CNS Pharmaceuticals (CNSP) widens Q1 loss but secures $22.5M private placement
CNS Pharmaceuticals reported a wider quarterly loss as it pivots strategy but shored up liquidity after quarter-end. For the three months ended March 31, 2026, the company recorded a net loss of about $4.9 million, compared with $4.3 million a year earlier, driven mainly by higher research and development and professional expenses.
Cash and cash equivalents fell to $2.95 million with a working capital deficit of roughly $0.5 million as of March 31, 2026, and operating cash use rose to about $4.6 million. A May 2026 private placement then generated gross proceeds of approximately $22.5 million through common stock and pre-funded warrants, which management believes will fund operations beyond 12 months from issuance of these financial statements.
The company announced a new corporate strategy in March 2026 to pursue innovative therapies for serious diseases, moving away from a sole focus on glioblastoma and exploring out-licensing of legacy assets TPI 287 and Berubicin. CNS Pharmaceuticals continues to report a material weakness in internal control over financial reporting and is adding senior executives, including a new CEO, CFO, Chief Medical Officer and Chief Technology Officer, while providing severance to departing leaders.
Positive
- None.
Negative
- None.
Insights
CNSP narrowed going-concern risk with a sizable financing but still posts heavy losses.
CNS Pharmaceuticals remains a pre-revenue biotech, reporting a quarterly net loss of about $4.9 million on operating expenses near $5.0 million. Research and development totaled roughly $3.5 million, reflecting continued spend on pipeline and transition activities.
Quarter-end cash of $2.95 million and a working capital deficit signaled pressure, but the May 2026 private placement added roughly $22.5 million in gross proceeds via common stock and pre-funded warrants. Management states this alleviates prior substantial doubt about going concern for more than 12 months from issuance.
The March 2026 strategy shift away from a single glioblastoma focus, leadership changes, and ongoing material weaknesses in internal control introduce execution risk. Future disclosures in periodic reports will be important for understanding how new assets, higher leadership compensation and stock-based incentives translate into clinical progress and cash burn.
Key Figures
Key Terms
pre-funded warrants financial
going concern financial
material weakness financial
reverse stock split financial
Sales Agreement (ATM) financial
Restricted Stock Units (RSUs) financial
FAQ
How much did CNS Pharmaceuticals (CNSP) lose in Q1 2026?
What was CNSP’s cash position and working capital at March 31, 2026?
What new financing did CNS Pharmaceuticals (CNSP) complete after Q1 2026?
How is CNSP’s new corporate strategy changing its focus?
What were CNS Pharmaceuticals’ R&D and G&A expenses in Q1 2026?
Did CNSP address its going concern uncertainty in this 10-Q?
Does CNS Pharmaceuticals (CNSP) report any weaknesses in internal controls?
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
OR
For the transition period from ____________ to ______________
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) filed all reports
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| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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The number of shares outstanding of the registrant’s common stock,
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TABLE OF CONTENTS
| Page | ||
| PART I FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | 3 |
| Balance Sheets as of March 31, 2026 and December 31, 2025 (unaudited) | 3 | |
| Statements of Operations for the three months ended March 31, 2026 and 2025 (unaudited) | 4 | |
| Statements of Stockholders’ Equity (Deficit) for the three months ended March 31, 2026 and 2025 (unaudited) | 5 | |
| Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (unaudited) | 6 | |
| Notes to the Financial Statements (unaudited) | 7 | |
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 14 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 18 |
| Item 4. | Controls and Procedures | 18 |
| PART II OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 19 |
| Item 1A. | Risk Factors | 19 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 19 |
| Item 3. | Defaults Upon Senior Securities | 19 |
| Item 4. | Mine Safety Disclosures | 19 |
| Item 5. | Other Information | 19 |
| Item 6. | Exhibits | 20 |
| Signatures | 21 | |
| 2 |
PART I - FINANCIAL INFORMATION
| ITEM 1. | FINANCIAL STATEMENTS |
CNS Pharmaceuticals, Inc.
Balance Sheets
(Unaudited)
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Deferred offering costs | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Noncurrent Assets: | ||||||||
| Prepaid expenses, net of current portion | ||||||||
| Property and equipment, net | ||||||||
| Total noncurrent assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Notes payable | ||||||||
| Total current liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies | – | – | ||||||
| Stockholders' Equity: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders' Equity | ||||||||
| Total Liabilities and Stockholders' Equity | $ | $ | ||||||
See accompanying notes to the unaudited financial statements.
| 3 |
CNS Pharmaceuticals, Inc.
Statements of Operations
(Unaudited)
| Three Months Ended | Three Months Ended | |||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Operating expenses: | ||||||||
| General and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expenses): | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other income (expense) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Loss per share - basic | $ | ( | ) | $ | ( | ) | ||
| Loss per share - diluted | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding - basic | ||||||||
| Weighted average shares outstanding - diluted | ||||||||
See accompanying notes to the unaudited financial statements.
| 4 |
CNS Pharmaceuticals, Inc.
Statements of Stockholders' Equity
For the three months ended March 31, 2026 and 2025
(Unaudited)
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance December 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common stock issued for cash, net | – | |||||||||||||||||||
| Stock-based compensation | – | – | – | |||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Balance December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common stock issued for cash, net | – | |||||||||||||||||||
| Stock repurchase during stock split rounding | ( | ) | – | ( | ) | – | ( | ) | ||||||||||||
| Stock-based compensation | – | – | – | |||||||||||||||||
| Net loss | – | – | – | ( | ) | ( | ) | |||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
See accompanying notes to the unaudited financial statements.
| 5 |
CNS Pharmaceuticals, Inc.
Statements of Cash Flows
(Unaudited)
| Three Months Ended | Three Months Ended | |||||||
| March 31, 2026 | March 31, 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Stock-based compensation | ||||||||
| Depreciation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Payments on notes payable | ( | ) | ( | ) | ||||
| Payments to stockholders for stock split round | ( | ) | ||||||
| Proceeds from subscription receivable | ||||||||
| Proceeds from equity issuance | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, at beginning of period | ||||||||
| Cash and cash equivalents, at end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Prepaid insurance financed with note payable | $ | $ | ||||||
| Amortization of deferred offering costs | $ | $ | ||||||
See accompanying notes to the unaudited financial statements.
| 6 |
CNS Pharmaceuticals, Inc.
Notes to the Financial Statements
(Unaudited)
Note 1 – Nature of Business
CNS Pharmaceuticals, Inc. (“we”, “our”, the “Company”) is a biotechnology company organized as a Nevada corporation in July 2017. In March 2026, we announced a new corporate strategy focused on developing innovative therapies for serious diseases. We are leveraging our executive team’s multi-functional experiences across high-value therapeutic areas to execute our new corporate strategy, which also includes pivoting from a singular focus on glioblastoma multiforme and exploring out-licensing opportunities for our legacy assets TPI 287 and Berubicin for which we have intellectual property rights under license agreement with Cortice and own pursuant to a collaboration and asset purchase agreement with Reata.
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation - The accompanying unaudited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim unaudited financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited financial statements include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary in order to make the condensed financial statements not misleading. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the final results that may be expected for the year ending December 31, 2026. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the period ended December 31, 2025 included in our Form 10-K filed with the SEC on March 31, 2026 (“Form 10-K”). Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.
Liquidity and Going Concern - These financial statements have
been prepared assuming the Company will continue as a going concern. The Company has a history of net losses and negative cash flows from
operations. For the three months ended March 31, 2026, the Company recorded a net loss of approximately $4.9 million and used cash in
operations of approximately $4.6 million. As of March 31, 2026, the Company had an accumulated deficit of approximately $105 million and
cash of approximately $
Cash and Cash Equivalents - The Company considers all highly
liquid accounts with original maturities of three months or less at the date of acquisition to be cash equivalents. Periodically, the
Company may carry cash balances at financial institutions in excess of the federally insured limit of $250,000. The amount in excess of
the FDIC insurance as of March 31, 2026 was $
| 7 |
Property and Equipment - Property and equipment is recorded at cost and depreciated over their estimated useful lives using the straight-line depreciation method as follows:
| Schedule of estimated useful lives | |
| Leasehold improvement | Shorter of estimated useful lives or the term of the lease |
| Computer equipment | |
| Machinery and equipment | |
| Furniture and office equipment |
Repairs and maintenance costs are expensed as incurred.
Related Parties - The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Stock-based Compensation - Employee and non-employee share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period for stock options and restricted stock units.
Restricted Stock Units (“RSUs”) - Our RSUs vest over two to four years from the date of grant. The fair value of RSUs is the market price of our common stock at the date of grant.
Performance Units (“PUs”) - The PUs vest based on our performance against predefined share price targets and the achievement of Positive Interim, Clinical Data as defined by the Board.
Warrants - The Company evaluates all freestanding and embedded warrants to determine whether they meet the criteria for equity classification under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, or if they must be classified as liabilities under ASC 480 or ASC 815-10. The Company evaluated the warrants and concluded they are indexed to the Company's common stock and meet the equity classification criteria under ASC 815-40, as they are settleable in shares, and the Company has sufficient shares authorized. The warrants were recorded at fair value upon issuance within stockholders' equity.
Loss Per Common Share - Basic loss per common share is computed
by dividing net loss available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted
loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the
dilutive effect of common stock equivalents. In periods when losses are reported, the weighted-average number of common shares outstanding
excludes common stock equivalents, because their inclusion would be anti-dilutive. As of March 31, 2026, the Company’s potentially
dilutive shares and options, which were not included in the calculation of net loss per share, included warrants to purchase
Segments Reporting
The Company manages its operations as a single segment for the purpose of assessing performance and making operating decisions. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company using information about combined net loss from operations. All significant operating decisions are based upon an analysis of the Company as one operating segment, which is the same as its reporting segment. See statement of operations for information about combined net loss from operations.
| 8 |
Note 3 – Note Payable
On November 8, 2025, the Company entered into a short-term note payable
for an aggregate of $
Note 4 – Equity
The Company has authorized
On July 22, 2025, the Company effected a reverse stock split on a
On November 20, 2025, following approval by shareholders, the Company
filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation with the Secretary of State of the State of Nevada
to increase the number of the Company’s authorized shares of common stock from
Common Stock
During the period ended March 31, 2026, the Company sold
| 9 |
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 three shares of common stock. As of March 31, 2026, there were no awards remaining to be issued under the 2017 Plan.
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 four shares of common stock. The 2020 Plan was amended effective as of August 9, 2023, which was approved by the Company’s
stockholders at the Company’s annual meeting on September 14, 2023. The amendment increased the 2020 Plan by
On November 17, 2025, the Company held its scheduled 2025 Annual Meeting
of Stockholders at which the Company’s stockholders approved amendments to the Company's 2020 Equity Plan including an increase
in the number of shares of common stock authorized for issuance under the 2020 Plan by
During the three months ended March 31, 2026 and 2025, the Company
recognized $(
The following table summarizes the stock option activity for the three months ended March 31, 2026:
| Schedule of stock option activity | ||||||||
| Options | Weighted-Average Exercise Price Per Share | |||||||
| Outstanding, December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited | ( | ) | ||||||
| Expired | ||||||||
| Outstanding, March 31, 2026 | $ | |||||||
| Exercisable, March 31, 2026 | $ | |||||||
As of March 31, 2026, the outstanding stock options have a weighted
average remaining term of
Stock Warrants
The following table summarizes the stock warrant activity for the three months ended March 31, 2026:
| Schedule of stock warrant activity | ||||||||
| Warrants | Weighted-Average Exercise Price Per Share | |||||||
| Outstanding, December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Exercised | ||||||||
| Forfeited | ||||||||
| Expired | ||||||||
| Outstanding, March 31, 2026 | $ | |||||||
| Exercisable, March 31, 2026 | $ | |||||||
As of March 31, 2026, the outstanding and exercisable warrants have
a weighted average remaining term of
| 10 |
Restricted Stock Units
During the three months ended March 31, 2026 and 2025, the Company
recognized $
The following table summarizes the RSUs activity for the three months ended March 31, 2026:
| Schedule of RSUs activity | ||||||||
| RSUs | Weighted-Average Grant Date Fair Value | |||||||
| Non-vested, December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited | ( | ) | ||||||
| Non-vested, March 31, 2026 | $ | |||||||
Performance Units
During the three months ended March 31,
2026 and 2025, the Company recognized $
The following table summarizes the PUs activity for the three months ended March 31, 2026:
| Schedule of PUs activity | ||||||||
| PUs | Weighted-Average Grant Date Fair Value | |||||||
| Non-vested – December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ||||||||
| Forfeited/Cancelled | ( | ) | ||||||
| Non-vested, March 31, 2026 | $ | |||||||
Note 5 – Commitments and Contingencies
Executive Employment Agreements
On December 16, 2025, John Climaco resigned from his positions as chief
executive officer of the Company and as a member of the Company’s Board of Directors. The Company and Mr. Climaco entered into a
Separation and Severance Agreement dated as of December 16, 2025 (the “Separation Agreement”), which memorializes the terms
of his resignation and separation from service with the Company. Pursuant to the Separation Agreement, subject to Mr. Climaco’s
timely execution, non-revocation, and compliance with the agreement’s terms, the Company is providing severance benefits, including
(i) severance equal to twelve months of Mr. Climaco’s current annualized base salary, paid in twelve equal monthly installments,
and payment of his base salary through December 31, 2025; (ii) payment of Mr. Climaco’s 2025 cash bonus in the total amount of $
| 11 |
On December 16, 2025, the Company entered into an employment agreement
with Mr. Rami Levin pursuant to which Mr. Levin agreed to serve as Chief Executive Officer and President of the Company commencing on
such date. Pursuant to the employment agreement, the compensation committee of the board of directors reviews the base salary payable
to Mr. Levin annually during the term of the agreement. Commencing on January 1, 2026, the compensation committee of the board of directors
set Mr. Levin’s 2026 annual base salary to $
On February 10, 2026, the Company entered into an employment agreement
with Steve O’Loughlin to serve as the Company’s Chief Financial Officer effective March 2, 2026. The employment agreement
provides for an initial annual base salary of $
On February 13, 2026, the Company entered into an employment agreement
with Christopher Downs, the Company’s current Chief Financial Officer, pursuant to which Mr. Downs agreed to resign as Chief Financial
Officer effective March 2, 2026 and to serve as the Company’s Senior Vice President – Finance effective March 2, 2026. The
employment agreement provides for an initial annual base salary of $
On February 26, 2026, the Company entered into an employment agreement
with Lynne Kelley to serve as the Company’s Chief Medical Officer effective March 2, 2026. The employment agreement provides for
an initial annual base salary of $
On March 2, 2026, the Company entered into an employment agreement
with Eric Faulkner to serve as the Company’s Chief Technology Officer effective March 2, 2026. The employment agreement provides
for an initial annual base salary of $
Effective March 2, 2026, the Company and Dr. Sandra Silberman, the Company’s former Chief Medical Officer, entered into a Separation and Severance Agreement (the “Separation Agreement”), which memorializes the terms of Dr. Silberman’s separation from service with the Company. Pursuant to the Separation Agreement, the Company is providing severance benefits, equal to three months of Dr. Silberman’s current annualized base salary, paid in three equal monthly installments.
Effective March 2, 2026, the Company and Dr. Donald Picker, the Company’s former Chief Scientific Officer, entered into a Separation and Severance Agreement (the “Separation Agreement”), which memorializes the terms of Dr. Picker’s separation from service with the Company. Pursuant to the Separation Agreement, the Company is providing severance benefits, equal to four months of Dr. Picker’s current annualized base salary, paid in four equal monthly installments.
In March 2026, the Board of Directors approved, based upon the recommendation
of the Compensation Committee, cash bonuses for 2025 totaling $
| 12 |
Cortice Biosciences, Inc. Exclusive License Agreement
On July 29, 2024, the Company entered into an Exclusive License Agreement
with Cortice Biosciences, Inc. (“Cortice”) pursuant to which Cortice granted the Company an exclusive license to the intellectual
property rights related to certain patents around the compound TPI 287 in the United States, Canada, Mexico and Japan. The term of the
license will expire, other than due to a breach of the Cortice Agreements, at the end of the royalty term with respect to any licensed
product in any of the included territories, which begins upon the first commercial sale in such territory and ends on the latest of (i)
ten years after such sale, (ii) the expiration of regulatory or marketing exclusivity for such licensed product in such country, or (iii)
the expiration of the last to expire valid patent claim in such country covering such licensed product. Pursuant to the Cortice Agreements,
the Company agreed to issue Cortice
Note 6 – Subsequent Events
On May 4, 2026, the Company entered into Securities Purchase Agreements (“SPAs”) for a private placement financing that resulted in gross proceeds of approximately $22.5 million. Pursuant to the terms of the securities purchase agreements, the Company sold an aggregate of (i) 650,000 shares of its common stock (“Common Stock”) at a purchase price of $2.30 per share and (ii) pre-funded warrants to purchase 9,143,479 shares of common stock at a purchase price of $2.299 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.001 per share. The private placement closed on May 5, 2026. We intend to use these proceeds to identify and secure the rights to development stage assets and advance any assets we obtain the rights to. The timing, cost and ultimate success of which are all difficult to predict. The cost of advancing any drug candidate will require significant additional capital. We have no commitments for such additional needed capital and will likely be required to raise additional capital through the sale of additional equity or debt securities.
On May 4, 2026, Jerzy (George) Gumulka resigned as a member of the Company’s Board of Directors (the “Board”). Mr. Gumulka’s resignation from the Board was not a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices.
On May 4, 2026, the Board agreed to appoint Michal Fisher as an independent member of the Company’s Board.
| 13 |
| ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See Item 1A. “Risk Factors” of our Form 10-K for the year ended December 31, 2025, available on the Security and Exchange Commission's (“SEC”) EDGAR website at www.sec.gov, for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this Form 10-Q.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
We make forward-looking statements under the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in other sections of this Form 10-Q. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “should,” “would,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described under Item 1A. “Risk Factors” of our Form 10-K for the year ended December 31, 2025 and in other filings made by us from time to time with the SEC.
While we believe we have identified material risks, these risks and uncertainties are not exhaustive. Other sections of this Form 10-Q may describe additional factors that could adversely impact our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations, and we do not intend to do so. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
| 14 |
Forward-looking statements include, but are not limited to, statements about:
| · | our ability to secure rights to new pipeline assets; | |
| · | our ability to obtain additional funding to develop pipeline assets; | |
| · | our ability to maintain compliance with the NASDAQ Capital Market’s continued listing requirements, including any new continued listing requirements that are approved in the future; | |
| · | the success of our research and development efforts and clinical trials through all phases of clinical development; | |
| · | the need to obtain regulatory approval of our product candidates; | |
| · | compliance with obligations under intellectual property licenses with third parties; | |
| · | any delays in regulatory review and approval of product candidates in clinical development; | |
| · | our ability to commercialize our product candidates; | |
| · | market acceptance of our product candidates; | |
| · | competition from existing products or new products that may emerge; | |
| · | potential product liability claims; | |
| · | our dependency on third-party manufacturers to supply or manufacture our products; | |
| · | our ability to establish or maintain collaborations, licensing or other arrangements; | |
| · | our ability and third parties’ abilities to protect intellectual property rights; | |
| · | our ability to adequately support future growth; and | |
| · | our ability to attract and retain key personnel to manage our business effectively. |
We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this Form 10-Q in the case of forward-looking statements contained in this Form 10-Q.
Overview
We are a biotechnology company organized as a Nevada corporation in July 2017. In March 2026, we announced a new corporate strategy focused on developing innovative therapies for serious diseases. We are leveraging our executive team’s multi-functional experiences across high-value therapeutic areas to execute our new corporate strategy, which also includes pivoting from a singular focus on glioblastoma multiforme and exploring out-licensing opportunities for our legacy assets TPI 287 and Berubicin for which we have intellectual property rights under license agreement with Cortice and own pursuant to a collaboration and asset purchase agreement with Reata.
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Results of Operations for the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025 (rounded to the nearest thousand):
General and Administrative Expense
General and administrative expense was approximately $1,431,000 for the three months ended March 31, 2026 compared to approximately $1,095,000 for the comparable period in 2025. The increase in general and administrative expense was attributable to increases of approximately $31,000 in advertising and marketing expenses, $315,000 in legal and professional expenses, $99,000 in insurance expense and $58,000 in other expenses, which were offset by decreases of approximately $52,000 in travel expenses, $49,000 in stock-based compensation and $66,000 in compensation expense.
Research and Development Expense
Research and development expense was approximately $3,544,000 for the three months ended March 31, 2026 compared to approximately $3,243,000 for the comparable period in 2025. The change in research and development expense during the period is primarily attributable to an increase in professional expenses of $240,000, increased headcount expenses of $61,000, drug manufacturing expenditures related to TPI 287 as well as other expenses. R&D expense includes activity related to completing and closing out the clinical trial for Berubicin as enrollment and patient treatment is complete. The decline in Berubicin clinical trial costs offset the increase in expenses above. Our future research and development expense will be dependent on the timing and nature of any new asset we in-license or acquire and the development expenses related to such asset.
Net Loss
The net loss for the three months ended March 31, 2026 was approximately $4,937,000 compared to approximately $4,301,000 for the comparable period in 2025. The change in net loss is primarily attributable to increased research and development costs and increase in professional expenses.
Liquidity and Capital Resources
On March 31, 2026, we had cash of approximately $2,951,000 and we had a working capital deficit of approximately $504,000. We have historically funded our operations from proceeds from debt and equity sales.
On July 26, 2024, the Company entered into a Sales Agreement (the “AGP ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP”). Pursuant to the terms of the AGP ATM Sales Agreement, we are permitted to sell from time to time through AGP, as sales agent or principal, shares of our common stock. During the period ended March 31, 2026, the Company sold 178,933 shares of common stock pursuant to the AGP ATM Sales Agreement for net proceeds of approximately $501,000. As of March 31, 2026, the Company sold 447,102 shares of common stock pursuant to the AGP ATM Sales Agreement for net proceeds of approximately $23.7 million.
On May 4, 2026, the Company entered into Securities Purchase Agreements (“SPAs”) for a private placement financing that resulted in gross proceeds of approximately $22.5 million. Pursuant to the terms of the securities purchase agreements, the Company sold an aggregate of (i) 650,000 shares of its common stock (“Common Stock”) at a purchase price of $2.30 per share and (ii) pre-funded warrants to purchase 9,143,479 shares of Common Stock at a purchase price of $2.299 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.001 per share. The private placement closed on May 5, 2026.
We estimate that with the proceeds from the May 2026 private placement together with our existing cash on hand we have sufficient capital to fund operations beyond twelve months from the issuance of these financial statements. Our strategy is focused on identifying and securing the rights to development stage assets and advancing any assets we obtain the rights to. The timing, cost and ultimate success of which are all difficult to predict and as such the foregoing estimate may prove to be inaccurate. The cost of advancing any drug candidate will require significant additional capital. We have no commitments for such additional needed financing and will likely be required to raise additional capital through the sale of additional equity or debt securities.
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We will need to raise significant additional capital in the future in order to meet our future obligations and execute our business plan. If we are unable to raise sufficient funds, we will be required to develop and implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful and if it is not successful we may need to cease operations entirely.
Summary of Cash Flows
Cash used in operating activities
Net cash used in operating activities was approximately $4,649,000 and $3,242,000 for the three months ended March 31, 2026 and 2025, respectively, and mainly included payments made for clinical trial costs, officer compensation, insurance, marketing and professional fees to our consultants, attorneys and accountants.
Cash used in investing activities
Net cash used in investing activities was approximately $6,000 for the three months ended March 31, 2026, related to the purchase of property and equipment. Net cash used in investing activities was $0 for the three months ended March 31, 2025.
Cash provided by financing activities
Net cash provided by financing activities was approximately $405,000 for the three months ended March 31, 2026, related to the sale of common stock, which was partially offset by the repayment of notes payable. Net cash provided by financing activities was approximately $9,828,000 for the three months ended March 31, 2025, related to the sale of common stock, which was partially offset by the repayment of notes payable.
Off-balance Sheet Arrangements
As of March 31, 2026, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Purchase Commitments
We do not have any material commitments for capital expenditures, although we are required to pay certain milestones fees to Reata and Cortice as described in the section “Overview” above.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements, including the notes thereto. As a result, management is required to routinely make judgments and estimates about the effects of matters that are inherently uncertain. Actual results may differ from these estimates under different conditions or assumptions. Management determined there were no critical accounting estimates.
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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
| Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures and Changes in 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 March 31, 2026. 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 March 31, 2026 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.
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.
Other than as described above, 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.
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PART II - OTHER INFORMATION
| Item 1. | Legal Proceedings |
From time to time in the ordinary course of our business, we may be involved in legal proceedings, the outcomes of which may not be determinable. The results of litigation are inherently unpredictable. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, require significant amounts of management time and result in diversion of significant resources. We are not able to estimate an aggregate amount or range of reasonably possible losses for those legal matters for which losses are not probable and estimable. We have insurance policies covering potential losses where such coverage is cost effective.
We are not at this time involved in any legal proceedings.
| Item 1A. | Risk Factors |
In addition to the other information set forth in this report, you should carefully consider the factors set forth in the section entitled “Risk Factors” in our 2025 Annual Report on Form 10-K, filed with the SEC, which are incorporated herein by reference. The risks described in such reports are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
We have not issued any unregistered securities during the quarter ended March 31, 2026.
| Item 3. | Defaults Upon Senior Securities |
None.
| Item 4. | Mine Safety Disclosures |
Not applicable.
| Item 5. | Other Information |
During the period covered by this Quarterly Report,
none of the Company’s directors or executive officers has
On May 13, 2026, the Company and Christopher Downs, the Company’s Senior Vice President – Finance, entered into a Separation and Severance Agreement, which memorializes the terms of Mr. Down’s separation from service with the Company. Pursuant to the agreement, subject to Mr. Down’s timely execution, non-revocation, and compliance with the agreement’s terms, the Company will provide severance benefits, equal to six months of Mr. Down’s current annualized base salary, paid in accordance with the Company’s regular payroll cycle.
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| Item 6. | Exhibits |
INDEX TO EXHIBITS
|
Exhibit Number |
Description | |
| 1.1 | Placement Agency Agreement dated May 4, 2026 by and between CNS Pharmaceuticals, Inc. and A.G.P./Alliance Global Partners (filed as Exhibit 1.1 to the Company’s Form 8-K filed May 4, 2026) | |
| 4.1 | Form of Pre-Funded Warrant (filed as Exhibit 4.1 to the Company’s Form 8-K filed May 4, 2026) | |
| 10.1 | Employment Agreement between Steve O’Loughlin and CNS Pharmaceuticals, Inc. dated February 10, 2026(filed as Exhibit 10.1 to the Company’s Form 8-K filed February 17, 2026) | |
| 10.2 | Employment Agreement between Christopher Downs and CNS Pharmaceuticals, Inc. dated February 13, 2026(filed as Exhibit 10.2 to the Company’s Form 8-K filed February 17, 2026) | |
| 10.3 | Employment Agreement between Lynne Kelley and CNS Pharmaceuticals, Inc. dated February 26, 2026(filed as Exhibit 10.1 to the Company’s Form 8-K filed March 2, 2026) | |
| 10.4 | Separation and Severance Agreement between Sandra Silberman and CNS Pharmaceuticals, Inc. dated February 27, 2026(filed as Exhibit 10.2 to the Company’s Form 8-K filed March 2, 2026) | |
| 10.5 | Employment Agreement between Eric Faulkner and CNS Pharmaceuticals, Inc. dated February 10, 2026 (filed as Exhibit 10.19 to the Company’s Form 10-K filed March 31, 2026) | |
| 10.6 | Form of Securities Purchase Agreement dated May 4, 2026 (filed as Exhibit 10.1 to the Company’s Form 8-K filed May 4, 2026) | |
| 10.7 | Form of Registration Rights Agreement dated May 4, 2026 (filed as Exhibit 10.2 to the Company’s Form 8-K filed May 4, 2026) | |
| 31.1* | Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. | |
| 31.2* | Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934. | |
| 32.1*(1) | Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2*(1) | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 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 (formatted in iXBRL, and included in exhibit 101). |
______________
| * | Filed herewith. |
| (1) | The certifications on Exhibit 32 hereto are deemed not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. |
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SIGNATURES
Pursuant to the requirements of the 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.
| SIGNATURE | TITLE | DATE | ||
| /s/ Rami Levin | Chief Executive Officer, President | May 14, 2026 | ||
| Rami Levin | (Principal Executive Officer) | |||
| /s/ Steve O’Loughlin | Chief Financial Officer | May 14, 2026 | ||
| Steve O’Loughlin | (Principal Financial and Accounting Officer) |
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