CNSP 10-K & 10-Q changes, risk factors and insider trading

We will require substantial funding to completeexecute our clinicalnew trials,corporate strategy, 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 will continue to require substantial additional capital to continueexecute in-licensing to expand our pipeline, 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.

If we are unable to obtain funding on a timely basis, we may not be requiredable to significantlyexecute curtail one or more ofon our researchin-licensing orfocused development programs.strategy. 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.

We have never been profitable and do not expect to to be profitable in the foreseeable future. We have not yet submitted any drug candidates for approval by regulatory authorities in the United United States or elsewhere. Our ability to continue as a going concern is dependent upon our generating cash flow from sales that are sufficient sufficient to fund operations or finding adequate financing to support our operations. To date, we have had no revenues and have relied on equity-based financing from the sale of securities in public and private placements and the issuance of convertible notes.placements. The continuation of the Company as a going concern is dependent upon our ability to obtain necessary equity or debt financing to continue operations and the attainment of profitable operations. As of December 31, 20242025 the Company has incurred an accumulated deficit of $84,424,704$100,275,268 since inception and had not yet generated any revenue from operations. Additionally, management anticipates that its cash on hand as of December 31, 2024,2025, combined with capital raised subsequent to December 31, 2024,2025, is sufficient to fund its planned operations within one year after the date that the financial statements are issued.

To date, we have devoted most of our financial resources to corporate overhead, preparing for and conducting the clinical trial and marketing of our securities. We have not generated any revenues from product sales. We expect to continue to incur losses for the foreseeable future, and we expect these losses to increase as we continuein-license ourand initiate development of and seek regulatory approvals for Berubicinnew andassets TPIor 287,programs, prepare for and begin the commercialization of any approved products, and add infrastructure and personnel to support our continuing product development efforts. We anticipate that any such losses could be significant for the next several years. If Berubicin or any of our otherfuture drug candidates fail in clinical trials or do not gain regulatory approval, or if our drug candidates do not achieve market acceptance, we may never become profitable. As a result of the foregoing, we expect to continue to experience net losses and negative cash flows for the foreseeable future. These net losses and negative cash flows have had, and will continue to have, an adverse effect on our stockholders’ equity and working capital.

We are a clinical pharmaceutical company with limited operating history. Our operations to date have been limited to acquiring our technology portfolio, preparing for and conducting our Berubicinclinical clinical trial, and preparing for and conducting our TPI 287 clinical trial.trials. We have not yet obtained any regulatory approvals for any of our drug candidates. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history or approved products on the market. Our operating results are expected to significantly fluctuate from quarter to quarter or year to year due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include:

We cannot be certain that TPIany 287of andour Berubicinfuture product candidates will receive regulatory approval, and without regulatory approval we will not be able to market TPIor 287commercialize and Berubicin.them.

If we are unable to obtain approval from the FDA, or other regulatory agencies, for Berubicin and our other product candidates, or if, subsequent to approval, we are unable to successfully commercialize Berubicinour product candidates or oursecure othercommercialization product candidates,partners, we will not be able to generate sufficient revenue to become profitable or to continue our operations, likely resulting in the total loss of principal for our investors.

Any statements in this filing indicating that our legacy assets TPI 287 and Berubicin hashave demonstrated preliminary evidence of efficacy are our own and are not based on the FDA’s or any other comparable governmental agency’s assessment of TPI 287 and Berubicin and do not indicate that TPI 287 and Berubicin will achieve favorable favorable efficacy results in any later stage trials or that the FDA or any comparable agency will ultimately determine that TPI 287 and Berubicin Berubicin is effective for purposes of granting marketing approval. Based on our intention to explore out-licensing TPI 287 and Berubicin, we may have limited or no ability to determine the future development or regulatory activity for these programs.

Delays in the commencement, enrollment and completion of clinical trials trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for TPI 287 and Berubicin and our other product candidates.

If TPIa 287future andproduct Berubicincandidate is found to be unsafe or lackineffective, we efficacy, we will not be able to obtain regulatory approval for it and our business would be materially and possibly irreparably harmed.

In some instances, there can be significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including changes in trial protocols, differences in composition of the patient populations, adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical trial participants. We do not know whether any clinical trials we or any of our potential future collaborators may conduct will demonstrate the consistent or adequate efficacy and safety that would be required to obtain regulatory approval and market any products. If we are unable to bring Berubicinany of our future product candidates to market, or to acquire other products that are on the market or can be developed, our ability to create long-term stockholder value will be limited.

Unforeseen side effects from any of our product candidates candidates could arise either during clinical development or, if TPI 287 and Berubicin (or our other product candidates) are approved, after the an approved product has been marketed. The range and potential severity of possible side effects from therapies suchfor asneurologic TPI 287 and Berubicin (or ourcancer otherindications productcan candidates) arebe significant. If TPIany 287 and Berubicin (orof our other product candidates) causes undesirable or unacceptable side effects in the future, this could interrupt, delay or halt clinical trials and result in the failure to obtain or suspension or termination of marketing approval from the FDA and other regulatory authorities, or result in marketing approval from the FDA and other regulatory authorities only with restrictive label warnings.

We do not have any manufacturing capabilities and we we do not intend to manufacture the pharmaceutical products that we plan to sell. We utilize contract manufacturers for the production of of the active pharmaceutical ingredients and the formulation of drug product for our pre-clinical development and clinical trials of TPIthat 287 and Berubicin that we will need to conduct prior to seeking regulatory approval. However, we currently do not have agreements for supplies of TPI 287 and Berubicin orfor any of our other product candidates and we may not be able to reach agreements with these or other contract manufacturers for sufficient supplies to commercialize any TPIproduct, 287 or Berubicineven if they are approved. Additionally, the facilities used by any contract manufacturer to manufacture Berubicin or any of our other product candidates must be the subject of a satisfactory inspection before the FDA approves the product candidate manufactured at that facility. We will be completely dependent on these third-party manufacturers for compliance with the requirements of U.S. and non-U.S. regulators for the manufacture of our finished products. If our manufacturers cannot successfully manufacture material that conform to our specifications and the FDA’s current good manufacturing practice standards, or GMP, and other requirements of any governmental agency whose jurisdiction to which we are subject, our product candidates will not be approved or, if already approved, may be subject to recalls. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured our product candidates, including:

We have no sales, marketing, or distribution experience. To develop sales, distribution, and marketing capabilities, we will have to invest significant amounts of financial and management resources, some of which will need to be committed prior to any confirmation that Berubicin or any of our other product candidates will be approved by the FDA. For product candidates where we decide to perform sales, marketing, and distribution functions ourselves or through third parties, we could face a number of additional risks, including that we or our third-party sales collaborators may not be able to build and maintain an effective marketing or sales force. If we use third parties to market and sell our products, we may have limited or no control over their sales, marketing and distribution activities on which our future revenues may depend.

Our licensed U.S. patents for BerubicnBerubicin have expired in March 2020 and theour licensed U.S. patents for TPI 287 will expire before commercialization is reasonably possible, and the expiration of our patents may subject us to increased competition, and the Orphan Drug Designations for TPI 287 and Berubicin will not bar approval of other similar products under certain certain circumstances.

The current U.S. and foreign patents for TPI 287 will all expire in 2028 well before commercialization is reasonably possible. The U.S. patents for Berubicin that we previously licensed from Houston Pharmaceuticals, Inc. expired in March 2020. Such patent expirations may subject us to increased competition. TPI 287 held Orphan Drug Designation when we licensed it from Cortice and on June 10, 2020, the FDA granted Orphan Drug Designation 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 an 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. The ODD similarly strengthens our TPI 287 patent protections and would become our primary protection upon expiration of those patents, however, we are also exploring new patent opportunities related to TPI 287.287 and Berubicin. Nevertheless, we can provide no assurance that we will be able to file or receive additional patent protection. The failure to obtain additional patent protection will reduce the barrier to entry for competition for TPI 287 or Berubicin, which may adversely affect our operations.

As of March 31, 2025,2026, we have foureight full-time employees. We also have 1 officer serving as part-time employee. As we secure rights to and advance our product candidates through preclinical studies and clinical trials, we will need to increase our product development, scientific and administrative headcount to manage these programs. In addition, to meet our obligations as a public company, we may need to increase our general and administrative capabilities. Our management, personnel, and systems currently in place may not be adequate to support this future growth. If we are unable to successfully manage this growth and increased complexity of operations, our business may be adversely affected.

We are dependent on Johnour M.executive Climaco,leadership Christopherteam: Downs,Rami SandraLevin, Silberman,Eric Faulkner, Lynne Kelley, Steve O’Loughlin and DonaldDylan PickerWenke in order to conduct our operations and execute our business plan, however, we have not purchased any insurance policies with respect to those individuals in the event of their death or disability. Therefore, if any of Johnour M.current Climaco, Christopher Downs, Sandra Silberman, or Donald Pickerexecutives die or become disabled, we will not receive any compensation to assist with such person’s person’s absence. The loss of such person could negatively affect us and our operations.

There aremay be limited suppliers for active pharmaceutical ingredients (“API”) used in our drug candidates. Problems with the third parties that manufacture the API used in our drug candidates, or in the supply chain between the manufacturer and CNS, may delay our clinical trials or subject us to liability.

We regularly maintain cash balances at third-party financial institutionsinstitutions. inOur excesscash ofinvestment strategy is intended to preserve capital and minimize cash balances that exceed the Federal Deposit Insurance Corporation, or FDIC, insurance limit. However, our cash balances may exceed the FDIC insurance limit from time to time. Events involving limitations to liquidity, defaults, non-performance or other adverse developments that affect financial institutions, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, the FDIC, took control and was appointed receiver of Silicon Valley Bank (to which the Company had no exposure). If other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, our ability to access our existing cash, cash equivalents and investments may be threatened and could have a material adverse effect on our business and financial condition.

Management performed an annual assessment as of December 31, 20242025 of the effectiveness of our internal control over financial reporting for its annual report. Our management concluded that our internal control over financial reporting was, and continues to be, ineffective as of December 31, 2024,2025, due to material weaknesses in our internal controls due to the lack of segregation of duties (resulting from the limited number of personnel available), limited access to timely and complete information regarding the status of costs incurred in the activation of investigational sites and costs from treating patients in our study which is a result of the use of a third-party Contract Research Organization (“CRO”) to manage the study, and the lack of formal documentation of our control environment. For as long as we remain ana “emergingsmaller growthreporting company company” as defined inby Rule 12b-2 of the JOBSExchange Act, we have and intend to consider to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerginga growthsmaller companies”reporting company including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. We may continue to take advantage of these reporting exemptions until we are no longer ana “emergingsmaller growthreporting company.” To mitigate the lack of segregation of duties material weaknesses, we engaged an outside firm to assist management with such accounting and will continue to use outside firms as a resource to deal with other non-recurring or unusual transactions. To mitigate the lack of formal documentation of the control environment, we have key team members review the critical reports and reconciliations as well as reporting documents. To mitigate the limited access to timely and complete information regarding the status of costs incurred in the activation of investigational sites and costs from treating patients in the study which is a result of the use of a third-party Contract Research Organization (“CRO”) to manage the study, we have senior leaders of our finance and research teams review period end estimates. However, notwithstanding our mitigation efforts, there is no assurance we will not encounter accounting errors in the future. If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed, and investors could lose confidence in our reported financial information.

ThereAlthough we are currently in compliance with all applicable Nasdaq listing requirements, there can be no assurance that we will continue to meet such requirements in the continued listing requirements of The Nasdaq Capital Marketfuture, and we could be subject to delisting at a future time. Delisting from The Nasdaq Capital Market would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors or interest in business development opportunities.

Results of Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Compared(rounded to the Yearnearest Ended December 31, 2023thousand)

General and administrative expense was approximately $5,612,000$6,215,000 for the year ended December 31, 20242025 compared to approximately $4,770,000$5,612,000 for 2023.2024. The increase in general and administrative expense was mainly attributable to an increase of approximately $756,000$34,000 in professional expenses, $440,000$913,000 in employee compensation.compensation, $142,000 in travel expenses, $48,000 in insurance expenses and other general and administrative expenses of $44,000. These changes were offset by decrease of approximately $104,000$575,000 in stock-based compensation,compensation $49,000and $3,000 in insurance expenses, $21,000 in travel expenses, board of director compensation of $9,000, advertising and marketing of $119,000 and other general and administrative expenses of $52,000.compensation.

Interest income was approximately $154,000 and $60,000 for the years ended December 31, 2025 and $28,0002024, respectively. Interest and other expenses were approximately $18,000 and $16,000 for the years ended December 31, 20242025 and 2023,2024, respectively. Interest expense was approximately $16,000 and $14,000 for the years ended December 31, 2024 and 2023, respectively.

On July 26, 2024,2024 the Companywe entered into a Sales Agreement Agreement (the “AGP ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP”). Pursuant to the terms of the AGP ATM Sales Agreement, thewe Company originally wasare permitted to sell from time to time through AGP, as sales agent or principal, shares of the Company’sour common stock, par value $0.001 per share with initial aggregate sales price of up to $5.2 million. On Julystock. 30, 2024,During the Companyyear increasedended theDecember aggregate31, sales2025, pricewe sold 185,521 shares of common shares that may be sold under the AGP ATM Sales Agreement to $25.0 million (not including the original $5.2 million). On March 20, 2025, the Company increased the aggregate sales price of common shares that may be sold under the AGP ATM Sales Agreement to $43.5 million (including $6.4 million remaining from the previous increase). As of December 31, 2024, the Company has sold 991,773 sharesstock pursuant to the AGP ATM Sales Agreement for net proceeds of approximately $13.7 $9.5 million. $882,539 of the net proceeds was deposited on January 10, 2025. As of December 31, 2024,2025, the Company recordedhas asold subscription268,169 shares of common stock pursuant to the AGP ATM Sales receivableAgreement for $882,539.net proceeds of approximately $23.2 million.

We estimate that we have sufficient capital to take us into the firstthird quarter of 2026,2026. aOur periodstrategy duringis whichfocused on identifying and securing the rights to development stage assets focused on neurology and oncology indications and advancing any assets we wouldobtain likelythe expectrights toto. initiateThe atiming, trialcost and ultimate success of TPI 287, as well as complete the Berubicin trial includingwhich its final analysis. In addition, we have working capital to fund our operations during this period (with such operations estimated at $4.5 to $5.0 million per annum). We do not currently have a firm trial design for TPI 287 so estimates of development cost are not available, however, regardless of trial design, the cost of bringing TPI 287 to regulatory approval for marketing will require significant additional financing. The timing and costs of clinical trials areall difficult to predict and as such the foregoing estimatesestimate may prove to be inaccurate. The cost of advancing any drug candidate will require significant additional capital. We have no commitments for such additional needed financing and will likely be required to raise additional such financingcapital through the sale of additional equity or debt securities.

Net cash used in operating activities was approximately $17,113,000$13,811,000 and $14,140,000$17,113,000 for the years ended December 31, 20242025 and 2023,2024, respectively, and mainly included payments made for clinical trial costs, drug development (includingmanufacturing theand cost of our trial of Berubicin), contract labor,development, officer compensation, stock-basedinsurance, compensation, marketing andmarketing, professional fees to our consultants, attorneys and accountants and accountants.stock-based compensation.

Management believes its application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change. As of December 31, 2024,2025, there waswere no critical audit estimates.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the related notes appearing elsewhere in this Form 10-Q. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See Item 1A. “Risk Factors” of our Form 10-K for the year ended December 31, 2025, available on the SecuritySecurities and Exchange Commission's (“SEC”) EDGAR website at www.sec.gov, for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this Form 10-Q.

General and administrative expense was approximately $1,431,000$1.5 million and $1.2 million for the three months ended MarchJune 31,30, 2026 comparedand to2025, approximately $1,095,000 for the comparable period in 2025.respectively. The increase of $0.3 million in general and administrative expense was attributable to increases in headcount related expenses of approximately$0.6 $31,000 in advertising and marketing expenses, $315,000 in legal and professional expenses, $99,000 in insurance expense and $58,000 in other expenses,million, which wereis partially offset by decreasesa decrease in professional services, including accounting consulting and investor relations fees of approximately $52,000$0.3 in travel expenses, $49,000 in stock-based compensation and $66,000 in compensation expense.million.

Research and development expense was approximately $3,544,000$4.7 million and $4.4 million for the threesix months ended MarchJune 31,30, 2026 comparedand to2025, approximately $3,243,000 for the comparable period in 2025.respectively. The change increase in research and development expense duringof the$0.3 periodmillion is primarily attributable to an increase in professionalpersonnel expensesrelated expense, including severance, of $240,000,$1.1 increasedmillion and headcountan expensesincrease in TPI-287 manufacturing and research costs of $61,000,$0.5 drugmillion. manufacturingThese expendituresincreases are partially offset by decreases in clinical costs related to TPIBerubicin 287of as$1.3 well as other expenses.million. R&D expense includes activity related to completing and closing out the clinical trial for Berubicin as enrollment and patient treatment is complete. The decline in Berubicin clinical trial costs offset the increase in expenses above. Our future research and development expense will be dependent on the timing and nature of any new asset we in-license or acquire and the development expenses related to such asset.

On MarchJune 31,30, 2026, we had cash of approximately $2,951,000$20.0 million and we had a working capital deficitsurplus of approximately $504,000.$18.2 million. We have historically funded our operations from proceeds from from debt and equity sales.

On July 26, 2024, the Companywe entered into a Sales Agreement Agreement (the “AGP ATM Sales Agreement”) with A.G.P./Alliance Global Partners (“AGP”). Pursuant to the terms of the AGP ATM Sales Agreement, we are permitted to sell from time to time through AGP, as sales agent or principal, shares of our common stock. stock. During the period ended MarchJune 31,30, 2026, the Company sold 178,933 shares of common stock pursuant to the AGP ATM Sales Agreement for net proceeds of approximately $501,000.$0.5 million. As of MarchJune 31,30, 2026, the Company sold 447,102 shares of common stock pursuant to the AGP ATM Sales Agreement for net proceeds of approximately $23.7 million.million since entering into the Sales Agreement in July 2024.

On May 4, 2026, the Companywe entered into Securities a Purchase Agreements (“SPAs”) Agreement for a private placement financing that resulted in gross proceeds of approximately $22.5 million. Pursuant to the terms of the securitiesPurchase Agreement, purchase agreements, the Companywe sold an aggregate of (i) 650,000 shares of itsour common stock (“Common Stock”) at a purchase price of $2.30 per share and (ii) pre-funded warrants to purchase 9,143,479 shares of Commoncommon Stockstock at a purchase price of $2.299 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.001 per share. The private placement closed on May 5, 2026.

We estimatebelieve that withthe thenet proceeds from thethis Mayfinancing, 2026 private placement togethercombined with our existing cash onresources, hand we haveare sufficient capital to fund planned operations beyond twelve months from the issuance ofdate these financial statements statements.are issued. Our strategy is focused on identifying and securing the rights to development stage assets and advancing any assets we obtain the rights to. The timing, cost and ultimate success of which are all difficult to predict and as such the foregoing estimate may prove to be inaccurate. The cost of advancing any drug candidate will require significant additional capital. We have no commitments for such additional needed financing and will likely be required to raise additional capital through the sale of additional equity or debt securities.

We will need to raise significant additional capital in the future in order to meet our future obligations and execute our business plan. If we are unable to raiseexecute sufficient funds,our business plan, we will be required to develop and implement an alternative plan to further extend payables, reduce overhead or scale back our business plan until sufficient additional capital is raised to support further operations.operations and the execution of our business plan. There can be no assurance that such a plan will be successful and if it is not successful we may need to cease operations entirely.

Net cash used in operating activities was approximately $4,649,000$8.2 million and $3,242,000$8.6 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, and mainly included payments made for clinical trial costs, officer compensation, insurance, marketingconsulting and professional fees to our consultants,fees, attorneys and accountants.

Net cash provided by financing activities was approximately $405,000$21.0 million and $14.3 million for the threesix months ended MarchJune 31,30, 2026,2026 and 2025, respectively. Net cash provided by financing activities for the six months ended June 30, 2026 included proceeds from the Offering, partially offset by the repayments on the notes payable. Net cash provided by financing activities for the six months ended June 30, 2025 related to the sale of common stock,stock and proceeds from our subscription receivable related to the AGP ATM Sales Agreement, which waswere partially offset by the repayment of notes payable. Net cash provided by financing activities was approximately $9,828,000 for the three months ended March 31, 2025, related to the sale of common stock, which was partially offset by the repaymentrepayments of notes payable.

As of MarchJune 31,30, 2026, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

We do not have any material commitments for capital expenditures, although we are required to pay certain milestones fees to Reata and Cortice as described in Note 5 - Commitments and Contingencies to the sectionfinancial “Overview” above.statements included elsewhere in this Form 10-Q.