CNS Pharmaceuticals, Inc. (NASDAQ:CNSP) has entered into a sales agreement with A.G.P./Alliance Global Partners (NYSE:GLP), according to a filing with the Securities and Exchange Commission on Friday. Under the terms of the agreement, CNS Pharmaceuticals may offer and sell its common stock up to an aggregate sales price of $5.2 million from time to time through A.G.P., acting as a sales agent or principal.
The Houston-based biopharmaceutical company, which specializes in developing treatments for brain and central nervous system tumors, stated that the proceeds from the stock sales would be used for working capital and general corporate purposes.
This move comes as part of an "at the market" equity offering under the company's existing "shelf" registration statement, which was initially filed on May 17, 2024, and includes a prospectus supplement filed on the same day as the agreement.
A.G.P. will sell shares at market prices or as otherwise agreed upon with CNS Pharmaceuticals and is not required to buy any shares on a principal basis, except as may be agreed in writing. The sales agreement stipulates that A.G.P. will receive a commission of 3.0% of the gross proceeds from any shares sold and will be reimbursed for certain expenses. Furthermore, either party can terminate the agreement under specific conditions.
In conjunction with this agreement, CNS Pharmaceuticals also entered into a waiver with an investor from its February 1, 2024 offering. The investor agreed to waive certain restrictions, allowing the company to proceed with the "at the market" transactions. In return, CNS Pharmaceuticals will adjust the exercise price of certain warrants as of August 1, 2024, and potentially further reduce the exercise price of additional warrants upon shareholder approval.
The information in this article is sourced from the SEC filing by CNS Pharmaceuticals, Inc.
In other recent news, CNS Pharmaceuticals has been grappling with a potential NASDAQ delisting due to an equity shortfall. The Houston-based company has been facing this issue since August 2023 and has been granted several extensions to demonstrate compliance with the Listing Rule 5550(b), the most recent of which is until August 12, 2024.
In an attempt to resolve this, CNS Pharmaceuticals has announced a 1-for-50 reverse stock split. The move is aimed at elevating the company's per-share trading price to meet NASDAQ's minimum price requirement. This will consolidate every 50 shares of existing common stock into one, affecting outstanding warrants, equity awards, and other equity rights.
The company also confirmed that no fractional shares will be issued, and the authorized shares will remain at 300 million. These are recent developments in the company's ongoing efforts to maintain its NASDAQ listing and navigate the financial challenges in the pharmaceutical industry.
InvestingPro Insights
As CNS Pharmaceuticals, Inc. (NASDAQ:CNSP) navigates the capital markets to bolster its financial runway, real-time data from InvestingPro provides a snapshot of the company's current market standing. With an adjusted market capitalization of just $3.24 million USD, CNSP's financial position is delicate. This is mirrored by a negative adjusted price-to-earnings (P/E) ratio for the last twelve months as of Q1 2024, standing at -0.19, reflecting market skepticism about future earnings. Moreover, the company's stock has experienced a significant 7.62% return over the last week, which could be indicative of market reactions to recent corporate actions or broader market volatility.
InvestingPro Tips highlight that CNSP holds more cash than debt on its balance sheet, which is a positive sign for investors concerned about the company's solvency. However, the Relative Strength Index (RSI) suggests the stock is currently in oversold territory, which may interest traders looking for potential rebounds. For those considering deeper analysis, InvestingPro offers additional tips on CNSP; using the promo code PRONEWS24, readers can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription to access these valuable insights.
Investors and traders can find more InvestingPro Tips at https://www.investing.com/pro/CNSP, which currently lists a total of 17 tips for CNSP, providing a comprehensive view of the company's financial health and stock performance.
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