Delaware
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11-3516358
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.0001 par value per share
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NYSE MKT
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Large Accelerated Filer
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¨
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Accelerated Filer
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¨
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Non-Accelerated Filer
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¨
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Smaller reporting company
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þ
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(Do not check if a smaller reporting company)
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Class
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Outstanding as of March 21, 2014
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Common Stock, $0.0001 par value per share
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176,533,519 shares
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· | our understandings and beliefs regarding the role of certain biological mechanisms and processes in cancer; |
· | our drug candidates being in early stages of development, including in pre-clinical development; |
· | our inability to initially develop drug candidates for orphan indications to reduce the time-to-market and take advantage of certain incentives provided by the U.S. Food and Drug Administration; |
· | our inability to transition from our initial focus on developing drug candidates for orphan indications to candidates for more highly prevalent indications; |
· | our inability to successfully and timely complete clinical trials for our drug candidates in clinical development; |
· | uncertainties related to the timing, results and analyses related to our drug candidates in pre-clinical development; |
· | our inability to obtain the necessary U.S. and international regulatory approvals for our drug candidates; |
· | our reliance on third-party contract research organizations and other investigators and collaborators for certain research and development services; |
· | our ability to maintain or engage third-party manufacturers to manufacture, supply, store and distribute supplies of our drug candidates for our clinical trials; |
· | our ability to form strategic alliances and partnerships with pharmaceutical companies and other partners for sales and marketing of certain of our product candidates; |
· | demand for and market acceptance of our drug candidates; |
· | the scope and validity of our intellectual property protection for our drug candidates and our ability to develop our candidates without infringing the intellectual property rights of others; |
· | our lack of profitability and the need for additional capital to operate our business; and |
· | other risks and uncertainties, including those set forth herein under the caption “Risk Factors” and those detailed from time to time in our filings with the Securities and Exchange Commission. |
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Page
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1
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Item 1
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16
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Item 1A
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31
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Item 1B
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31
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Item 2
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31
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Item 3
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31
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Item 4
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31
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32
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Item 5
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32
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Item 6
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33
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Item 7
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34
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Item 7A
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46
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Item 8
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46
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Item 9
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47
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Item 9A
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47
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Item 9B
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49
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Item 10
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50
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Item 11
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50
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Item 12
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50
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Item 13
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50
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Item 14
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50
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Item 15
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51
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52
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· | Archexin is a potential best-in-class, potent inhibitor of the protein kinase Akt, which we believe plays critical roles in cancer cell proliferation, survival, angiogenesis, metastasis and drug resistance. Archexin has received “orphan drug” designation from the U.S. Food and Drug Administration (“FDA”) for renal cell carcinoma (“RCC”), glioblastoma, ovarian cancer, stomach cancer and pancreatic cancer. That designation provides tax incentives for clinical research and a waiver from user fees. In addition, a drug that is approved for its orphan-designated use receives seven years of exclusivity after approval, during which the FDA generally cannot approve another product with the same active moiety for the same indication. We have completed a Phase IIa clinical trial for Archexin for the treatment of pancreatic cancer, and in early 2014, we initiated a Phase IIa proof-of-concept clinical trial to study Archexin’s safety and efficacy in patients with metastatic RCC. |
· | RX-3117 is a small molecule nucleoside compound with an anti-metabolite mechanism of action, and we believe it has therapeutic potential in a broad range of cancers, including colon, lung and pancreatic cancer. We completed an exploratory Phase I clinical study for RX-3117 in 2012 that demonstrated the oral bioavailability of RX-3117 in humans with no adverse effects reported. In January 2014, we initiated a Phase Ib clinical trial to study the safety and efficacy of RX-3117 in patients with solid tumors. |
· | Supinoxin , or RX-5902, is a potential first-in-class small molecule that inhibits the phosphorylation of p68 RNA helicase, a protein that we believe plays a key role in cancer growth, progression and metastasis. In July 2012, we submitted an Investigational New Drug (“IND”) application to the FDA for Supinoxin. We initiated a Phase I clinical in August 2013 to study Supinoxin’s safety and efficacy in patients with solid tumors. |
· | Long-term management of cancers : Surgery, radiation therapy or chemotherapy may not result in long-term remission, although surgery and radiation therapies are considered effective methods for some cancers. There is a need for more effective drugs and adjuvant therapies to treat relapsed and refractory cancers. |
· | Multi-drug resistance : Multi-drug resistance is a major obstacle to effectively treating various cancers with chemotherapy. |
· | Debilitating toxicity by chemotherapy : Chemotherapy as a mainstay of cancer treatment induces severe adverse reactions and toxicities, affecting quality of life or life itself. |
· | Expedited Regulatory or Commercialization Pathways . Drugs for life-threatening diseases such as cancer are often candidates for fast track, priority and accelerated reviews, each of which can lead to approval sooner than would otherwise be the case. |
· | Favorable Environment for Formulary Access and Reimbursement . We believe that cancer drugs with proven efficacy would gain rapid market uptake, formulary listing and third-party payor reimbursement. Drugs with orphan designations are generally reimbursed by third-party payors because there are few, if any, alternatives. |
· | Focus on Specialty Markets . The marketing of new drugs to specialty physicians can be accomplished with a specialty sales force that requires fewer personnel and lower related costs than a typical sales force that markets to primary care physicians and general practitioners. |
· | developing drugs; |
· | undertaking pre-clinical testing and human clinical trials; |
· | obtaining FDA and other regulatory approvals of drugs; |
· | formulating and manufacturing drugs; and |
· | launching, marketing and selling drugs. |
· | The federal Anti-Kickback Law, which prohibits, among other things, knowingly or willingly offering, paying, soliciting or receiving remuneration, directly or indirectly, in cash or in kind, to induce or reward the purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any health care items or service for which payment may be made, in whole or in part, by federal healthcare programs such as Medicare and Medicaid. This statute has been interpreted to apply to arrangements between pharmaceutical companies on one hand and prescribers, purchasers and formulary managers on the other. Further, the Patient Protection and Affordable Care Act, among other things, clarified that a person or entity need not to have actual knowledge of the federal Anti-Kickback statute or specific intent to violate it. In addition, the Patient Protection and Affordable Care Act amended the Social Security Act to provide that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Law constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Although there are a number of statutory exemptions and regulatory safe harbors to the federal Anti-Kickback Law protecting certain common business arrangements and activities from prosecution or regulatory sanctions, the exemptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exemption or safe harbor may be subject to scrutiny; |
· | The federal civil False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. Many pharmaceutical and other healthcare companies have been investigated and have reached substantial financial settlements with the federal government under the civil False Claims Act for a variety of alleged improper marketing activities, including: providing free product to customers with the expectation that the customers would bill federal programs for the product; providing consulting fees, grants, free travel and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices reported to private price publication services, which are used to set drug payment rates under government healthcare programs. In addition, in recent years the government has pursued civil False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted as a result of the marketing of their products for unapproved, and thus non-reimbursable, uses. Pharmaceutical and other healthcare companies also are subject to other federal false claim laws, including, among others, federal criminal healthcare fraud and false statement statutes that extend to non-government health benefit programs; |
· | Analogous state laws and regulations, such as state anti-kickback and false claims laws, may apply to items or services reimbursed under Medicaid and other state programs or, in several states, apply regardless of the payor. Some state laws also require pharmaceutical companies to report expenses relating to the marketing and promotion of pharmaceutical products and to report gifts and payments to individual physicians in the states. Other states prohibit providing meals to prescribers or other marketing related activities. In addition, California, Connecticut, Nevada and Massachusetts require pharmaceutical companies to implement compliance programs or marketing codes of conduct. Foreign governments often have similar regulations; |
· | The federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, requires certain pharmaceutical manufacturers to engage in extensive tracking of payments or transfers of value to physicians and teaching hospitals, maintenance of a payments database and public reporting of the payment data. Pharmaceutical manufacturers with products for which payment is available under Medicare, Medicaid or the State Children’s Health Insurance Program are required to track and report such payments. Centers for Medicare and Medicaid Services (“CMS”) recently issued a final rule implementing the Physician Payment Sunshine Act provisions and clarified the scope of the reporting obligations, as well as that applicable manufacturers must begin tracking on August 1, 2013 and must report payment data to CMS by March 31, 2014 and annually thereafter. |
· | The federal Foreign Corrupt Practices Act of 1997 and other similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from providing money or anything of value to officials of foreign governments, foreign political parties, or international organizations with the intent to obtain or retain business or seek a business advantage. Recently, there has been a substantial increase in anti-bribery law enforcement activity by U.S. regulators, with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and the U.S. Securities and Exchange Commission (“SEC”). Violations of United States or foreign laws or regulations could result in the imposition of substantial fines, interruptions of business, loss of supplier, vendor or other third-party relationships, termination of necessary licenses and permits and other legal or equitable sanctions. Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence. |
· | continued pre-clinical development and clinical trials for our current and new drug candidates; |
· | finding suitable partners to help us research, develop and commercialize new drug candidates; |
· | efforts to seek regulatory approvals for our drug candidates; |
· | implementing additional internal systems and infrastructure; |
· | in-licensing in additional technologies to develop; and |
· | hiring additional personnel or entering into relationships with third parties to perform functions that we are unable to perform on our own. |
· | conducting pre-clinical and clinical trials; |
· | participating in regulatory approval processes; |
· | formulating and manufacturing products; and |
· | conducting sales and marketing activities. |
· | delay or failure in reaching agreement with the FDA or a foreign regulatory authority on the design of a given trial, or in obtaining authorization to commence a trial; |
· | delay or failure in reaching agreement on acceptable terms with prospective contract research organizations and clinical trial sites; |
· | delay or failure in obtaining approval of an Institutional Review Board (“IRB”) to conduct a clinical trial at a given site; |
· | withdrawal of clinical trial sites from our clinical trials as a result of changing standards of care of the ineligibility of a site to participate; |
· | delay or failure in recruiting and enrolling study subjects |
· | delay or failure in having subjects complete a clinical trial or return for post-treatment follow up; |
· | clinical sites or investigators deviating from trial protocol, failing to conduct the trial in accordance with applicable regulatory requirements, or dropping out of a trial; |
· | inability to identify and maintain a sufficient number of trial sites; |
· | failure of third-party clinical trial managers to meet their contractual obligations or deadlines; |
· | the need to modify a study protocol; |
· | unforeseen safety issues; |
· | determination of dosing issues; |
· | lack of effectiveness during clinical trials; |
· | change in the standard of care of the indication being studied; |
· | reliance on third-party suppliers for the supply of drug candidate samples; |
· | inability to monitor patients adequately during or after treatment; |
· | lack of sufficient funding to finance the clinical trials; and |
· | changes in governmental regulations or administrative action. |
· | disagreement with the design or implementation of our clinical trials; |
· | failure to demonstrate to the authority’s satisfaction that the product candidate is safe and effective for the proposed indication; |
· | failure of clinical trials to meet the level of statistical significance required for approval; |
· | failure to demonstrate that the product’s benefits outweigh its risks; |
· | disagreement with our interpretation of pre-clinical or clinical data; and |
· | inadequacies in the manufacturing facilities or processes of third-party manufacturers. |
· | awareness of a drug’s availability and benefits; |
· | perceptions by members of the health care community, including physicians, about the safety and effectiveness of our drugs; |
· | pharmacological benefit and cost-effectiveness of our products relative to competing products; |
· | availability of reimbursement for our products from government or other third-party payors; |
· | effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any; and |
· | the price at which we sell our products. |
· | the federal Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for the furnishing or arranging for the furnishing, or the purchase, lease or order, or arranging for or recommending purchase, lease or order, any good or service for which payment may be made under a federal healthcare program such as Medicare and Medicaid; |
· | the federal False Claims Act imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; |
· | the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes criminal liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, or knowingly and willfully making false statements relating to healthcare matters; |
· | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 and its implementing regulations, also imposes obligations on certain covered entity health care providers, health plans and health care clearinghouses as well as their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; |
· | the federal Open Payments program, created under Section 6002 of the Affordable Care Act and its implementing regulations, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the U.S. Department of Health and Human Services information related to “payments or other transfers of value” made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to the U.S. Department of Health and Human Services ownership and investment interests held by physicians (as defined above) and their immediate family members; and |
· | analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws that govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. |
· | developing drugs; |
· | undertaking pre-clinical testing and human clinical trials; |
· | obtaining FDA and other regulatory approvals of drugs; |
· | formulating and manufacturing drugs; and |
· | launching, marketing and selling drugs. |
· | We may be unable to contract with third-party manufacturers on acceptable terms, or at all, because the number of potential manufacturers is limited and is subject to FDA approval. FDA approval requires testing and compliance inspections. In addition, any new manufacturer would have to be educated in, or develop substantially equivalent processes for, the production of our products after receipt of FDA approval, if any. |
· | Our third-party manufacturers might be unable to formulate and manufacture our drugs in the volume and of the quality required to meet our clinical and commercial needs. |
· | Our third-party manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials through completion or to successfully produce, store and distribute our products. |
· | Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA, the Drug Enforcement Agency and corresponding state agencies to ensure strict compliance with good manufacturing practice and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures. |
· | If any third-party manufacturer makes improvements in the manufacturing process for our products, we may not own, or may have to share, the intellectual property rights to such improvements. |
· | A third-party manufacturer may gain knowledge from working with us that could be used to supply one of our competitors with a product that competes with ours. |
· | the degree and range of protection any patents will afford us against competitors, including whether third parties find ways to invalidate or otherwise circumvent our licensed patents; |
· | if and when patents will issue in the United States or any other country; |
· | whether or not others will obtain patents claiming aspects similar to those covered by our licensed patents and patent applications; |
· | whether we will need to initiate litigation or administrative proceedings to protect our intellectual property rights, which may be costly whether we win or lose; |
· | whether any of our patents will be challenged by our competitors alleging invalidity or unenforceability and, if opposed or litigated, the outcome of any administrative or court action as to patent validity, enforceability or scope; |
· | whether a competitor will develop a similar compound that is outside the scope of protection afforded by a patent or whether the patent scope is inherent in the claims modified due to interpretation of claim scope by a court; |
· | whether there were activities previously undertaken by a licensor that could limit the scope, validity or enforceability of licensed patents and intellectual property; or |
· | whether a competitor will assert infringement of its patents or intellectual property, whether or not meritorious, and what the outcome of any related litigation or challenge may be. |
· | obtain licenses, which may not be available on commercially reasonable terms, if at all; |
· | redesign our products or processes to avoid infringement; |
· | stop using the subject matter claimed in patents held by others, which could cause us to lose the use of one or more of our drug candidates; |
· | pay damages; or |
· | defend litigation or administrative proceedings that may be costly whether we win or lose and that could result in a substantial diversion of our management resources. |
· | the announcement of new products or product enhancements by us or our competitors; |
· | changes in our relationships with our licensors or other strategic partners; |
· | developments concerning intellectual property rights and regulatory approvals; |
· | variations in our and our competitors’ results of operations; |
· | changes in earnings estimates or recommendations by securities analysts; |
· | changes in the structure of healthcare payment systems; and |
· | developments and market conditions in the pharmaceutical and biotechnology industries. |
Item 5. | Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Period
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High
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Low
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||||||
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|
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||||||
2012
|
|
|
||||||
First Quarter
|
0.67
|
0.36
|
||||||
Second Quarter
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0.57
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0.29
|
||||||
Third Quarter
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0.81
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0.32
|
||||||
Fourth Quarter
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0.56
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0.28
|
||||||
2013
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||||||||
First Quarter
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0.41
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0.30
|
||||||
Second Quarter
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0.52
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0.28
|
||||||
Third Quarter
|
0.66
|
0.36
|
||||||
Fourth Quarter
|
0.62
|
0.37
|
|
|
|
Cumulative from
March 19, 2001
(Inception)
|
|||||||||
|
2013
|
2012
|
to December 31,
2013
|
|||||||||
|
|
|
|
|||||||||
Oncology Candidates
|
|
|
|
|||||||||
Archexin
|
$
|
144,300
|
$
|
165,000
|
$
|
6,779,300
|
||||||
RX-3117
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402,000
|
1,065,000
|
4,664,500
|
|||||||||
Supinoxin
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784,800
|
626,000
|
1,983,800
|
|||||||||
|
||||||||||||
CNS Candidates
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||||||||||||
Serdaxin
|
-
|
150,000
|
9,820,000
|
|||||||||
Zoraxel
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-
|
10,000
|
1,255,000
|
|||||||||
|
||||||||||||
Pre-clinical Compounds:
|
222,000
|
295,000
|
2,634,000
|
|||||||||
|
||||||||||||
Total
|
$
|
1,553,100
|
$
|
2,311,000
|
$
|
27,136,600
|
· | the progress of our product development activities; |
· | the number and scope of our product development programs; |
· | the progress of our pre-clinical and clinical trial activities; |
· | the progress of the development efforts of parties with whom we have entered into collaboration agreements; |
· | our ability to maintain current collaboration programs and to establish new collaboration arrangements; |
· | the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and |
· | the costs and timing of regulatory approvals. |
· | Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the dispositions of our assets; |
· | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and the board of directors; and |
· | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
(a) | The following documents are filed as a part of this Annual Report on Form 10-K: |
REXAHN PHARMACEUTICALS, INC.
|
||||
|
||||
By: |
/s/ Peter D. Suzdak
|
|||
Peter D. Suzdak
|
||||
Chief Executive Officer
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Name
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Title
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/s/ Peter Suzdak*
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Chief Executive Officer and Director (Principal Executive Officer)
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Peter Suzdak
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||
/s/ Tae Heum Jeong*
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Chief Financial Officer, and Secretary (Principal Financial and Accounting Officer)
|
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Tae Heum Jeong
|
||
/s/ Chang H. Ahn*
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Chairman
|
|
Chang H. Ahn
|
|
|
/s/ Peter Brandt*
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Director
|
|
Peter Brandt
|
|
|
/s/ David McIntosh*
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Director
|
|
David McIntosh
|
|
|
/s/ Charles Beever*
|
Director
|
|
Charles Beever
|
|
|
/s/ Kwang Soo Cheong*
|
Director
|
|
Kwang Soo Cheong
|
|
|
/s/ Si Moon Hwang*
|
Director
|
|
Si Moon Hwang
|
|
|
/s/ Mark Carthy*
|
Director
|
|
Mark Carthy
|
|
|
|
|
||||||
|
|
|
||||||
|
December 31, 2013
|
December 31, 2012
|
||||||
ASSETS
|
||||||||
Current Assets:
|
|
|
||||||
Cash and cash equivalents
|
$
|
18,688,031
|
$
|
13,486,543
|
||||
Marketable securities (note 3)
|
100,000
|
100,000
|
||||||
Prepaid expenses and other current assets (note 4)
|
507,165
|
188,808
|
||||||
Total Current Assets
|
19,295,196
|
13,775,351
|
||||||
Restricted Cash Equivalents
(note 16)
|
196,130
|
1,091,801
|
||||||
Equipment, Net
(note 6)
|
65,172
|
52,156
|
||||||
Total Assets
|
$
|
19,556,498
|
$
|
14,919,308
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses (note 7)
|
$
|
933,758
|
$
|
851,837
|
||||
|
||||||||
Deferred Research and Development Arrangements
(note 8)
|
833,630
|
1,626,000
|
||||||
|
||||||||
Other Liabilities
(note 9)
|
129,564
|
65,417
|
||||||
|
||||||||
Warrant Liabilities
(note 13)
|
5,034,058
|
2,842,065
|
||||||
|
||||||||
Total Liabilities
|
6,931,010
|
5,385,319
|
||||||
Commitments and Contingencies
(note 16)
|
||||||||
Stockholders’ Equity
(note 11):
|
||||||||
Preferred stock, par value $0.0001, 100,000,000 authorized shares, none issued and outstanding
|
-
|
-
|
||||||
Common stock, par value $0.0001, 500,000,000 authorized shares, 146,732,000 and 119,443,194 issued and 146,717,795 and 119,428,989 outstanding
|
14,673
|
11,944
|
||||||
Additional paid-in capital
|
85,449,932
|
72,861,738
|
||||||
Accumulated deficit during the development stage
|
(72,810,707
|
)
|
(63,311,283
|
)
|
||||
Treasury stock, 14,205 shares, at cost
|
(28,410
|
)
|
(28,410
|
)
|
||||
|
||||||||
Total Stockholders’ Equity
|
12,625,488
|
9,533,989
|
||||||
|
||||||||
Total Liabilities and Stockholders’ Equity
|
$
|
19,556,498
|
$
|
14,919,308
|
|
For the Year Ended December 31,
|
Cumulative
from March 19,
2001
(Inception) to
December 31,
|
||||||||||
|
2013
|
2012
|
2013
|
|||||||||
Revenues:
|
|
|
|
|||||||||
Research
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||
|
||||||||||||
Expenses:
|
||||||||||||
General and administrative
|
4,260,363
|
2,713,149
|
34,320,507
|
|||||||||
Research and development
|
3,253,139
|
3,392,896
|
38,531,638
|
|||||||||
Patent fees
|
428,203
|
431,099
|
2,960,307
|
|||||||||
Depreciation and amortization
|
37,133
|
42,386
|
720,056
|
|||||||||
|
||||||||||||
Total Expenses
|
7,978,838
|
6,579,530
|
76,532,508
|
|||||||||
|
||||||||||||
Loss from Operations
|
(7,978,838
|
)
|
(6,579,530
|
)
|
(76,532,508
|
)
|
||||||
|
||||||||||||
Other Income (Expense)
|
||||||||||||
Realized loss on marketable securities
|
-
|
-
|
(13,301
|
)
|
||||||||
Interest income
|
49,280
|
21,092
|
1,491,679
|
|||||||||
Interest expense
|
-
|
-
|
(301,147
|
)
|
||||||||
Other income
|
-
|
-
|
56,047
|
|||||||||
Unrealized (loss)/gain on fair value of warrants
|
(1,365,654
|
)
|
663,876
|
2,974,327
|
||||||||
Unrealized gain on fair value of put feature on common stock
|
-
|
-
|
2,315,539
|
|||||||||
Financing expense
|
(204,212
|
)
|
(332,108
|
)
|
(1,176,343
|
)
|
||||||
Beneficial conversion feature
|
-
|
-
|
(1,625,000
|
)
|
||||||||
Total Other Income (Expense)
|
(1,520,586
|
)
|
352,860
|
3,721,801
|
||||||||
|
||||||||||||
Loss Before Provision for Income Taxes
|
(9,499,424
|
)
|
(6,226,670
|
)
|
(72,810,707
|
)
|
||||||
Provision for income taxes
|
-
|
-
|
-
|
|||||||||
Net Loss
|
$
|
(9,499,424
|
)
|
$
|
(6,226,670
|
)
|
$
|
(72,810,707
|
)
|
|||
|
||||||||||||
Net loss per share, basic and diluted
|
$
|
(0.07
|
)
|
$
|
(0.06
|
)
|
||||||
|
||||||||||||
Weighted average number of shares outstanding, basic and diluted
|
128,649,303
|
97,138,233
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
||||||||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated Deficit During the Development Stage
|
Number of
Shares
|
Amount
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders'
Equity (Deficit)
|
||||||||||||||||||||||||
Opening Balance, March 19, 2001
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||||
Common Stock issued
|
7,126,666
|
71,266
|
4,448,702
|
-
|
-
|
-
|
-
|
4,519,968
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(625,109
|
)
|
-
|
-
|
-
|
(625,109
|
)
|
||||||||||||||||||||||
Balances at December 31, 2001
|
7,126,666
|
71,266
|
4,448,702
|
(625,109
|
)
|
-
|
-
|
-
|
3,894,859
|
|||||||||||||||||||||||
Net loss
|
(1,181,157
|
)
|
-
|
-
|
-
|
(1,181,157
|
)
|
|||||||||||||||||||||||||
Balances at December 31, 2002
|
7,126,666
|
71,266
|
4,448,702
|
(1,806,266
|
)
|
-
|
-
|
-
|
2,713,702
|
|||||||||||||||||||||||
Common Stock issued
|
500,000
|
5,000
|
1,995,000
|
-
|
-
|
-
|
-
|
2,000,000
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
538,074
|
-
|
-
|
-
|
-
|
538,074
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(2,775,075
|
)
|
-
|
-
|
-
|
(2,775,075
|
)
|
||||||||||||||||||||||
Balances at December 31, 2003
|
7,626,666
|
76,266
|
6,981,776
|
(4,581,341
|
)
|
-
|
-
|
-
|
2,476,701
|
|||||||||||||||||||||||
Common Stock issued
|
1,500
|
15
|
1,785
|
-
|
-
|
-
|
-
|
1,800
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
230,770
|
-
|
-
|
-
|
-
|
230,770
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(3,273,442
|
)
|
-
|
-
|
-
|
(3,273,442
|
)
|
||||||||||||||||||||||
Balances at December 31, 2004
|
7,628,166
|
76,281
|
7,214,331
|
(7,854,783
|
)
|
-
|
-
|
-
|
(564,171
|
)
|
||||||||||||||||||||||
Stock split (5 for 1)
|
30,512,664
|
(72,467
|
)
|
72,467
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Common Stock issued in connection with merger
|
3,397,802
|
340
|
(340
|
)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||
Common Stock issued for cash
|
4,175,000
|
417
|
8,349,565
|
-
|
-
|
-
|
-
|
8,349,982
|
||||||||||||||||||||||||
Common Stock issued on conversion of convertible debt
|
650,000
|
65
|
1,299,935
|
-
|
-
|
-
|
-
|
1,300,000
|
||||||||||||||||||||||||
Stock options exercised
|
40,000
|
4
|
9,596
|
-
|
-
|
-
|
-
|
9,600
|
||||||||||||||||||||||||
Common stock issued in exchange for services
|
7,000
|
1
|
21,876
|
-
|
-
|
-
|
-
|
21,877
|
||||||||||||||||||||||||
Beneficial conversion feature
|
-
|
-
|
1,625,000
|
-
|
-
|
-
|
-
|
1,625,000
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
436,748
|
-
|
-
|
-
|
-
|
436,748
|
||||||||||||||||||||||||
Net Loss
|
-
|
-
|
-
|
(6,349,540
|
)
|
-
|
-
|
-
|
(6,349,540
|
)
|
||||||||||||||||||||||
Balances at December 31, 2005
|
46,410,632
|
4,641
|
19,029,178
|
(14,204,323
|
)
|
-
|
-
|
-
|
4,829,496
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
||||||||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated Deficit During the Development Stage
|
Number of
Shares
|
Amount
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders'
Equity (Deficit)
|
||||||||||||||||||||||||
Balances at December 31, 2005
|
46,410,632
|
4,641
|
19,029,178
|
(14,204,323
|
)
|
-
|
-
|
-
|
4,829,496
|
|||||||||||||||||||||||
Stock options exercised
|
61,705
|
6
|
14,802
|
-
|
-
|
-
|
-
|
14,808
|
||||||||||||||||||||||||
Common Stock issued on conversion of convertible debt
|
3,850,000
|
385
|
3,849,615
|
-
|
-
|
-
|
-
|
3,850,000
|
||||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
14,205
|
(28,410
|
)
|
-
|
(28,410
|
)
|
||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
1,033,956
|
-
|
-
|
-
|
-
|
1,033,956
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(6,486,003
|
)
|
-
|
-
|
-
|
(6,486,003
|
)
|
||||||||||||||||||||||
Balances at December 31, 2006
|
50,322,337
|
5,032
|
23,927,551
|
(20,690,326
|
)
|
14,205
|
(28,410
|
)
|
-
|
3,213,847
|
||||||||||||||||||||||
Common stock issued
|
4,857,159
|
486
|
1,144,219
|
-
|
-
|
-
|
-
|
1,144,705
|
||||||||||||||||||||||||
Stock options exercised
|
127,500
|
12
|
59,988
|
-
|
-
|
-
|
-
|
60,000
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
1,121,646
|
-
|
-
|
-
|
-
|
1,121,646
|
||||||||||||||||||||||||
Stock issuance costs
|
-
|
-
|
(139,674
|
)
|
-
|
-
|
-
|
-
|
(139,674
|
)
|
||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(4,442,331
|
)
|
-
|
-
|
-
|
(4,442,331
|
)
|
||||||||||||||||||||||
Balances at December 31, 2007
|
55,306,996
|
5,530
|
26,113,730
|
(25,132,657
|
)
|
14,205
|
(28,410
|
)
|
-
|
958,193
|
||||||||||||||||||||||
Common stock issued
|
642,858
|
65
|
155,450
|
-
|
-
|
-
|
-
|
155,515
|
||||||||||||||||||||||||
Stock options exercised
|
90,000
|
9
|
31,191
|
-
|
-
|
-
|
-
|
31,200
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
484,684
|
-
|
-
|
-
|
-
|
484,684
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(3,681,801
|
)
|
-
|
-
|
-
|
(3,681,801
|
)
|
||||||||||||||||||||||
Unrealized loss on securities available-for-sale
|
-
|
-
|
-
|
-
|
-
|
-
|
(550,480
|
)
|
(550,480
|
)
|
||||||||||||||||||||||
Balances at December 31, 2008
|
56,039,854
|
5,604
|
26,785,055
|
(28,814,458
|
)
|
14,205
|
(28,410
|
)
|
(550,480
|
)
|
(2,602,689
|
)
|
||||||||||||||||||||
Issuance of common stock and units
|
15,883,847
|
1,588
|
9,996,015
|
-
|
-
|
-
|
-
|
9,997,603
|
||||||||||||||||||||||||
Stock options exercised
|
15,000
|
2
|
3,600
|
-
|
-
|
-
|
-
|
3,602
|
||||||||||||||||||||||||
Stock issuance costs
|
-
|
-
|
(641,018
|
)
|
-
|
-
|
-
|
-
|
(641,018
|
)
|
||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
497,531
|
-
|
-
|
-
|
-
|
497,531
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(2,903,098
|
)
|
-
|
-
|
-
|
(2,903,098
|
)
|
||||||||||||||||||||||
Reversal of unrealized loss on securities available-for-sale
|
-
|
-
|
-
|
-
|
-
|
-
|
550,480
|
550,480
|
||||||||||||||||||||||||
Balances at December 31, 2009
|
71,938,701
|
7,194
|
36,641,183
|
(31,717,556
|
)
|
14,205
|
(28,410
|
)
|
-
|
4,902,411
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
||||||||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated Deficit During the Development Stage
|
Number of Shares
|
Amount
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders'
Equity (Deficit)
|
||||||||||||||||||||||||
Balances at December 31, 2009
|
71,938,701
|
7,194
|
36,641,183
|
(31,717,556
|
)
|
14,205
|
(28,410
|
)
|
-
|
4,902,411
|
||||||||||||||||||||||
Issuance of common stock and units
|
6,666,667
|
667
|
8,198,534
|
-
|
-
|
-
|
-
|
8,199,201
|
||||||||||||||||||||||||
Stock issuance costs
|
-
|
-
|
(681,773
|
)
|
-
|
-
|
-
|
-
|
(681,773
|
)
|
||||||||||||||||||||||
Common stock issued in exchange for services
|
1,700,000
|
170
|
2,107,830
|
-
|
-
|
-
|
-
|
2,108,000
|
||||||||||||||||||||||||
Stock options exercised
|
155,500
|
16
|
107,224
|
-
|
-
|
-
|
-
|
107,240
|
||||||||||||||||||||||||
Stock warrants exercised
|
3,714,186
|
371
|
9,199,797
|
-
|
-
|
-
|
-
|
9,200,168
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
584,657
|
-
|
-
|
-
|
-
|
584,657
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(14,022,107
|
)
|
-
|
-
|
-
|
(14,022,107
|
)
|
||||||||||||||||||||||
Unrealized loss on securities available-for-sale
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,340
|
)
|
(2,340
|
)
|
||||||||||||||||||||||
Balances at December 31, 2010
|
84,175,054
|
8,418
|
56,157,452
|
(45,739,663
|
)
|
14,205
|
(28,410
|
)
|
(2,340
|
)
|
10,395,457
|
|||||||||||||||||||||
Issuance of common stock and units
|
10,667,848
|
1,067
|
11,122,265
|
-
|
-
|
-
|
-
|
11,123,332
|
||||||||||||||||||||||||
Stock issuance costs
|
-
|
-
|
(729,727
|
)
|
-
|
-
|
-
|
-
|
(729,727
|
)
|
||||||||||||||||||||||
Stock options exercised
|
183,000
|
18
|
59,222
|
-
|
-
|
-
|
-
|
59,240
|
||||||||||||||||||||||||
Stock warrants exercised
|
333,959
|
33
|
561,798
|
-
|
-
|
-
|
-
|
561,831
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
638,607
|
-
|
-
|
-
|
-
|
638,607
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(11,344,950
|
)
|
-
|
-
|
-
|
(11,344,950
|
)
|
||||||||||||||||||||||
Reversal of unrealized loss on securities available-for-sale
|
-
|
-
|
-
|
-
|
-
|
-
|
2,340
|
2,340
|
||||||||||||||||||||||||
Balances at December 31, 2011
|
95,359,861
|
9,536
|
67,809,617
|
(57,084,613
|
)
|
14,205
|
(28,410
|
)
|
-
|
10,706,130
|
||||||||||||||||||||||
Issuance of common stock and units
|
24,083,333
|
2,408
|
5,533,472
|
-
|
-
|
-
|
-
|
5,535,880
|
||||||||||||||||||||||||
Stock issuance costs
|
-
|
-
|
(712,338
|
)
|
-
|
-
|
-
|
-
|
(712,338
|
)
|
||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
230,987
|
-
|
-
|
-
|
-
|
230,987
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(6,226,670
|
)
|
-
|
-
|
-
|
(6,226,670
|
)
|
||||||||||||||||||||||
Balances at December 31, 2012
|
119,443,194
|
11,944
|
72,861,738
|
(63,311,283
|
)
|
14,205
|
(28,410
|
)
|
-
|
9,533,989
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
||||||||||||||||||||||||||
|
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated Deficit During the Development Stage
|
Number of
Shares
|
Amount
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders'
Equity (Deficit)
|
||||||||||||||||||||||||
Balances at December 31, 2012
|
119,443,194
|
11,944
|
72,861,738
|
(63,311,283
|
)
|
14,205
|
(28,410
|
)
|
-
|
9,533,989
|
||||||||||||||||||||||
Issuance of common stock and units
|
21,592,309
|
2,159
|
8,631,696
|
-
|
-
|
-
|
-
|
8,633,855
|
||||||||||||||||||||||||
Stock issuance costs
|
-
|
-
|
(952,490
|
)
|
-
|
-
|
-
|
-
|
(952,490
|
)
|
||||||||||||||||||||||
Common stock issued in exchange for services
|
640,000
|
64
|
306,736
|
-
|
-
|
-
|
-
|
306,800
|
||||||||||||||||||||||||
Stock options exercised
|
375,000
|
38
|
89,962
|
-
|
-
|
-
|
-
|
90,000
|
||||||||||||||||||||||||
Stock warrants exercised
|
4,681,497
|
468
|
3,946,862
|
-
|
-
|
-
|
-
|
3,947,330
|
||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
565,428
|
-
|
-
|
-
|
-
|
565,428
|
||||||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(9,499,424
|
)
|
-
|
-
|
-
|
(9,499,424
|
)
|
||||||||||||||||||||||
Balances at December 31, 2013
|
146,732,000
|
$
|
14,673
|
$
|
85,449,932
|
$
|
(72,810,707
|
)
|
14,205
|
$
|
(28,410
|
)
|
$
|
-
|
$
|
12,625,488
|
|
For the Year Ended
December 31,
|
Cumulative
From March 19, 2001
|
||||||||||
|
2013
|
2012
|
2013
|
|||||||||
Cash Flows from Operating Activities:
|
|
|
|
|||||||||
Net loss
|
$
|
(9,499,424
|
)
|
$
|
(6,226,670
|
)
|
$
|
(72,810,707
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Beneficial conversion feature
|
-
|
-
|
1,625,000
|
|||||||||
Compensatory stock
|
306,800
|
-
|
2,436,677
|
|||||||||
Depreciation and amortization
|
37,133
|
42,386
|
720,056
|
|||||||||
Stock-based compensation
|
565,428
|
230,987
|
6,374,044
|
|||||||||
Amortization of deferred research and development arrangements
|
(792,370
|
)
|
(125,000
|
)
|
(1,592,370
|
)
|
||||||
Note receivable (Note 5)
|
-
|
18,682
|
-
|
|||||||||
Realized losses on marketable securities
|
-
|
-
|
13,301
|
|||||||||
Unrealized loss/(gain) on fair value of warrants
|
1,365,654
|
(663,876
|
)
|
(2,974,327
|
)
|
|||||||
Unrealized gain on fair value of put feature on common stock
|
-
|
-
|
(2,315,539
|
)
|
||||||||
Financing expense
|
204,212
|
332,108
|
1,176,343
|
|||||||||
Amortization of deferred lease incentive
|
(16,222
|
)
|
(20,000
|
)
|
(86,222
|
)
|
||||||
Deferred lease expenses
|
25,709
|
(18,971
|
)
|
61,126
|
||||||||
Loss on impairment of intangible assets
|
-
|
-
|
286,132
|
|||||||||
Changes in assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
(263,697
|
)
|
144,363
|
(452,505
|
)
|
|||||||
Accounts payable and accrued expenses
|
81,921
|
(333,568
|
)
|
933,758
|
||||||||
Net Cash Used in Operating Activities
|
(7,984,856
|
)
|
(6,619,559
|
)
|
(66,605,233
|
)
|
||||||
Cash Flows from Investing Activities:
|
||||||||||||
Restricted cash equivalents
|
895,671
|
339,964
|
(196,130
|
)
|
||||||||
Purchase of equipment
|
(50,149
|
)
|
-
|
(615,144
|
)
|
|||||||
Purchase of marketable securities
|
-
|
-
|
(21,123,960
|
)
|
||||||||
Proceeds from sales of marketable securities
|
-
|
1,850,000
|
21,010,659
|
|||||||||
Payment of licensing fees
|
-
|
-
|
(356,216
|
)
|
||||||||
Net Cash Provided by (Used In) Investing Activities
|
845,522
|
2,189,964
|
(1,280,791
|
)
|
||||||||
Cash Flows from Financing Activities:
|
||||||||||||
Issuance of common stock and units, net of issuance costs
|
10,041,155
|
7,128,650
|
72,975,379
|
|||||||||
Proceeds from exercise of stock options
|
90,000
|
-
|
260,082
|
|||||||||
Proceeds from exercise of stock warrants
|
2,209,667
|
-
|
5,791,004
|
|||||||||
Proceeds from long-term debt
|
-
|
-
|
5,150,000
|
|||||||||
Proceeds from research and development arrangements
|
-
|
926,000
|
2,426,000
|
|||||||||
Purchase of treasury stock
|
-
|
-
|
(28,410
|
)
|
||||||||
Net Cash Provided by Financing Activities
|
12,340,822
|
8,054,650
|
86,574,055
|
|||||||||
Net Increase in Cash and Cash Equivalents
|
5,201,488
|
3,625,055
|
18,688,031
|
|||||||||
Cash and Cash Equivalents – beginning of period
|
13,486,543
|
9,861,488
|
-
|
|||||||||
Cash and Cash Equivalents - end of period
|
$
|
18,688,031
|
$
|
13,486,543
|
$
|
18,688,031
|
For the Year Ended
December 31,
|
Cumulative
From March 19, 2001
|
|||||||||||
2013
|
2012
|
2013
|
||||||||||
Supplemental Cash Flow Information
|
|
|
|
|||||||||
Interest paid
|
$
|
-
|
$
|
-
|
$
|
301,147
|
||||||
Non-cash financing and investing activities:
|
||||||||||||
Warrants issued
|
$
|
2,564,002
|
$
|
2,637,216
|
$
|
16,255,645
|
||||||
Put feature on common stock issued
|
$
|
-
|
$
|
-
|
$
|
4,954,738
|
||||||
Dilutive issuances of common stock
|
$
|
-
|
$
|
-
|
$
|
2,639,199
|
||||||
Warrant liability extinguishment from exercise of warrants
|
$
|
1,737,663
|
$
|
-
|
$
|
7,918,323
|
||||||
Leasehold improvement incentive
|
$
|
54,660
|
$
|
-
|
$
|
154,660
|
||||||
Settlement of lawsuit
|
$
|
-
|
$
|
-
|
$
|
43,953
|
1.
|
Operations and Organization
|
2.
|
Summary of Significant Accounting Policies
|
a)
|
Cash and Cash Equivalents
|
b)
|
Marketable Securities
|
c)
|
Equipment
|
d)
|
Research and Development
|
e)
|
Use of Estimates
|
f)
|
Fair Value of Financial Instruments
|
g)
|
Income Taxes
|
h)
|
Stock-Based Compensation
|
i)
|
Impairment of Long-Lived Assets
|
j)
|
Concentration of Credit Risk
|
k)
|
Recent Accounting Pronouncements Affecting the Company
|
3.
|
Marketable Securities
|
|
Cost
|
Gross Unrealized
|
Fair
|
|||||||||
Securities available-for-sale
|
Basis
|
Gains/(Losses)
|
Value
|
|||||||||
December 31, 2013:
|
|
|
|
|||||||||
State and municipal obligations
|
$
|
100,000
|
$
|
-
|
$
|
100,000
|
||||||
|
||||||||||||
December 31, 2012:
|
||||||||||||
State and municipal obligations
|
$
|
100,000
|
$
|
-
|
$
|
100,000
|
|
Cost
|
Fair
|
||||||
Maturity
|
Basis
|
Value
|
||||||
10 years or more
|
$
|
100,000
|
$
|
100,000
|
4.
|
Prepaid Expenses and Other Current Assets
|
|
December 31,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Deposits on contracts
|
$
|
37,760
|
$
|
12,818
|
||||
Other assets
|
469,405
|
175,990
|
||||||
|
||||||||
|
$
|
507,165
|
$
|
188,808
|
5.
|
Note Receivable
|
6.
|
Equipment, Net
|
|
December 31,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Furniture and fixtures
|
$
|
59,133
|
$
|
34,200
|
||||
Office equipment
|
41,752
|
81,074
|
||||||
Lab and computer equipment
|
425,195
|
430,261
|
||||||
Leasehold improvements
|
119,841
|
119,841
|
||||||
|
||||||||
Total equipment
|
645,921
|
665,376
|
||||||
Less: Accumulated depreciation
|
(580,749
|
)
|
(613,220
|
)
|
||||
|
||||||||
Net carrying amount
|
$
|
65,172
|
$
|
52,156
|
7.
|
Accounts Payable and Accrued Expenses
|
|
December 31,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Trade payables
|
$
|
251,687
|
$
|
250,682
|
||||
Accrued expenses
|
25,367
|
76,289
|
||||||
Accrued research and development contract costs
|
215,211
|
452,577
|
||||||
Payroll liabilities
|
441,493
|
72,289
|
||||||
|
||||||||
|
$
|
933,758
|
$
|
851,837
|
8.
|
Deferred Research and Development Arrangements
|
9.
|
Other Liabilities
|
|
December 31,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Deferred lease incentive
|
$
|
154,660
|
$
|
100,000
|
||||
Less accumulated amortization
|
(86,222
|
)
|
(70,000
|
)
|
||||
|
||||||||
Balance
|
$
|
68,438
|
$
|
30,000
|
10.
|
Net Loss per Common Share
|
11.
|
Common Stock
|
a) | On May 10, 2001, the Company issued 3,600,000 shares of common stock to the Company’s founders for cash of $1. |
b) | On August 10, 2001, the Company issued: |
i) | 1,208,332 shares of common stock to the directors of the Company for cash of $1,450,000. |
ii) | 958,334 shares of common stock to Rexgene for cash of $550,000. |
iii) | 360,000 shares of common stock in a private placement to individual investors for cash of $1,080,000. |
c) | On October 10, 2001, the Company issued 400,000 shares of common stock to Chong Kun Dang Pharmaceutical Corp. (“CKD”) for cash of $479,991 and 400,000 shares of common stock to an individual investor for cash of $479,991. |
d) | On October 10, 2001, the Company issued 200,000 shares of common stock to CKD for cash of $479,985. |
e) | Since inception, the Company’s founders have transferred 800,000 shares of the common stock described in a) to officers and directors of the Company. |
f) | In July 2003, the stockholders described in b) (iii) and e) transferred an aggregate of 1,268,332 shares of common stock to a voting trust. The trust allows for the unified voting of the stock by the trustees. |
g) | On August 20, 2003, the Company issued 500,000 shares of common stock to KT&G Corporation for cash consideration of $2,000,000. |
h) | On October 29, 2004, an option holder exercised options to purchase shares of common stock for cash of $1,800, and the Company issued an aggregate of 1,500 shares. |
i) | Pursuant to the agreement and plan of merger that occurred on May 13, 2005, (i) each share of the issued and outstanding common stock of Rexahn (other than dissenting shares) was converted into the right to receive five shares of Rexahn Pharmaceuticals common stock; (ii) each issued, outstanding and unexercised option to purchase a share of Rexahn common stock was converted into an option to purchase five shares of Rexahn Pharmaceuticals’ common stock and (iii) the par value of Rexahn’s common stock was adjusted to reflect the par value of CRS’s common stock. In the acquisition merger, 289,780,000 pre‑reverse stock split CRS shares were converted into 2,897,802 post‑reverse-stock-split Rexahn Pharmaceuticals shares, and an additional 500,000 post‑reverse-stock-split Rexahn Pharmaceuticals shares were issued to a former executive of CRS. All shares and earnings per share information have been retroactively restated in these financial statements. |
j) | On August 8, 2005, the Company issued, in a transaction exempt from registration under the Securities Act, 4,175,000 shares of common stock at a purchase price of $2.00 per share. |
k) | On October 3, 2005, the Company issued 7,000 shares of common stock for $21,877 and paid $7,500 in cash in exchange for legal services from W. Rosenstadt and Steve Sanders. |
l) | On December 2, 2005, the holders of a convertible note that was issued on August 8, 2005 and represented an aggregate principal amount of $1,300,000 exercised their option to convert the entire principal amount of the note into the Company’s common stock. Based on a $2.00 per share conversion price, the holders received an aggregate of 650,000 shares. |
m) | On December 27, 2005, option holders exercised options to purchase shares of the Company’s common stock for cash of $9,600, and the Company issued an aggregate of 40,000 shares. |
n) | On February 22, 2006, an option holder exercised options to purchase shares of the Company’s common stock for cash of $1,200, and the Company issued an aggregate of 5,000 shares. |
o) | On April 12, 2006, an option holder exercised options to purchase shares of the Company’s common stock for cash of $3,409, and the Company issued an aggregate of 14,205 shares. On the same date, the Company agreed to repurchase common stock from the option holder based on the then market price for treasury in exchange for the aggregate purchase price of $28,410 in cash. |
p) | On May 13, 2006, holders of the $3,850,000 of convertible notes issued on February 28, 2005 exercised their rights to convert the entire principal amount of the notes into shares of the Company’s common stock. Based on a $1.00 per share conversion price, the Company issued 3,850,000 shares of common stock in connection with the conversion. |
q) | On October 9, 2006, an option holder exercised options to purchase shares of the Company’s common stock for cash of $2,400, and the Company issued an aggregate of 10,000 shares. |
r) | On November 19, 2006, an option holder exercised options to purchase shares of the Company’s common stock for cash of $1,800, and the Company issued an aggregate of 7,500 shares. |
s) | On December 19, 2006, an option holder exercised options to purchase shares of the Company’s common stock for cash of $6,000, and the Company issued an aggregate of 25,000 shares. |
t) | On April 18, 2007, an option holder exercised options to purchase shares of the Company’s common stock for cash of $14,400, and the Company issued an aggregate of 18,000 shares. |
u) | On July 23, 2007, an option holder exercised options to purchase shares of the Company’s common stock for cash of $12,000, and the Company issued an aggregate of 15,000 shares. |
v) | On September 27, 2007, an option holder exercised options to purchase shares of the Company’s common stock for cash of $15,600, and the Company issued an aggregate of 19,500 shares. |
w) | On December 18, 2007, the Company issued 4,857,159 units, consisting of one share of the Company’s common stock and one warrant for every five common shares purchased, in a private placement at a price of $1.40 per unit for total gross proceeds of $6,800,023. One warrant entitles the holder to purchase an additional share of common stock at an exercise price of $1.80 at any time over a period of three years from the date of the closing. The Company has recorded the warrants as liabilities at fair value. Private placement closing costs of $139,675 were recorded as a reduction of the issuance proceeds. Private placements costs also consist of 107,144 warrants, valued at $138,326, and were recorded as a financing expense. The Company extended anti-dilution protection to investors. The anti-dilution protection provision is structured to protect a holder’s position from being diluted, contains a price protection based on a mathematical calculation and is recorded as a liability at fair value. |
Gross Proceeds:
|
$
|
6,800,023
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
1,392,476
|
|||
Less: Warrants allocated to placement agent
|
(138,326
|
)
|
||
Put feature on common stock
|
4,401,169
|
|||
Total allocated to liabilities
|
5,655,319
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
1,144,704
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
6,800,023
|
x) | On December 27, 2007, an option holder exercised options to purchase shares of the Company’s common stock for cash of $18,000, and the Company issued an aggregate of 75,000 shares. |
y) | On March 20, 2008, the Company issued 642,858 units, consisting of one share of the Company’s common stock and one warrant for every five common shares purchased, in a private placement at a price of $1.40 per unit for total gross proceeds of $900,001. One warrant entitles the holder to purchase an additional share of common stock at an exercise price of $1.80 at any time over a period of three years from the date of the closing. The Company has recorded the warrants as liabilities at fair value. The Company extended anti-dilution protection to investors. The anti-dilution protection provision is structured to protect a holder’s position from being diluted, contains a price protection based on a mathematical calculation and is recorded as a liability at fair value. |
Gross Proceeds:
|
$
|
900,001
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
190,917
|
|||
Put feature on common stock
|
553,569
|
|||
Total allocated to liabilities
|
744,486
|
|||
|
||||
Allocated to common stock and additional paid-in capital
|
155,515
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
900,001
|
z) | On May 30, 2008, an option holder exercised options to purchase shares of the Company’s common stock for cash of $7,200, and the Company issued an aggregate of 30,000 shares. |
aa) | On June 2, 2008, an option holder exercised options to purchase shares of the Company’s common stock for cash of $12,000, and the Company issued an aggregate of 50,000 shares. |
ab) | On June 30, 2008, an option holder exercised options to purchase shares of the Company’s common stock for cash of $12,000, and the Company issued an aggregate of 10,000 shares. |
ac) | On June 5, 2009 the Company closed on a purchase agreement to issue 2,857,143 shares of common stock at a price of $1.05 per share to an institutional investor for total gross proceeds of $3,000,000 and incurred $289,090 of stock issuance costs. The investor was also issued: |
1) | Series I warrants to purchase 2,222,222 shares of common stock at a purchase price of $1.05 per share at any time before September 3, 2009; |
2) | Series II warrants to purchase 1,866,666 shares of common stock at a purchase price of $1.25 per share at any time from December 3, 2009 to June 5, 2012; and |
3) | Series III warrants to purchase 1,555,555 shares of common stock at a purchase price of $1.50 per share at any time from December 3, 2009 to June 5, 2014. |
Gross Proceeds
|
$
|
3,000,000
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
3,451,194
|
|||
Less: Warrants allocated to placement agent
|
(122,257
|
)
|
||
Total allocated to liabilities
|
3,328,937
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
-
|
|||
|
||||
Allocated to expense:
|
||||
Derivative loss at inception
|
(328,937
|
)
|
||
|
||||
Total allocated gross proceeds:
|
$
|
3,000,000
|
ad) | On June 9, 2009, the Company issued 1,833,341 shares of common stock and 862,246 warrants to purchase common stock at a purchase price of $1.05 per share to existing stockholders pursuant to the anti-dilution protection provisions of the private placements transacted on December 18, 2007 and March 20, 2008. The fair value of the additional warrants issued was approximately $422,300. |
ae) | On September 4, 2009, an option holder exercised options to purchase shares of the Company’s common stock for cash of $3,600, and the Company issued an aggregate of 15,000 shares. |
af) | On September 21, 2009, the Company issued 3,102,837 shares of common stock at a purchase price of $1.13 per share to an institutional investor for net proceeds of $3,371,340, which includes $128,659 of stock issuance costs. |
ag) | On October 23, 2009, the Company closed on a purchase agreement to issue 6,072,383 shares of common stock at a price of $0.82 per share to five institutional investors for gross proceeds of $5,000,000, which includes $351,928 of stock issuance costs. The investors were also issued warrants to purchase 2,125,334 shares of common stock at an exercise price of $1.00 per share, exercisable on or after the date of delivery until the five-year anniversary, which were recorded as liabilities at fair value. The closing costs included 245,932 warrants valued at $101,693 and were recorded as a financing expense. |
Gross Proceeds:
|
$
|
5,000,000
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
1,114,627
|
|||
Less: Warrants allocated to placement agent
|
(101,693
|
)
|
||
Total allocated to liabilities
|
1,012,934
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
3,987,066
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
5,000,000
|
ah) | On October 23, 2009, the Company issued 2,018,143 shares of common stock and 569,502 warrants to purchase common stock at a purchase price of $0.82 per share to existing stockholders pursuant to anti-dilution protection provisions of the private placements transacted on December 24, 2007 and March 20, 2008. The fair value of the additional warrants issued was approximately $476,200. |
ai) | On February 12, 2010, the Company entered into two consulting agreements pursuant to which the Company issued 300,000 shares of common stock upon the execution of the agreements. Upon the extension of the term, 200,000 shares of common stock for each month will be issued until the termination of services. |
Date of Issuance
|
Number of Shares Issued
|
Market Value Per Share
|
Total Market Value of Share Issuance
|
|||||||||
February 12, 2010
|
300,000
|
$
|
1.22
|
$
|
366,000
|
|||||||
May 24, 2010
|
200,000
|
1.40
|
280,000
|
|||||||||
June 15, 2010
|
200,000
|
1.15
|
230,000
|
|||||||||
August 2, 2010
|
400,000
|
1.37
|
548,000
|
|||||||||
September 21, 2010
|
200,000
|
1.20
|
240,000
|
|||||||||
October 21, 2010
|
200,000
|
1.16
|
232,000
|
|||||||||
November 11, 2010
|
200,000
|
1.06
|
212,000
|
|||||||||
|
||||||||||||
Total
|
1,700,000
|
$
|
2,108,000
|
aj) | In March 2010, warrant holders exercised their warrants to purchase shares of the Company’s common stock for cash of $1,297,001, and the Company issued an aggregate of 1,197,001 shares. |
ak) | In March 2010, option holders exercised options to purchase shares of the Company’s common stock for cash of $21,240, and the Company issued an aggregate of 48,000 shares. |
al) | In April 2010, warrant holders exercised their warrants to purchase shares of the Company’s common stock for cash of $1,966,375, and the Company issued an aggregate of 1,595,825 shares. |
am) | On April 20, 2010, an option holder exercised options to purchase shares of the Company’s common stock for cash of $86,000, and the Company issued an aggregate of 107,500 shares. |
an) | In May 2010, warrant holders exercised 890,051 cashless warrants to obtain shares of the Company’s common stock, and the Company issued an aggregate of 547,674 shares. |
ao) | On June 30, 2010, the Company closed on a purchase agreement to issue 6,666,667 shares of common stock at a price of $1.50 per share to investors for gross proceeds of $10,000,000, which includes $681,773 of stock issuance costs. The investors were also issued warrants to purchase 2,000,000 shares of common stock at an exercise price of $1.90 per share, exercisable from date of delivery until the four-year anniversary of that date. These warrants were valued at $1,800,800 and recorded as liabilities at fair value. The closing costs included 200,000 warrants valued at $180,080 and were recorded as a financing expense. |
Gross Proceeds:
|
$
|
10,000,000
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
1,980,880
|
|||
Less: Warrants allocated to placement agent
|
(180,080
|
)
|
||
Total allocated to liabilities
|
1,800,800
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
8,199,200
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
10,000,000
|
ap) | In November 2010, warrant holders exercised 936,883 cashless warrants to obtain shares of the Company’s common stock, and the Company issued an aggregate of 247,491 shares. |
aq) | In December 2010, warrant holders exercised 530,900 cashless warrants to obtain shares of the Company’s common stock, and the Company issued an aggregate of 126,195 shares. |
ar) | On January 19, 2011, the Company issued 2,334,515 shares of common stock at a purchase price of $1.69 per share to an institutional investor for net proceeds of $3,926,397, which includes $23,603 of stock issuance costs. |
as) | On February 15, 2011, a warrant holder exercised warrants to purchase shares of the Company’s common stock for cash of $215,104, and the Company issued 209,042 shares. |
at) | On February 28, 2011, an option holder exercised options to purchase shares of the Company’s common stock for cash of $6,000, and the Company issued 25,000 shares. |
au) | On March 11, 2011, an option holder exercised options to purchase shares of the Company’s common stock for cash of $12,000, and the Company issued 50,000 shares. |
av) | On March 28, 2011, warrant holders exercised their warrants to purchase shares of the Company’s common stock for cash of $102,857, and the Company issued 124,917 shares. |
aw) | On March 31, 2011, the Company closed on a purchase agreement to issue 8,333,333 shares of common stock at a price of $1.20 per share to five institutional investors for gross proceeds of $10,000,000, which includes $706,124 of cash stock issuance costs. The investors were also issued warrants to purchase 3,333,333 shares of common stock at an exercise price of $1.50 per share, exercisable on or after six months after the closing date until the five-year anniversary of the initial exercise date. These warrants were valued at $2,826,666 and recorded at fair value. The closing costs included 208,333 warrants valued at $97,667 and were recorded as a financing expense. |
Gross Proceeds:
|
$
|
10,000,000
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
2,924,333
|
|||
Less: Warrants allocated to placement agent
|
(97,667
|
)
|
||
Total allocated to liabilities
|
2,826,666
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
7,173,334
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
10,000,000
|
ax) | In September 2011, an option holder exercised options to purchase shares of the Company’s common stock for cash of $22,040, and the Company issued 28,000 shares. |
ay) | In October 2011, an option holder exercised options to purchase shares of the Company’s common stock for cash of $19,200, and the Company issued 80,000 shares. |
az) | On December 4, 2012 the Company closed on an underwritten public offering to issue and sell 19,130,435 shares of common stock and warrants to purchase up to 10,521,739 shares of common stock. The common stock and warrants were sold in units, consisting of common stock and a warrant to purchase 0.55 shares of common stock, at a price of $0.33 per share, and the warrants have an exercise price of $0.472 per share. Pursuant to the underwriting agreement, the Company granted the underwriters a 45-day option to purchase an additional 2,869,565 shares of common stock and warrants to purchase 1,578,261 shares of common stock. On December 4, 2012, the underwriters partially exercised this option, and 869,565 units, consisting of 869,565 shares and 478,261 warrants were issued. On December 10, 2012, the underwriters exercised the remaining overallotment option, and the Company issued 2,000,000 units, consisting of 2,000,000 shares and 1,100,000 warrants. The total gross proceeds of the offering were $7,260,000. The warrants issued are exercisable on the closing date until the five-year anniversary of the closing date and were recorded as liabilities at fair value. |
Gross Proceeds:
|
$
|
7,260,000
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
2,637,216
|
|||
Less: Warrants allocated to placement agent
|
(163,096
|
)
|
||
Total allocated to liabilities
|
2,474,120
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
4,785,880
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
7,260,000
|
ba) | On December 7, 2012, the Company issued 2,083,333 shares of common stock at a purchase price of $0.36 per share to an institutional investor for gross proceeds of $750,000. The total stock issuance costs were $63,658. |
bb) | On May 10, 2013, the Company issued 120,000 shares of stock to a vendor in exchange for investor relations services. The market value of the stock issued was $0.31, and the total market value of the issuance was $37,200. |
bc) | On June 10, 2013, the Company issued 200,000 shares of stock to a vendor in exchange for investor relations services. The market value of the stock issued was $0.50, and the total market value of the issuance was $100,000. |
bd) | On June 21, 2013, a warrant holder exercised warrants to purchase shares of the Company’s common stock for cash of $26,739, and the Company issued 56,650 shares. |
be) | In July 2013 option holders exercised options to purchase shares of the Company’s common stock for cash of $36,000, and the Company issued 150,000 shares. |
bf) | On July 26, 2013 the Company closed on a registered direct public offering to issue and sell 11,400,000 shares of common stock and warrants to purchase up to 3,990,000 shares of common stock. The common stock and warrants were sold in units, consisting of common stock and a warrant to purchase 0.35 shares of common stock, at a price of $0.50 per share, and the warrants have an exercise price of $0.59 per share. The total gross proceeds of the offering were $5,700,000. The warrants issued are exercisable beginning six months after the closing date until the five-year anniversary of the closing date and were recorded as liabilities at fair value. |
Gross Proceeds:
|
$
|
5,700,000
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
1,406,441
|
|||
Less: Warrants allocated to placement agent
|
(110,489
|
)
|
||
Total allocated to liabilities
|
1,295,952
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
4,404,048
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
5,700,000
|
bg) | In July 2013, warrant holders exercised warrants to purchase shares of the Company’s common stock for cash of $1,199,966 and the Company issued 2,542,300 shares. |
bh) | On August 1, 2013, the Company issued 120,000 shares of stock to a vendor in exchange for investor relations services. The market value of the stock issued was $0.53, and the total market value of the issuance was $63,600. |
bi) | In August 2013, warrant holders exercised warrants to purchase shares of the Company’s common stock for cash of $94,400, and the Company issued 200,000 shares. |
bj) | In September 2013, option holders exercised options to purchase shares of the Company’s common stock for cash of $54,000, and the Company issued 225,000 shares. |
bk) | In October 2013, warrant holders exercised warrants to purchase shares of the Company’s common stock for cash of $888,562, and the Company issued 1,882,547 shares. |
bl) | On October 10, 2013, the Company issued 200,000 shares of stock to a vendor in exchange for investor relations services. The market value of the stock issued was $0.53, and the total market value of the issuance was $106,000. |
bm) | On October 16, 2013, the Company closed on a registered direct public offering to issue and sell 10,192,309 shares of common stock and warrants to purchase up to 3,567,309 shares of common stock. The common stock and warrants were sold in units, consisting of common stock and a warrant to purchase 0.35 shares of common stock, at a price of $0.52 per share, and the warrants have an exercise price of $0.575 per share. The total gross proceeds of the offering were $5,300,001. The warrants issued are exercisable beginning six months after the closing date until the five-year anniversary of the closing date and were recorded as liabilities at fair value. |
Gross Proceeds:
|
$
|
5,300,001
|
||
|
||||
Allocated to liabilities:
|
||||
Warrant liabilities
|
1,157,561
|
|||
Less: Warrants allocated to placement agent
|
(87,368
|
)
|
||
Total allocated to liabilities
|
1,070,193
|
|||
|
||||
Allocated to equity:
|
||||
Common stock and additional paid-in capital
|
4,229,808
|
|||
|
||||
Total allocated gross proceeds:
|
$
|
5,300,001
|
12.
|
Stock-Based Compensation
|
|
Year Ended December 31,
|
Cumulative from March 19, 2001 (Inception) to
|
||||||||||
|
2013
|
2012
|
December 31, 2013
|
|||||||||
Statement of operations line item:
|
|
|
|
|||||||||
General and administrative:
|
|
|
|
|||||||||
Payroll
|
$
|
499,183
|
$
|
126,029
|
3,120,612
|
|||||||
Consulting and other professional fees
|
3,893
|
23,932
|
814,348
|
|||||||||
Research and development:
|
||||||||||||
Payroll
|
53,980
|
76,008
|
1,102,037
|
|||||||||
Consulting and other professional fees
|
8,372
|
5,018
|
1,337,047
|
|||||||||
|
||||||||||||
Total
|
$
|
565,428
|
$
|
230,987
|
6,374,044
|
|
Year Ended December 31,
|
|||||||
|
2013
|
2012
|
||||||
Black-Scholes weighted average assumptions
|
|
|
||||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected volatility
|
94-96
|
%
|
98-101
|
%
|
||||
Risk free interest rate
|
0.75-1.75
|
%
|
0.62-0.89
|
%
|
||||
Expected term (in years)
|
5 years
|
5 years
|
|
2013
|
2012
|
||||||||||||||
|
Number of
Options
|
Weighted
Average Exercise
Price
|
Number of Options
|
Weighted Average
Exercise Price
|
||||||||||||
Outstanding at January 1
|
7,741,795
|
$
|
1.03
|
7,646,795
|
$
|
1.05
|
||||||||||
Granted
|
2,450,000
|
0.39
|
245,000
|
0.41
|
||||||||||||
Exercised
|
(375,000
|
)
|
0.24
|
-
|
-
|
|||||||||||
Expired
|
(375,000
|
)
|
0.52
|
-
|
-
|
|||||||||||
Cancelled
|
(85,000
|
)
|
0.80
|
(150,000
|
)
|
1.15
|
||||||||||
|
||||||||||||||||
Outstanding at December 31
|
9,356,795
|
$
|
0.92
|
7,741,795
|
$
|
1.03
|
|
Number of
Options
|
Weighted
Average
Exercise Price
|
Weighted
Average
Remaining
Contractual Term
|
Aggregate
Intrinsic Value
|
|||||||||
Outstanding at December 31, 2013
|
9,356,795
|
$
|
0.92
|
4.8 years
|
$
|
350,865
|
|||||||
|
|
||||||||||||
Exercisable at December 31, 2013
|
7,956,795
|
$
|
0.99
|
4.0 years
|
$
|
199,795
|
|||||||
|
|
||||||||||||
Outstanding at December 31, 2012
|
7,741,795
|
$
|
1.03
|
3.9 years
|
$
|
41,706
|
|||||||
|
|
||||||||||||
Exercisable at December 31, 2012
|
7,176,795
|
$
|
1.04
|
3.5 years
|
$
|
41,706
|
|
2013
|
|||||||
|
Number of Options
|
Weighted Average Fair Value at Grant Date
|
||||||
Unvested at January 1, 2013
|
565,000
|
$
|
0.66
|
|||||
Granted
|
2,450,000
|
$
|
0.28
|
|||||
Vested
|
(1,597,500
|
)
|
$
|
0.36
|
||||
Cancelled
|
(17,500
|
)
|
$
|
0.36
|
||||
|
||||||||
Unvested at December 31, 2013
|
1,400,000
|
$
|
0.34
|
13.
|
Warrants
|
|
2013
|
2012
|
||||||||||||||
|
Number of warrants
|
Weighted average
exercise price
|
Number of
warrants
|
Weighted average
exercise price
|
||||||||||||
Balance, January 1
|
21,656,142
|
$
|
0.89
|
8,676,142
|
$
|
1.53
|
||||||||||
Issued during the period
|
8,421,001
|
0.59
|
12,980,000
|
$
|
0.47
|
|||||||||||
Exercised during the period
|
(4,681,497
|
)
|
0.47
|
-
|
$
|
-
|
||||||||||
Expired during the period
|
(426,778
|
)
|
1.67
|
-
|
$
|
-
|
||||||||||
|
||||||||||||||||
Balance, December 31
|
24,968,868
|
$
|
0.86
|
21,656,142
|
$
|
0.89
|
|
Fair Value as of:
|
|||||||||||
Warrant Issuance:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
December 18, 2007 financing
|
$
|
-
|
$
|
-
|
$
|
1,392,476
|
||||||
March 20, 2008 financing
|
-
|
-
|
190,917
|
|||||||||
June 5, 2009 financing:
|
||||||||||||
Series I warrants
|
-
|
-
|
707,111
|
|||||||||
Series II warrants
|
-
|
-
|
1,315,626
|
|||||||||
Series III warrants
|
11
|
35,311
|
1,306,200
|
|||||||||
Warrants to placement agent
|
1
|
3,489
|
122,257
|
|||||||||
October 23, 2009 financing:
|
||||||||||||
Warrants to institutional investors
|
19,689
|
73,454
|
1,012,934
|
|||||||||
Warrants to placement agent
|
-
|
41
|
101,693
|
|||||||||
June 30, 2010 financing
|
||||||||||||
Warrants to institutional investors
|
10
|
12,200
|
1,800,800
|
|||||||||
Warrants to placement agent
|
-
|
20
|
180,080
|
|||||||||
March 31, 2011 financing:
|
||||||||||||
Warrants to institutional investors
|
311,360
|
306,333
|
2,826,666
|
|||||||||
Warrants to placement agent
|
-
|
83
|
97,667
|
|||||||||
December 4, 2012 financing:
|
||||||||||||
Warrants to institutional investors
|
2,124,444
|
2,263,910
|
2,474,120
|
|||||||||
Warrants to placement agent
|
222,286
|
147,224
|
163,096
|
|||||||||
July 26, 2013 financing:
|
||||||||||||
Warrants to institutional investors
|
1,148,390
|
-
|
1,295,952
|
|||||||||
Warrants to placement agent
|
83,808
|
-
|
110,489
|
|||||||||
October 16, 2013 financing:
|
||||||||||||
Warrants to institutional investors
|
1,051,454
|
-
|
1,070,193
|
|||||||||
Warrants to placement agent
|
72,605
|
-
|
87,368
|
|||||||||
Total:
|
$
|
5,034,058
|
$
|
2,842,065
|
$
|
16,255,645
|
|
Number of Shares indexed as of:
|
|||||||||||
Warrant Issuance
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
December 18, 2007 financing
|
-
|
-
|
1,078,579
|
|||||||||
March 20, 2008 financing
|
-
|
-
|
128,572
|
|||||||||
June 5, 2009 financing:
|
||||||||||||
Series I warrants
|
-
|
-
|
2,222,222
|
|||||||||
Series II warrants
|
-
|
-
|
1,866,666
|
|||||||||
Series III warrants
|
1,555,555
|
1,555,555
|
1,555,555
|
|||||||||
Warrants to placement agent
|
132,143
|
132,143
|
142,857
|
|||||||||
October 23, 2009 financing:
|
||||||||||||
Warrants to institutional investors
|
1,228,333
|
1,228,333
|
2,125,334
|
|||||||||
Warrants to placement agent
|
-
|
18,445
|
245,932
|
|||||||||
June 30, 2010 financing
|
||||||||||||
Warrants to institutional investors
|
2,000,000
|
2,000,000
|
2,000,000
|
|||||||||
Warrants to placement agent
|
-
|
200,000
|
200,000
|
|||||||||
March 31, 2011 financing:
|
||||||||||||
Warrants to institutional investors
|
3,333,333
|
3,333,333
|
3,333,333
|
|||||||||
Warrants to placement agent
|
-
|
208,333
|
208,333
|
|||||||||
December 4, 2012 financing:
|
||||||||||||
Warrants to institutional investors
|
7,418,503
|
12,100,000
|
12,100,000
|
|||||||||
Warrants to placement agent
|
880,000
|
880,000
|
880,000
|
|||||||||
July 26, 2013 financing:
|
||||||||||||
Warrants to institutional investors
|
3,990,000
|
-
|
3,990,000
|
|||||||||
Warrants to placement agent
|
456,000
|
-
|
456,000
|
|||||||||
October 16, 2013 financing:
|
||||||||||||
Warrants to institutional investors
|
3,567,309
|
-
|
3,567,308
|
|||||||||
Warrants to placement agent
|
407,692
|
-
|
407,692
|
|||||||||
Total:
|
24,968,868
|
21,656,142
|
36,508,383
|
December 18, 2007 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
-
|
$
|
-
|
$
|
1.75
|
||||||
Estimated future volatility
|
-
|
-
|
143
|
%
|
||||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
-
|
-
|
3.27
|
%
|
||||||||
Equivalent volatility
|
-
|
-
|
106
|
%
|
||||||||
Equivalent risk-free rate
|
-
|
-
|
3.26
|
%
|
||||||||
Estimated additional shares to be issued upon dilutive event
|
-
|
-
|
98,838
|
March 20, 2008 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
-
|
$
|
-
|
$
|
2.14
|
||||||
Estimated future volatility
|
-
|
-
|
142
|
%
|
||||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
-
|
-
|
1.95
|
%
|
||||||||
Equivalent volatility
|
-
|
-
|
97
|
%
|
||||||||
Equivalent risk-free rate
|
-
|
-
|
1.31
|
%
|
||||||||
Estimated additional shares to be issued upon dilutive event
|
-
|
-
|
7,479
|
June 5, 2009 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
0.51
|
$
|
0.31
|
$
|
1.14
|
||||||
Estimated future volatility
|
109
|
%
|
100
|
%
|
100
|
%
|
||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
0.13
|
%
|
0.16
|
%
|
0.63-4.31
|
%
|
||||||
Equivalent volatility
|
43-45
|
%
|
92
|
%
|
103-117
|
%
|
||||||
Equivalent risk-free rate
|
0.05-0.06
|
%
|
0.11
|
%
|
0.20-1.44
|
%
|
October 23, 2009 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
0.51
|
$
|
0.31
|
$
|
0.69
|
||||||
Estimated future volatility
|
109
|
%
|
100
|
%
|
100
|
%
|
||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
0.13
|
%
|
0.16-0.34
|
%
|
2.63-3.80
|
%
|
||||||
Equivalent volatility
|
57
|
%
|
74-93
|
%
|
98-99
|
%
|
||||||
Equivalent risk-free rate
|
0.07
|
%
|
0.06-0.13
|
%
|
0.93-1.16
|
%
|
June 30, 2010 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
0.51
|
$
|
0.31
|
$
|
1.43
|
||||||
Estimated future volatility
|
109
|
%
|
100
|
%
|
100
|
%
|
||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
0.13
|
%
|
0.16-0.34
|
%
|
1.78
|
%
|
||||||
Equivalent volatility
|
49
|
%
|
74-75
|
%
|
98
|
%
|
||||||
Equivalent risk-free rate
|
0.06
|
%
|
0.06
|
%
|
0.59
|
%
|
March 31, 2011 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
0.51
|
$
|
0.31
|
$
|
1.18
|
||||||
Estimated future volatility
|
109
|
%
|
93-100
|
%
|
100
|
%
|
||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
1.58
|
%
|
0.16-0.58
|
%
|
1.32-3.64
|
%
|
||||||
Equivalent volatility
|
71
|
%
|
74-89
|
%
|
79-96
|
%
|
||||||
Equivalent risk-free rate
|
0.27
|
%
|
0.06-0.23
|
%
|
0.39-1.09
|
%
|
December 4, 2012 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
0.51
|
$
|
0.31
|
$
|
0.30-0.33
|
||||||
Estimated future volatility
|
109
|
%
|
85-100
|
%
|
100
|
%
|
||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
1.58-2.72
|
%
|
0.58-1.26
|
%
|
0.52-1.065
|
%
|
||||||
Equivalent volatility
|
69-73
|
%
|
88
|
%
|
88-90
|
%
|
||||||
Equivalent risk-free rate
|
0.22-0.40
|
%
|
0.21-0.32
|
%
|
0.22-0.31
|
%
|
July 26, 2013 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
0.51
|
-
|
$
|
0.53
|
|||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Equivalent volatility
|
69-77
|
%
|
-
|
78-80
|
%
|
|||||||
Equivalent risk-free rate
|
0.22-0.62
|
%
|
-
|
0.20-0.48
|
%
|
October 16, 2013 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
0.51
|
-
|
$
|
0.49
|
|||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Equivalent volatility
|
69-76
|
%
|
-
|
81-83
|
%
|
|||||||
Equivalent risk-free rate
|
0.20-0.52
|
%
|
-
|
0.21-0.55
|
%
|
|
Year Ended
December 31, 2013
|
Year Ended
December 31, 2012
|
Cumulative from
March 19, 2001
(Inception) to
December 31, 2013
|
|||||||||
December 18, 2007 financing
|
$
|
-
|
$
|
-
|
$
|
50,722
|
||||||
March 20, 2008 financing
|
-
|
-
|
160,063
|
|||||||||
June 5, 2009 financing:
|
||||||||||||
Series I warrants
|
-
|
-
|
707,111
|
|||||||||
Series II warrants
|
-
|
-
|
(2,191,175
|
)
|
||||||||
Series III warrants
|
35,300
|
54,445
|
1,306,189
|
|||||||||
Warrants to placement agent
|
3,488
|
5,404
|
107,876
|
|||||||||
Derivative loss at inception
|
-
|
-
|
(328,937
|
)
|
||||||||
October 23, 2009 financing:
|
||||||||||||
Warrants to institutional investors
|
53,765
|
55,767
|
(55,995
|
)
|
||||||||
Warrants to placement agent
|
41
|
673
|
(135,938
|
)
|
||||||||
June 30, 2010 financing
|
||||||||||||
Warrants to institutional investors
|
12,190
|
77,600
|
1,800,790
|
|||||||||
Warrants to placement agent
|
20
|
2,300
|
180,080
|
|||||||||
March 31, 2011 financing:
|
||||||||||||
Warrants to institutional investors
|
(5,027
|
)
|
237,667
|
2,515,306
|
||||||||
Warrants to placement agent
|
83
|
3,938
|
97,667
|
|||||||||
December 4, 2012 financing:
|
||||||||||||
Warrants to institutional investors
|
(1,598,195
|
)
|
210,210
|
(1,387,985
|
)
|
|||||||
Warrants to placement agent
|
(75,062
|
)
|
15,872
|
(59,190
|
)
|
|||||||
July 26, 2013 financing:
|
||||||||||||
Warrants to institutional investors
|
147,562
|
-
|
147,562
|
|||||||||
Warrants to placement agent
|
26,681
|
-
|
26,681
|
|||||||||
October 16, 2013 financing:
|
||||||||||||
Warrants to institutional investors
|
18,739
|
-
|
18,739
|
|||||||||
Warrants to placement agent
|
14,761
|
-
|
14,761
|
|||||||||
Total:
|
$
|
(1,365,654
|
)
|
$
|
663,876
|
$
|
2,974,327
|
14.
|
Put feature on Common Stock
|
Fair Values:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
December 18, 2007 financing
|
$
|
-
|
$
|
-
|
$
|
4,401,169
|
||||||
March 20, 2008 financing
|
-
|
-
|
553,569
|
|||||||||
Total:
|
$
|
-
|
$
|
-
|
$
|
4,954,738
|
Number of Shares indexed:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
December 18, 2007 financing
|
-
|
-
|
4,857,159
|
|||||||||
March 20, 2008 financing
|
-
|
-
|
642,858
|
|||||||||
Total:
|
-
|
-
|
5,500,017
|
December 18, 2007 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
-
|
$
|
-
|
$
|
1.75
|
||||||
Estimated future stock price
|
-
|
-
|
$
|
0.98-$1.75
|
||||||||
Estimated future volatility
|
-
|
-
|
143
|
%
|
||||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
-
|
-
|
3.14
|
%
|
March 20, 2008 financing:
|
December 31, 2013
|
December 31, 2012
|
Transaction Date
|
|||||||||
Trading market prices
|
$
|
-
|
$
|
-
|
$
|
2.14
|
||||||
Estimated future stock price
|
-
|
-
|
$
|
1.36-$2.10
|
||||||||
Estimated future volatility
|
-
|
-
|
142
|
%
|
||||||||
Dividend
|
-
|
-
|
-
|
|||||||||
Estimated future risk-free rate
|
-
|
-
|
1.85
|
%
|
|
Year Ended
December 31, 2013
|
Year Ended
December 31, 2012
|
Cumulative from March 19, 2001 (Inception) to December 31, 2013
|
|||||||||
December 18, 2007 financing
|
$
|
-
|
$
|
-
|
$
|
2,148,418
|
||||||
March 20, 2008 financing
|
-
|
-
|
167,121
|
|||||||||
Total:
|
$
|
-
|
$
|
-
|
$
|
2,315,539
|
15.
|
Income Taxes
|
|
December 31,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Net Operating Loss Carryforwards
|
$
|
26,924,000
|
24,094,200
|
|||||
Stock Option Expense
|
2,028,200
|
1,843,000
|
||||||
Book tax differences on assets and liabilities
|
424,000
|
352,500
|
||||||
Valuation Allowance
|
(29,376,200
|
)
|
(26,289,700
|
)
|
||||
|
||||||||
Net Deferred Tax Assets
|
$
|
-
|
$
|
-
|
16.
|
Commitments and Contingencies
|
a) | The Company has contracted with various vendors for research and development services. The terms of these agreements usually require an initial fee and monthly or periodic payments over the term of the agreement, ranging from two months to 36 months. The costs to be incurred are estimated and are subject to revision. As of December 31, 2013, the total estimated cost to be incurred under these agreements was approximately $2 2,968,113, and the Company had made payments totaling $20,153,882 since inception under the terms of the agreements. All of these agreements may be terminated by either party upon appropriate notice as stipulated in the respective agreements. |
b) | The Company and four of its key executives currently have outstanding employment agreements. The agreements result in annual commitments for each key executive of $330,000, $285,000, $250,000 and $250,000, respectively. |
c) | On June 22, 2009, the Company entered into a License Agreement with Korea Research Institute of Chemical Technology (“KRICT”) to acquire the rights to all intellectual properties related to Quinoxaline-Piperazine derivatives that were synthesized under a Joint Research Agreement. The initial license fee was $100,000, all of which was paid as of December 31, 2009. The agreement with KRICT calls for a one-time milestone payment of $1,000,000 within 30 days after the first achievement of marketing approval of the first commercial product arising out of or in connection with the use of KRICT’s intellectual properties. As of December 31, 2013, the milestone has not occurred. |
d) | On June 29, 2009, the Company signed a five-year commercial lease agreement for 5,466 square feet of office space in Rockville, Maryland commencing on June 29, 2009. The lease agreement required annual base rent with increases over the next five years. Under the lease agreement, the Company pays its allocable portion of real estate taxes and common area operating charges. Rent paid under the Company’s lease during the years ended December 31, 2013 and 2012, including the amendment terms described below, was $ 117,977 and $158,835, respectively. |
For the year ending December 31:
|
2014
|
139,675
|
|||
|
2015
|
156,000
|
|||
|
2016
|
159,881
|
|||
|
2017
|
163,871
|
|||
|
2018 and thereafter
|
252,994
|
|||
|
|
||||
|
Total
|
$
|
872,421
|
e) | On September 21, 2009, the Company closed on the Purchase Agreement with Teva, and contemporaneous with the execution and delivery of this agreement, the parties executed the RELO Agreement, pursuant to which the Company agreed to use proceeds from the issuance and sale of shares to Teva to fund a research and development program for the pre-clinical development of RX-3117. On December 27, 2012, the Company received $926,000 from Teva in accordance with a second amendment to the RELO Agreement, entered into on November 27, 2012. The Company did not issue equity for this transaction. On August 28, 2013, the Company announced that Teva had decided not to exercise its option to license RX-3117, and as a result the RELO Agreement was terminated. The remaining proceeds of $158,630, which is included in restricted cash equivalents at December 31, 2013 will be used to pay for unbilled expenses. |
f) | The Company has established a 401(k) plan for its employees. The Company has elected to match 100% of the first 3% of an employee’s compensation plus 50% of an additional 2% of the employee’s deferral. Expense related to this matching contribution aggregated to $78,487 and $ 65,686 for the years ended December 31, 2013, and 2012, respectively. |
g) | On June 24, 2013 and May 30, 2012, the Company signed a one-year renewal to use laboratory space commencing on July 1, 2013 and 2012, respectively. The lease requires monthly rental payments of $4,554. Rent paid under the Company’s lease during the years ended December 31, 2013 and 2012 was $ 54,648. |
h) | In July 2013, the Company entered into an exclusive license agreement with the University of Maryland, Baltimore for a novel drug delivery platform, Nano-Polymer Drug Conjugate Systems. RX-21101 is the Company’s first drug candidate utilizing this platform. The agreement requires the Company to make payments to the University of Maryland if RX-21101 or any products from the licensed delivery platform achieve development milestones. As of December 31, 2013, no development milestones have occurred. |
i) | In October 2013, the Company signed an exclusive license agreement with the Ohio State Innovation Foundation, for a novel oligonucleotide drug delivery platform, Lipid-Coated Albumin Nanoparticle (“LCAN”). The agreement requires the Company to make payments to the Ohio State if or any products from the licensed delivery platform achieve development milestones. As of December 31, 2013, no development milestones have occurred. |
17.
|
Fair Value Measurements
|
Level 1 Inputs
|
—
|
Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;
|
Level 2 Inputs
|
—
|
Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly;
|
Level 3 Inputs
|
—
|
Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.
|
|
Fair Value Measurements at December 31, 2013
|
|||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Restricted Cash Equivalents
|
$
|
196,130
|
$
|
158,630
|
$
|
37,500
|
$
|
-
|
||||||||
Marketable Securities
|
100,000
|
100,000
|
-
|
-
|
||||||||||||
Total Assets:
|
$
|
296,130
|
$
|
258,630
|
$
|
37,500
|
$
|
-
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
5,034,058
|
-
|
-
|
$
|
5,034,058
|
|
Fair Value Measurements at December 31, 2012
|
|||||||||||||||
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Restricted Cash Equivalents
|
$
|
1,091,801
|
$
|
1,054,301
|
$
|
37,500
|
$
|
-
|
||||||||
Marketable Securities
|
100,000
|
100,000
|
-
|
-
|
||||||||||||
Total Assets:
|
$
|
1,191,801
|
$
|
1,154,301
|
$
|
37,500
|
$
|
-
|
||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
2,842,065
|
-
|
-
|
$
|
2,842,065
|
a) | Money market funds valued at the net asset value of shares held by the Company and classified within level 1 of the fair value hierarchy; |
b) | Certificate of deposit valued based upon the underlying terms of a letter of credit, as disclosed in Note 16, and classified within level 2 of the fair value hierarchy. |
|
Warrant Liabilities
|
|||
Balance at January 1, 2013
|
$
|
2,842,065
|
||
Additions
|
2,564,002
|
|||
Unrealized losses, net
|
1,365,798
|
|||
Unrealized gains on expiration
|
(144
|
)
|
||
Transfers out of level 3
|
(1,737,663
|
)
|
||
Balance at December 31, 2013
|
$
|
5,034,058
|
|
Warrant Liabilities
|
|||
Balance at January 1, 2012
|
$
|
868,725
|
||
Additions
|
2,637,216
|
|||
Unrealized gains, net
|
(663,876
|
)
|
||
Unrealized gains on expiration
|
-
|
|||
Transfers out of level 3
|
-
|
|||
Balance at December 31, 2012
|
$
|
2,842,065
|
18.
|
Subsequent Events
|
Signature
|
Title
|
Date
|
||
|
/s/ Peter D. Suzdak
|
|
Chief Executive Officer and Director
|
March 21, 2014
|
Peter D. Suzdak
|
|
|||
|
/s/ Tae Heum Jeong
|
|
Chief Financial Officer and Secretary
|
March 21, 2014
|
Tae Heum Jeong
|
|
|||
|
/s/ Chang H. Ahn
|
|
Chairman
|
March 21, 2014
|
Chang H. Ahn
|
|
|
||
|
/s/ Peter Brandt
|
|
Director
|
March 21, 2014
|
Peter Brandt
|
|
|
||
|
/s/David McIntosh
|
|
Director
|
March 21, 2014
|
David McIntosh
|
|
|
||
|
/s/ Charles Beever
|
|
Director
|
March 21, 2014
|
Charles Beever
|
|
|
||
|
/s/ Kwang Soo Cheong
|
|
Director
|
March 21, 2014
|
Kwang Soo Cheong
|
|
|
||
|
/s/ Si Moon Hwang
|
|
Director
|
March 21, 2014
|
Si Moon Hwang
|
|
|
||
|
/s/ Mark Carthy
|
|
Director
|
March 21, 2014
|
Mark Carthy
|
|
|
1. | I have reviewed this Annual Report on Form 10-K of Rexahn Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: March 21, 2014
|
|
/s/ Peter D. Suzdak
|
|
Peter D. Suzdak
|
|
Chief Executive Officer
|
1. | I have reviewed this Annual Report on Form 10-K of Rexahn Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: March 21, 2014
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/s/ Tae Heum Jeong
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Tae Heum Jeong
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Chief Financial Officer
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(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: March 21, 2014
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By:
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/s/ Peter D. Suzdak
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Peter D. Suzdak,
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Chief Executive Officer
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* | This Certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing. |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: March 21, 2014
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By:
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/s/ Tae Heum Jeong
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Tae Heum Jeong,
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Chief Financial Officer
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* | This Certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing. |