HOUSTON - CNS Pharmaceuticals, Inc. (NASDAQ:CNSP), a company focusing on the development of novel brain and central nervous system cancer treatments, has announced a registered direct offering to institutional investors. The company has agreed to sell 17,647,060 shares at $0.17 each, expecting to close the sale on or about October 24, 2024.
The offering is anticipated to generate gross proceeds of around $3 million before deducting fees for the placement agent and other expenses. CNS Pharmaceuticals plans to allocate the net proceeds for working capital and general corporate purposes.
A.G.P./Alliance Global Partners (NYSE:GLP) is serving as the sole placement agent for the transaction. The shares are being offered under a shelf registration statement on Form S-3, which was filed with the U.S. Securities and Exchange Commission (SEC) and declared effective on May 17, 2024.
Investors can access a prospectus supplement with more details about the offering from the SEC's website or directly from A.G.P./Alliance Global Partners.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, and there will be no sale of these securities in any jurisdiction where such offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of that jurisdiction.
CNS Pharmaceuticals' lead drug candidate, Berubicin, is an anthracycline and the first of its kind believed to cross the blood-brain barrier. It is currently under development to address several serious brain and CNS oncology indications, including glioblastoma multiforme (GBM), a particularly aggressive and incurable form of brain cancer.
The information in this article is based on a press release statement from CNS Pharmaceuticals.
In other recent news, CNS Pharmaceuticals has seen significant developments. The company faced potential delisting from the NASDAQ but has regained compliance with NASDAQ's minimum bid price and equity requirements. This was achieved through a series of extensions and strategic financial maneuvers, including amending its sales agreement with A.G.P./Alliance Global Partners to increase the potential sale of its common stock from $5.2 million to $25 million.
Additionally, CNS Pharmaceuticals received an upgrade from Maxim Group from Hold to Buy, citing the company's improved financial position and the potential of its treatment for Glioblastoma Multiforme (GBM), Berubicin. The company has also acquired an exclusive license for TPI 287, another drug candidate for GBM, with plans to initiate a study in 2025.
These developments demonstrate CNS Pharmaceuticals' proactive approach to navigating financial challenges while focusing on its mission to develop innovative cancer treatments. The company's recent actions have bolstered its financial position and ensured its continued listing on the NASDAQ. However, the company will be monitored for one year to ensure continued compliance with NASDAQ's requirements.
InvestingPro Insights
CNS Pharmaceuticals' recent registered direct offering comes at a critical time for the company, as reflected in the latest InvestingPro data and tips. The company's market capitalization stands at a modest $7.04 million, highlighting its current position as a small-cap pharmaceutical firm.
One InvestingPro Tip notes that CNS Pharmaceuticals is "quickly burning through cash," which aligns with the company's decision to raise additional funds through this offering. This cash burn rate underscores the importance of the $3 million in gross proceeds the company expects to generate from the share sale.
Another relevant InvestingPro Tip indicates that the company "holds more cash than debt on its balance sheet." This positive aspect of CNS Pharmaceuticals' financial position may provide some reassurance to potential investors in the offering, despite the company's overall financial challenges.
The InvestingPro data shows a significant 1-week price total return of 27.19%, which could be related to anticipation of this offering. However, it's important to note that the company has experienced a dramatic year-to-date price total return of -99.75%, reflecting the substantial challenges it has faced.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for CNS Pharmaceuticals, providing a deeper understanding of the company's financial health and market position.
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