upon 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 nine months ended September 30, 2021 and 2020, the Company recognized $1,228,811 and $930,443 of stock-based compensation, respectively, related to outstanding stock options. At September 30, 2021, the Company had $2,999,404 of unrecognized expenses related to outstanding options.

 

The following table summarizes the stock option activity for the nine months ended September 30, 2021:

           
   

 

Options

    Weighted-Average Exercise Price Per Share  
Outstanding, December 31, 2020     2,200,736     $ 2.00  
Granted     739,000       2.99  
Exercised            
Forfeited            
Expired            
Outstanding, September 30, 2021     2,939,736     $ 2.25  
Exercisable, September 30, 2021     1,450,986     $ 1.72  

 

As of September 30, 2021, the outstanding stock options have a weighted average remaining term of 8.04 years and the aggregate intrinsic value of options vested and outstanding were $370,281 and $397,375 respectively. As of September 30, 2021, there are no awards remaining to be issued under the 2017 Plan and 2,060,264 awards remaining to be issued under the 2020 Plan.

 

Stock Warrants

 

During the nine months ended September 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 nine months ended September 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, September 30, 2021     5,130,240     $ 4.04  
Exercisable, September 30, 2021     5,130,240     $ 4.04  

 

As of September 30, 2021 the outstanding and exercisable warrants have a weighted average remaining term of 3.02 years and have an aggregate intrinsic value of $738,793.