CNS Pharmaceuticals Announces Pricing of Registered Direct Offering and Concurrent Private Placement
CNS Pharmaceuticals (NASDAQ:CNSP) announced a securities purchase agreement with institutional investors, involving a registered direct offering of 366,000 shares of common stock and warrants to purchase up to another 366,000 shares. The combined purchase price is $3.75 per share, and the warrants have an exercise price of $3.62, expiring in 5 years. The offering is expected to close around June 17, 2024, bringing in gross proceeds of $1.37 million. The net proceeds will be used for working capital and general corporate purposes. The offering is based on a registration statement declared effective by the SEC on May 17, 2024.
- CNSP secured $1.37 million in gross proceeds from the offering.
- The warrants' exercise price is close to the current share price, indicating investor confidence.
- The offering supports working capital and general corporate purposes, potentially aiding future growth.
- The SEC has already declared the registration statement effective, ensuring regulatory compliance.
- Share dilution from the issuance of 366,000 new shares could negatively impact existing shareholders.
- The net proceeds will be reduced by financial advisory fees and other expenses.
- The small funding amount may not sufficiently address long-term capital needs.
- The warrants add potential future dilution with 366,000 more shares.
Insights
CNS Pharmaceuticals announced a direct offering and concurrent private placement, raising approximately
An effective shelf registration statement underpins this offering, signaling regulatory compliance, yet the market's reaction will hinge on how the funds are deployed. Efficient use of proceeds could enhance research and development efforts, leading to potential breakthroughs that could drive long-term value. However, the uncertainty surrounding the company's ability to maximize these funds effectively may affect short-term stock performance.
Investors should also consider the 5-year expiration on the warrants, which provides a substantial timeline for potential value appreciation but also adds a layer of ongoing dilution risk.
The direct offering and concurrent private placement indicate that CNS Pharmaceuticals is seeking to bolster its financial position. For a biopharmaceutical firm focused on cancer treatments, this capital infusion could be vital for pursuing clinical trials and regulatory approvals. However, the presence of institutional investors in this offering suggests confidence in the company's prospects, which could instill confidence in retail investors as well.
It's essential to note the pattern of raising funds via equity offerings, which can dilute current shareholders' value but also underlines the company's commitment to advancing its pipeline. The market's anticipation of how these funds will be used—whether for strategic acquisitions, expanding trials, or enhancing operational capabilities—will guide stock performance in the near term.
Moreover, inclusion of a private placement demonstrates strategic use of available exemptions under the Securities Act, allowing for a more streamlined fundraising process. While this move aligns with industry norms, the core focus should remain on how effectively CNS Pharmaceuticals can utilize these funds to generate tangible clinical and commercial milestones.
HOUSTON, TX / ACCESSWIRE / June 14, 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 366,000 shares of common stock (or common stock equivalents in lieu thereof) in a registered direct offering and warrants to purchase up to 366,000 shares of common stock in a concurrent private placement (together with the registered direct offering, the "Offering") at a combined purchase price of
The closing of the Offering is expected to occur on or about June 17, 2024, subject to the satisfaction of customary closing conditions. The gross proceeds from the Offering are expected to be approximately
The common stock and common stock equivalents in lieu thereof 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
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