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Table of Contents
As filed with the Securities and Exchange Commission
on December 8, 2023.
Registration No. 333-___
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CNS Pharmaceuticals, Inc.
(Exact Name of Registrant as Specified in Its
Charter)
Nevada |
2834 |
82-2318545 |
(State or Other Jurisdiction of
Incorporation or Organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
2100 West Loop South, Suite 900
Houston, TX 77027
(800) 946-9185
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)
Mr. John Climaco
Chief Executive Officer
2100 West Loop South, Suite 900
Houston, TX 77027
(800) 946-9185
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
Copies to:
Cavas S. Pavri
Johnathan Duncan
ArentFox Schiff LLP
1717 K Street NW
Washington, DC 20006
Telephone: (202) 724-6847
Fax: (202) 778-6460 |
Ron Ben-Bassat
Eric Victorson
Sullivan & Worcester LLP
1633 Broadway
New York, NY 10019
Telephone: (212) 660-3000 |
Approximate date of commencement
of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities
being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933,
check the following box. ☒
If this form is filed to
register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this form is a post-effective
amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Non-accelerated filer |
☒ |
Smaller reporting company |
☒ |
|
|
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 7(a)(2)(B) of the Securities Act.
The Registrant hereby
amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant
to said Section 8(a), may determine.
The information in this preliminary
prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities
and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting offers
to buy these securities in any jurisdiction where the offer or sale is not permitted.
Preliminary Prospectus |
Subject to Completion |
Dated December 8, 2023 |
Up to 3,809,524 Shares of Common Stock
Up to 3,809,524 Pre-Funded Warrants to Purchase
up to 3,809,524 Shares of Common Stock
Up to 3,809,524 Common Warrants to Purchase
up to 3,809,524 Shares of Common Stock
Up to 3,809,524 Shares of Common Stock Underlying
such Pre-Funded Warrants
Up to 3,809,524 Shares of Common Stock Underlying
such Common Warrants
CNS Pharmaceuticals,
Inc.
We are offering on a reasonable
best efforts basis up to 3,809,524 shares of our common stock together with warrants (each, a “common warrant”) to purchase
up to 3,809,524 shares of our common stock, based on an assumed combined public offering price of $2.10 per share and accompanying common
warrant (the last reported sale price of our common stock on The Nasdaq Capital Market (“Nasdaq”) on December 7, 2023). Each
common warrant will be exercisable for one share of our common stock and have an assumed exercise price of $2.10 per share (or 100% of
the price per share and accompanying common warrant). The common warrants will be exercisable immediately and will expire five years from
the date of issuance. The shares of common stock and common warrants will be issued separately and will be immediately separable upon
issuance but will be purchased together in this offering. This prospectus also relates to the shares of common stock issuable upon exercise
of the common warrants sold in this offering.
We are also offering pre-funded
warrants (the “pre-funded warrants” and together with the common warrants, the “warrants”) to purchase up to 3,809,524
shares of common stock to those investors whose purchase of shares of common stock in this offering would result in the purchaser, together
with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of
our outstanding common stock immediately following the consummation of this offering, in lieu of shares of common stock that would result
in beneficial ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock. Each pre-funded
warrant is exercisable for one share of common stock and has an exercise price of $0.001 per share. The combined purchase price per pre-funded
warrant and accompanying common warrant is equal to $2.099, which is equal to the combined purchase price per share of common stock and
accompanying common warrant less $0.001. Each pre-funded warrant will be exercisable immediately upon issuance and may be exercised at
any time until exercised in full. The pre-funded warrants and common warrants will be issued separately and will be immediately separable
upon issuance but will be purchased together in this offering. For each pre-funded warrant we sell, the number of shares of common stock
we are offering will be decreased on a one-for-one basis. This prospectus also relates to the shares of common stock issuable upon exercise
of the pre-funded warrants sold in this offering.
We refer to the common stock
and warrants to be sold in this offering collectively as the “securities.”
These securities are being
sold in this offering to certain purchasers under a securities purchase agreement dated , 2023 between us and such purchasers. The securities
are expected to be issued in a single closing and the combined public offering price per share of common stock or pre-funded warrant and
accompanying common warrant will be fixed for the duration of this offering. We will deliver all securities to be issued in connection
with this offering delivery versus payment or receipt versus payment, as the case may be, upon receipt of investor funds received by us.
Our common stock is listed
on the Nasdaq Capital Market under the symbol “CNSP.” On December 7, 2023, the last reported sale price of our common stock
on Nasdaq was $2.10 per share. The actual number of securities, the combined offering price per share of common stock or pre-funded warrant
and accompanying common warrant and the exercise price per share of common stock for the accompanying common warrant will be as determined
between us, the placement agent and the investors in this offering based on market conditions at the time of pricing. Therefore, the recent
market price used throughout this prospectus may not be indicative of the actual public offering price for the securities, which may be
substantially lower than the assumed price used in this prospectus. There is no established public trading market for the warrants and
we do not expect a market to develop. In addition, we do not intend to apply for a listing of the warrants on any national securities
exchange or other trading system.
We have engaged A.G.P./Alliance
Global Partners to act as our lead placement agent and Maxim Group LLC as co-placement agent (together, the “placement agents”)
in connection with this offering. The placement agents have agreed to use their reasonable best efforts to arrange for the sale of the
securities offered by this prospectus. The placement agents are not purchasing or selling any of the securities we are offering and the
placement agents are not required to arrange the purchase or sale of any specific number of securities or dollar amount. We have agreed
to compensate the placement agents as set forth in the table below, which assumes that we sell all of the securities offered by this prospectus.
Because there is no minimum number of securities or minimum aggregate amount of proceeds for this offering to close, we may sell fewer
than all of the securities offered hereby, and investors in this offering will not receive a refund in the event that we do not sell an
amount of securities sufficient to pursue the business goals outlined in this prospectus. Because there is no escrow account and there
is no minimum offering amount, investors could be in a position where they have invested in our company, but we are unable to fulfill
our objectives due to a lack of interest in this offering. Also, any proceeds from the sale of securities offered by us will be available
for our immediate use, despite uncertainty about whether we would be able to use such funds to effectively implement our business plan.
This offering will end no later than December 31, 2023, except that the shares of common stock underlying the warrants will be offered
on a continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).
You should read this prospectus,
together with additional information described under the headings “Information Incorporated by Reference” and “Where You Can Find More Information,” carefully before you invest in any of our securities.
We are an “emerging
growth company” as defined in Section 2(a) of the Securities Act and we have elected to comply with certain reduced public company
reporting requirements.
Investing in our
securities involves a high degree of risk. See the section entitled “Risk Factors” beginning on
page 6 of this prospectus and in the documents incorporated by reference into this prospectus for a discussion of risks that should
be considered in connection with an investment in our securities.
Neither the Securities
and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy
of this prospectus. Any representation to the contrary is a criminal offense.
|
|
Per Share and
accompanying
Common Warrant |
|
|
Per Pre-Funded
Warrant and
accompanying
Common Warrant |
|
|
Total |
|
Public offering price |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Placement agent fees (1) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Proceeds to us, before expenses(2) |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
(1) |
We have agreed to pay the placement agents a cash fee equal to 7.0% of the aggregate proceeds of this offering and to reimburse the placement agents for certain of its offering-related expenses. See “Plan of Distribution” beginning on page 21 of this prospectus for a description of the compensation to be received by the placement agents. |
(2) |
The amount of the proceeds to us presented in this table does not give effect to any exercise of the warrants. |
Delivery of the shares and warrants is expected to be made on or about
__________, 2023, subject to satisfaction of customary closing conditions.
__________________
Joint Placement Agents
The date of this prospectus is
Table
of Contents
ABOUT THIS PROSPECTUS
This prospectus is part of
a registration statement on Form S-1 that we filed with the SEC to register the securities offered hereby under the Securities Act. We
may also file a prospectus supplement or post-effective amendment to the registration statement of which this prospectus forms a part
that may contain material information relating to these offerings. We incorporate by reference important information into this prospectus.
You may obtain the information incorporated by reference without charge by following the instructions under “Where You Can Find More Information.” You should carefully read this prospectus as well as additional information described under “Incorporation of Certain Information by Reference,” before deciding to invest in our securities.
We have not, and the placement
agents have not, authorized anyone to provide any information or to make any representations other than those contained in this prospectus
or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We take no responsibility for, and
can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell
only the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. The information contained
in this prospectus or in any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or
any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.
For investors outside the
United States: We have not, and the placement agents have not, done anything that would permit this offering or possession or distribution
of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the
United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the
offering of the securities and the distribution of this prospectus outside the United States.
This prospectus and the information
incorporated by reference into this prospectus may contain references to trademarks belonging to other entities. Solely for convenience,
trademarks and trade names referred to in this prospectus and the information incorporated by reference into this prospectus, including
logos, artwork, and other visual displays, may appear without the ® or TM symbols. We do not intend our use or display of other companies’
trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.
No dealer, salesperson or
other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.
This prospectus contains estimates
and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry.
We obtained the industry and market data in this prospectus from our own research as well as from industry and general publications, surveys
and studies conducted by third parties. This data involves a number of assumptions and limitations and contains projections and estimates
of the future performance of the industries in which we operate that are subject to a high degree of uncertainty. We caution you not to
give undue weight to such projections, assumptions and estimates.
Prospectus
Summary
This summary highlights
information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before
deciding to invest in our securities. You should read this entire prospectus carefully, including the “Risk Factors” section
in this prospectus and under similar captions in the documents incorporated by reference into this prospectus. References in this prospectus
to “we”, “us”, “its”, “our” or the “Company” are to CNS Pharmaceuticals, Inc.,
as appropriate to the context.
Overview
We are a clinical pharmaceutical
company organized as a Nevada corporation in July 2017 to focus on the development of anti-cancer drug candidates for the treatment of
brain and central nervous system tumors, based on intellectual property that we license under license agreements with Houston Pharmaceuticals,
Inc. (“HPI”) and The University of Texas M.D. Anderson Cancer Center (“UTMDACC”) and own pursuant to a collaboration
and asset purchase agreement with Reata Pharmaceuticals, Inc. (“Reata”).
We believe our lead drug candidate,
Berubicin, may be a significant development in the treatment of Glioblastoma and other CNS malignancies, and if approved by the U.S. Food
and Drug Administration (“FDA”), could give Glioblastoma patients an important new therapeutic alternative to the current
standard of care. Glioblastomas are tumors that arise from astrocytes, which are star-shaped cells making up the supportive tissue of
the brain. These tumors are usually highly malignant (cancerous) because the cells reproduce quickly, and they are supported by a large
network of blood vessels. Berubicin is an anthracycline, which is a class of drugs that are among the most powerful and extensively used
chemotherapy drugs known. Based on limited clinical data, we believe Berubicin is the first anthracycline that appears to cross the blood
brain barrier in significant concentrations targeting brain cancer cells. While our focus is currently on the development of Berubicin,
we are also in the process of attempting to secure intellectual property rights to additional compounds that we plan to develop into drugs
to treat CNS and other cancers.
Berubicin was discovered at
UTMDACC by Dr. Waldemar Priebe, the founder of the Company. Through a series of transactions, Berubicin was initially licensed to Reata.
Reata initiated several Phase I clinical trials with Berubicin for CNS malignancies, one of which was for malignant gliomas, but subsequently
allowed their IND with the FDA to lapse for strategic reasons. This required us to obtain a new IND for Berubicin before beginning further
clinical trials. On December 17, 2020, we announced that our IND application with the FDA for Berubicin for the treatment of Glioblastoma
Multiforme was in effect. We initiated this trial for patient enrollment during the second quarter of 2021 with the first patient dosed
during the third quarter of 2021 to investigate the efficacy of Berubicin in adults with Glioblastoma Multiforme who have failed first-line
therapy. The first patient on the trial was treated during the third quarter of 2021. Correspondence between the Company and the FDA resulted
in modifications to our initial trial design, including designating overall survival (OS) as the primary endpoint of the study. OS is
a rigorous endpoint that the FDA has recognized as a basis for approval of oncology drugs when a statistically significant improvement
can be shown relative to a randomized control arm.
The current trial being conducted
will evaluate the efficacy of Berubicin in patients with Glioblastoma Multiforme who have failed primary treatment for their disease,
and results will be compared to the efficacy of Lomustine, a current standard of care in this setting, with a 2 to 1 randomization of
the estimated 243 patients to Berubicin or Lomustine. Patients receiving Berubicin will be administered a 2-hour IV infusion of 7.5 mg/m2
berubicin hydrochloride daily for three consecutive days followed by 18 days off (a 21-day cycle). Lomustine is administered orally once
every six weeks. The trial will include a pre-planned, non-binding interim futility analysis which will be conducted by an independent
Data Safety Monitoring Board (DSMB) to recommend whether this study should continue as planned based on Berubicin showing statistically
significant value as a second-line treatment for patients with glioblastoma compared with Lomustine. We will conduct this analysis after
at least 50% of the patients in the interim analysis population (30-50% of total expected patients for the trial) can be evaluated as
having failed the primary efficacy endpoint (death). This recommendation will review the number of deaths on each arm to ensure that the
overall survival of patients receiving Berubicin shows a statistically significant comparability to or is even higher than those receiving
Lomustine. The median survival of patients receiving second-line treatment for glioblastoma has historically been shown to be approximately
6 months. We have historically used 6 months as an estimate for the median time to a 50% mortality rate. Taking into account the recent
rate of enrollment and the number of patients that can be adequately assessed for their follow-up outcomes, we are anticipating that the
DSMB will be able to perform this interim analysis and we can release the data during the fourth quarter of 2023. Additional analyses
that will be provided based on this data will be comparisons of secondary endpoints, including progression-free survival (PFS), response
rates, and safety assessments. Even if Berubicin is approved, there is no assurance that patients will choose an infusion treatment, as
compared to the current standard of care, which requires oral administration.
We do not have manufacturing facilities and
all manufacturing activities are contracted out to third parties. Additionally, we do not have a sales organization.
On November 21, 2017, we entered
into a Collaboration and Asset Purchase Agreement with Reata (the “Reata Agreement”). Pursuant to the Reata Agreement we purchased
all of Reata’s intellectual property and development data regarding Berubicin, including all trade secrets, knowhow, confidential
information and other intellectual property rights.
On December 28, 2017, we obtained
the rights to a worldwide, exclusive royalty-bearing, license to the chemical compound commonly known as Berubicin from HPI in an agreement
we refer to as the HPI License. HPI is affiliated with Dr. Priebe, our founder. Under the HPI License we obtained the exclusive right
to develop certain chemical compounds for use in the treatment of cancer anywhere in the world. In the HPI License we agreed to pay HPI:
(i) development fees of $750,000 over a three-year period beginning November 2019; (ii) a 2% royalty on net sales; (iii) a $50,000 per
year license fee; (iv) milestone payments of $100,000 upon the commencement of a Phase II trial and $1.0 million upon the approval of
a New Drug Application (“NDA”) for Berubicin; and (v) 6,667 shares of our common stock. The patents we licensed from HPI expired
in March 2020.
On June 10, 2020, the FDA
granted Orphan Drug Designation (“ODD”) for Berubicin for the treatment of malignant gliomas. ODD from the FDA is available
for drugs targeting diseases with less than 200,000 cases per year. ODD may enable market exclusivity of 7 years from the date of approval
of a NDA in the United States. During that period the FDA generally could not approve another product containing the same drug for the
same designated indication. Orphan drug exclusivity will not bar approval of another product under certain circumstances, including if
a subsequent product with the same active ingredient for the same indication is shown to be clinically superior to the approved product
on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity
is not able to meet market demand. The ODD now constitutes our primary intellectual property protections although we are exploring if
there are other patents that could be filed related to Berubicin to extend additional protections.
With the Reata Agreement and
the HPI License, we believe we have obtained all rights and intellectual property necessary to develop Berubicin. As stated earlier, it
is our plan to obtain additional intellectual property covering other compounds which, subject to the receipt of additional financing,
may be developed into drugs for brain and other cancers.
On January 10, 2020, we entered
into a Patent and Technology License Agreement (the “WP1244 Agreement”) with The Board of Regents of The University of Texas
System, an agency of the State of Texas, on behalf of the UTMDACC. Pursuant to the WP1244 Agreement, we obtained a royalty-bearing, worldwide,
exclusive license to certain intellectual property rights, including patent rights, related to our portfolio of WP1244 drug technology.
In consideration, we must make payments to UTMDACC including an up-front license fee, annual maintenance fee, milestone payments and royalty
payments (including minimum annual royalties) for sales of licensed products developed under the WP1244 Agreement. The term of the WP1244
Agreement expires on the last to occur of: (a) the expiration of all patents subject to the WP1244 Agreement, or (b) fifteen years after
execution; provided that UTMDACC has the right to terminate the WP1244 Agreement in the event that we fail to meet certain commercial
diligence milestones. We have not met the commercial diligence milestones required as of the date hereof. As such, UTMDACC has the right
to terminate the WP1244 Agreement upon notice to us. As of November 14, 2023, UTMDACC has not notified us of its intention to terminate
the WP1244 Agreement.
On May 7, 2020, pursuant to
the WP1244 portfolio license agreement described above, we entered into a Sponsored Research Agreement with UTMDACC to perform research
relating to novel anticancer agents targeting CNS malignancies. We agreed to fund approximately $1,134,000 over a two-year period. We
paid and recorded $334,000 in 2020 related to this agreement in research and development expenses in our statements of operations. The
remaining $800,000 was paid in 2021. The principal investigator for this agreement is Dr. Priebe. The work conducted under this Sponsored
Research Agreement has produced a new mesylate salt of WP1244 termed WP1874. We believe the enhanced solubility of this salt may increase
its ability to be formulated for use in an IV infusion, while maintaining similar potency and toxicity characteristics. As such, WP1874
will be the primary focus in our development efforts of the WP1244 portfolio. This agreement was extended and expired on March 31,
2023.
Recent Developments
Warrant Exercise Inducement Transaction
On
October 16, 2023, we entered into a warrant exercise inducement offer letter (the “Inducement Letter”) with a holder of certain
existing warrants (“Existing Warrants”) to receive new warrants (the “Inducement Warrants”) to purchase up to
a number of shares of common stock equal to 200% of the number of warrant shares issued pursuant to the exercise of such Existing Warrants
to purchase shares of common stock, pursuant to which the warrant holder agreed to exercise for cash its Existing Warrants to purchase
up to 1,878,000 shares of the Company’s common stock, at $1.28 per share, in exchange for the Company’s agreement to
issue Inducement Warrants to purchase up to 3,756,000 shares of the Company’s common stock (the “Inducement Warrant Shares”).
Each
Inducement Warrant has an exercise price equal to $1.28. The Inducement Warrants will be exercisable on the six-month anniversary of the
date of issuance and may be exercised for a period of five years therefrom. The exercise price and number of shares of common stock issuable
upon exercise is subject to appropriate proportional adjustment in the event of share dividends, share splits, reorganizations or similar
events affecting the Company’s common stock and the exercise price.
A
holder may not exercise any portion of the Inducement Warrant to the extent that the holder, together with its affiliates and any other
persons acting as a group together with any such persons, would own more than 4.99% (or, at the election of the purchaser, 9.99%) of the
number of shares of common stock outstanding immediately after exercise (the “Beneficial Ownership Limitation”); provided
that a holder with a Beneficial Ownership Limitation of 4.99%, upon notice to the Company and effective sixty-one (61) days
after the date such notice is delivered to us, may increase the Beneficial Ownership Limitation so long as it in no event exceeds 9.99%
of the number of shares of common stock outstanding immediately after exercise.
If,
at the time a holder exercises its Inducement Warrants, a registration statement registering the issuance of the shares of common stock
underlying the Inducement Warrants under the Securities Act is not then effective or available for the issuance of such shares, then in
lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate exercise
price, the holder may only exercise its Inducement Warrants (either in whole or in part), at such time by means of a cashless exercise
in which the holder shall be entitled to receive upon such exercise the net number of shares of common stock determined according to a
formula set forth in the Inducement Warrants, which generally provides for a number of shares of common stock equal to (A) (1) the volume
weighted average price on (x) the trading day preceding the notice of exercise, if the notice of exercise is executed and delivered on
a day that is not a trading day or prior to the opening of “regular trading hours” on a trading day or (y) the trading day
of the notice of exercise, if the notice of exercise is executed and delivered after the close of “regular trading hours”
on such trading day, or (2) the bid price on the day of the notice of exercise, if the notice of exercise is executed during “regular
trading hours” on a trading day and is delivered within two hours thereafter, less (B) the exercise price, multiplied by (C) the
number of shares of common stock the Inducement Warrant was exercisable into, with such product then divided by the number determined
under clause (A) in this sentence.
In
the event of a fundamental transaction, as described in the Inducement Warrants and generally including any reorganization, recapitalization
or reclassification of the Company’s common stock, the sale, transfer or other disposition of all or substantially all of the Company’s
properties or assets, the Company’s consolidation or merger with or into another person, the acquisition of more than 50% of the
Company’s outstanding shares of common stock, the holders of the Inducement Warrants will be entitled to receive upon exercise of
the Inducement Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised
the Inducement Warrants immediately prior to such fundamental transaction. Additionally, in the event of a fundamental transaction, the
Company or any successor entity will, at the option of the holder of a Inducement Warrant exercisable at any time concurrently with or
within 30 days after the consummation of the fundamental transaction (or, if later, the date of the public announcement thereof), purchase
the Inducement Warrant from the holder by paying to the holder an amount of consideration equal to the value of the remaining unexercised
portion of such Inducement Warrant on the date of consummation of the fundamental transaction based on the Black-Scholes option pricing
model, determined pursuant to a formula set forth in the Inducement Warrants. The consideration paid to the holder will be the same type
or form of consideration that was offered and paid to the holders of shares of common stock in connection with the fundamental transaction;
provided that if no such consideration was offered or paid, the holders of common stock will be deemed to have received common stock of
the successor entity in such fundamental transaction for purposes of this provision of the Inducement Warrants.
Company Information
Our principal executive offices
are located at 2100 West Loop South, Suite 900, Houston, TX 77027 and our telephone number is (800) 946-9185. Our website address is www.cnspharma.com.
The information on or accessible through our website is not part of this prospectus.
The Offering
Common stock we are offering |
Up to 3,809,524 shares of common stock based on an assumed combined public offering price of $2.10 per share of common stock and accompanying common warrant, which is equal to the last sale price of our common stock as reported by Nasdaq on December 7, 2023.
|
Pre-funded warrants we are offering |
We are also offering up to 3,809,524 pre-funded warrants to purchase up to 3,809,524 shares of common stock in lieu of shares of common stock to any purchaser whose purchase of shares of common stock in this offering would otherwise result in such purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the purchaser’s election, 9.99%) of our outstanding common stock immediately following the consummation of this offering. Each pre-funded warrant will be exercisable for one share of common stock, will have an exercise price of $0.001 per share, will be immediately exercisable, and may be exercised at anytime until exercised in full. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the pre-funded warrants.
|
Common warrants we are offering |
We are also offering up to 3,809,524 common warrants to purchase up to 3,809,524 shares of common stock. Each common warrant will be exercisable for one share of common stock, will have an exercise price of $2.10 per share (or 100% of the combined public offering price per share of common stock and accompanying common warrant), which will be exercisable immediately, and will expire five years from the date of issuance. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the common warrants.
|
Common stock outstanding immediately before this offering |
6,214,598 shares (as adjusted for the exercise and full delivery of the Existing Warrants in the Warrant Exercise Inducement Transaction described above and sales under the Company’s Capital on Demand™ Sales Agreement subsequent to September 30, 2023)
|
Common stock outstanding immediately after this offering |
10,024,122 shares, assuming no sale of any pre-funded warrants and assuming none of the common warrants issued in this offering are exercised.
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Use of proceeds |
We estimate that the net proceeds from this offering
will be approximately $7.1 million, based on an assumed combined public offering price of $2.10 per share, which is the closing price
of our common stock as reported on NASDAQ on December 7, 2023, after deducting the placement agent fees and estimated offering expenses
payable by us.
We intend to use the proceeds from this offering
primarily to fund our CNS-201 trial, which is a global potentially pivotal trial of Berubicin for Glioblastoma, for other research and
development, and for working capital. See “Use of Proceeds.”
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Reasonable
best efforts offering |
We have agreed to offer and sell the securities offered hereby to the purchasers through the placement agents. The placement agents are not required to buy or sell any specific number or dollar amount of the securities offered hereby, but will use their reasonable best efforts to solicit offers to purchase the securities offered by this prospectus. See “Plan of Distribution” on page 21 of this prospectus.
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Risk
Factors |
An investment
in our securities involves a high degree of risk. See “Risk Factors” beginning on page 6 of this
prospectus and the other information included and incorporated by reference in this prospectus for a discussion of the risk factors
you should carefully consider before deciding to invest in our securities.
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Nasdaq
listing symbol |
Our common stock is listed on The Nasdaq Capital Market under the symbol “CNSP.” There is no established trading market for the common warrants or pre-funded warrants and we do not expect a market to develop. In addition, we do not intend to apply for the listing of the common warrants or pre-funded warrants on any national securities exchange or other trading market. Without an active trading market, the liquidity of the common warrants and pre-funded warrants will be limited.
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The number of shares of common
stock to be outstanding after this is based on 6,214,598 shares outstanding as of December 8, 2023, which includes 129,530 shares issued
under the Company’s Capital on Demand™ Sales Agreement subsequent to September 30, 2023, 1,878,000 shares of common stock
issued and yet to be issued to the holder of the Existing Warrants that were exercised pursuant to the Inducement Letter discussed in
the above section “Recent Developments - Warrant Exercise Inducement Transaction” and excludes:
· 4,240,727
shares of common stock underlying outstanding warrants at a weighted average exercise price of $3.89 per share;
· 328,770
shares of common stock underlying outstanding options with a weighted average exercise price of $20.35 per share, which options vest over
a three to four-year period;
· 35,707
shares of common stock underlying Restricted Stock Units which vest over a four-year period and Performance Units which vest based on
our performance against predefined share price targets and the achievement of Positive Interim, Clinical Data as defined by the Board;
· 545,610
shares available for future issuance under the CNS Pharmaceuticals, Inc. 2020 Stock Plan; and
· the
shares of common stock issuable upon exercise of the pre-funded warrants and the common warrants issued in this offering.
Except as otherwise indicated,
the information in this prospectus assumes no exercise of options or exercise of warrants or sale of pre-funded warrants in this offering.
The information discussed
above is illustrative only and will adjust based on the actual public offering price and other terms of this offering determined at pricing.
Risk
Factors
Investing in our securities
involves a high degree of risk. Before investing in our securities, you should consider carefully the risks and uncertainties discussed
under “Risk Factors” in our latest annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and current reports
on Form 8-K, which are incorporated by reference herein in their entirety. You should carefully consider each of the following risks,
together with all other information set forth in this prospectus, including the financial statements and the related notes, before making
a decision to buy our securities. If any of the following risks actually occurs, our business could be harmed. In that case, the trading
price of our common stock could decline, and you may lose all or part of your investment.
Risks Related to this Offering
The results of the interim analysis of our
CNS-201 trial may not be indicative of the final results from this trial.
We have reached the criteria
required by the study protocol for our CNS-201 trial to conduct a pre-planned, non-binding futility analysis, which an independent Data
Safety Monitoring Board (“DSMB”) will review to determine whether or not to recommend continuing the study. The DSMB will
review the number of deaths in each arm to ensure that the overall survival of patients receiving Berubicin shows at least a statistically
significant comparability to those receiving Lomustine. We expect to release the conclusion of the DSMB before year end. The conclusions
of the DSMB, whether positive or negative, may not be indicative of the final results of our CNS-201 trial, which we will not have until
year end 2024 at the earliest.
We have broad discretion in how we use the
proceeds of this offering and may not use these proceeds effectively, which could affect our results of operations and cause our common
stock to decline.
We will have considerable
discretion in the application of the net proceeds of this offering. We intend to use the net proceeds from this offering primarily to
fund our CNS-201 trial, which is a global potentially pivotal trial of Berubicin for glioblastoma, for other research and development,
and for working capital. As a result, investors will be relying upon management’s judgment with only limited information about our
specific intentions for the use of the net proceeds of this offering. We may use the net proceeds for purposes that do not yield a significant
return or any return at all for our stockholders. In addition, pending their use, we may invest the net proceeds from this offering in
a manner that does not produce income or that loses value.
We will require substantial funding, which
may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our
operations.
We are using the proceeds
from this offering to, among other uses, advance Berubicin through clinical development, including our current CNS-201 trial, which is
a global potentially pivotal trial of Berubicin for glioblastoma. Developing pharmaceutical products, including conducting preclinical
studies and clinical trials, is expensive. We will require substantial additional future capital in order to complete clinical development
and commercialize Berubicin. If the FDA requires that we perform additional nonclinical studies or clinical trials, our expenses would
further increase beyond what we currently expect and the anticipated timing of any potential approval of Berubicin would likely be delayed.
Further, there can be no assurance that the costs we will need to incur to obtain regulatory approval of Berubicin will not increase.
We will continue to require
substantial additional capital to continue our clinical development and commercialization activities. Because successful development of
our product candidates is uncertain, we are unable to estimate the actual amount of funding we will require to complete research and development
and commercialize our products under development.
We estimate that we will require
additional financing of approximately $12 million (before taking into account the expected proceeds from this offering) to complete the
CNS-201 trial, which is a global potentially pivotal trial of Berubicin for glioblastoma, plus such additional working capital to fund
our operations and other pre-clinical programs during the pendency of the trial. We believe that our existing cash and cash equivalents
plus the proceeds from this offering (assuming we complete the maximum offering of which there is no assurance) will be sufficient to
meet our projected operating requirements into the second quarter of 2024. Such projections are subject to changes in our internally funded
preclinical and clinical activities, including unplanned preclinical and clinical activity. The timing and costs of clinical trials are
difficult to predict and as such the foregoing estimates may prove to be inaccurate. We have no commitments for such additional needed
financing and will likely be required to raise such financing through the sale of additional equity or debt securities.
The amount and timing of our
future funding requirements will depend on many factors, including but not limited to:
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whether our planned interim futility analysis of our CNS-201 global clinical trials of Berubicin in glioblastoma demonstrates clinical benefit of at least equivalence versus the Lomustine control arm results; |
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whether our plan for clinical trials will be completed on a timely basis; |
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whether we are successful in obtaining an accelerated approval pathway with the FDA related to Berubicin; |
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the progress, costs, results of and timing of our clinical trials for Berubicin; |
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the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals; |
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the costs associated with securing and establishing commercialization and manufacturing capabilities; |
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market acceptance of our product candidates; |
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the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies; |
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our ability to maintain, expand and enforce the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; |
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our need and ability to hire additional management and scientific and medical personnel; |
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the effect of competing drug candidates and new product approvals; |
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our need to implement additional internal systems and infrastructure, including financial and reporting systems; and |
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the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future. |
Some of these factors are
outside of our control. We may seek additional funding through a combination of equity offerings, debt financings, government or other
third-party funding, commercialization, marketing and distribution arrangements and other collaborations, strategic alliances and licensing
arrangements. Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may
adversely affect the holdings or the rights of our stockholders.
If we are unable to obtain
funding on a timely basis, we may be required to significantly curtail one or more of our research or development programs. We also could
be required to seek funds through arrangements with collaborative partners or otherwise that may require us to relinquish rights to some
of our technologies or product candidates or otherwise agree to terms unfavorable to us.
Purchasers in this offering will experience
immediate and substantial dilution in net tangible book value.
The public offering price per share of common stock and related common
warrant and the public offering price of each pre-funded warrant and related common warrant will be substantially higher than the pro
forma as adjusted net tangible book value per share of our common stock after giving effect to this offering. Assuming the sale of 3,809,524
shares of our common stock and accompanying warrants to purchase up to 3,809,524 shares of common stock at an assumed combined public
offering price of $2.10 per share, the closing sale price per share of our common stock on The Nasdaq Capital Market on December
7, 2023, assuming no sale of any pre-funded warrants in this offering, no exercise of the warrants being offered in this offering and
after deducting the placement agent fees and commissions and estimated offering expenses payable by us, you will incur immediate dilution
in pro forma as adjusted net tangible book value of approximately $1.315 per share. As a result
of the dilution to investors purchasing securities in this offering, investors may receive significantly less than the purchase price
paid in this offering, if anything, in the event of the liquidation of our company. See the section entitled “Dilution” below
for a more detailed discussion of the dilution you will incur if you participate in this offering. To the extent shares are issued under
outstanding options and warrants at exercise prices lower than the public offering price of our common stock in this offering, you will
incur further dilution.
Your ownership may be diluted if additional
capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions.
We will require additional,
substantial financing in order to complete our clinical trials. We intend to seek to raise additional funds for our operations, to finance
acquisitions or to develop strategic relationships by issuing equity or convertible debt securities in addition to the securities issued
in this offering, which would reduce the percentage ownership of our existing stockholders. Our board of directors has the authority,
without action or vote of the stockholders, to issue all or any part of our authorized but unissued shares of common or preferred stock.
Our articles of incorporation authorize us to issue up to 75,000,000 shares of common stock and 5,000,000 shares of preferred stock. Future
issuances of common or preferred stock would reduce your influence over matters on which stockholders vote and would be dilutive to earnings
per share. In addition, any newly issued preferred stock could have rights, preferences and privileges senior to those of the common stock.
Those rights, preferences and privileges could include, among other things, the establishment of dividends that must be paid prior to
declaring or paying dividends or other distributions to holders of our common stock or providing for preferential liquidation rights.
These rights, preferences and privileges could negatively affect the rights of holders of our common stock, and the right to convert such
preferred stock into shares of our common stock at a rate or price that would have a dilutive effect on the outstanding shares of our
common stock.
There is no public market for the common
warrants or pre-funded warrants being offered in this offering.
There is no established public
trading market for the common warrants or pre-funded warrants being offered in this offering, and we do not expect a market to develop.
In addition, we do not intend to apply to list the common warrants or pre-funded warrants on any securities exchange or nationally recognized
trading system, including The Nasdaq Stock Market. Without an active market, the liquidity of the common warrants and pre-funded warrants
will be limited.
Holders of our common warrants
and pre-funded warrants will have no rights as a common stockholder until they acquire our common stock.
Until holders of our common
warrants and pre-funded warrants acquire shares of our common stock upon exercise of such common warrants or pre-funded warrants, the
holders will have no rights with respect to shares of our common stock issuable upon exercise of such common warrants or pre-funded warrants.
Upon exercise of the common warrants or pre-funded warrants, holders will be entitled to exercise the rights of a common stockholder only
as to matters for which the record date occurs after the exercise date.
If we do not maintain a current and effective
prospectus relating to the common stock issuable upon exercise of the common warrants and pre-funded warrants, public holders will only
be able to exercise such common warrants and pre-funded warrants on a “cashless basis.”
If we do not maintain a current
and effective prospectus relating to the shares of common stock issuable upon exercise of the common warrants and pre-funded warrants
at the time that holders wish to exercise such warrants, they will only be able to exercise them on a “cashless basis,” and
under no circumstances would we be required to make any cash payments or net cash settle such warrants to the holders. As a result, the
number of shares of common stock that holders will receive upon exercise of the common warrants and pre-funded warrants will be fewer
than it would have been had such holders exercised their common warrants or pre-funded warrants for cash. We will do our best efforts
to maintain a current and effective prospectus relating to the shares of common stock issuable upon exercise of such warrants until the
expiration of such warrants. However, we cannot assure you that we will be able to do so. If we are unable to do so, the potential “upside”
of the holder’s investment in our company may be reduced.
The common warrants and pre-funded warrants
are speculative in nature.
The common warrants and pre-funded
warrants offered hereby do not confer any rights of common stock ownership on their holders, such as voting rights or the right to receive
dividends, but rather merely represent the right to acquire shares of common stock at a fixed price. Specifically, commencing on the date
of issuance, holders of the pre-funded warrants may acquire the common stock issuable upon exercise of such warrants at an exercise price
of $0.001 per share and holders of the common warrants may acquire the common stock issuable upon exercise of such warrants at an exercise
price per share equal to the public offering price of shares of common stock in this offering. Moreover, following this offering, the
market value of the pre-funded warrants and common warrants will be uncertain and there can be no assurance that the market value of such
warrants will equal or exceed their public offering price. There can be no assurance that the market price of the common stock will ever
equal or exceed the exercise price of the common warrants, and consequently, whether it will ever be profitable for holders of the common
warrants to exercise the common warrants.
This is a “best efforts” offering.
No minimum amount of securities is required to be sold, and we may not raise the amount of capital we believe is required for our business
plans, including our near-term business plans.
The placement agents have
agreed to use their reasonable best efforts to solicit offers to purchase the securities in this offering. The placement agents have no
obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the
securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering. Because
there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement agent
fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth above. We may
sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors
in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our continued
operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required for our
operations and may need to raise additional funds to complete such short-term operations. Such additional fundraises may not be available
or available on terms acceptable to us.
We may be required to repurchase the common
warrants, which may prevent or deter a third party from acquiring us.
The common warrants provide
that in the event of a “Fundamental Transaction” (as defined in the related warrant agreement, which generally includes any
merger with another entity, the sale, transfer or other disposition of all or substantially all of our assets to another entity, or the
acquisition by a person of more than 50% of our common stock), each common warrant holder will have the right at any time prior to the
consummation of the Fundamental Transaction to require us to repurchase the common warrant for a purchase price in cash equal to the Black-Scholes
value (as calculated under the warrant agreement) of the then remaining unexercised portion of such common warrant on the date of such
Fundamental Transaction, which may materially adversely affect our financial condition and/or results of operations and may prevent or
deter a third party from acquiring us.
If our stock price fluctuates after the
offering, you could lose a significant part of your investment.
The market price of our common
stock could be subject to wide fluctuations in response to, among other things, the risk factors described in this prospectus, and other
factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to be comparable to us. Furthermore,
the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity
securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies.
These broad market and industry fluctuations, as well as general economic, political, and market conditions, such as recessions, interest
rate changes or international currency fluctuations, may negatively affect the market price of our common stock. In the past, many companies
that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be
the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our
management’s attention from other business concerns, which could seriously harm our business.
This offering may cause the trading price of our common stock
to decrease.
The
price per share, together with the number of shares of common stock we issue if this offering is completed, may result in an immediate
decrease in the market price of our common stock. This decrease may continue after the completion of this offering.
We have never paid dividends on our capital stock, and we do
not anticipate paying dividends in the foreseeable future.
We have never paid dividends
on any of our capital stock and currently intend to retain any future earnings to fund the growth of our business. We may also enter into
credit agreements or other borrowing arrangements in the future that will restrict our ability to declare or pay cash dividends on our
common stock. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend on
our financial condition, operating results, capital requirements, general business conditions and other factors that our board of directors
may deem relevant. As a result, capital appreciation, if any, of the securities will be the sole source of gain, if any, for the foreseeable
future.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, and any documents
we incorporate by reference, contain certain forward-looking statements that involve substantial risks and uncertainties. All statements
contained in this prospectus and any documents we incorporate by reference, other than statements of historical facts, are forward-looking
statements including statements regarding our strategy, future operations, future financial position, future revenue, projected costs,
prospects, plans, objectives of management and expected market growth. These statements involve known and unknown risks, uncertainties
and other important factors that may cause our actual results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the forward-looking statements.
The words “anticipate”,
“believe”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”,
“project”, “target”, “potential”, “will”, “would”, “could”, “should”,
“continue” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements
contain these identifying words. These forward-looking statements include, among other things, statements about:
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our ability to obtain additional funding to develop our product candidates; |
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the need to obtain regulatory approval of our product candidates; |
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the success of our clinical trials through all phases of clinical development; |
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compliance with obligations under intellectual property licenses with third parties; |
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any delays in regulatory review and approval of product candidates in clinical development; |
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our ability to commercialize our product candidates; |
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market acceptance of our product candidates; |
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competition from existing products or new products that may emerge; |
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potential product liability claims; |
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our dependency on third-party manufacturers to supply or manufacture our products; |
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our ability to establish or maintain collaborations, licensing or other arrangements; |
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our ability and third parties’ abilities to protect intellectual property rights; |
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our ability to adequately support future growth; and |
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our ability to attract and retain key personnel to manage our business effectively. |
These forward-looking statements
are only predictions and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements,
so you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans,
intentions and expectations disclosed in the forward-looking statements we make. We have based these forward-looking statements largely
on our current expectations and projections about future events and trends that we believe may affect our business, financial condition
and operating results. We have included important factors in the cautionary statements included in this prospectus that could cause actual
future results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
You should read this prospectus with the understanding
that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking
statements whether as a result of new information, future events or otherwise, except as required by applicable law.
Use
of Proceeds
We estimate that the net proceeds
from the offering will be approximately $7.1 million, assuming we complete the maximum offering pursuant to this prospectus, after deducting
the placement agent fees and estimated offering expenses payable by us, and excluding the proceeds, if any, from the exercise of the common
warrants. However, because this is a “best efforts” offering and there is no minimum offering amount required as a condition
to the closing of this offering, the actual offering amount, the placement agents’ fees and net proceeds to us are not presently
determinable and may be substantially less than the maximum amounts set forth on the cover page of this prospectus. As a result, we may receive significantly less in net proceeds. Based
on the assumed offering price set forth above, we estimate that our net proceeds from the sale of 75%, 50%, and 25% of the securities
offered in this offering would be approximately $5.3 million, $3.4 million, and $1.6 million, respectively, after deducting the estimated
placement agent fees and estimated offering expenses payable by us, and assuming no issuance of any pre-funded warrants and assuming no
exercise of the common warrants. The combined public
offering price per share (or pre-funded warrant) and common warrant will be fixed for the duration of this offering.
We intend to use the net proceeds
for (i) our CNS-201 trial, which is a global potentially pivotal trial of Berubicin for glioblastoma; (ii) other research and development;
and (iii) working capital.
We estimate that our CNS-201
trial will cost approximately $12 million (excluding such additional working capital to fund our operations and other pre-clinical programs
during the pendency of the trial) and, as such, we will require significant additional financing even if we complete the maximum offering
hereunder. The timing and costs of clinical trials are difficult to predict and as such the foregoing estimates may prove to be inaccurate.
We have no commitments for such additional needed financing, and will likely be required to raise such financing through the sale of additional
equity securities, which may occur at prices lower than the offering price of our common stock in this offering.
As of the date of this prospectus,
we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. Accordingly, our management
will have broad discretion in the application of these proceeds. Net offering proceeds not immediately applied to the uses summarized
above will be invested in short-term investments such as money market funds, commercial paper, U.S. treasury bills and similar securities
investments pending their use.
Dilution
If you invest in our securities
in this offering, your interest will be diluted immediately to the extent of the difference between the public offering price paid by
the purchasers of the shares of common stock (and pre-funded warrants) and related common warrants sold in this offering and the as adjusted
net tangible book value per shares of common stock after this offering.
As of September 30, 2023, our as reported net tangible book value was
$(1.7) million, or $(0.414) per share of common stock. Net tangible book value per share represents our total tangible assets, less our
total liabilities, divided by the number of outstanding shares of our common stock. After giving effect to: (i) 1,878,000 shares of common
stock issued and to be issued to the holder of the Existing Warrants that were exercised pursuant to the Inducement Letter discussed in
the section “Prospectus Summary – Recent Developments
- Warrant Exercise Inducement Transaction”; and (ii) 129,530 shares issued under the Company’s Capital on Demand™ Sales Agreement subsequent
to September 30, 2023 for gross proceeds of $222,312, our proforma net tangible book value was $0.7 million, or $0.118 per share of common
stock.
Dilution represents the difference
between the amount per share paid by purchasers in this offering and the as adjusted net tangible book value per share of common stock
after the offering. After giving effect to the sale of shares of common stock and accompanying common warrants in this offering at an
assumed offering price of $2.10 per share, which was the closing price of our common stock as reported on Nasdaq on December 7, 2023,
and after deducting underwriting commissions and estimated offering expenses payable by us, but without adjusting for any other change
in our net tangible book value subsequent to September 30, 2023, our proforma as adjusted net tangible book value would have been $0.785
per share. This represents an immediate increase in net tangible book value on a reported basis of $1.199, and on a proforma basis of
$0.667 per share to our existing stockholders and immediate dilution of $1.315 per share to new investors purchasing securities at the
proposed public offering price. The dilution figures assume no sale of pre-funded warrants, which, if sold, would reduce the number of
shares of common stock that we are offering on a one-for-one basis, and excludes the proceeds, if any, from the exercise of any common
warrants issued in this offering. The following table illustrates the dilution in net tangible book value per share to new investors as
of September 30, 2023:
Assumed public offering price per share and accompanying common warrant | |
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$ | 2.10 | |
Historical net tangible book value per share at September 30, 2023 (proforma) | |
$ | 0.118 | | |
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Increase in net tangible book value per share to the existing stockholders on a proforma basis attributable to ––this offering. | |
$ | 0.667 | | |
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Proforma net tangible book value per share after this offering | |
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$ | 0.785 | |
Dilution in net tangible book value per share to new investors on a proforma basis | |
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$ | 1.315 | |
Each $0.25 increase (decrease)
in the assumed public offering price of $2.10 per share, would increase (decrease) our proforma as adjusted net tangible book value per
share to existing investors by $0.088, and would increase (decrease) dilution per share to new investors in this offering by $0.162,
assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting
the estimated placement agent fees and estimated offering expenses payable by us. We may also increase or decrease the number of securities
to be issued in this offering. Each increase (decrease) of 400,000 shares offered by us would increase (decrease) our as adjusted
net tangible book value per share by $0.045 and the dilution per share to new investors purchasing securities in this offering by $0.045
assuming that the assumed public offering price remains the same, and after deducting placement agent fees and estimated offering expenses
payable by us. The information discussed above is illustrative only and will be adjusted based on the actual public offering price and
other terms of this offering as determined between us and the placement agents at pricing.
The number of shares of common
stock to be outstanding after this offering is based on 4,207,068 shares outstanding as of September 30, 2023 plus 129,530 shares issued
under the Company’s Capital on Demand™ Sales Agreement subsequent to September 30, 2023, 1,878,000 shares of common stock
issued and yet to be issued to the holder of the Existing Warrants that were exercised pursuant to the Inducement Letter discussed in
the above section “Recent Developments - Warrant Exercise Inducement Transaction”, and excludes:
· 4,240,727
shares of common stock underlying outstanding warrants at a weighted average exercise price of $3.89 per share;
· 328,770
shares of common stock underlying outstanding options with a weighted average exercise price of $20.35 per share, which options vest over
a three to four-year period;
· 35,707
shares of common stock underlying Restricted Stock Units which vest over a four-year period and Performance Units which vest based on
our performance against predefined share price targets and the achievement of Positive Interim, Clinical Data as defined by the Board;
· 545,610
shares available for future issuance under the CNS Pharmaceuticals, Inc. 2020 Stock Plan; and
· the
shares of common stock issuable upon exercise of the pre-funded warrants, common warrants and placement agent warrants issued in this
offering.
The
discussion and table above assume no exercise of the common warrants. To the extent that the warrants are exercised, you may
experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations
even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised
through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
CAPITALIZATION
The following table sets
forth our cash and cash equivalents and capitalization as of September 30, 2023:
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on a pro forma basis to give effect to 129,530 shares issued under the Company’s Capital on Demand™ Sales Agreement subsequent to September 30, 2023, 1,878,000 shares of common stock issued and to be issued to the holder of the Existing Warrants that were exercised pursuant to the Inducement Letter discussed in the section “Prospectus Summary – Recent Developments - Warrant Exercise Inducement Transaction”; |
|
|
|
|
|
· |
|
on a pro forma as adjusted basis to give further effect to the issuance and sale of shares of our common stock and accompanying warrants in this offering at an assumed offering price of $2.10 per share, which was the closing price of our common stock as reported on NASDAQ on December 7, 2023, after deducting the placement agent fees and estimated offering expenses payable by us, and assuming no sale of pre-funded warrants and no exercise of warrants. |
Our
capitalization following the closing of this offering will be adjusted based on the actual public offering price and other terms of this
offering determined at pricing. You should read this table in conjunction with “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” and our financial statements and related notes incorporated by reference into
this prospectus.
| |
| | |
| | |
| |
| |
Actual | | |
Pro Forma | | |
Pro Forma As Adjusted | |
Cash and cash equivalents | |
$ | 909,547 | | |
$ | 3,384,798 | | |
$ | 10,522,536 | |
Notes Payable | |
| 41,904 | | |
| 41,904 | | |
| 41,904 | |
Stockholders’ equity (deficit): | |
| | | |
| | | |
| | |
Common stock, par value $0.0001 per share: 75,000,000 shares authorized as of September 30, 2023; 4,207,068 shares issued and outstanding as of September 30, 2023; 6,214,598 shares issued and outstanding pro forma; 10,024,122 shares issued and outstanding pro forma as adjusted; | |
| 4,207 | | |
| 6,215 | | |
| 10,024 | |
Additional paid-in capital | |
| 62,446,694 | | |
| 64,919,937 | | |
| 72,053,866 | |
Accumulated deficit | |
| (64,191,653 | ) | |
| (64,191,653 | ) | |
| (64,191,653 | ) |
| |
| | | |
| | | |
| | |
Total stockholders’ equity (deficit) | |
| (1,740,752 | ) | |
| 734,499 | | |
| 7,872,237 | |
| |
| | | |
| | | |
| | |
Total capitalization | |
$ | (1,698,848 | ) | |
$ | 776,403 | | |
$ | 7,914,141 | |
A $0.25 increase or decrease
in the assumed public offering price of $2.10 per share, which was the closing price of our common stock as reported on NASDAQ on December
7, 2023, would increase or decrease, respectively, our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total
stockholders’ equity, and total capitalization by approximately $885,714, assuming the number of securities offered by us, as set
forth on the cover page of this prospectus, remains the same, assuming no sale of any pre-funded warrants and no exercise of warrants,
and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease
the number of securities to be issued in this offering. An increase or decrease of 400,000 in the number of shares of common stock and
common warrants offered by us would increase or decrease, respectively, our pro forma as adjusted cash and cash equivalents, additional
paid-in capital, total stockholders’ equity, and total capitalization by $781,200, assuming that the assumed public offering price
remains the same, assuming no sale of any pre-funded warrants and no exercise of warrants, and after deducting estimated placement
agent fees and estimated offering expenses payable by us. The information discussed above is illustrative only and will be adjusted based
on the actual public offering price and other terms of this offering as determined between us, the placement agent, and the investors
at pricing.
Description
of Capital Stock
The following summary of
the rights of our capital stock is not complete and is subject to and qualified in its entirety by reference to our articles of incorporation
and bylaws, copies of which are filed as exhibits to the registration statement of which this prospectus forms a part, which are incorporated
by reference herein, and the applicable provisions of the Nevada Revised Statutes.
Our amended and restated articles
of incorporation authorize us to issue up to 75,000,000 shares of common stock and 5,000,000 shares of preferred stock.
Common Stock
Shares of our common stock
have the following rights, preferences and privileges:
Voting
Each holder of common stock
is entitled to one vote for each share of common stock held on all matters submitted to a vote of stockholders. Any action at a meeting
at which a quorum is present will be decided by a majority of the voting power present in person or represented by proxy, except in the
case of any election of directors, which will be decided by a plurality of votes cast. There is no cumulative voting.
Dividends
Holders of our common stock
are entitled to receive dividends when, as and if declared by our board of directors out of funds legally available for payment, subject
to the rights of holders, if any, of any class of stock having preference over the common stock. Any decision to pay dividends on our
common stock will be at the discretion of our board of directors. Our board of directors may or may not determine to declare dividends
in the future. The board’s determination to issue dividends will depend upon our profitability and financial condition any contractual
restrictions, restrictions imposed by applicable law and the SEC, and other factors that our board of directors deems relevant.
Liquidation Rights
In the event of a voluntary
or involuntary liquidation, dissolution or winding up of the Company, the holders of our common stock will be entitled to share ratably
on the basis of the number of shares held in any of the assets available for distribution after we have paid in full, or provided for
payment of, all of our debts and after the holders of all outstanding series of any class of stock have preference over the common stock,
if any, have received their liquidation preferences in full.
Other
Our issued and outstanding
shares of common stock are fully paid and nonassessable. Holders of shares of our common stock are not entitled to preemptive rights.
Shares of our common stock are not convertible into shares of any other class of capital stock, nor are they subject to any redemption
or sinking fund provisions.
Preferred Stock
We are authorized to issue
up to 5,000,000 shares of preferred stock. We have no shares of preferred stock outstanding. Our articles of incorporation authorizes
the board to issue these shares in one or more series, to determine the designations and the powers, preferences and relative, participating,
optional or other special rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion
or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking
fund provisions and the number of shares constituting the series. Our board of directors could, without stockholder approval, issue preferred
stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and which
could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire,
a majority of our outstanding voting stock.
Articles of Incorporation and Bylaw Provisions
Our articles of incorporation
and bylaws include a number of anti-takeover provisions that may have the effect of encouraging persons considering unsolicited tender
offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts.
These provisions include:
Advance Notice Requirements.
Our bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election
as directors or new business to be brought before meetings of stockholders. These procedures provide that notice of stockholder proposals
must be timely and given in writing to our corporate Secretary. Generally, to be timely, notice must be received at our principal executive
offices not fewer than 120 calendar days prior to the first anniversary date on which our notice of meeting and related proxy statement
were mailed to stockholders in connection with the previous year’s annual meeting of stockholders. The notice must contain the information
required by the bylaws, including information regarding the proposal and the proponent.
Special Meetings of Stockholders.
Our bylaws provide that special meetings of stockholders may be called at any time by only the Chairman of the Board, the Chief Executive
Officer, the President or the board of directors, or in their absence or disability, by any vice president.
Amendment of Bylaws.
Our stockholders may amend any provisions of our bylaws by obtaining the affirmative vote of the holders of a majority of each class of
issued and outstanding shares of our voting securities, at a meeting called for the purpose of amending and/or restating our bylaws.
Preferred Stock. Our
articles of incorporation authorizes our board of directors to create and issue rights entitling our stockholders to purchase shares of
our stock or other securities. The ability of our board to establish the rights and issue substantial amounts of preferred stock without
the need for stockholder approval may delay or deter a change in control of us. See “Preferred Stock” above.
Nevada Takeover Statute
The Nevada Revised Statutes
contain provisions governing the acquisition of a controlling interest in certain Nevada corporations. Nevada’s “acquisition
of controlling interest” statutes (NRS 78.378 through 78.3793, inclusive) contain provisions governing the acquisition of a controlling
interest in certain Nevada corporations. These “control share” laws provide generally that any person that acquires a “controlling
interest” in certain Nevada corporations may be denied voting rights, unless a majority of the disinterested stockholders of the
corporation elects to restore such voting rights. These laws will apply to us if we were to have 200 or more stockholders of record (at
least 100 of whom have addresses in Nevada appearing on our stock ledger) and do business in the State of Nevada directly or through an
affiliated corporation, unless our articles of incorporation or bylaws in effect on the tenth day after the acquisition of a controlling
interest provide otherwise. These laws provide that a person acquires a “controlling interest” whenever a person acquires
shares of a subject corporation that, but for the application of these provisions of the NRS, would enable that person to exercise (1)
one-fifth or more, but less than one-third, (2) one-third or more, but less than a majority or (3) a majority or more, of all of the voting
power of the corporation in the election of directors. Once an acquirer crosses one of these thresholds, shares which it acquired in the
transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person acquired or offered
to acquire a controlling interest become “control shares” to which the voting restrictions described above apply. These laws
may have a chilling effect on certain transactions if our amended and restated articles of incorporation or amended and restated bylaws
are not amended to provide that these provisions do not apply to us or to an acquisition of a controlling interest, or if our disinterested
stockholders do not confer voting rights in the control shares.
Nevada’s “combinations
with interested stockholders” statutes (NRS 78.411 through 78.444, inclusive) provide that specified types of business “combinations”
between certain Nevada corporations and any person deemed to be an “interested stockholder” of the corporation are prohibited
for two years after such person first becomes an “interested stockholder” unless the corporation’s board of directors
approves the combination (or the transaction by which such person becomes an “interested stockholder”) in advance, or unless
the combination is approved by the board of directors and 60% of the corporation’s voting power not beneficially owned by the interested
stockholder, its affiliates and associates. Furthermore, in the absence of prior approval certain restrictions may apply even after such
two-year period. For purposes of these statutes, an “interested stockholder” is any person who is (1) the beneficial owner,
directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation, or (2) an affiliate or
associate of the corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of 10% or
more of the voting power of the then-outstanding shares of the corporation. The definition of the term “combination” is sufficiently
broad to cover most significant transactions between a corporation and an “interested stockholder”. These laws generally apply
to Nevada corporations with 200 or more stockholders of record. However, a Nevada corporation may elect in its articles of incorporation
not to be governed by these particular laws, but if such election is not made in the corporation’s original articles of incorporation,
the amendment (1) must be approved by the affirmative vote of the holders of stock representing a majority of the outstanding voting power
of the corporation not beneficially owned by interested stockholders or their affiliates and associates, and (2) is not effective until
18 months after the vote approving the amendment and does not apply to any combination with a person who first became an interested stockholder
on or before the effective date of the amendment. We have not made such an election in our original articles of incorporation or in our
amended and restated articles of incorporation.
Limitations on Liability and Indemnification of Officers and Directors
Our articles of incorporation
and bylaws limit the liability of our officers and directors and provide that we will indemnify our officers and directors, in each case,
to the fullest extent permitted by the Nevada Revised Statutes.
Listing
Our common stock is listed
on the Nasdaq Capital Market under the symbol “CNSP”.
Transfer Agent
The transfer agent for our
common stock is Continental Stock Transfer and Trust.
Description
of PRE-FUNDED WARRANTS
The following summary of
certain terms and provisions of pre-funded warrants that are being offered hereby is not complete and is subject to, and qualified in
its entirety by, the provisions of the pre-funded warrant, the form of which is filed as an exhibit to the registration statement of which
this prospectus forms a part.
Form. The pre-funded
warrants will be issued as individual warrant agreements to the investors. You should review the form of pre-funded warrant, filed as
an exhibit to the registration statement of which this prospectus forms a part, for a complete description of the terms and conditions
applicable to the pre-funded warrants.
Exercisability.
The pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full in immediately available funds for the number of shares of our common stock purchased upon such
exercise (except in the case of a cashless exercise as described below). A holder (together with its affiliates) may not exercise any
portion of the pre-funded warrant to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of
the outstanding common stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us,
the holder may increase the amount of ownership of outstanding stock after exercising the holder’s pre-funded warrants up to 9.99%
of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership
is determined in accordance with the terms of the pre-funded warrants. Purchasers of pre-funded warrants in this offering may also elect
prior to the issuance of the pre-funded warrants to have the initial exercise limitation set at 9.99% of our outstanding common stock.
No fractional shares of common stock will be issued in connection with the exercise of a pre-funded warrant. In lieu of fractional shares,
we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.
Duration and Exercise
Price. The exercise price per whole share of our common stock purchasable upon the exercise of the pre-funded warrants is $0.001
per share of common stock. The pre-funded warrants will be immediately exercisable and may be exercised at any time until the pre-funded
warrants are exercised in full. The exercise price of the pre-funded warrants is subject to appropriate adjustment in the event of certain
stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock and
also upon any distributions of assets, including cash, stock or other property to our stockholders.
Cashless Exercise.
If, at any time after the holder’s purchase of pre-funded warrants, such holder exercises its pre-funded warrants and a registration
statement registering the issuance of the shares of common stock underlying the pre-funded warrants under the Securities Act is not then
effective or available (or a prospectus is not available for the resale of shares of common stock underlying the pre-funded warrants),
then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise
price, the holder shall instead receive upon such exercise (either in whole or in part) only the net number of shares of common stock
determined according to a formula set forth in the pre-funded warrants. Notwithstanding anything to the contrary, in the event we do not
have or maintain an effective registration statement, there are no circumstances that would require us to make any cash payments or net
cash settle the pre-funded warrants to the holders.
Transferability.
Subject to applicable laws, the pre-funded warrants may be offered for sale, sold, transferred or assigned at the option of the holder
upon surrender of the pre-funded warrant to us together with the appropriate instruments of transfer.
Exchange Listing.
We do not plan on applying to list the pre-funded warrants on the Nasdaq Capital Market, any other national securities exchange or any
other nationally recognized trading system.
Fundamental Transactions.
In the event of a fundamental transaction, as described in the pre-funded warrants and generally including any reorganization, recapitalization
or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets,
our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person
or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, the holders of the pre-funded
warrants will be entitled to receive upon exercise of the pre-funded warrants the kind and amount of securities, cash or other property
that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental transaction.
Rights as a Stockholder.
Except by virtue of such holder’s ownership of shares of our common stock, the holder of a pre-funded warrant does not have the
rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the pre-funded warrant.
Description
of COMMON WARRANTS
The following summary of
certain terms and provisions of common warrants that are being offered hereby is not complete and is subject to, and qualified in its
entirety by, the provisions of the common warrant, the form of which is filed as an exhibit to the registration statement of which this
prospectus forms a part.
Form. The common
warrants will be issued as individual warrant agreements to the investors. You should review the form of common warrant, filed as an exhibit
to the registration statement of which this prospectus forms a part, for a complete description of the terms and conditions applicable
to the common warrants.
Exercisability.
The common warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full in immediately available funds for the number of shares of our common stock purchased upon such
exercise (except in the case of a cashless exercise as described below). A holder (together with its affiliates) may not exercise any
portion of the common warrant to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of the
outstanding common stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us, the
holder may increase the amount of ownership of outstanding stock after exercising the holder’s common warrants up to 9.99% of the
number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined
in accordance with the terms of the common warrants. Purchasers of common warrants in this offering may also elect prior to the issuance
of the common warrants to have the initial exercise limitation set at 9.99% of our outstanding common stock. No fractional shares of common
stock will be issued in connection with the exercise of a common warrant. In lieu of fractional shares, we will pay the holder an amount
in cash equal to the fractional amount multiplied by the exercise price.
Duration and Exercise
Price. The exercise price per whole share of our common stock purchasable upon the exercise of the common warrants is $2.10 per
share of common stock (or 100% of the price per share and accompanying common warrant). The common warrants will be immediately exercisable
and may be exercised for a period of five years after issuance. The exercise price of the common warrants is subject to appropriate adjustment
in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting
our common stock and also upon any distributions of assets, including cash, stock or other property to our stockholders.
Cashless Exercise.
If, at any time after the holder’s purchase of common warrants, such holder exercises its common warrants and a registration statement
registering the issuance of the shares of common stock underlying the common warrants under the Securities Act is not then effective or
available (or a prospectus is not available for the resale of shares of common stock underlying the common warrants), then in lieu of
making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder
shall instead receive upon such exercise (either in whole or in part) only the net number of shares of common stock determined according
to a formula set forth in the common warrants. Notwithstanding anything to the contrary, in the event we do not have or maintain an effective
registration statement, there are no circumstances that would require us to make any cash payments or net cash settle the common warrants
to the holders.
Transferability.
Subject to applicable laws, the common warrants may be offered for sale, sold, transferred or assigned at the option of the holder upon
surrender of the common warrant to us together with the appropriate instruments of transfer.
Exchange Listing.
We do not plan on applying to list the common warrants on the Nasdaq Capital Market, any other national securities exchange or any other
nationally recognized trading system.
Fundamental Transactions.
In the event of a fundamental transaction, as described in the common warrants and generally including any reorganization, recapitalization
or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets,
our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person
or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, the holders of the common
warrants will be entitled to receive upon exercise of the common warrants the kind and amount of securities, cash or other property that
the holders would have received had they exercised the common warrants immediately prior to such fundamental transaction. In the case
of certain fundamental transactions affecting us, a holder of common warrants, upon exercise of such warrants after such fundamental transaction,
will have the right to receive, in lieu of shares of our common stock, the same amount and kind of securities, cash or property that such
holder would have been entitled to receive upon the occurrence of the fundamental transaction, had the common warrants been exercised
immediately prior to such fundamental transaction. In lieu of such consideration, a holder of common warrants may instead elect to receive
a cash payment based upon the Black-Scholes value of their common warrants.
Rights as a Stockholder.
Except by virtue of such holder’s ownership of shares of our common stock, the holder of a common warrant does not have the rights
or privileges of a holder of our common stock, including any voting rights, until the holder exercises the common warrant.
PLAN OF DISTRIBUTION
A.G.P./Alliance
Global Partners has agreed to act as our lead placement agent and Maxim Group LLC has agreed to act as our co-placement agent in connection
with this offering subject to the terms and conditions of the placement agent agreement dated __________, 2023. The placement agents are
not purchasing or selling any of the securities offered by this prospectus, nor are they required to arrange the purchase or sale of any
specific number or dollar amount of securities, but have agreed to use their reasonable best efforts to arrange for the sale of all of
the securities offered hereby. We will enter into a securities purchase agreement (the “purchase agreement”) directly with
the investors who purchase our securities in this offering, at the investors’ option. Investors who do not enter into the purchase
agreement shall rely solely on this prospectus in connection with the purchase of our securities in this offering.
We
expect this offering to be completed not later than two business days following the commencement of the offering and we will deliver the
securities being issued to each investor upon receipt of such investor’s funds for the purchase of the securities offered pursuant
to this prospectus and we will deliver all securities to be issued in connection with this offering delivery versus payment (DVP)/receipt
versus payment (RVP) upon receipt of investor funds received by us. We expect to deliver the securities being offered pursuant to this
prospectus on or about __________, 2023.
We
have agreed to indemnify the placement agents against specified liabilities, including liabilities under the Securities Act, and to contribute
to payments the placement agents may be required to make in respect thereof.
Placement Agent Fees,
Commissions and Expenses
This
offering is being conducted on a reasonable best efforts basis and the placement agents have no obligation to buy any of the securities
from us or to arrange for the purchase or sale of any specific number or dollar amount of securities. Upon the closing of this offering,
we will pay the placement agents a cash transaction fee equal to 7.0% of the aggregate gross cash proceeds to us from the sale of the
securities in the offering. In addition, we will reimburse the placement agents for up to $75,000 for the placement agents’ legal
fees and up to $25,000 of the aggregate gross proceeds of the offering for certain reasonable non-accountable fees and expenses.
The
following table shows the public offering price, placement agent fees and proceeds, before expenses, to us, assuming the sale of all the
shares of common stock we are offering and no exercise of any warrants.
| Per Share
and Accompanying
Common Warrant |
| Per Pre-Funded
Warrant and Accompanying
Common Warrant | |
Total | |
Public offering price | $ |
– |
| $ |
– | |
$ | – | |
Placement agent fees | $ |
|
| $ |
| |
$ | | |
Proceeds, before expenses, to us | $ |
|
| $ |
| |
$ | | |
We
estimate that the total expenses of the offering payable by us, excluding the total placement agent fees, will be approximately $200,000.
Lock-Up Agreements
Our
directors and executive officers have entered into lock-up agreements. Under these agreements, these individuals have agreed,
subject to specified exceptions, not to sell or transfer any shares of common stock or securities convertible into, or exchangeable or
exercisable for, our shares of common stock during a period ending 90 days after the closing of this offering, without first obtaining
the written consent of the lead placement agent. Specifically, these individuals have agreed, in part, not to:
· sell,
offer, contract or grant any option to sell (including any short sale), pledge, transfer, establish an open “put equivalent position”
within the meaning of Rule 16a-l(h) under the Securities Exchange Act of 1934, as amended;
· enter
into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our
securities, whether any such transaction is to be settled by delivery of our shares of common stock, in cash or otherwise;
· make
any demand for or exercise any right with respect to the registration of any of our securities;
· publicly
disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge;
· or
other arrangement relating to any of our securities.
Notwithstanding
these limitations, these shares of common stock may be transferred under limited circumstances, including, without limitation, by gift,
will or intestate succession.
In
addition, we have agreed that, subject to certain exceptions, we will not (i) conduct any issuances of our common stock for a period
of 60 days following closing of this offering or (ii) enter into a variable rate transaction (as defined in the purchase agreement)
for a period of 180 days following closing of this offering; provided that for the period commencing on the closing date of this offering
and ending on the 90th day following the closing of this offering, we will be permitted to make sales under our Capital on Demand™
Sales Agreement if such sales are made at prices of not less than 150% of the combined offering price per share and accompanying warrant
in this offering, and for the period commencing on the 91st day following closing date of this offering and ending on the 180th day following
the closing of this offering, we will be permitted to make sales under our Capital on Demand™ Sales Agreement if such sales are
made at prices of not less than 125% of the combined offering price per share and accompanying warrant in this offering.
Regulation M
Each
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions
received by it and any profit realized on the resale of the shares sold by it while acting as principal might be deemed to be underwriting
discounts or commissions under the Securities Act. As an underwriter, each placement agent would be required to comply with the requirements
of the Securities Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and
Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares by the placement
agent acting as principal. Under these rules and regulations, the placement agents:
· may
not engage in any stabilization activity in connection with our securities; and
· may
not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted
under the Exchange Act, until it has completed its participation in the distribution.
Listing
Our
common stock is listed on The Nasdaq Capital Market under the symbol “CNSP.” There is no established public market for the
common warrants or pre-funded warrants, and we do not expect a market to develop. In addition, we do not intend to apply for listing of
the common warrants or pre-funded warrants on any national securities exchange.
Discretionary Accounts
The
placement agents do not intend to confirm sales of the securities offered hereby to any accounts over which they have discretionary authority.
Other Relationships
In
October 2023, we completed the warrant inducement transaction discussed in the section “Prospectus Summary – Recent Developments
- Warrant Exercise Inducement Transaction”. We engaged A.G.P./Alliance Global Partners to act as our financial advisor in connection
with the transaction and paid A.G.P./Alliance Global Partners a fee of $145,000.
The
placement agents and certain of their respective affiliates are full service financial institutions engaged in various activities, which
may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal
investment, hedging, financing and brokerage activities. The placement agents and certain of their respective affiliates may in the future
perform various commercial and investment banking and financial advisory services for us and our affiliates, for which they will receive
customary fees and expenses.
In
the ordinary course of their various business activities, the placement agents and certain of their respective affiliates may make or
hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments
(including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may
involve securities and/or instruments issued by us and our affiliates. If the placement agents or their respective affiliates have a lending
relationship with us, they routinely hedge their credit exposure to us consistent with their customary risk management policies. The placement
agents and their respective affiliates may hedge such exposure by entering into transactions that consist of either the purchase of credit
default swaps or the creation of short positions in our securities or the securities of our affiliates, including potentially the common
stock offered hereby. Any such short positions could adversely affect future trading prices of the common stock offered hereby. The placement
agents and certain of their respective affiliates may also communicate independent investment recommendations, market color or trading
ideas and/or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend
to clients that they acquire, long and/or short positions in such securities and instruments.
LEGAL MATTERS
The validity of the securities
offered hereby will be passed upon for us by ArentFox Schiff LLP, Washington, DC. The placement agents are being represented by Sullivan
& Worcester LLP, New York, New York, in connection with this offering.
EXPERTS
The financial statements of
the Company as of December 31, 2022 and 2021, and for the years then ended, have been incorporated by reference herein and in the registration
statement in reliance upon the report of MaloneBailey, LLP, independent registered public accounting firm, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” information from other documents that we file with it, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Information
in this prospectus supersedes information incorporated by reference that we filed with the SEC prior to the date of this prospectus. We
incorporate by reference into this prospectus and the registration statement of which this prospectus is a part the information or documents
listed below that we have filed with the SEC:
· Our Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 31, 2023 (as amended on May 1, 2023);
· Our Quarterly Reports
on Form 10-Q for the fiscal quarters ended March 31, 2023, filed on May 15, 2023; June 30, 2023, filed on August 14, 2023; and September 30, 2023, filed on November 14, 2023;
· Our Current Reports
on Form 8-K filed on January 3, 2023, May 8, 2023, August 15, 2023, August 18, 2023, September 19, 2023, and October 17, 2023; and
· Our Definitive Proxy Statement on Schedule 14A filed on August 14, 2023; and
· the
description of our common stock contained in our registration statement on Form 8-A filed
with the SEC on November 5, 2019, including any amendments or reports filed for the purposes of updating this description, including
Exhibit 4.3 to our Annual Report on Form 10-K/A for the year ended December 31, 2020, filed with the SEC on April 30, 2021.
Additionally, all documents
filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after (i) the date of the initial registration statement
and prior to effectiveness of the registration statement, and (ii) the date of this prospectus and before the termination or completion
of any offering hereunder, shall be deemed to be incorporated by reference into this prospectus from the respective dates of filing of
such documents, except that we do not incorporate any document or portion of a document that is “furnished” to the SEC, but
not deemed “filed.”
We will furnish without charge
to you, on written or oral request, a copy of any or all of the documents incorporated by reference in this prospectus, including exhibits
to these documents. You should direct any requests for documents to CNS Pharmaceuticals, Inc., Attn: Corporate Secretary, 2100 West Loop
South, Suite 900, Houston, TX 77027.
You also may access these
filings on our website at www.cnspharma.com. We do not incorporate the information on our website into this prospectus or any supplement
to this prospectus and you should not consider any information on, or that can be accessed through, our website as part of this prospectus
or any supplement to this prospectus (other than those filings with the SEC that we specifically incorporate by reference into this prospectus
or any supplement to this prospectus).
Any statement contained in
a document incorporated or deemed to be incorporated by reference in this prospectus will be deemed modified, superseded or replaced for
purposes of this prospectus to the extent that a statement contained in this prospectus modifies, supersedes or replaces such statement.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC
a registration statement on Form S-1 under the Securities Act for the securities being offered by this prospectus. This prospectus, which
is part of the registration statement, does not contain all of the information included in the registration statement and the exhibits.
For further information about us and the securities offered by this prospectus, you should refer to the registration statement and its
exhibits. References in this prospectus to any of our contracts or other documents are not necessarily complete, and you should refer
to the exhibits attached to the registration statement for copies of the actual contract or document. SEC filings are also available to
the public at the SEC’s website at www.sec.gov.
We are subject to the reporting
and information requirements of the Exchange Act and, as a result, we file periodic and current reports, proxy statements and other information
with the SEC. We make our periodic reports and other information filed with or furnished to the SEC, available, free of charge, through
our website as soon as reasonably practicable after those reports and other information are filed with or furnished to the SEC. Additionally,
these periodic reports, proxy statements and other information are available for inspection and copying at the public reference room and
website of the SEC referred to above.
Up to 3,809,524
Shares of Common Stock
Up to 3,809,524
Pre-Funded Warrants to Purchase up to 3,809,524 Shares of Common Stock
Up to 3,809,524
Common Warrants to Purchase up to 3,809,524 Shares of Common Stock
Up to 3,809,524
Shares of Common Stock Underlying such Pre-Funded Warrants
Up to 3,809,524
Shares of Common Stock Underlying such Common Warrants
CNS Pharmaceuticals,
Inc.
Joint Placement Agents
PROSPECTUS
________________
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth
the estimated costs and expenses to be incurred in connection with the issuance and distribution of the securities of CNS Pharmaceuticals,
Inc. (the “Registrant”) which are registered under this Registration Statement on Form S-1 (this “Registration Statement”),
other than placement agent fees. All amounts are estimates except the Securities and Exchange Commission registration fee and the Financial
Industry Regulatory Authority, Inc. filing fee.
The following expenses will
be borne solely by the Registrant.
|
|
Amount to be
Paid |
|
SEC Registration fee |
|
$ |
2,361.60 |
|
Financial Industry Regulatory Authority, Inc. filing fee |
|
|
2,900.00 |
|
Legal fees and expenses |
|
|
150,000.00 |
|
Accounting fees and expenses |
|
|
25,000.00 |
|
Transfer Agent’s fees |
|
|
5,000.00 |
|
Miscellaneous fees and expenses |
|
|
15,000.00 |
|
Total |
|
$ |
200,261.60 |
|
Item 14. Indemnification of Directors and Officers.
Section 78.138 of the Nevada
Revised Statute provides that a director or officer is not individually liable to the corporation or its stockholders or creditors for
any damages as a result of any act or failure to act in his capacity as a director or officer unless it is proven that (1) his act or
failure to act constituted a breach of his fiduciary duties as a director or officer and (2) his breach of those duties involved intentional
misconduct, fraud or a knowing violation of law.
This provision is intended
to afford directors and officers protection against and to limit their potential liability for monetary damages resulting from suits alleging
a breach of the duty of care by a director or officer. As a consequence of this provision, stockholders of our company will be unable
to recover monetary damages against directors or officers for action taken by them that may constitute negligence or gross negligence
in performance of their duties unless such conduct falls within one of the foregoing exceptions. The provision, however, does not alter
the applicable standards governing a director’s or officer’s fiduciary duty and does not eliminate or limit the right of our
company or any stockholder to obtain an injunction or any other type of non-monetary relief in the event of a breach of fiduciary duty.
The Registrant’s Articles
of Incorporation, as amended, and amended and restated bylaws provide for indemnification of directors, officers, employees or agents
of the Registrant to the fullest extent permitted by Nevada law (as amended from time to time). Section 78.7502 of the Nevada Revised
Statute provides that such indemnification may only be provided if the person acted in good faith and in a manner he or she reasonably
believed to be in, or not opposed to, the best interest of the Registrant and, with respect to any criminal action or proceeding, had
no reasonable cause to behave his conduct was unlawful.
Item 15. Recent Sales of Unregistered Securities.
Except as set forth below,
in the three years preceding the filing of this Registration Statement, the Registrant has not issued any securities that were not registered
under the Securities Act (all share and per share numbers are reflected on a post-split basis for all periods presented):
In September 2020, the Registrant
entered into a Purchase Agreement with Lincoln Park Capital Fund, LLC, or Lincoln Park, which provides that, upon the terms and subject
to the conditions and limitations set forth in the agreement, Lincoln Park is committed to purchase up to an aggregate of $15.0 million
shares of the Registrant’s common stock over the 36-month term of the agreement. The Registrant issued 6,734 shares of its common
stock to Lincoln Park in consideration for entering into the agreement.
In January 2021, the Registrant
entered into a twelve-month agreement with an investor relations firm that included the issuance of 834 restricted shares of common stock.
Upon signing the agreement, 209 shares vested immediately, and the remaining 625 shares vested quarterly over the remainder of the agreement.
In May 2021, the Registrant entered into a four-month agreement with an investor relations firm that included the issuance of 2,500 shares
of common stock.
In January 2022, the Registrant
entered into a Securities Purchase Agreement with several institutional investors for the sale by the Company of (i) 316,316 shares of
the Registrant’s common stock, (ii) pre-funded warrants to purchase up to an aggregate of 87,193 shares of common stock and (iii)
warrants to purchase up to an aggregate of 403,509 shares of common stock, in a private placement offering. The combined purchase price
of one share of common stock (or one pre-funded warrant) and accompanying common warrant was $28.50. H.C. Wainwright & Co., LLC acted
as the exclusive placement agent for the offering, pursuant to an engagement letter with the Registrant dated January 5, 2022.
In
October 2023, the Registrant entered into a warrant exercise inducement offer letter with a holder of certain existing warrants (“Existing
Warrants”) to receive new warrants (the “Inducement Warrants”) to purchase up to a number of shares of common stock
equal to 200% of the number of warrant shares issued pursuant to the exercise of such Existing Warrants to purchase shares of common stock,
pursuant to which the warrant holder agreed to exercise for cash its Existing Warrants to purchase up to 1,878,000 shares of the Registrant’s
common stock, at $1.28 per share, in exchange for the Registrant’s agreement to issue Inducement Warrants to purchase up to
3,756,000 shares of the Registrant’s common stock (the “Inducement Warrant Shares”).
All of the securities above
were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act or Regulation D promulgated
thereunder.
Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits:
3.3 |
Amended and Restated Bylaws of CNS Pharmaceuticals, Inc. (incorporated
by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Commission on August 15, 2023) |
|
|
4.1 |
Form of warrant issued to convertible debt holders (incorporated by reference to Exhibit 3.2 to the Company’s Form 1-A file no. 024-10855) |
|
|
4.2 |
Form of Underwriter Warrant (incorporated by reference to Exhibit 4.4 to the Company’s Form 1-A Amendment file no. 024-10855) |
|
|
4.3 |
Description of Securities of CNS Pharmaceuticals, Inc. (incorporated by reference to Exhibit 4.3 to the Company’s Form 10-K/A filed April 30, 2021) |
|
|
4.4 |
Form of Warrant issued in January 2022 offering (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on January 6, 2022) |
|
|
4.5 |
Form of Pre-Funded Warrant issued in January 2022 offering (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Commission on January 6, 2022) |
|
|
4.6 |
Form of Pre-Funded Warrant issued in November 2022 offering (incorporated by reference to Exhibit 4.7 to the Company’s Form S-1 file no. 333-267975) |
|
|
4.7 |
Form of Common Warrant issued in November 2022 offering (incorporated by reference to exhibit 4.8 to the Company’s Form S-1 file no. 333-267975) |
|
|
4.8 |
Form of Placement Agent Warrant issued in November 2022 offering (incorporated by reference to exhibit 4.9 to the Company’s Form S-1 file no. 333-267975) |
|
|
4.9 |
Form of Inducement Warrant issued in October 2023 offering (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on October 17, 2023) |
|
|
4.10* |
Form of Pre-Funded Warrant |
|
|
4.11* |
Form of Common Warrant |
|
|
5.1* |
Opinion of ArentFox Schiff, LLP |
|
|
10.1 |
Amended And Restated Patent License Agreement effective as of December 28, 2017 between CNS Pharmaceuticals, Inc. and Houston Pharmaceuticals, Inc. (incorporated by reference to Exhibit 6.1 to the Company’s Form 1-A file no. 024-10855) |
|
|
10.2 |
Collaboration and Asset Purchase Agreement between CNS Pharmaceuticals, Inc. and Reata Pharmaceuticals, Inc. dated November 21, 2017 (incorporated by reference to Exhibit 6.2 to the Company’s Form 1-A file no. 024-10855) |
|
|
10.3** |
2017 Stock Plan of CNS Pharmaceuticals, Inc. (incorporated by reference to Exhibit 6.3 to the Company’s Form 1-A file no. 024-10855) |
|
|
10.4** |
Employment Agreement between CNS Pharmaceuticals, Inc. and John M. Climaco dated September 1, 2017 (incorporated by reference to Exhibit 6.4 to the Company’s Form 1-A file no. 024-10855) |
|
|
10.5 |
Sublicense Agreement between CNS Pharmaceuticals, Inc. and WPD Pharmaceuticals, Inc. dated August 30, 2018 (incorporated by reference to Exhibit 6.6 to the Company’s Form 1-A Amendment file no. 024-10855) |
10.6 |
Sublicense Agreement between CNS Pharmaceuticals, Inc. and Animal Life Sciences, LLC. dated August 31, 2018 (incorporated by reference to Exhibit 6.7 to the Company’s Form 1-A Amendment file no. 024-10855) |
|
|
10.7** |
Employment Letter between CNS Pharmaceuticals, Inc. and Donald Picker (incorporated by reference to Exhibit 10.8 to the Company’s Form S-1 Amendment file no. 333-232443) |
|
|
10.8** |
Employment Letter between CNS Pharmaceuticals, Inc. and Sandra Silberman (incorporated by reference to Exhibit 10.9 to the Company’s Form S-1 Amendment file no. 333-232443) |
|
|
10.9** |
Employment Agreement between CNS Pharmaceuticals, Inc. and Christopher Downs (incorporated by reference to Exhibit 10.10 to the Company’s Form S-1 Amendment file no. 333-232443) |
|
|
10.10 + |
Patent and Technology License Agreement with The Board of Regents of The University of Texas System, an agency of the State of Texas, on behalf of The University of Texas M. D. Anderson Cancer Center, dated January 10, 2020 (incorporated by reference to Exhibit 10.11 to the Company’s Form 10-K filed March 12, 2020) |
|
|
10.11** |
Non-Employee Director Compensation Plan (incorporated by reference to Exhibit 10.12 to the Company’s Form 10-K filed March 12, 2020) |
|
|
10.12 |
Development Agreement between CNS Pharmaceuticals, Inc. and WPD Pharmaceuticals dated March 20, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed March 26, 2020) |
|
|
10.13** |
2020 Stock Plan of CNS Pharmaceuticals, Inc. (as amended September 14, 2023) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on September 19, 2023) |
|
|
10.14** |
Amendment to Employment Agreement between CNS Pharmaceuticals, Inc. and John Climaco dated September 1, 2020 (incorporated by reference to Exhibit 99.1 to the Company’s Form 8-K filed September 4, 2020) |
|
|
10.15 |
Purchase Agreement, dated as of September 15, 2020, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed September 21, 2020) |
|
|
10.16 |
Registration Rights Agreement, dated as of September 15, 2020, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed September 21, 2020) |
|
|
10.17 |
Form of Registration Rights Agreement to investors in January 2022 offering (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on January 6, 2022) |
|
|
10.18 |
Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia Securities, LLC (incorporated by reference to Exhibit 1.1 to the Current Report on Form 8-K filed with the Commission on February 12, 2021) |
|
|
10.19** |
Non-Employee Director Compensation Policy effective July 15, 2021. (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q filed with the Commission on August 12, 2022) |
* |
Filed herewith. |
** |
Management contract or compensatory plan, contract or arrangement. |
+ |
Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted. The Company hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit. |
(b) Consolidated Financial
Statement Schedules: All schedules are omitted because the required information is inapplicable or the information is presented
in the consolidated financial statements and the related notes.
Item 17. Undertakings
(a) The undersigned Registrant
hereby undertakes that:
(1) To file, during any period
in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include
any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the
prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement;
(iii) To include
any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs
(i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in this Registration Statement or is contained in a form of prospectus filed pursuant to Rule 424(b)
that is part of the Registration Statement.
(2) That, for the purpose
of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose
of determining liability under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant
undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless
of the method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of
the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such
securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424
(§230.424 of this chapter);
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned Registrant
hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s
annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions referenced in Item 14 of this Registration Statement, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered hereunder,
the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes
that:
(1) For purposes of determining
any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2) For the purpose of determining
any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
SIGNATURES
Pursuant to the requirements
of the Securities Act, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the city of Houston, Texas, on December 8, 2023.
|
CNS PHARMACEUTICALS, INC.
(Registrant) |
|
|
|
|
By: |
_/s/ John Climaco______________________ |
|
|
John Climaco
Chief Executive Officer and Director |
KNOW ALL MEN AND WOMEN BY
THESE PRESENTS, that each person whose signature appears below constitutes and appoints either John Climaco or Christopher Downs, his
true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and any
subsequent registration statements pursuant to Rule 462 of the Securities Act of 1933 and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents,
and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that
each of said attorney-in-fact or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements
of the Securities Act of 1933, as amended, this registration statement has been signed below by the following persons in the capacities
and on the dates indicated:
SIGNATURE |
|
TITLE |
|
DATE |
|
|
|
|
|
/s/ John Climaco |
|
|
|
|
John Climaco |
|
Chief Executive Officer and Director
(Principal Executive Officer) |
|
December 8, 2023 |
|
|
|
|
|
/s/ Christopher Downs |
|
|
|
|
Christopher Downs |
|
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer) |
|
December 8, 2023 |
|
|
|
|
|
/s/ Faith Charles |
|
|
|
|
Faith Charles |
|
Director and Chair of the Board of Directors |
|
December 8, 2023 |
|
|
|
|
|
/s/ Jerzy (George) Gumulka |
|
|
|
|
Jerzy (George) Gumulka |
|
Director |
|
December 8, 2023 |
|
|
|
|
|
/s/ Carl Evans |
|
|
|
|
Carl Evans |
|
Director |
|
December 8, 2023 |
|
|
|
|
|
/s/ Jeffry Keyes |
|
|
|
|
Jeffry Keyes |
|
Director |
|
December 8, 2023 |
|
|
|
|
|
/s/ Andrzej Andraczke |
|
|
|
|
Andrzej Andraczke |
|
Director |
|
December 8, 2023 |
|
|
|
|
|
/s/ Bettina Cockroft |
|
|
|
|
Bettina Cockroft |
|
Director |
|
December 8, 2023 |
Exhibit 1.1
December [___], 2023
CNS Pharmaceuticals, Inc.
Attention: John Climaco
2100 West Loop South, Suite 900
Houston, Texas
Dear Mr. Climaco:
This letter (the “Agreement”)
constitutes the agreement between A.G.P./Alliance Global Partners (“A.G.P.”), Maxim Group LLC (“Maxim”
and together with A.G.P., the “Placement Agents”) and CNS Pharmaceuticals, Inc., a Nevada corporation (the “Company”),
that the Placement Agents shall serve as the exclusive placement agents for the Company, on a reasonable “best efforts” basis,
in connection with the proposed placement (the “Placement”) of (i) shares (the “Shares”) of common
stock of the Company, par value $0.001 per share (the “Common Stock”), (ii) warrants (the “Common Warrants”)
to purchase shares of Common Stock (the “Common Warrant Shares”) and (iii) pre-funded warrants (the “Pre-Funded
Warrants” and together with the Shares and Common Warrants, the “Securities”) to purchase shares of Common
Stock (the “Pre-Funded Warrant Shares”). The Securities actually placed by the Placement Agents are referred to herein
as the “Placement Agents Securities.” The terms of the Placement shall be mutually agreed upon by the Company and the
purchasers of the Securities (each, a “Purchaser” and collectively, the “Purchasers”), and nothing
herein constitutes that the Placement Agents would have the power or authority to bind the Company or any Purchaser, or an obligation
for the Company to issue any Securities or complete the Placement. The Company expressly acknowledges and agrees that the Placement Agents’
obligations hereunder are on a reasonable “best efforts” basis only and that the execution of this Agreement does not constitute
a commitment by the Placement Agents to purchase the Securities and does not ensure the successful placement of the Securities or any
portion thereof or the success of the Placement Agents with respect to securing any other financing on behalf of the Company. The Securities
shall be offered and sold under the Company’s registration statement on Form S-1 (File No. 333-[___]). The Placement Agents may
retain other brokers or dealers to act as sub-agents or selected dealers on its behalf in connection with the Placement. Certain affiliates
of either of the Placement Agents may participate in the Placement by purchasing some of the Placement Agents Securities. The sale of
Placement Agents Securities to any Purchaser will be evidenced by a securities purchase agreement (the “Purchase Agreement”)
between the Company and such Purchaser, in a form reasonably acceptable to the Company and the Purchaser. Capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the Purchase Agreement. Prior to the signing of any Purchase Agreement,
officers of the Company will be available to answer inquiries from the prospective Purchasers. The Placement Agents may retain other brokers
or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement.
SECTION 1.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.
A.
Representations of the Company. With respect to the Placement Agents Securities, each of the representations and warranties
(together with any related disclosure schedules thereto) and covenants made by the Company to the Purchasers in the Purchase Agreement
in connection with the Placement, is hereby incorporated herein by reference into this Agreement (as though fully restated herein) and
is, as of the date of this Agreement and as of the date of the sale of the Placement Agents Securities (the “Closing Date”),
hereby made to, and in favor of, the Placement Agents, as applicable. In addition to the foregoing, the Company represents and warrants
that there are no affiliations with any Financial Industry Regulatory Authority (“FINRA”) member firm among the Company’s
officers, directors or, to the knowledge of the Company, any five percent (5.0%) or greater stockholder of the Company, except as set
forth in the Purchase Agreement.
B. Covenants of the Company.
The Company covenants and agrees to continue to retain (i) a firm of Public Company Accounting Oversight Board independent
registered public accountants for a period of at least two (2) years after the Closing Date and (ii) a reputable transfer agent with
respect to the Common Stock for a period of two (2) years after the Closing Date, provided in each case that the Company is then subject
to the reporting requirement of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Furthermore,
except as set forth below, from the date hereof until sixty (60) days after the Closing Date, without the prior written consent of the
Placement Agents, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement to issue or announce the issuance
or proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration statement or amendment or
supplement thereto, other than filing the final Prospectus and a registration statement on Form S-8 in connection with any employee benefit
plan; provided, however, such restrictions shall not apply with respect to an Exempt Issuance. In addition, from the date hereof until
the 180 day anniversary of the Closing Date, the Company shall not effect or enter into an agreement to effect any issuance of Common
Stock or Common Stock Equivalents involving an at-the-market offering or Variable Rate Transaction (as defined in the Purchase Agreement).
No Variable Rate Transaction shall be an Exempt Issuance. Notwithstanding the foregoing, commencing on the Closing Date and ending on
the 90th day following the Closing Date, the Company will be permitted to make sales under its Capital on Demand™ Sales Agreement
with JonesTrading Institutional Services LLC and Brookline Capital Markets, a division of Arcadia Securities, LLC, dated February 12,
2021 (“ATM Agreement”) if such sales are made at prices of not less than 150% of the Per Share Purchase Price, and for the
period commencing on the 91st day following Closing Date and ending on the 180th day following the Closing Date, the Company will be
permitted to make sales under the ATM Agreement if such sales are made at prices of not less than 125% of the Per Share Purchase Price.
SECTION 2.
REPRESENTATIONS OF THE PLACEMENT AGENTS. The Placement Agents each represent and warrant that it (i) is a member in good
standing of FINRA, (ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of
the United States of America applicable to the offers and sales of the Placement Agent Securities by the Placement Agent, (iv) is and
will be a corporate body validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter
into and perform its obligations under this Agreement. The Placement Agent will immediately notify the Company in writing of any change
in its status with respect to subsections (i) through (v) above. The Placement Agents each covenant that it will use its reasonable best
efforts to conduct the Placement hereunder in compliance with the provisions of this Agreement and the requirements of applicable law.
SECTION 3.
COMPENSATION. In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agents
and/or its respective designees a cash fee of 7.0% of the aggregate gross proceeds raised from the sale of the Placement Agents Securities,
65% of which shall be paid to A.G.P., and 35% of which shall be paid to Maxim (the “Cash Fee”). Each of the Placement
Agents reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination
is made by FINRA to the effect that either of the Placement Agent’s aggregate compensation is in excess of that permitted by FINRA
Rules or that the terms thereof require adjustment.
SECTION 4.
EXPENSES. The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance
of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation: (i) all expenses
incident to the issuance, delivery and qualification of the Placement Agents Securities (including all printing and engraving costs);
(ii) all fees and expenses of the registrar and transfer agent of the Shares; (iii) all necessary issue, transfer and other stamp taxes
in connection with the issuance and sale of the Placement Agents Securities; (iv) all fees and expenses of the Company’s counsel,
independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents
and certificates of experts), Preliminary Prospectus and the Prospectus, and all amendments and supplements thereto, and this Agreement;
(vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the Company in connection with qualifying or registering
(or obtaining exemptions from the qualification or registration of) all or any part of the Placement Agents Securities for offer and sale
under the state securities or blue sky laws or the securities laws of any other country; (vii) the fees and expenses associated with including
the Placement Agents Securities on the Trading Market; (viii) up to $75,000 for the reasonable, documented, and accountable expenses related
to legal fees of counsel to the Placement Agents specifically incurred in connection with the Placement; (ix) non-accountable expenses
in an amount of not more than $25,000; and (x) closing costs, which shall include the reimbursement of the reasonable out-of-pocket cost
of the escrow agent or clearing agent, as applicable, in an amount up to $10,000; provided, that this sentence in no way limits or impairs
the indemnification or contribution provisions contained herein. The Placement Agents reserve the right to reduce any item of compensation
or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Placement
Agents’ aggregate compensation is in excess of FINRA Rules or that the terms thereof require adjustment.
SECTION 5.
INDEMNIFICATION.
A.
To the extent permitted by law, with respect to the Placement Agents Securities, the Company will indemnify the Placement Agents
and its affiliates, stockholders, directors, officers, employees, members, counsel and controlling persons (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) (each such person, an “Indemnified Person”) against all
losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable and documented fees and expenses
of counsel) (“Claims”), relating to or arising out of its activities hereunder, its status, title or role as Placement
Agents, pursuant to this Agreement, except to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect
thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted from the Placement Agents’ fraud,
willful misconduct, gross negligence, recklessness, or violation of law or insofar as such Claims arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission in disclosure in the Registration Statement, the Preliminary Prospectus,
or the Prospectus furnished to the Company in writing by the Placement Agents expressly for use therein. Notwithstanding anything set
forth herein to the contrary, the Company agrees to indemnify the Placement Agents and its counsel, Sullivan & Worcester LLP, to the
fullest extent set forth in this Section 5, against any and all claims asserted by any or person or entity alleging that the Placement
Agents were not permitted or entitled to act as a placement agent herein, or that the Company was not permitted to hire or retain the
Placement Agents herein, including but not limited to any claims arising out of any purported right of first refusal another person or
entity claims to have to act as a placement agent or any similar role with respect to the Company or its securities.
B.
Promptly after receipt by either of the s of notice of any claim or the commencement of any action or proceeding with respect to
which either of the Placement Agents is entitled to indemnity hereunder, the applicable Placement Agent will notify the Company in writing
of such claim or of the commencement of such action or proceeding, but failure to so notify the Company shall not relieve the Company
from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial
rights and defenses. If the Company so elects or is requested by either of the Placement Agents, the Company will assume the defense of
such action or proceeding and will employ counsel reasonably satisfactory to the applicable Placement Agent and will pay the reasonable
fees and expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agents will be entitled to employ its own counsel
separate from counsel for the Company and from any other party in such action if counsel for the Placement Agents reasonably determines
that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company
and the Placement Agents. In such event, the reasonable and documented fees and disbursements of no more than one (1) such separate counsel
will be paid by the Company, in addition to fees of local counsel. The Company will have the right to settle the claim or proceeding,
provided that the Company will not settle any such claim, action or proceeding without the prior written consent of the Placement Agents
(which will not be unreasonably withheld or delayed) unless such settlement provides for an unconditional and irrevocable release of the
Indemnified Persons from any and all liability arising out of such claim or proceeding.
C.
The Company agrees to notify the Placement Agents promptly of the assertion against it or any other person of any claim or the
commencement of any action or proceeding relating to a transaction contemplated by this Agreement.
D.
If for any reason the foregoing indemnity is unavailable to the Placement Agents or insufficient to hold the Placement Agents harmless,
then the Company shall contribute to the amount paid or payable by the Placement Agents as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and
the Placement Agents on the other, but also the relative fault of the Company on the one hand and the Placement Agents on the other that
resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable
by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees
and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the Placement
Agents’ share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by the
Placement Agents under this Agreement.
E.
These indemnification provisions shall remain in full force and effect whether or not the transaction contemplated by this Agreement
is completed and shall survive the termination of this Agreement, and shall be in addition to any liability that the Company might otherwise
have to any indemnified party under this Agreement or otherwise.
SECTION 6.
ENGAGEMENT TERM. The Placement Agents’ engagement hereunder will be until the earlier of (i) March 2, 2024 and (ii)
the Closing Date (such earlier date, the “Termination Date”). In the event, however, in the course of the Placement
Agents’ performance of due diligence it deems it necessary to terminate the engagement, the Placement Agents may do so prior to
the Termination Date. The Company may elect to terminate the engagement hereunder for any reason prior to the Termination Date but will
remain responsible for fees and expenses pursuant to Section 3 and Section 4 hereof and fees and expenses with respect to the Placement
Agents Securities, if sold in the Placement. Notwithstanding anything to the contrary contained herein, the provisions concerning the
Company’s obligation to pay any fees or expenses actually earned pursuant to Section 3 and Section 4 hereof and the provisions concerning
confidentiality, indemnification and contribution, no fiduciary duty and governing law (including the waiver of the right to trial by
jury) contained herein will survive any expiration or termination of this Agreement. If this Agreement is terminated prior to the completion
of the Placement, all fees or expenses due to the Placement Agents shall be paid by the Company to the Placement Agents on or before the
Termination Date (in the event such fees or expenses are earned or owed as of the Termination Date). The Placement Agents agree not to
use any confidential information concerning the Company provided to the Placement Agents by the Company for any purposes other than those
contemplated under this Agreement.
SECTION 7.
PLACEMENT AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agents in connection
with this engagement is for the confidential use of the Company only in their evaluation of the Placement and, except as otherwise required
by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Placement Agents’
prior written consent.
SECTION 8.
NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by
any person or entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof. The Company
acknowledges and agrees that the Placement Agents are not and shall not be construed as a fiduciary of the Company and shall have no duties
or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention
of the Placement Agents hereunder, all of which are hereby expressly waived.
SECTION 9.
CLOSING. The obligations of the Placement Agents, and the closing of the sale of the Placement Agents Securities hereunder,
are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company contained
herein and in the Purchase Agreement, to the performance by the Company of its obligations hereunder and in the Purchase Agreement, and
to each of the following additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement
Agents:
A.
All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each
of this Agreement, the Placement Agents Securities, and all other legal matters relating to this Agreement and the transactions contemplated
hereby with respect to the Placement Agents Securities shall have been completed or resolved in a manner reasonably satisfactory in all
material respects to the Placement Agents.
B.
The Placement Agents shall have received from the Company’s outside legal counsel, ArentFox Schiff LLP, such counsel’s
written opinion and negative assurance letter with respect to the Placement Agents Securities, addressed to the Placement Agents and dated
as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agents.
C.
[Reserved.]
D.
The Placement Agents shall have a received customary certificate of the Company’s Chief Executive Officer, as to the accuracy
of the representations and warranties contains in the Purchase Agreement, and a certificate of the Company’s secretary certifying
(i) that each of the Company’s charter documents are true and complete, have not been modified and are in full force and effect;
(ii) that the resolutions of the Company’s Board of Directors (or any authorized committee thereof) relating to the Placement are
in full force and effect and have not been modified; and (iii) as to the incumbency of the officers of the Company.
E.
The Shares shall be registered under the Exchange Act and, as of the Closing Date, the Common Stock and the shares issuable upon
exercise of the Warrants shall be listed and admitted and authorized for trading on the Trading Market or other applicable U.S. national
exchange and satisfactory evidence of such action shall have been provided to the Placement Agents. The Company shall have taken no action
designed to terminate, or likely to have the effect of terminating, the registration of the Shares under the Exchange Act or delisting
or suspending from trading the Shares from the Trading Market or other applicable U.S. national exchange, nor has the Company received
any information suggesting that the Commission or the Trading Market or other U.S. applicable national exchange is contemplating terminating
such registration or listing except as otherwise publicly disclosed.
F.
No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance or sale of the Placement Agents Securities or materially and
adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or
order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance or sale of the Placement Agents Securities or materially and adversely affect or potentially and adversely
affect the business or operations of the Company.
G.
The Company shall have entered into a Purchase Agreement with each of the several Purchasers of the Placement Agents Securities
and such agreements shall be in full force and effect and shall contain representations, warranties and covenants of the Company as agreed
upon between the Company and the Purchasers.
H.
FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition,
the Company shall, if requested by the Placement Agent, make or authorize Placement Agent’s counsel to make on the Company’s
behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110 with respect to the Placement and pay all
filing fees required in connection therewith.
I.
The Placement Agent shall have received an executed lock-up agreement from each of the Company’s executive officers and directors
prior to the Closing Date.
J.
On the date hereof, the Placement Agents shall have received, and the Company shall have caused to be delivered to the Placement
Agents, a letter from Malone Bailey LLP (the independent registered public accounting firm of the Company), addressed to the Placement
Agents, dated as of the date hereof, in form and substance satisfactory to the Placement Agents. The letter shall not disclose any change
in the condition (financial or other), earnings, operations, business or prospects of the Company from that set forth in the Registration
Statement, Preliminary Prospectus, and Prospectus, in the Placement Agents’ judgment, is material and adverse and that makes it,
in the Placement Agents’ judgment, impracticable or inadvisable to proceed with the offering of the Placement Agents Securities.
On the Closing Date, the Placement Agents shall have received from Malone Bailey LLP, or such other independent registered public accounting
firm of the Company, a letter dated as of the Closing Date, in form and substance satisfactory to the Placement Agents, to the effect
that they reaffirm the statements made in the letter furnished pursuant to this Section 9(J), except that the specified date referred
to therein for the carrying out of procedures shall be no more than three business days prior to such Closing Date.
K.
The Placement Agents shall have received an executed FINRA questionnaire from each of the Company and the Company’s executive
officers, directors and 5% or greater securityholders.
If any of the conditions specified
in this Section 9 shall not have been fulfilled when and as required by this Agreement, all obligations of the Placement Agents hereunder
may be cancelled by the Placement Agents at, or at any time prior to, the Closing Date. Notice of such cancellation shall be given to
the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.
SECTION 10.
GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable
to agreements made and to be performed entirely in such State, without regard to its conflict of laws principles. This Agreement may not
be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute
arising under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement
may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and
delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction
of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any
such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by
law. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such action or proceeding.
SECTION 11.
ENTIRE AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto,
and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined
to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision
of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except
by an instrument in writing signed by both the Placement Agents and the Company. The representations, warranties, agreements and covenants
contained herein shall survive the Closing Date of the Placement and delivery of the Placement Agents Securities for three years after
the Closing Date. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.
SECTION 12.
NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication
is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day,
(b) the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature
pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third
business day following the date of mailing, if sent by an internationally recognized air courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature
pages hereto.
SECTION 13.
PRESS ANNOUNCEMENTS. The Company agrees that the Placement Agents shall, on and after the Closing Date, have the right to
reference the Placement and the Placement Agents’ role in connection therewith in the Placement Agents’ marketing materials
and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense.
Please confirm that the foregoing
correctly sets forth our agreement by signing and returning to the Placement Agents the enclosed copy of this Agreement.
Very truly yours, |
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A.G.P./ALLIANCE GLOBAL PARTNERS |
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By: |
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Name: |
Thomas J. Higgins |
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Title: |
Managing Director |
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Address for Notice: |
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590 Madison Avenue 28th Floor |
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New York, New York 10022 |
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Attn: Thomas J. Higgins |
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Email: thiggins@allianceg.com |
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MAXIM GROUP LLC |
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By: |
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Name: |
Clifford A. Teller |
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Title: |
Co-President |
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Address for Notice: |
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300 Park Avenue, 16th Floor
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New York, NY 10022 |
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Attn: Clifford A. Teller |
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Email: [___] |
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Accepted and Agreed to as of |
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the date first written above: |
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CNS PHARMACEUTICALS, INC. |
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By: |
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Name: |
John Climaco, Ph.D. |
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Title: |
Chief Executive Officer |
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Address for Notice: |
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2100 West Loop South, Suite 900 |
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Houston, Texas |
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Attn: John Climaco |
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Email: [___] |
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[Signature Page to Placement Agency Agreement]
Exhibit 4.10
FORM OF PRE-FUNDED
COMMON STOCK PURCHASE WARRANT
CNS PHARMACEUTICALS,
INC.
Warrant Shares: |
Initial Exercise Date: [___] |
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Issue Date: [___] |
THIS PRE-FUNDED COMMON STOCK
PURCHASE WARRANT (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised in full (the “Termination
Date”), but not thereafter, to subscribe for and purchase from CNS Pharmaceuticals, Inc., a Nevada corporation (the “Company”),
up to [___]shares of common stock, par value $0.001 per share (the “Common Stock”) (as subject to adjustment hereunder,
the “Warrant Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated [___], among the Company and each purchaser signatory thereto.
Section 2.
Exercise.
a) Exercise of Warrant.
Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail
attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Notice of Exercise”). Within
the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in
Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant
Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless
the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise
be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to
the Company until the Holder has purchased all of the Warrant Shares available hereunder and this Warrant has been exercised in full,
in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which
the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the
total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records
showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice
of Exercise within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the
number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. For
the avoidance of doubt, there is no circumstance that would require the Company to net cash settle this Warrant.
b) Exercise Price.
The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.001 per Warrant Share, was pre-funded to the
Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price
of $0.001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder
shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance
or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining
unpaid exercise price per Warrant Share under this Warrant shall be $0.001, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise.
This Warrant may be exercised, in whole or in part, by means of a “cashless exercise” in which the Holder shall be entitled
to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) |
= | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice
of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at
the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or
(z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the
time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular
trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close
of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable
Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered
pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B) |
= | the Exercise Price, as adjusted hereunder; and |
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(X) |
= | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with
the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued
in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the registered characteristics of this Warrant. The Company agrees not to take any position contrary to this Section
2(c), except to the extent required by applicable law, rules, or regulations.
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the
Common Stock are then reported on OTCQB or OTCQX and OTCQB or OTCQX, as applicable, is not a Trading Market, the VWAP of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX, as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders
of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall
be paid by the Company.
“Trading Day”
means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for trading for a
period of time less than the customary time.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and
if prices for the Common Stock are then reported on OTCQB or OTCQX, and OTCQB or OTCQX, as applicable, is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX, as applicable, (c) if the
Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and prices for the Common Stock are then reported on The Pink
Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the holders of a majority in interest of the Common Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
d) Mechanics of Exercise.
i. Delivery of Warrant
Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the
Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through
its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A)
there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the
Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate representing
the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant
Shares set forth in the Notice of Exercise to the address specified by the Holder in such Notice of Exercise by the date that is the
earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery
of the aggregate Exercise Price to the Company, and (iii) the number of Trading Days comprising the Standard Settlement Period after
the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the
Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with
respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of
the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days
and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to
such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing
to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share
Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent
(which may be the Transfer Agent) that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable.
As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice of
Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 9:00 a.m. (New York City
time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company
agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial
Exercise Date, and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of
the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following
the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given
time will be less than the amount stated on the face hereof.
ii. Delivery of New Warrants
Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender
of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.
iii. Rescission Rights.
If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant
Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In
on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company
fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to
purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock
to deliver in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving upon such exercise (a
“Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the Warrant Shares so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of this Warrant and equivalent number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have
been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases
shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with
an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the
Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit
a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock
upon exercise of this Warrant as required pursuant to the terms hereof.
v. No Fractional Shares
or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either
pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round
up to the next whole share of Common Stock.
vi. Charges, Taxes and
Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company,
and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided,
however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form, attached hereto as Exhibit B, duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental
thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the
Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic
delivery of the Warrant Shares.
vii. Closing of Books.
The Company will not close its stockholder books or records in any manner that prevents the timely exercise of this Warrant, pursuant
to the terms hereof.
e) Holder’s Exercise
Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion
of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth
on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates, (ii) any other Persons acting as a
group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for the purposes of determination of beneficial ownership pursuant to Section 13(d)
and Rule 13d-3 of the Exchange Act (such Persons, “Attribution Parties”)), would beneficially own in excess of the
Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant Shares issuable upon exercise of this
Warrant with respect to which such determination is being made, but shall exclude the number of Warrant Shares that would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or
Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in
the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not
representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission
of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable,
in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy
of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership
Limitation, except to the extent the Holder has detrimentally relied on the number of outstanding shares of Common Stock that was provided
in writing by the Company. In addition, a determination as to any group status as contemplated above shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company shall have no obligation
to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance
with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstanding shares of Common Stock
that was provided by the Company. For purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock,
a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or
annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent
written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written
request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the
conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since
the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be [4.99/9.99]% of the Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon
exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the Common Stock outstanding immediately
after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st
day after such notice is delivered to the Company. The provisions of this paragraph shall not be construed and implemented in
a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) that
may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor
holder of this Warrant. To the extent that this Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation,
no alternate consideration is owing to the Holder.
Section 3. Certain Adjustments.
a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution
or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of this Warrant), (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise
of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant remains unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
b) Reserved.
c) Subsequent Rights Offerings.
In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents
or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock
(the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights,
the aggregate Purchase Rights that the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate
in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled
to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase
Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro Rata Distributions.
During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder
exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent
(or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such
Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result
in the Holder exceeding the Beneficial Ownership Limitation).
e) Fundamental Transaction.
If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another Person in which the Company is not the surviving entity, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to
sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of
the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the voting power of the common equity of the Company (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares
of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation
in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of
one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents
in accordance with the provisions of this Section 3(a) pursuant to written agreements in form and substance reasonably satisfactory to
the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of
the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Warrant that is exercisable for a corresponding number of shares of capital stock of such Successor
Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price that applies
the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such
exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and that is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
f) Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
i. Adjustment to
Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the
number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise
by Holder. If, while this Warrant is outstanding, (A) the Company declares a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption of, the Common Stock, (C) the
Company authorizes the granting to all holders of shares of Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights, (D) the approval of any stockholders of the Company is required in connection with a Fundamental
Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear
upon the Warrant Register of the Company, at least three calendar days prior to the applicable record or effective date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of the shares of Common Stock of record to be entitled
to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash
or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the
failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action
required to be specified in such notice; and provided, further, that no notice shall be required if the information is disseminated in
a press release or a document filed with the Commission. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice
with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly
set forth herein.
iii. Voluntary
Adjustment by the Company. Subject to the rules and regulations of the Trading Market on which the Common Stock is then listed,
the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then
current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4. Transfer of
Warrant.
a) Transferability.
Subject to compliance with applicable securities law, this Warrant and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new
Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned
this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company on the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. This Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. Subject
to compliance with applicable securities law, this Warrant may be divided or combined with other Warrants upon presentation hereof at
the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer that may be
involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the
Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights as Stockholder
Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as
a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3.
Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to
receive cash payments pursuant to Section 2(d)(i) or 2(d)(iv) herein, in no event shall the Company be required to net cash settle an
exercise of this Warrant.
b) Loss, Theft, Destruction
or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to this Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of this Warrant, shall not include the
posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein
shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
d) Authorized Shares.
The Company covenants that,
during the period this Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares underlying this Warrant. The Company further covenants that its issuance of
this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon
the exercise of this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares
may be issued and delivered as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading
Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares that may be issued and delivered upon
the exercise this Warrant will, upon exercise of this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as
waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company
will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action that
would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company
shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
e) Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with
the provisions of the Purchase Agreement.
f) Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize
cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses.
No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the
Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, and such failure results
in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder
in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any notice,
request or other document required or permitted to be given or delivered hereunder shall be delivered in accordance with the notice provisions
of the Purchase Agreement.
i) Limitation of Liability.
No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and
no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price
of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder,
in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance
of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for
specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of
this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if
any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed
a part of this Warrant.
o)
Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”). All
amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in
the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange
rate as published in the Wall Street Journal (NY edition) on the relevant date of calculation.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has caused this
Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
CNS PHARMACEUTICALS, INC. |
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By: |
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Name: John Climaco |
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Title: Chief Executive Officer |
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EXHIBIT A
NOTICE OF EXERCISE
TO: CNS PHARMACEUTICALS, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
[_]
in lawful money of the United States; or
[_]
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC Account
Number:
[SIGNATURE OF HOLDER]
Name of Investing Entity:
Signature of Authorized Signatory of Investing Entity:
______________________________________________________
Name of Authorized Signatory:
______________________________________________________
Title of Authorized Signatory:
______________________________________________________
Date:
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to exercise the Warrant to purchase Warrant Shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
Name: |
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(Please Print) |
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Address: |
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(Please Print) |
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Phone Number: |
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Email Address: |
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Dated: |
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Holder’s Signature: |
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Holder’s Address: |
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Exhibit 4.11
FORM OF COMMON
STOCK PURCHASE WARRANT
CNS PHARMACEUTICALS,
INC.
Warrant Shares: |
Initial Exercise Date: [___] |
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Issue Date: [___] |
THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [___] (the
“Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on [___], 2028 (the “Termination
Date”), but not thereafter, to subscribe for and purchase from CNS Pharmaceuticals, Inc., a Nevada corporation (the “Company”),
up to [___] shares of common stock, par value $0.001 per share (the “Common Stock”) (as subject to adjustment hereunder,
the “Warrant Shares”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise
Price, as defined in Section 2(b).
Section 1.
Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities
Purchase Agreement (the “Purchase Agreement”), dated [___], 2023, among the Company and each purchaser signatory thereto.
Section 2.
Exercise.
i
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any
time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed
PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto as Exhibit A (the “Notice
of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No
ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any
Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender
this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and this Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date
on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion
of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise
within one (1) Trading Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree
that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of
Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof. For the avoidance
of doubt, there is no circumstance that would require the Company to net cash settle this Warrant.
b)
Exercise Price. The exercise price per share of Common Stock under this Warrant shall be [___], subject to adjustment hereunder
(the “Exercise Price”).
c)
Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering or the prospectus
contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may only be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant
Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = |
as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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(B) = |
the Exercise Price, as adjusted hereunder; and |
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(X) = |
the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued
in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the registered characteristics of this Warrant. The Company agrees not to take any position contrary to this Section
2(c), except to the extent required by applicable law, rules, or regulations.
Notwithstanding anything herein to the contrary,
on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and if prices for the
Common Stock are then reported on OTCQB or OTCQX and OTCQB or OTCQX, as applicable, is not a Trading Market, the VWAP of the Common Stock
for such date (or the nearest preceding date) on OTCQB or OTCQX, as applicable, (c) if the Common Stock is not then listed or quoted for
trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other
cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders
of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall
be paid by the Company.
“Trading Day”
means any day on which the Trading Market is open for trading, including any day on which the Trading Market is open for trading for a
period of time less than the customary time.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted on a Trading Market and
if prices for the Common Stock are then reported on OTCQB or OTCQX, and OTCQB or OTCQX, as applicable, is not a Trading Market, the volume
weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX, as applicable, (c) if the
Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and prices for the Common Stock are then reported on The Pink
Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share
of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the holders of a majority in interest of the Common Warrants then outstanding and reasonably acceptable
to the Company, the fees and expenses of which shall be paid by the Company.
d)
[RESERVED]
e)
Mechanics of Exercise.
i
Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted
by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in
such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of
the Warrant Shares by the Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a
certificate representing the Warrant Shares, registered in the Company’s share register in the name of the Holder or its designee,
for the number of Warrant Shares set forth in the Notice of Exercise to the address specified by the Holder in such Notice of Exercise
by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1)
Trading Day after delivery of the aggregate Exercise Price to the Company, and (iii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”).
Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of
the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares,
provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of
(i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice
of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant
Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading
Day (increasing to $20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such
Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a
transfer agent (which may be the Transfer Agent) that is a participant in the FAST program so long as this Warrant remains outstanding
and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number
of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of
the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 9:00 a.m. (New
York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement,
the Company agrees to deliver, or cause to be delivered, the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time)
on the Initial Exercise Date, and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided
that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery
Date. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at
any given time will be less than the amount stated on the face hereof.
ii
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new
Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
iii
Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares
of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the Warrant Shares so purchased exceeds (y) the amount obtained by
multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of this Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases shares of Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Warrants with an aggregate sale
price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in
respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise
of this Warrant as required pursuant to the terms hereof.
v
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share that the Holder would otherwise be entitled to purchase upon such exercise, the Company
shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share of Common Stock.
vi
Charges, Taxes and Expenses. The issuance and delivery of Warrant Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses
shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form, attached hereto as Exhibit B,
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise
and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Warrant Shares.
vii
Closing of Books. The Company will not close its stockholder books or records in any manner that prevents the timely exercise
of this Warrant, pursuant to the terms hereof.
f)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have
the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such
issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with (i) the Holder’s Affiliates,
(ii) any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates, and (iii) any other Persons
whose beneficial ownership of Common Stock would be aggregated with the Holder’s for the purposes of determination of beneficial
ownership pursuant to Section 13(d) and Rule 13d-3 of the Exchange Act (such Persons, “Attribution Parties”)), would
beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number
of shares of Common Stock beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Warrant
Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of
Warrant Shares that would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other Common Stock Equivalents) subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 2(f), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that
the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder
is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this
Section 2(f) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify
or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance with
the Beneficial Ownership Limitation, except to the extent the Holder has detrimentally relied on the number of outstanding shares of Common
Stock that was provided in writing by the Company. In addition, a determination as to any group status as contemplated above shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, and the Company
shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant
that are not in compliance with the Beneficial Ownership Limitation, except to the extent the Holder relies on the number of outstanding
shares of Common Stock that was provided by the Company. For purposes of this Section 2(f), in determining the number of outstanding shares
of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a
more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the
written request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties
since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation”
shall be [4.99/9.99]% of the Common Stock outstanding immediately after giving effect to the issuance of Warrant Shares issuable upon
exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions
of this Section 2(f), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the Common Stock outstanding immediately
after giving effect to the issuance of Warrant Shares upon exercise of this Warrant held by the Holder and the provisions of this Section
2(f) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this paragraph shall not be construed and implemented in a manner otherwise than
in strict conformity with the terms of this Section 2(f) to correct this paragraph (or any portion hereof) that may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. To the
extent that this Warrant is unexercisable as a result of the Holder’s Beneficial Ownership Limitation, no alternate consideration
is owing to the Holder.
Section 3.
Certain Adjustments.
a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable
in shares of Common Stock (which, for avoidance of doubt, shall not include any Warrant Shares issued by the Company upon exercise of
this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares
of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant remains unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or re-classification.
b)
[RESERVED]
c)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights that the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for
the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance
for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the
beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
e) Fundamental Transaction.
If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another Person in which the Company is not the surviving entity, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of the Company’s assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer
or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to
sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of
the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the voting power of the common equity of the Company (each a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant
Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option
of the Holder (without regard to any limitation in Section 2(f) on the exercise of this Warrant), the number of shares of Common Stock
of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the
“Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares
of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation
in Section 2(f) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of
one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.
Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined
below) shall, at the Holder’s option, exercisable at any time concurrently with, or within thirty (30) days after, the consummation
of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase
this Warrant from the Holder by paying to the Holder, as described below, an amount of consideration equal to the Black Scholes Value
(as defined below) of the remaining unexercised portion of this Warrant on the date of consummation of such Fundamental Transaction,
provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s
Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity as of the date of consummation
of such Fundamental Transaction the same type or form of consideration (and in the same proportion), valued at the Black Scholes Value
of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock of the Company in connection
with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the
holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection with the Fundamental
Transaction; provided further, that if holders of Common Stock of the Company are not offered or paid any consideration in such Fundamental
Transaction, such holders of Common Stock will be deemed to have received shares of the Successor Entity (which Successor Entity may
be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means
the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the 100 day volatility
obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall
be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if
any, being offered in such Fundamental Transaction and (ii) the greater of (x) the last VWAP immediately prior to the public announcement
of such Fundamental Transaction and (y) the last VWAP immediately prior to the consummation of such Fundamental Transaction, (D) a remaining
option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination
Date, and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds
within five Trading Days of the Holder’s election (or, if later, on the effective date of the Fundamental Transaction). The Company
shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with
the provisions of this Section 3(a) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved
by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the
Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant that is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or
its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to
any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price that applies the exercise
price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to
such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and that is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction,
the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions
of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the
other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
f)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g)
Notice to Holder.
i
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company
shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii
Notice to Allow Exercise by Holder. If, while this Warrant is outstanding, (A) the Company declares a dividend (or any other
distribution in whatever form) on the Common Stock, (B) the Company declares a special nonrecurring cash dividend on, or a redemption
of, the Common Stock, (C) the Company authorizes the granting to all holders of shares of Common Stock rights or warrants to subscribe
for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company is required
in connection with a Fundamental Transaction, or (E) the Company authorizes the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email
address as it shall appear upon the Warrant Register of the Company, at least three calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the shares of Common Stock of record
to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure
to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required
to be specified in such notice; and provided, further, that no notice shall be required if the information is disseminated in a press
release or a document filed with the Commission. To the extent that any notice provided in this Warrant constitutes, or contains, material,
non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission
pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the
date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
iii
Voluntary Adjustment by the Company. Subject to the rules and regulations of the Trading Market on which the Common Stock
is then listed, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce
the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
Section 4.
Transfer of Warrant.
a)
Transferability. Subject to compliance with applicable securities law, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office
of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue
to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company on the date on which the Holder
delivers an assignment form to the Company assigning this Warrant in full. This Warrant, if properly assigned in accordance herewith,
may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b)
New Warrants. Subject to compliance with applicable securities law, this Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations
in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to
any transfer that may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges
shall be dated the Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
Section 5.
Miscellaneous.
a)
No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights,
dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly
set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant
to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) or 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to this Warrant Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of this Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant
or stock certificate.
c)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding
Trading Day.
d)
Authorized Shares.
The Company covenants that,
during the period this Warrant is outstanding, it will reserve from its authorized and unissued shares of Common Stock a sufficient number
of shares to provide for the issuance of the Warrant Shares underlying this Warrant. The Company further covenants that its issuance of
this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon
the exercise of this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares
may be issued and delivered as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading
Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares that may be issued and delivered upon
the exercise this Warrant will, upon exercise of this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as
waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company
will (i) not increase the par value of any shares of Common Stock above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action that
would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company
shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.
e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the provisions of the Purchase Agreement.
f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered
and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other
provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this
Warrant, and such failure results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
h)
Notices. Any notice, request or other document required or permitted to be given or delivered hereunder shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
i)
Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant
to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the
Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company
or by creditors of the Company.
j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to
assert the defense in any action for specific performance that a remedy at law would be adequate.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and
shall be enforceable by the Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holder.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be
deemed a part of this Warrant.
o)
Currency. All dollar amounts referred to in this Warrant are in United States Dollars (“U.S. Dollars”).
All amounts owing under this Warrant shall be paid in U.S. Dollars. All amounts denominated in other currencies shall be converted in
the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means,
in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Warrant, the U.S. Dollar exchange rate as published
in the Wall Street Journal (NY edition) on the relevant date of calculation.
********************
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has caused this
Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
CNS PHARMACEUTICALS, INC. |
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EXHIBIT A
NOTICE OF EXERCISE
TO: CNS PHARMACEUTICALS, INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if
any.
(2)
Payment shall take the form of (check applicable box):
[_]
in lawful money of the United States; or
[_]
if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in
subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless
exercise procedure set forth in subsection 2(c).
(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
The Warrant Shares shall be delivered to the following DWAC Account
Number:
[SIGNATURE OF HOLDER]
Name of Investing Entity:
______________________________________________________
Signature of Authorized Signatory of Investing Entity:
______________________________________________________
Name of Authorized Signatory:
______________________________________________________
Title of Authorized Signatory:
______________________________________________________
Date:
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required
information. Do not use this form to exercise the Warrant to purchase Warrant Shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all
rights evidenced thereby are hereby assigned to
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Address: |
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Phone Number: |
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Email Address: |
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Dated: _______________ __, ______ |
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Holder’s Signature: |
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Exhibit 5.1
![](https://www.sec.gov/Archives/edgar/data/1729427/000168316823008734/image_001.jpg) |
ArentFox Schiff LLP
1717 K Street NW
Washington, DC 20006
202.857.6000 main
202.857.6395 fax
afslaw.com
|
December 8, 2023
CNS Pharmaceuticals, Inc.
2100 West Loop South, Suite 900
Houston, Texas 77027
Ladies and Gentlemen:
We have acted as counsel to CNS Pharmaceuticals,
Inc., a Nevada corporation (the “Company”), in connection with the Registration Statement on Form S-1 (as amended,
the “Registration Statement”), filed by the Company on December 8, 2022 with the Securities and Exchange Commission
(the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”),
and the related prospectus contained therein (the “Prospectus”). The Registration Statement relates to the offering
by the Company of up to an aggregate of: (i) 3,809,524 shares (the “Shares”) of the Company’s common stock,
par value $0.001 per share (“Common Stock”), (ii) pre-funded warrants (the “Pre-Funded Warrants”)
to purchase up to 3,809,524 shares of Common Stock (the “Pre-Funded Warrant Shares”); and (iii) common
warrants (the “Common Warrants”) to purchase 3,809,524 shares of Common Stock (the “Common Warrant
Shares”). The Shares, the Pre-Funded Warrants, and the Common Warrants are collectively referred to herein as the “Securities.”
The terms “Shares,” “Pre-Funded Warrants,” “Pre-Funded Warrant Shares,” “Common Warrants,”
“Common Warrant Shares” and “Securities” shall include any additional securities registered by the Company pursuant
to Rule 462(b) under the Securities Act in connection with the offering contemplated by the Registration Statement. This opinion is being
furnished in connection with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act, and no opinion is expressed
herein as to any matter pertaining to the contents of the Registration Statement or related prospectus, other than as expressly stated
herein with respect to the issue of the Shares, the Pre-Funded Warrants, Pre-Funded Warrant Shares, the Common Warrants, and the Common
Warrant Shares. The Securities are being sold pursuant to a Placement Agent Agreement to be entered into by and among the Company, A.G.P./Alliance
Global Partners and Maxim Group LLC in the form most recently filed as an exhibit to the Registration Statement (the “Placement
Agent Agreement”).
In connection with our opinion, we have examined
the Registration Statement, including the exhibits thereto, the form of Pre-Funded Warrant, the form of Common Warrant and such other
documents, corporate records and instruments, and have examined such laws and regulations, as we have deemed necessary for the purposes
of this opinion. In making our examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity with the originals of all documents submitted to us as copies and the legal capacity of all natural
persons. As to matters of fact material to our opinions in this letter, we have relied on certificates and statements from officers and
other employees of the Company, public officials and other appropriate persons.
Based on the foregoing and subject to the qualifications
set forth below, we are of the opinion that:
1. The
Shares, when issued by the Company against payment therefor in the circumstances contemplated by the Prospectus, will have been duly authorized
for issuance by all necessary corporate action by the Company, and will be validly issued, fully paid and non-assessable;
![](https://www.sec.gov/Archives/edgar/data/1729427/000168316823008734/image_001.jpg) |
December 8, 2023
Page 2
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2. The
Pre-Funded Warrants, and the Common Warrants when issued by the Company against payment therefor in the circumstances contemplated by
the Prospectus, will have been duly authorized by all necessary corporate action of the Company and will constitute a valid and binding
agreement of the Company enforceable against the Company in accordance with its terms; and
3. The
Pre-Funded Warrant Shares initially issuable upon exercise of the Pre-Funded Warrants and the Common Warrant Shares initially issuable
upon exercise of the Common Warrants when issued by the Company against payment therefor (not less than par value) in the circumstances
contemplated by the Pre-Funded Warrants or Common Warrants, respectively, will have been duly authorized by all necessary corporate action
of the Company, and will be validly issued, fully paid and non-assessable.
The opinions set forth above are subject to the
following qualifications:
A. The
opinion expressed herein with respect to the legality, validity, binding nature and enforceability of the Pre-Funded Warrants, and Common
Warrants is subject to (i) applicable laws relating to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
other similar laws affecting creditors’ rights generally, whether now or hereafter in effect and (ii) general principles of
equity, including, without limitation, concepts of materiality, laches, reasonableness, good faith and fair dealing and the principles
regarding when injunctive or other equitable remedies will be available (regardless of whether considered in a proceeding at law or in
equity).
B. The
foregoing opinions are limited to the Chapter 78 of the Nevada Revised Statutes and the State of New York, and we express no opinion as
to the laws of any other jurisdiction.
The opinions expressed in this opinion letter
are as of the date of this opinion letter only and as to laws covered hereby only as they are in effect on that date, and we assume no
obligation to update or supplement such opinion to reflect any facts or circumstances that may come to our attention after that date or
any changes in law that may occur or become effective after that date. The opinions herein are limited to the matters expressly set forth
in this opinion letter, and no opinion or representation is given or may be inferred beyond the opinions expressly set forth in this opinion
letter.
We hereby consent to the filing of this opinion
with the Commission as an exhibit to the Registration Statement and to the use of this firm’s name under the caption “Legal
Matters” in the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder.
Sincerely,
/s/ ArentFox Schiff, LLP
ArentFox Schiff LLP
Exhibit 10.22
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of December [___], 2023, between CNS Pharmaceuticals, Inc., a Nevada corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act (as defined below),
the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I
DEFINITIONS
1.1.
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:
“Action”
shall have the meaning ascribed to such term in Section 3.1(m).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Applicable Laws”
shall have the meaning ascribed to such term in Section 3.1(qq).
“Auditor”
means Malone Bailey LLP.
“Authorizations”
shall have the meaning ascribed to such term in Section 3.1(qq).
“Beneficial Ownership
Limitation” shall have the meaning ascribed to such term in Section 2.1(a).
“BHCA”
shall have the meaning ascribed to such term in Section 3.1(nn).
“Board of Directors”
means the board of directors, or any authorized committee thereof, of the Company.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and
all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations
to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day following
the date hereof.
“Commission”
means the U.S. Securities and Exchange Commission.
“Common Stock”
means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Common Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Common Warrants.
“Common Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.3(a) hereof,
which warrants shall be exercisable immediately upon issuance and have terms equal to five (5) years, in substantially the form of Exhibit
B attached hereto.
“Company Counsel”
means ArentFox Schiff LLP, with offices located at 1301 Avenue of the Americas, 42nd Floor, New York, NY 10019 United States
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight
(New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by the Placement Agents, and (ii) if this Agreement is signed between midnight (New York City
time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by the Placement Agents.
“DVP” shall
have the meaning ascribed to such term in Section 2.1(a).
“DWAC”
shall have the meaning ascribed to such term in Section 2.1(a).
“EDGAR”
means the Commission’s Electronic Data Gathering, Analysis and Retrieval System.
“Environmental Law”
shall have the meaning ascribed to such term in Section 3.1(p).
“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(v).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock, options, restricted stock units, or other equity awards to employees, consultants, contractors,
advisors, officers, or directors of the Company pursuant to any equity incentive plan duly adopted for such purpose, by a majority of
the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for
such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued
hereunder and upon exercise of other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in
connection with stock splits or combinations) or to extend the term of such securities, (c) shares of Common Stock or securities exercisable
or exchangeable for or convertible into shares of Common Stock sold to employees, directors, consultants, or any of their affiliated entities
in the ordinary course of business or pursuant to agreements or in connection with commitments in place as of the date hereof and (d)
securities issued pursuant to acquisitions, joint ventures, strategic alliances, or other strategic transactions, including without limitation
collaborations or arrangements involving research and development or the sale or licensing of intellectual property, approved by a majority
of the disinterested directors of the Company, except for a transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in securities (for avoidance of doubt, securities issued to a venture
arm of a strategic investor shall be deemed an “Exempt Issuance”), provided in the case of each of clauses (c) and (d),
that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that
require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.12(a) herein.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
“Federal Reserve”
shall have the meaning ascribed to such term in Section 3.1(nn).
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(k).
“Hazardous Substances”
shall have the meaning ascribed to such term in Section 3.1(p).
“Intellectual Property
Rights” shall have the meaning ascribed to such term in Section 3.1(s).
“Issuer Free Writing
Prospectus” shall have the meaning ascribed to such term in Section 3.1(f)(ii).
“IT Systems”
shall have the meaning ascribed to such term in Section 3.1(pp).
“Lien”
means a lien, charge, mortgage, pledge, security interest, claim, right of first refusal, pre-emptive right, or other encumbrance of any
kind whatsoever.
“Lock-Up Agreements”
means the lock-up agreements, each dated as of the date hereof in substantially the form of Exhibit A.
“Material Adverse
Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits”
shall have the meaning assigned to such term in Section 3.1(r).
“Money Laundering
Laws” shall have the meaning assigned to such term in Section 3.1(oo).
“OFAC”
means the Office of Foreign Assets Control of the U.S. Treasury Department
“Offering”
means the offering of the Securities hereunder.
“Per Pre-Funded Warrant
Purchase Price” means the Per Share Purchase Price minus $0.001.
“Per Share Purchase
Price” equals $[___], subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date of this Agreement.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Personal Data”
shall have the meaning ascribed to such term in Section 3.1(pp).
“Placement Agency
Agreement” means that certain Placement Agency Agreement by and between the Company and the Placement Agents, dated as of the
date hereof.
“Placement Agents”
means A.G.P./Alliance Global Partners and Maxim Group LLC.
“Pre-Funded Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.
“Pre-Funded Warrants”
means, collectively, the pre-funded Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section
2.3(a) hereof, in substantially the form of Exhibit C attached hereto.
“Preliminary Prospectus”
means the preliminary prospectus included in the Registration Statement at the time the Registration Statement is declared effective.
“Pre-Settlement Period”
shall have the meaning ascribed to such term in Section 2.1(b).
“Pre-Settlement Securities”
shall have the meaning ascribed to such term in Section 2.1(b).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition) pending or, to the Company’s knowledge, threatened in writing against the Company, a Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal,
state, county, local or foreign).
“Prospectus”
means the final prospectus filed under the Registration Statement complying with Rule 424(b).
“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.9.
“Registration Statement”
means the effective registration statement with the Commission on Form S-1 (File No. 333-[___]), as amended, including all information,
documents and exhibits filed with or incorporated by reference into such registration statement, which registers the sale of the Securities
and includes any Rule 462(b) Registration Statement.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b) Registration
Statement” means any registration statement prepared by the Company registering additional Securities, which was filed with
the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission
pursuant to the Securities Act.
“Sanctions”
shall have the meaning ascribed to such term in Section 3.1(kk).
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(j).
“Securities”
means for each Purchaser, the Shares, the Warrants and the Warrant Shares purchased pursuant to this Agreement.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
locating and/or borrowing shares of Common Stock).
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares or Pre-Funded Warrants (in lieu of Shares) and Common Warrants
purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in U.S. dollars and in immediately available funds.
“Subsidiary”
and “Subsidiaries” means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable,
also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day”
means a day on which the Trading Market is open for trading.
“Trading Market”
means The Nasdaq Capital Market (or any nationally recognized successor thereto); provided, however, that in the event the Company’s
Common Stock is ever listed or traded on The Nasdaq Global Market, The Nasdaq Global Select Market, The New York Stock Exchange, NYSE
American, NYSE Arca, the OTC Bulletin Board, or the OTCQX or the OTCQB operated by the OTC Markets Group, Inc. (or any nationally recognized
successor to any of the foregoing), then the “Trading Market” shall mean such other market or exchange on which the Company’s
Common Stock is then listed or traded.
“Transaction Documents”
means this Agreement, the Warrants, and the Lock-Up Agreements, all exhibits and schedules thereto and hereto and any other documents
or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent”
means Continental Stock Transfer and Trust, the current transfer agent of the Company, with a mailing address of 1 State Street 30th Floor,
New York, NY 10004-1561, and any successor transfer agent of the Company.
“Variable Rate Transaction”
shall have the meaning ascribed to such term in Section 4.12(b).
“Warrants”
means, collectively, the Common Warrants and the Pre-Funded Warrants.
“Warrant Shares”
means, collectively, the Common Warrant Shares and the Pre-Funded Warrant Shares.
ARTICLE II
PURCHASE AND SALE
2.1.
Closing.
(a)
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees
to purchase, (i) the number of shares of Common Stock set forth under the heading “Subscription Amount” on the Purchaser’s
signature page hereto, at the Per Share Purchase Price, and (ii) Common Warrants exercisable for shares of Common Stock as calculated
pursuant to Section 2.2(a). Notwithstanding anything herein to the contrary, to the extent that a Purchaser determines, in its sole discretion,
that as a result of such Purchaser’s Subscription Amount, such Purchaser (together with such Purchaser’s Affiliates and any
Person acting as a group together with such Purchaser or any of such Purchaser’s Affiliates) would beneficially own shares of Common
Stock in excess of the Beneficial Ownership Limitation, the Purchaser may elect to purchase Pre-Funded Warrants in lieu of the Shares
as determined pursuant to Section 2.3(a). The “Beneficial Ownership Limitation” shall be 4.99% (or, at the election
of the Purchaser, 9.99%) of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of the Securities
on the Closing Date. In each case, the election to receive Pre-Funded Warrants is solely at the option of the Purchaser; provided, however,
the Purchaser shall receive Pre-Funded Warrants at the option of the Company if necessary to avoid a stockholder vote in connection with
the purchase.
Each Purchaser shall deliver
to the Company, via wire transfer, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by such Purchaser shall be made available for Delivery Versus Payment (“DVP”) settlement
with the Company or its designees. The Company shall deliver to each Purchaser its respective Shares and Warrants as determined pursuant
to Section 2.3(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur remotely via the exchange
of documents and signatures or such other location as the parties shall mutually agree. Unless otherwise directed by either of the Placement
Agents, settlement of the Shares shall occur via DVP (i.e., on the Closing Date, the Company shall issue the Shares registered
in the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s) at the Placement Agents identified
by each Purchaser; upon receipt of such Shares, the Placement Agents shall promptly electronically deliver such Shares to the applicable
Purchaser, and payment therefor shall be made by the Placement Agents (or its clearing firm) by wire transfer to the Company). Unless
otherwise directed by either of the Placement Agents, the Warrants shall be issued to each Purchaser in originally signed form.
(b)
Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of this Agreement by the Company
and an applicable Purchaser through, and including the time immediately prior to, the Closing (the “Pre-Settlement Period”),
such Purchaser sells to any Person all, or any portion, of any Securities to be issued hereunder to such Purchaser at the Closing (collectively,
the “Pre-Settlement Securities”), such Person shall, automatically hereunder (without any additional required actions
by such Purchaser or the Company), be deemed to be a Purchaser under this Agreement unconditionally bound to purchase, and the Company
shall be deemed unconditionally bound to sell, such Pre-Settlement Securities to such Purchaser at the Closing; provided, that the Company
shall not be required to deliver any Pre-Settlement Securities to such Person prior to the Company’s receipt of the purchase price
for such Pre-Settlement Securities hereunder; and provided, further, that the Company hereby acknowledges and agrees (i) that the foregoing
shall not constitute a representation or covenant by such Purchaser as to whether or not such Purchaser will elect to sell any Pre-Settlement
Securities during the Pre-Settlement Period and (ii) that any such decision to sell any shares of Common Stock by such Purchaser shall
solely be made at the time such Purchaser elects to effect any such sale, if any.
2.2.
Deliveries.
(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i)
this Agreement duly executed by the Company;
(ii)
a legal opinion of Company Counsel, in form and substance reasonably satisfactory to the Placement Agents;
(iii)
[Reserved.];
(iv)
the Company’s wire instructions, on Company letterhead and executed by the Company’s Chief Executive Officer or Chief
Financial Officer;
(v)
subject to the penultimate sentence of Section 2.1(a), a copy of the irrevocable instructions to the Transfer Agent instructing
the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (“DWAC”)
Shares equal to the number of shares of Common Stock set forth on such Purchaser’s signature page hereto, registered in the name
of such Purchaser;
(vi)
an originally signed Common Warrant registered in the name of such Purchaser to purchase up to the number of shares of Common Stock
equal to 100% of such Purchaser’s Shares plus the Prefunded Warrant Shares underlying such Purchaser’s Pre-Funded Warrant
on the date hereof, with an exercise price equal to $[___], subject to adjustment as set forth therein;
(vii)
if applicable, an originally signed Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number of shares
of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to Pre-Funded Warrants divided by the Per
Pre-Funded Warrant Purchase Price, with an exercise price equal to $0.001, subject to adjustment therein;
(viii)
the Preliminary Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act);
(ix)
Lock-up Agreements, in form and substance reasonably acceptable to the Placement Agents and the Purchasers, executed by each of
the Company’s executive officers, directors and stockholders beneficially owning 5% or more of the issued and outstanding shares
of Common Stock as of the date hereof.
(x)
an Officer’s Certificate, in form and substance reasonably satisfactory to the Placement Agents; and
(xi)
a Secretary’s Certificate, in form and substance reasonably satisfactory to the Placement Agents.
(b)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i)
this Agreement duly executed by such Purchaser; and
(ii)
such Purchaser’s Subscription Amount, which shall be made available for DVP settlement with the Company or its designees.
(c)
At the time this Agreement is executed, the Placement Agents shall have received from the Auditor a cold comfort letter containing
statements and information of the type customarily included in accountants’ comfort letters with respect to the financial statements
and certain financial information contained in the Registration Statement, the Preliminary Prospectus and the Prospectus, or any Issuer
Free Writing Prospectus, addressed to the Placement Agents and in form and substance satisfactory in all respects to the Placement Agents,
dated as of the date of this Agreement.
(d)
On the Closing Date, the Placement Agents shall have received from the Auditor a letter, dated as of the Closing Date, to the effect
that the Auditor reaffirms the statements made in the letter furnished pursuant to Section 2.2(c).
2.3.
Closing Conditions.
(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect (as defined below), in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers
contained herein (unless such representation or warranty is as of a specific date therein in which case they shall be accurate as of such
date);
(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have
been performed; and
(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b)
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being
met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein
(unless such representation or warranty is as of a specific date therein in which case they shall be accurate as of such date);
(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed;
(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Trading
Market on which it is currently listed, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by U.S. or New York State authorities,
nor shall there have occurred after the date of this Agreement any material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case,
in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1.
Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to
each Purchaser in addition to the information included in the Disclosure Schedules attached hereto, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation or warranty made herein to the extent of the disclosure contained in the corresponding
section of the Disclosure Schedules:
(a)
Subsidiaries. All of the direct and indirect subsidiaries of the Company (each, a “Subsidiary”, and collectively,
the “Subsidiaries”) are as set forth on Schedule 3.1(a). The Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital
stock or equity interests, as applicable, of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive
rights. There are no outstanding options, warrants, scrips or rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right
to subscribe for or acquire, any capital stock or equity interests, as applicable, of any Subsidiary, or contracts, commitments, understandings
or arrangements by which any Subsidiary is or may become bound to issue capital stock or equity interests, as applicable. If the Company
has no Subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b)
Organization and Qualification. Each of the Company and the Subsidiaries has been duly organized and validly exists as a
corporation, limited partnership or company in good standing (or the foreign equivalent thereof, if any) under the laws of its jurisdiction
of organization. The Company and each of the Subsidiaries is duly qualified to do business and is in good standing as a foreign or extra-provincial
corporation, partnership, company or limited liability company in each jurisdiction in which the character or location of its properties
(owned, leased or licensed) or the nature or conduct of its business makes such qualification necessary, except for those failures to
be so qualified or in good standing which (individually and in the aggregate) would not have a Material Adverse Effect. No Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or charter documents. The term “Material Adverse Effect”
means a material adverse effect on (i) the business, general affairs, management, condition (financial or otherwise), results of operations,
stockholders’ equity, assets, properties or prospects of the Company and the Subsidiaries, taken as a whole, (ii) the legality,
validity or enforceability of any Transaction Document, or (iii) the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document.
(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required Approvals (as defined below). This Agreement and each other Transaction
Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by general
equitable principles and laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and
(iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or
articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties
or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument
(evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.
(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state (including state blue sky law), local or other
governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.5 of this Agreement, (ii) the filing with the Commission of the Prospectus,
and (iii) notices and/or application(s) to and approvals by each applicable Trading Market for the listing of the Shares and Warrant Shares
for trading thereon in the time and manner required thereby, and (iv) filings required by the Financial Industry Regulatory Authority
(collectively, the “Required Approvals”).
(f)
Issuance of the Shares and Warrant Shares; Qualification; Registration.
(i)
The Shares and Warrant Shares are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company, except for restrictions
set forth in the Transaction Documents. The Warrants are duly authorized and, when issued in accordance with this Agreement, will be binding
obligations of the Company under the law of the jurisdiction governing the Warrants, duly and validly issued, and free and clear of all
Liens imposed by the Company, except for restrictions set forth in the Transaction Documents. The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. The Securities are not
and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by
the Company.
(ii)
The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which
Registration Statement was declared effective on [___], including the Preliminary Prospectus, and such amendments and supplements thereto
as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop
order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Preliminary
Prospectus or the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge
of the Company, are threatened by the Commission. The Company shall file the Preliminary Prospectus and the Prospectus with the Commission
pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective as determined under the Securities
Act, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform
in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and
the Prospectus and any amendments or supplements thereto, at the time the Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities
Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not misleading.
Any “issuer free writing
prospectus” (as defined in Rule 433 under the Securities Act) relating to the Securities is hereafter referred to as an “Issuer
Free Writing Prospectus”. Any reference herein to the Preliminary Prospectus and the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein as of the date of filing thereof; and any reference herein to any “amendment”
or “supplement” with respect to any of the Preliminary Prospectus and the Prospectus shall be deemed to refer to and include
(i) the filing of any document with the Commission incorporated or deemed to be incorporated therein by reference after the date of filing
of such Preliminary Prospectus or Prospectus and (ii) any such document so filed.
All references in this Agreement
to the Registration Statement, the Preliminary Prospectus, the Prospectus, or any Issuer Free Writing Prospectus, or any amendments or
supplements to any of the foregoing, shall be deemed to include any copy thereof filed with the Commission on EDGAR.
(g)
Securities Act Compliance. The Registration Statement complies, and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus will comply, in all material respects, with the applicable provisions of the Securities
Act. Each part of the Registration Statement, when such part became effective, did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus,
as of its filing date, and any amendment thereof or supplement thereto, did not and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(h)
No Stop Orders. No order preventing or suspending the use of the Registration Statement, the Preliminary Prospectus or any
Issuer Free Writing Prospectus has been issued by the Commission.
(i)
Capitalization. The equity capitalization of the Company is as set forth in the Registration Statement and the SEC Reports
as of the dates indicated therein. All of the issued and outstanding shares of Common Stock are fully paid and non-assessable and have
been duly and validly authorized and issued, in compliance with all applicable federal and state securities laws and not in violation
of or subject to any preemptive or similar right that entitles any person to acquire from the Company any Common Stock or other security
of the Company or any security convertible into, or exercisable or exchangeable for, Common Stock or any other such security, except for
such rights as may have been fully satisfied or waived prior to the date hereof. Except as set forth on Schedule 3.1(i), or as
a result of the issuance and sale of the Securities, the Company has not issued any capital stock since its most recently filed SEC Report.
Except as set forth on Schedule 3.1(i), or as a result of the issuance and sale of the Securities, the Company has no outstanding
options, warrants, scrips or rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Common
Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional Common
Stock or Common Stock Equivalents and no Person has any right of first refusal, pre-emptive right, right of participation, or any similar
right to participate in the transactions contemplated by the Transaction Documents, except for such rights as may have been fully satisfied
or waived prior to the date hereof. Except as set forth on Schedule 3.1(i), the issuance and sale of the Securities will not obligate
the Company to issue Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding
securities or instruments of the Company with any provision that adjusts the exercise, conversion, exchange or reset price of such security
or instrument upon an issuance of securities by the Company (other than in connection with a stock split, recapitalization, or similar
transaction). There are no outstanding securities or instruments of the Company that contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem an equity security
of the Company. The Company does not have any stock appreciation rights or “phantom share” plans or agreements or any similar
plan or agreement. All of the outstanding shares of the Company are duly authorized, validly issued, fully paid and non-assessable, have
been issued in compliance with all federal and state securities laws where applicable, and none of such outstanding shares was issued
in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals, no
further approval or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of Securities.
Except as set forth in the SEC Reports, there are no stockholders agreements, voting agreements or other similar agreements with respect
to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the
Company’s stockholders.
(j)
Reports. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two (2) years preceding
the date hereof (or such shorter period as the Company was required by law or regulation to file such materials) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, together with the Preliminary Prospectus and the Prospectus,
being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension (or
waiver from the Commission) of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As
of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act.
(k)
Financial Statements. The consolidated financial statements of the Company, including the notes thereto, included or incorporated
by reference in the Registration Statement and the Prospectus comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have
been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) applied on
a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto
and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects
the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations
and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(l)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest consolidated financial statements
included in or incorporated by reference into the Registration Statement, the Preliminary Prospectus and the Prospectus, except as set
forth ion Schedule 3.1(l), (i) there has been no event, occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) neither the Company nor any Subsidiary has incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission,
(iii) the Company has not altered its method of accounting in any material respect, (iv) the Company has not declared or made any dividend
or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any
shares of its capital stock and (v) the Company has not issued any equity securities to any executive officer, director or Affiliate,
except pursuant to existing Company stock option or omnibus incentive plans. The Company does not have pending before the Commission any
request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement, no event,
liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect
to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made
that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.
(m)
Litigation. Except as set forth in on Schedule 3.1(m), there is no action, suit, inquiry, notice of violation, Proceeding
or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) that (i) adversely affects or challenges the legality, validity
or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect. Except as set forth on Schedule 3.1(m), neither the Company nor any Subsidiary,
nor any director or executive officer thereof, is or has been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty, which could result in a Material Adverse Effect. There
has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving
the Company or any current or former director or executive officer of the Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act.
(n)
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the
Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that
their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state,
local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and
hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(o)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters, except in each case of (i), (ii) and (iii) as could not
have or reasonably be expected to result in a Material Adverse Effect.
(p)
Environmental Law. There has been no storage, generation, transportation, handling, use, treatment, disposal, discharge,
emission, contamination, release or other activity involving any kind of hazardous, toxic or other wastes, pollutants, contaminants, petroleum
products or other hazardous or toxic substances, chemicals or materials (“Hazardous Substances”) by, due to, on behalf
of, or caused by the Company or any Subsidiary (or, to the Company’s knowledge, any other entity for whose acts or omissions the
Company is or may be liable) upon any property now or previously owned, operated, used or leased by the Company or any Subsidiary, or
upon any other property, that would be a violation of or give rise to any liability under any applicable law, rule, regulation, order,
judgment, decree or permit, common law provision or other legally binding standard relating to pollution or protection of human health
and the environment (“Environmental Law”), except for violations and liabilities which, individually or in the aggregate,
would not have a Material Adverse Effect. There has been no disposal, discharge, emission contamination or other release of any kind at,
onto or from any such property or into the environment surrounding any such property of any Hazardous Substances with respect to which
the Company or any Subsidiary has knowledge, except as would not, individually or in the aggregate, have a Material Adverse Effect. There
is no pending or, to the best of the Company’s knowledge, threatened administrative, regulatory or judicial action, claim or notice
of noncompliance or violation, investigation or proceedings relating to any Environmental Law against the Company or any Subsidiary, except
as would not, individually or in the aggregate, have a Material Adverse Effect. To the best of the Company’s knowledge, no property
of the Company or any Subsidiary is subject to any Lien under any Environmental Law, except as would not, individually or in the aggregate,
have a Material Adverse Effect. Except as disclosed in the Prospectus, neither the Company nor any Subsidiary is subject to any order,
decree, agreement or other individualized legal requirement related to any Environmental Law, that, in any case (individually or in the
aggregate), would have a Material Adverse Effect. The Company and each Subsidiary has all permits, authorizations and approvals required
under any applicable Environmental Laws and are each in compliance with their requirements, except as would not, individually or in the
aggregate, have a Material Adverse Effect. In the ordinary course of its business, the Company periodically reviews the effect of Environmental
Laws on the business, operations and properties of the Company and the Subsidiaries and identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating expenditures required for clean-up, closure or remediation of properties
or compliance with Environmental Laws, or any permit, license or approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, have a Material Adverse Effect.
(q)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities currently held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material
respects.
(r)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the
SEC Reports, except where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect
(“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any Material Permit.
(s)
Intellectual Property. Except as set forth in the Registration Statement, the Preliminary Prospectus and the Prospectus,
to the Company’s knowledge, the Company and the Subsidiaries have, or have rights to use (or can acquire on reasonable terms), all
patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses
and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses
as described in the Registration Statement, the Preliminary Prospectus and the Prospectus and which the failure to so have could reasonably
be expected to have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither
the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement
except as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since
the date of the latest financial statements included within or incorporated by reference into the Registration Statement, the Preliminary
Prospectus and the Prospectus, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate
or infringe upon the rights of any Person or is aware of any facts which would form a reasonable basis for any such claim, except as could
not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. None of the Intellectual Property Rights used by the Company or any of its Subsidiaries in their respective businesses has been
obtained or is being used by the Company or such Subsidiary in violation of any contractual obligation binding on the Company or any of
its subsidiaries in violation of the rights of any person. The Company and its subsidiaries have taken all reasonable steps in accordance
with normal industry practice to protect and maintain the Intellectual Property Rights including, without limitation, the execution of
appropriate nondisclosure and invention assignment agreements. The consummation of the transactions contemplated by this Agreement will
not result in the loss or impairment of, or payment of, and additional amounts with respect to, nor require the consent of, any other
person regarding the Company’s or any of its subsidiaries’ right to own or use any of the Intellectual Property Rights as
owned or used in the conduct of such party’s business as currently conducted. To the knowledge of the Company and its Subsidiaries,
no employee of any of the Company or its subsidiaries is the subject of any pending claim or proceeding involving a violation of any term
of any employment contract, invention disclosure agreement, patent disclosure agreement, noncompetition agreement, non-solicitation agreement,
nondisclosure agreement or restrictive covenant to or with a former employer, where the basis of such violation relates to such employee’s
employment with the Company or its subsidiaries or actions undertaken by the employee while employed with the Company or its Subsidiaries.
The Company has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual Property
Rights. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property
Rights that are necessary to conduct its business.
(t)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither
the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant
increase in cost.
(u)
Transactions With Affiliates and Employees. Except as set forth on Schedule 3.1(u), none of the executive officers or directors
of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently
a party to any transaction with the Company or any Subsidiary (other than for services as employees, executive officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or
from any executive officer, director or such employee or, to the knowledge of the Company, any entity in which any executive officer,
director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each
case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company or a Subsidiary and (iii) other employee benefits, including stock option agreements under any stock
option or omnibus incentive plan of the Company.
(v)
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with all applicable requirements
of the Sarbanes-Oxley Act of 2002, as amended, except as disclosed in the SEC Reports, the Registration Statement, the Preliminary Prospectus
and the Prospectus. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability,
(iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to
any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated
the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of applicable dates specified under
the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report
under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Except as set forth in the Registration Statement, the Preliminary Prospectus and the
Prospectus, since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined
in the Exchange Act) of the Company and the Subsidiaries that have materially affected, or is reasonably likely to materially affect,
the internal control over financial reporting of the Company and the Subsidiaries.
(w)
Certain Fees. Except for fees payable to the Placement Agents, no brokerage or finder’s fees or commissions are or
will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. Other than to Persons engaged by any
Purchaser, the Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction
Documents.
(x)
Investment Company. The Company is not, and immediately after receipt of payment for the Securities, will not be required
to register as an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall
conduct its business in a manner so that it will not be required to register as an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(y)
Registration Rights. Except as set forth in the SEC Reports, the Registration Statement, the Preliminary Prospectus and
the Prospectus, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary that has not been satisfied or waived prior to the date hereof.
(z)
Listing and Maintenance Requirements. The Company is subject to the reporting requirements of Section 13 of the Exchange
Act and files periodic reports with the Commission; the Common Stock is registered with the Commission under Section 12(b) of the Exchange
Act and the Company is not in breach of any filing or other requirements under the Exchange Act. The Company has not received any notice
from that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the Registration Statement,
the Preliminary Prospectus and the Prospectus, the Company has not, in the 12 months preceding the date hereof, received notice from any
Trading Market on which the Common Stock are or have been listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Registration Statement, the Preliminary
Prospectus and the Prospectus, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be,
in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through
The Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to The Depository
Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(aa)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its jurisdiction of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
(bb)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their
agents or counsel with any information that it believes constitutes or might constitute material, non-public information that is not otherwise
disclosed in the Preliminary Prospectus or the Prospectus. The Company understands and confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company
to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including
pursuant to the SEC Reports and the Disclosure Schedules to this Agreement, is true and correct in all material respects and does not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the
twelve (12) months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section
3.2 hereof.
(cc)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act, or (ii) except as set forth in
the SEC Reports, any applicable stockholder approval provisions of any Trading Market on which any of the securities of the Company are
listed or designated.
(dd)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on
its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii)
the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or
circumstances that lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws
of any jurisdiction within one (1) year from the Closing Date. All outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments, is set forth on Schedule 3.1(dd). For the purposes of this
Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other
than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
(ee)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all U.S. federal, state and local income and
all foreign tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other
governmental assessments and charges, fines or penalties that are material in amount, shown or determined to be due on such returns, reports
and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such
claim.
(ff)
Foreign Corrupt Practices; Criminal Acts. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or
any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any
funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any
person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of FCPA.
(gg)
Accountants. The Company’s independent registered public accounting firm is as set forth in the Prospectus. To the
knowledge and belief of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act.
(hh)
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions
contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on
the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(ii)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 3.2(e) and 4.15 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified
term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales
or “derivative” transactions, before or after the closing of this or future securities offering transactions, may negatively
impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the
Common Stock, and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party
in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage
in hedging activities (in material compliance with applicable laws) at various times during the period that the Securities are outstanding,
and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at
and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities
do not constitute a breach of any of the Transaction Documents.
(jj)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf (other than the Placement
Agents, as to which no representation is made) has, (i) taken, directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses
(ii) and (iii), compensation paid to the Placement Agents pursuant to the Placement Agency Agreement.
(kk)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any “Sanctions,” which
shall include but are not limited to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”) and the Company will not, directly or indirectly, use the proceeds of the Offering hereunder, or lend, contribute
or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any Sanctions, including but not limited to U.S. sanctions administered by OFAC.
(ll)
Stock Option and Omnibus Incentive Plans. Each stock option granted by the Company under the Company’s stock option
or omnibus incentive plan, or as an inducement grant outside of such plan, was granted (i) in accordance with the terms of such plan,
or under its terms, respectively, and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date
such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option
or omnibus incentive plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or
practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or
other public announcement of material information regarding the Company or the Subsidiaries or their financial results or prospects.
(mm)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within
the meaning of Section 897 of the U.S. Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.
(nn)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither the Company nor any of its Subsidiaries owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation
by the Federal Reserve.
(oo)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively,
the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.
(pp)
Information Technology. The Company’s, the Subsidiaries’ information technology assets and equipment, computers,
systems, networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) operate and
perform in all material respects as required in connection with the operation of the business of the Company and the Subsidiaries as currently
conducted. The Company, the Subsidiaries maintain commercially reasonable controls, policies, procedures, and safeguards to maintain and
protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and
all personal, personally identifiable, sensitive, confidential or regulated data (“Personal Data”) processed and stored
thereon, and to the knowledge of the Company, there have been no breaches, incidents, violations, outages, compromises or unauthorized
uses of or accesses to same, except as would not reasonably be expected to have a Material Adverse Effect. The Company and the Subsidiaries
have implemented backup and disaster recovery technology consistent with industry standards and practices, and are presently in compliance
in all material respects with all applicable laws or statutes and all applicable judgments, orders, rules and regulations of any court
or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security
of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation
or modification, except for any such noncompliance that would not reasonably be expected to have a Material Adverse Effect.
(qq)
Regulatory. Except as described on Schedule 3.1 (qq), the Company and its Subsidiaries (i) are and at all times have been
in material compliance with all statutes, rules and regulations applicable to the ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, advertising, labeling, promotion, sale, offer for sale, storage, import, export or disposal
of any product manufactured or distributed by the Company including, without limitation the Federal Food, Drug and Cosmetic Act (21 U.S.C.
§ 301 et seq.), the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Health Insurance Portability and Accountability
Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and the Patient Protection
and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, the regulations
promulgated pursuant to such laws, and any successor government programs and comparable state laws, regulations relating to Good Clinical
Practices and Good Laboratory Practices and all other local, state, federal, national, supranational and foreign laws, manual provisions,
policies and administrative guidance relating to the regulation of the Company (collectively, the “Applicable Laws”);
(ii) have not received any notice from any court or arbitrator or governmental or regulatory authority or third party alleging or asserting
noncompliance with any Applicable Laws or any licenses, exemptions, certificates, approvals, clearances, authorizations, permits, registrations
and supplements or amendments thereto required by any such Applicable Laws (“Authorizations”); (iii) possess all material
Authorizations and such Authorizations are valid and in full force and effect and are not in violation of any term of any such Authorizations;
(iv) have not received written notice of any claim, action, suit, proceeding, hearing, enforcement, investigation arbitration or other
action from any court or arbitrator or governmental or regulatory authority or third party alleging that any product operation or activity
is in violation of any Applicable Laws or Authorizations nor is any such claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action threatened; (v) have not received any written notice that any court or arbitrator or governmental or regulatory
authority has taken, is taking or intends to take, action to limit, suspend, materially modify or revoke any Authorizations nor is any
such limitation, suspension, modification or revocation threatened; (vi) have filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Applicable Laws
or Authorizations and that all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or
amendments were complete and accurate on the date filed (or were corrected or supplemented by a subsequent submission); and (vii) are
not a party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar agreements with
or imposed by any governmental or regulatory authority.
(rr)
Promotional Stock Activities. Neither the Company nor any Subsidiary of the Company and none of their respective officers,
directors, managers, affiliates or agents have engaged in any stock promotional activity that could give rise to a complaint, inquiry,
or trading suspension by the SEC alleging: (i) a violation of the anti-fraud provisions of the federal securities laws; (ii) violations
of the anti-touting provisions; (iii) improper “gun-jumping”; or (iv) promotion without proper disclosure of compensation.
3.2.
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which
case they shall be accurate as of such date):
(a)
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which
it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof or thereof,
will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except:
(i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally; (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited
by applicable law.
(b)
Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct
or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this
representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or
otherwise in compliance with applicable federal and state securities laws).
(c)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an
investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
(d)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto) and the SEC Reports, the Registration Statement and the Preliminary Prospectus, and has been afforded:
(i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning
the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information
about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such
Purchaser acknowledges and agrees that neither of the Placement Agents, nor any Affiliate of the Placement Agents, has provided such Purchaser
with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither of the Placement
Agents nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agents
and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided
to it. In connection with the issuance of the Securities to such Purchaser, neither of the Placement Agents, nor any of its Affiliates
has acted as a financial advisor or fiduciary to such Purchaser.
(e)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser
has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of
such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion
of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other
than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or a prohibition
of, any actions with respect to the borrowing of, arrangement to borrow, identification of the availability of, and/or securing of, securities
of the Company in order for such Purchaser (or its broker or other financial representative) to effect Short Sales or similar transactions
in the future.
(f)
No Voting Agreements. The Purchaser is not a party to any agreement or arrangement, whether written or oral, between the
Purchaser and any other Purchaser and any of the Company’s stockholders as of the date hereof, regulating the management of the
Company, the stockholders’ rights in the Company, the transfer of shares in the Company, including any voting agreements, stockholder
agreements or any other similar agreement, even if its title is different or has any other relations or agreements with any of the Company’s
stockholders, directors or officers.
(g)
Brokers. Except as set forth in the Prospectus, no agent, broker, investment banker, person or firm acting in a similar
capacity on behalf of or under the authority of the Purchaser is or will be entitled to any broker’s or finder’s fee or any
other commission or similar fee, directly or indirectly, for which the Company or any of its Affiliates after the Closing could have any
liabilities in connection with this Agreement, any of the transactions contemplated by this Agreement, or on account of any action taken
by the Purchaser in connection with the transactions contemplated by this Agreement.
(h)
Independent Advice. Each Purchaser understands that nothing in this Agreement or any other materials presented by or on
behalf of the Company to the Purchaser in connection with the purchase of the Securities constitutes legal, tax or investment advice.
The Company acknowledges and
agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty, or preclude any actions, except as set forth in this Agreement, with respect to locating or borrowing shares
in order to effect Short Sales or similar transactions in the future.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1.
Legends. The Shares and, if all or any portion of a Warrant is exercised at a time when there is an effective registration
statement to cover the issuance of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares shall be
issued free of all restrictive legends. If at any time following the date hereof the Registration Statement (or any subsequent registration
statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the initial sale by
the Company of the Shares, the Warrants or the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing
that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement
is effective again and available for the initial sale by the Company of the Shares, the Warrants or the Warrant Shares (it being understood
and agreed that the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Shares, the Warrants
or the Warrant Shares in compliance with applicable federal and state securities laws). The Company shall use commercially reasonable
efforts to keep a registration statement (including the Registration Statement) registering the issuance of the Warrant Shares effective
during the term of the Warrants.
4.2.
[Reserved.]
4.3.
Furnishing of Information; Public Information. Until the earliest of the time that (i) no Purchaser owns Securities and
(ii) the Common Warrants have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g)
of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the Exchange Act, even if the Company is not then subject to the
reporting requirements of the Exchange Act, except in the event that the Company consummates (in each case on or after the date as of
which the Purchasers may sell all of their Securities without restriction or limitation pursuant to Rule 144) (a) any transaction or series
of related transactions as a result of which any Person (together with its Affiliates) acquires then outstanding securities of the Company
representing more than fifty percent (50%) of the voting control of the Company; (b) a merger or reorganization of the Company with one
or more other entities in which the Company is not the surviving entity; or (c) a sale of all or substantially all of the assets of the
Company, where the consummation of such transaction results in the Company no longer subject to the reporting requirements of the Exchange
Act.
4.4.
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market such that it would require stockholder approval prior to the closing of such other
transaction unless stockholder approval is obtained before the closing of such subsequent transaction.
4.5.
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time issue a press release disclosing the
material terms of the transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents
as exhibits thereto as deemed by Company Counsel, with the Commission within the time required by the Exchange Act. From and after the
issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company or any of the Subsidiaries or Affiliates, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon
the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company, any of the Subsidiaries or any of their respective officers, directors, agents,
employees or Affiliates, including without limitation, the Placement Agents, on the one hand, and any of the Purchasers or any of their
Affiliates on the other hand, with respect to the transactions contemplated hereby shall terminate and be of no further force or effect.
The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without
the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser,
with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure
is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement
or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name
of any Purchaser in any filing with the Commission or any regulatory agency or applicable Trading Market, without the prior written consent
of such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with
the Commission and (b) to the extent such disclosure is required by applicable law or Trading Market regulations, in which case the Company
shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
4.6.
Stockholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the
Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities
under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.7.
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, which shall be disclosed pursuant to Section 4.5, the Company covenants and agrees that neither it, nor any other
Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company
reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt
of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company
delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and
agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of the Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to the Company, any of the Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser
shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously with the delivery of such
notice file such material non-public information on with the Commission pursuant to a Current Report on Form 8-K. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4.8.
Use of Proceeds. Except as set forth in the Preliminary Prospectus or the Prospectus, the Company shall use the net proceeds
from the sale of the Securities hereunder for working capital and general corporate purposes and shall not use such proceeds: (a) for
the satisfaction of any portion of the Company’s debt (other than payment of trade payables and accrued liabilities in the ordinary
course of the Company’s business and repayment of obligations outstanding as of the date of this Agreement and consistent with prior
practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation,
or (d) in violation of FCPA or OFAC regulations.
4.9.
Indemnification of Purchasers. Subject to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser
and its directors, officers, stockholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur
caused by or based upon (a) any material breach of any of the representations or warranties made by the Company in this Agreement or in
the other Transaction Documents (b) any action instituted against a Purchaser Party in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (except to the extent such action is solely based upon a material breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may
have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser
Party that is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent
that (x) the employment thereof has been specifically authorized by the Company in writing, (y) the Company has failed after a reasonable
period of time to assume such defense and to employ counsel or (z) in such action there is, in the reasonable opinion of counsel to the
applicable Purchaser Party, a material conflict on any material issue between the position of the Company and the position of such Purchaser
Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement (1) for any settlement by a Purchaser Party effected without
the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (2) to the extent, but only to the
extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required
by this Section 4.9 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and
when bills are received or are incurred; provided, that if any Purchaser Party is finally judicially determined not to be entitled to
indemnification or payment under this Section 4.9, such Purchaser Party shall promptly reimburse the Company for any payments that are
advanced under this sentence. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of
any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.10.
Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and
keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the
Company to issue the Shares pursuant to this Agreement and the Warrant Shares pursuant to any exercise of the Warrants.
4.11.
Listing of Common Stock. For as long as any Warrants are outstanding and exercisable, the Company hereby agrees to use commercially
reasonable best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed,
and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Market
and promptly secure the listing of all of the Shares and Warrant Shares on such Trading Market to the extent required by the rules of
such Trading Market; provided, however, that the Purchasers acknowledge that the Common Stock is currently subject to delisting by the
Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will
then include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of
the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take
all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. For so long as the Company
maintains a listing or quotation of the Common Stock on a Trading Market, the Company agrees to use commercially reasonable efforts to
maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing
corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing
corporation in connection with such electronic transfer.
4.12.
Subsequent Equity Sales.
(a) From the date hereof
until sixty (60) days after the Closing Date, except as permitted pursuant to Section 4.12(b), neither the Company nor any Subsidiary
shall (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common
Stock Equivalents or (ii) file any registration statement or amendment or supplement thereto, other than filing the final Prospectus
and a registration statement on Form S-8 in connection with any employee benefit plan.
(b) From the date hereof until
the one hundred eighty (180) days after the Closing Date, the Company shall be prohibited from effecting or entering into an agreement
to effect any issuance by the Company or any of its Subsidiaries of shares of Common Stock or Common Stock Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the
Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right
to receive additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is
based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial issuance of such
debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after
the initial issuance of such debt or equity security (other than in connection with a stock split or stock dividend or similar event)
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for
the Common Stock, or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of
credit or an “at-the-market offering”, whereby the Company may issue securities at a future determined price regardless of
whether shares pursuant to such agreement have actually been issued and regardless of whether such agreement is subsequently cancelled.
Notwithstanding the foregoing, commencing on the Closing Date and ending on the 90th day following the Closing Date, the Company will
be permitted to make sales under its Capital on Demand™ Sales Agreement with JonesTrading Institutional Services LLC and Brookline
Capital Markets, a division of Arcadia Securities, LLC, dated February 12, 2021 (“ATM Agreement”) if such sales are made at
prices of not less than 150% of the Per Share Purchase Price, and for the period commencing on the 91st day following Closing Date and
ending on the 180th day following the Closing Date, the Company will be permitted to make sales under the ATM Agreement if such sales
are made at prices of not less than 125% of the Per Share Purchase Price.
(c)
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction shall be an Exempt Issuance.
4.13.
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration
is also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision constitutes a separate
right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the
Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Shares or otherwise.
4.14.
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at
such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.5. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.5,
such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in this Agreement,
including the schedules hereto. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary,
the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will
not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described in Section 4.5, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.5 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the
Company to the Company or the Subsidiaries after the issuance of the initial press release as described in Section 4.5. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate
portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this
Agreement.
4.15.
Exercise Procedures. The form of Notice of Exercise included in the Warrants sets forth the totality of the procedures required
of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information, or instructions shall be required
of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required,
nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to
exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms,
conditions, and time periods set forth in the Transaction Documents.
4.16.
Capital Changes. From the date hereof until ninety (90) days after the Closing Date, the Company shall not undertake a reverse
or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority
in interest of the Securities, except for any reverse or forward stock split or reclassification previously approved by the Company’s
stockholders and expressly contemplated by the SEC Filings.
4.17.
Lock-Up Agreements. The Company shall not amend, modify, waive or terminate any provision of any of the Lock-Up Agreements
except to extend the term of the lock-up period and shall enforce the provisions of each Lock-Up Agreement in accordance with its terms.
If any party to a Lock-Up Agreement breaches any provision of a Lock-Up Agreement, the Company shall promptly use its best efforts to
seek specific performance of the terms of such Lock-Up Agreement.
ARTICLE V
MISCELLANEOUS
5.1.
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties,
if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no
such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2.
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise
notice delivered by a Purchaser). The Company shall pay any issuance, stamp or documentary taxes (other than transfer taxes) or charges
imposed by any governmental body, agency or official (other than income taxes) by reason of the issuance of Shares to the Purchasers.
5.3.
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Preliminary Prospectus,
and the Prospectus contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged
into such documents, exhibits and schedules.
5.4.
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication
is delivered via email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New
York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered
via email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later
than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The
address for such notices and communications shall be as set forth on the signature pages attached hereto.
5.5.
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Company and Purchasers that purchased at least 50.1% in interest of the Securities
based on the initial Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately
and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or at least 50.1%
in interest of such group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver
of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder
in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely
affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require
the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding
upon each Purchaser and holder of Securities and the Company. To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.6.
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed
to limit or affect any of the provisions hereof.
5.7.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8.
Third-Party Beneficiaries. The Placement Agents shall be the third-party beneficiary of the representations and warranties
of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9 and this Section 5.8.
5.9.
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, stockholders, partners, members, employees or agents) shall be commenced exclusively in the state and
federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted
by law. If any party shall commence an suit, action or proceeding to enforce any provisions of the Transaction Documents, then, in addition
to the obligations of the Company under Section 4.9, the prevailing party in such suit, action or proceeding shall be reimbursed by the
non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such suit, action or proceeding.
5.10.
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities
for the applicable statue of limitations.
5.11.
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery
of a “.pdf” format data file, by other electronic signing created on an electronic platform (such as DocuSign) or by digital
signing (such as Adobe Sign), such signature shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such “.pdf” or other electronic or digital signature page were
an original thereof.
5.12.
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by
such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
5.13.
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights provided, however, that in the case of a rescission of an exercise
of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice
concurrently (if such shares were delivered to the applicable Purchaser) with the return to such Purchaser of the aggregate exercise price
paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s
Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).
5.14.
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to
the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also
pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15.
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in
the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
5.16.
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent
of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.17.
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in
any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers
as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any
way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this
Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional
party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation
of the Transaction Documents. For reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to
communicate with the Company through Sullivan & Worcester LLP, the legal counsel of the Placement Agents, and Sullivan & Worcester
LLP, as legal counsel of the Placement Agents, does not represent any of the Purchasers and only represents the Placement Agents. The
Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and
the Purchasers collectively and not between and among the Purchasers.
5.18.
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the
Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and
other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.
5.19.
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding
Trading Day.
5.20.
Currency. Unless otherwise stated, all dollar amounts and references to “$” in this Agreement refer to the lawful
currency of the United States.
5.21.
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to
revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition,
each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement.
5.22.
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
CNS PHARMACEUTICALS, INC. |
|
|
|
By: |
|
|
Name: |
John Climaco |
|
Title: |
Chief Executive Officer, President, and Director |
|
Address for Notice:
[___]
Email: [___]
With a copy to (which shall not constitute notice):
[___]
Email: [___]
[PURCHASER SIGNATURE PAGES TO VCNX
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser:
Signature of Authorized Signatory of Purchaser:  
Name of Authorized Signatory:
Title of Authorized Signatory:
Email Address of Authorized Signatory:
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser (if not same as address
for notice):
DWAC for Common Stock:
Subscription Amount: $
Shares of Common Stock:
Pre-Funded Warrant Shares: ___________ Beneficial Ownership Blocker
☐ 4.99% or ☐
9.99%
Common Warrant Shares: _____________ Beneficial Ownership Blocker ☐
4.99% or ☐ 9.99%
EIN Number: ____________________
☐
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to
purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company
to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing
shall occur on the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated by this
Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement,
instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead be an unconditional
obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or the like or purchase
price (as applicable) to such other party on the Closing Date.
Exhibit A
Form of Lock-Up Agreement
(See attached)
Exhibit B
Form of Common Warrant
(See attached)
Exhibit C
Form of Pre-Funded Warrant
(See attached)
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
We consent to the incorporation
by reference in this Registration Statement on Form S-1 of our report dated March 31, 2023 with respect to the audited financial statements
of CNS Pharmaceuticals, Inc. for the year ended December 31, 2022. Our report contains an explanatory paragraph regarding the Company’s
ability to continue as a going concern.
We also consent to the references
to us under the heading “Experts” in such Registration Statement.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
December 8, 2023
Exhibit 107
Calculation of
Filing Fee Table
Form S-1
(Form Type)
CNS Pharmaceuticals,
Inc.
(Exact Name of Registrant
as Specified in its Charter)
Table 1: Newly
Registered Securities
Security Type |
|
Security Class Title |
|
Fee
Calculation
Rule |
|
|
Amount
Registered |
|
|
Proposed
Maximum
Offering
Price Per
Share |
|
|
Maximum
Aggregate
Offering
Price(1) |
|
|
Fee Rate |
|
|
Amount of
Registration
Fee |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
Common stock, par value $0.001 per share(2) |
|
|
457(o) |
|
|
|
|
|
|
|
|
|
$ |
8,000,000 |
|
|
$ |
0.00014760 |
|
|
$ |
1,180.80 |
|
Equity |
|
Pre-Funded Warrants to purchase shares
of common stock(3) |
|
|
457(g) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- (4) |
|
Equity |
|
Common Stock underlying the Pre-Funded Warrants(2)(3) |
|
|
457(o) |
|
|
- |
|
|
- |
|
|
|
(3) |
|
|
$ |
0.00014760 |
|
|
|
- (3) |
|
Equity |
|
Common Warrants to purchase shares of common
stock |
|
|
457(g) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- (4) |
|
Equity |
|
Common Stock underlying the Common Warrants to purchase Common Stock(2) |
|
|
457(o) |
|
|
- |
|
|
- |
|
|
$ |
8,000,000 |
|
|
$ |
0.00014760 |
|
|
$ |
1,180.80 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Offering Amounts |
|
|
|
|
|
|
$ |
16,000,000 |
|
|
|
|
|
|
$ |
2,361.60 |
|
Total Fees Previously Paid |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
- |
|
Total Fee Offsets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
- |
|
Net Fee Due |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,361.60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Estimated solely for the purpose of calculating the amount
of the registration fee in accordance with Rule 457(o) under the Securities Act of 1933 (the “Securities Act”). |
|
|
(2) |
Pursuant to Rule 416 under the Securities Act, the securities registered
hereby also include an indeterminate number of additional securities as may from time to time become issuable by reason of stock
splits, stock dividends, recapitalizations, or other similar transactions. |
|
|
(3) |
The proposed maximum aggregate offering price of the common stock will
be reduced on a dollar-for-dollar basis based on the offering price of any pre-funded warrants issued in the offering, and the proposed
maximum aggregate offering price of the pre-funded warrants to be issued in the offering will be reduced on a dollar-for-dollar basis
based on the offering price of any common stock issued in the offering. Accordingly, the proposed maximum aggregate offering price
of the common stock and pre-funded warrants (including the common stock issuable upon exercise of the pre-funded warrants), if any,
is $8,000,000. |
|
|
(4) |
No separate registration fee is payable pursuant to Rule 457(g) under
the Securities Act. |
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