CNS Pharmaceuticals Announces Pricing of Registered Direct Offering and Concurrent Private Placement

Rhea-AI Summary

CNS Pharmaceuticals announced a registered direct offering and concurrent private placement, raising approximately $1.98 million before expenses. The company will sell 1,425,000 shares of common stock at $1.39 each, along with warrants to purchase an equal number of shares at $1.26 per share, exercisable immediately and expiring in 5 years. The closing is expected around July 5, 2024, pending customary conditions. Net proceeds will support working capital and general corporate purposes. The offering is conducted under an effective shelf registration statement and a private placement exemption.

Positive

• Gross proceeds of $1.98 million expected from the Offering.
• Funding to be used for working capital and general corporate purposes.

Negative

• Potential dilution of existing shareholders due to the issuance of new shares and warrants.

Insights

Financial Analyst

The registered direct offering and concurrent private placement announced by CNS Pharmaceuticals reveal several layers of financial strategy and market positioning. These actions aim to raise gross proceeds of approximately $1.98 million, which will be used for working capital and general corporate purposes. This move is significant for a few reasons.

Firstly, the $1.98 million raised will provide liquidity, enabling CNS Pharmaceuticals to fund ongoing operations and possibly accelerate its R&D activities. Access to capital is critical for a biopharmaceutical company, especially one working on novel treatments for complex conditions like brain and central nervous system cancers.

Secondly, the pricing of the shares at $1.39 each represents a discount to the current market price, a common practice in direct offerings to attract institutional investors. The concurrent private placement further sweetens the deal with warrants priced at $1.26, exercisable immediately and expiring in 5 years. This not only provides immediate funding but also offers potential future investment through warrant exercises.

However, investors should be mindful of the potential dilution of existing shares. The issuance of new shares and warrants means more shares in circulation, which can dilute the value of existing shares. The overall impact on share prices will depend on how the market perceives this financing move and the company’s ability to effectively utilize the new capital raised.

This strategy aligns with typical industry practices where small to mid-cap biopharma companies leverage direct offerings to ensure they have the necessary funds to advance their pipeline products through clinical trials and regulatory hurdles.

HOUSTON, TX / ACCESSWIRE / July 3, 2024 / CNS Pharmaceuticals, Inc. (NASDAQ:CNSP) ("CNS" or the "Company"), a biopharmaceutical company specializing in the development of novel treatments for primary and metastatic cancers in the brain and central nervous system, today announced it has entered into securities purchase agreements with health-care focused institutional investors for the purchase and sale of 1,425,000 shares of common stock in a registered direct offering and warrants to purchase up to 1,425,000 shares of common stock in a concurrent private placement (together with the registered direct offering, the "Offering") at a combined purchase price of $1.39 per share. The warrants issued pursuant to the concurrent private placement will have an exercise price of $1.26 per share, will be exercisable immediately following the date of issuance and will expire 5 years from the initial exercise date.

The closing of the Offering is expected to occur on or about July 5, 2024, subject to the satisfaction of customary closing conditions. The gross proceeds from the Offering are expected to be approximately $1.98 million before deducting financial advisory fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes.

The common stock will be issued in a registered direct offering pursuant to an effective shelf registration statement on Form S-3 (File No. 333-279285) previously filed with the U.S. Securities and Exchange Commission (the "SEC"), under the Securities Act of 1933, as amended (the "Securities Act"), and declared effective by the SEC on May 17, 2024. The warrants will be issued in a concurrent private placement. A prospectus supplement describing the terms of the proposed registered direct offering will be filed with the SEC and once filed, will be available on the SEC's website located at http://www.sec.gov.

The private placement of the ordinary warrants and the underlying shares will be made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and/or Regulation D thereunder. Accordingly, the securities issued in the concurrent private placement may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About CNS Pharmaceuticals, Inc.

CNS Pharmaceuticals a clinical-stage pharmaceutical company developing a pipeline of anti-cancer drug candidates for the treatment of primary and metastatic cancers of the brain and central nervous system. The Company's lead drug candidate, Berubicin, is a novel anthracycline and the first anthracycline to appear to cross the blood-brain barrier. Berubicin is currently in development for the treatment of a number of serious brain and CNS oncology indications including glioblastoma multiforme (GBM), an aggressive and incurable form of brain cancer.

For more information, please visit www.CNSPharma.com, and connect with the Company on Twitter, Facebook, and LinkedIn.

Forward-Looking Statements

Some of the statements in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. Forward-looking statements in this press release include, without limitation, the timing for closing of the Offering and the expected use of proceeds from the Offering. These statements relate to future events, future expectations, plans and prospects. Although CNS believes the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. CNS has attempted to identify forward-looking statements by terminology including ''believes,'' ''estimates,'' ''anticipates,'' ''expects,'' ''plans,'' ''projects,'' ''intends,'' ''potential,'' ''may,'' ''could,'' ''might,'' ''will,'' ''should,'' ''approximately'' or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including those discussed under Item 1A. "Risk Factors" in CNS's most recently filed Form 10-K filed with the Securities and Exchange Commission ("SEC") and updated from time to time in its Form 10-Q filings and in its other public filings with the SEC. Any forward-looking statements contained in this press release speak only as of its date. CNS undertakes no obligation to update any forward-looking statements contained in this press release to reflect events or circumstances occurring after its date or to reflect the occurrence of unanticipated events.

CONTACTS:

Investor Relations Contact

JTC Team, LLC
Jenene Thomas
833-475-8247
CNSP@jtcir.com

SOURCE: CNS Pharmaceuticals, Inc.

View the original press release on accesswire.com

FAQ

What is the combined purchase price per share in the CNS Pharmaceuticals (CNSP) offering?

The combined purchase price per share in the CNS Pharmaceuticals offering is $1.39.

When is the closing date for the CNS Pharmaceuticals (CNSP) offering?

The closing date for the CNS Pharmaceuticals offering is expected to be around July 5, 2024.

How much is CNS Pharmaceuticals (CNSP) expecting to raise from the offering?

CNS Pharmaceuticals is expecting to raise approximately $1.98 million in gross proceeds from the offering.

What will CNS Pharmaceuticals (CNSP) use the proceeds from the offering for?

CNS Pharmaceuticals will use the proceeds for working capital and general corporate purposes.

What are the details of the warrants issued in the CNS Pharmaceuticals (CNSP) offering?

The warrants have an exercise price of $1.26 per share, are exercisable immediately, and expire in 5 years.

What is the stock symbol for CNS Pharmaceuticals?

The stock symbol for CNS Pharmaceuticals is CNSP.