Delaware
|
11-3516358
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
15245 Shady Grove Road, Suite 455
Rockville, MD
|
20850
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, $.0001 par value
|
REXN
|
Nasdaq Capital Market
|
Large accelerated filer
|
☐ |
Accelerated filer
|
☐ |
Non-accelerated filer
|
☑ |
Smaller reporting company
|
☑ |
Emerging growth company
|
☐
|
|
Page
|
|
|
|
|
PART I
|
1
|
|
Item 1
|
1
|
|
1
|
||
2
|
||
3
|
||
4
|
||
6
|
||
7
|
||
Item 2
|
24
|
|
Item 3
|
30
|
|
Item 4
|
30
|
|
PART II
|
31
|
|
Item 1A
|
31
|
|
Item 6
|
32
|
|
|
||
33
|
September 30,
2019
|
December 31,
2018
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
7,932,100
|
$
|
8,744,301
|
||||
Marketable securities
|
5,981,540
|
5,981,520
|
||||||
Prepaid expenses and other current assets
|
722,217
|
1,173,847
|
||||||
Total Current Assets
|
14,635,857
|
15,899,668
|
||||||
Security Deposits
|
25,681
|
30,785
|
||||||
Operating Lease Right-of-Use Assets
|
233,936
|
-
|
||||||
Equipment, Net
|
85,302
|
112,473
|
||||||
Total Assets
|
$
|
14,980,776
|
$
|
16,042,926
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
1,366,215
|
$
|
3,152,550
|
||||
Deferred revenue
|
1,500,000
|
-
|
||||||
Operating lease liabilities, current
|
135,052
|
-
|
||||||
Total Current Liabilities
|
3,001,267
|
3,152,550
|
||||||
Operating Lease Liabilities, non-current
|
100,397
|
-
|
||||||
Warrant Liabilities
|
123,872
|
2,307,586
|
||||||
Other Liabilities
|
-
|
19,900
|
||||||
Total Liabilities
|
3,225,536
|
5,480,036
|
||||||
Commitments and Contingencies (note 14)
|
||||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, par value $0.0001, 10,000,000 authorized shares, none issued and outstanding
|
-
|
-
|
||||||
Common stock, par value $0.0001, 75,000,000 authorized shares, 4,019,141 and 3,122,843 issued and outstanding
|
402
|
312
|
||||||
Additional paid-in capital
|
173,200,742
|
165,267,656
|
||||||
Accumulated other comprehensive income (loss)
|
7,848
|
(17,836
|
)
|
|||||
Accumulated deficit
|
(161,453,752
|
)
|
(154,687,242
|
)
|
||||
Total Stockholders’ Equity
|
11,755,240
|
10,562,890
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
14,980,776
|
$
|
16,042,926
|
For the Three Months
Ended
September 30,
|
For the Nine Months
Ended
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Revenues:
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Expenses:
|
||||||||||||||||
General and administrative
|
1,149,206
|
1,795,952
|
4,184,744
|
5,192,122
|
||||||||||||
Research and development
|
1,131,418
|
2,887,955
|
5,022,049
|
10,379,081
|
||||||||||||
Total Expenses
|
2,280,624
|
4,683,907
|
9,206,793
|
15,571,203
|
||||||||||||
Loss from Operations
|
(2,280,624
|
)
|
(4,683,907
|
)
|
(9,206,793
|
)
|
(15,571,203
|
)
|
||||||||
Other Income
|
||||||||||||||||
Interest income
|
78,534
|
55,153
|
256,569
|
198,362
|
||||||||||||
Other income
|
-
|
-
|
-
|
368,750
|
||||||||||||
Unrealized gain (loss) on fair value of warrants
|
242,860
|
(710,065
|
)
|
2,183,714
|
3,752,131
|
|||||||||||
Total Other Income (Expense)
|
321,394
|
(654,912
|
)
|
2,440,283
|
4,319,243
|
|||||||||||
Net Loss Before Provision for Income Taxes
|
(1,959,230
|
)
|
(5,338,819
|
)
|
(6,766,510
|
)
|
(11,251,960
|
)
|
||||||||
Provision for income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net Loss
|
$
|
(1,959,230
|
)
|
$
|
(5,338,819
|
)
|
$
|
(6,766,510
|
)
|
$
|
(11,251,960
|
)
|
||||
|
||||||||||||||||
Net loss per share, basic and diluted
|
$
|
(0.49
|
)
|
$
|
(2.02
|
)
|
$
|
(1.72
|
)
|
$
|
(4.26
|
)
|
||||
|
||||||||||||||||
Weighted average number of shares outstanding, basic and diluted
|
4,019,141
|
2,641,511
|
3,940,288
|
2,640,769
|
For the Three Months
Ended September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net Loss
|
$
|
(1,959,230
|
)
|
$
|
(5,338,819
|
)
|
$
|
(6,766,510
|
)
|
$
|
(11,251,960
|
)
|
||||
Unrealized gain on available-for-sale securities
|
669
|
35,468
|
25,684
|
27,399
|
||||||||||||
Comprehensive Loss
|
$
|
(1,958,561
|
)
|
$
|
(5,303,351
|
)
|
$
|
(6,740,826
|
)
|
$
|
(11,224,561
|
)
|
Common Stock
|
||||||||||||||||||||||||
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
Stockholders'
Equity
|
|||||||||||||||||||
Balances at July 1, 2019
|
4,019,141
|
$
|
402
|
$
|
173,110,047
|
$
|
(159,494,522
|
)
|
$
|
7,179
|
$
|
13,623,106
|
||||||||||||
Stock-based compensation
|
-
|
-
|
90,695
|
-
|
-
|
90,695
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(1,959,230
|
)
|
-
|
(1,959,230
|
)
|
||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
669
|
669
|
||||||||||||||||||
Balances at September 30, 2019
|
4,019,141
|
$
|
402
|
$
|
173,200,742
|
$
|
(161,453,752
|
)
|
$
|
7,848
|
$
|
11,755,240
|
||||||||||||
Balances at July 1, 2018
|
2,640,927
|
264
|
157,719,808
|
(146,231,853
|
)
|
(64,955
|
)
|
11,423,264
|
||||||||||||||||
Common stock issued in exchange for services
|
625
|
-
|
10,500
|
-
|
-
|
10,500
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
281,482
|
-
|
-
|
281,482
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(5,338,819
|
)
|
-
|
(5,338,819
|
)
|
||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
35,468
|
35,468
|
||||||||||||||||||
Balances at September 30, 2018
|
2,641,552
|
$
|
264
|
$
|
158,011,790
|
$
|
(151,570,672
|
)
|
$
|
(29,487
|
)
|
$
|
6,411,895
|
Common Stock
|
||||||||||||||||||||||||
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
Stockholders'
Equity
|
|||||||||||||||||||
Balances at January 1, 2019
|
3,122,843
|
$
|
312
|
$
|
165,267,656
|
$
|
(154,687,242
|
)
|
$
|
(17,836
|
)
|
$
|
10,562,890
|
|||||||||||
Issuance of common stock and units, net of issuance costs
|
895,834
|
90
|
7,553,738
|
-
|
-
|
7,553,828
|
||||||||||||||||||
Common stock issued from vested restricted stock units
|
464
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
379,348
|
-
|
-
|
379,348
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(6,766,510
|
)
|
-
|
(6,766,510
|
)
|
||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
25,684
|
25,684
|
||||||||||||||||||
Balances at September 30, 2019
|
4,019,141
|
$
|
402
|
$
|
173,200,742
|
$
|
(161,453,752
|
)
|
$
|
7,848
|
$
|
11,755,240
|
||||||||||||
Balances at January 1, 2018
|
2,639,319
|
264
|
157,143,930
|
(140,318,712
|
)
|
(56,886
|
)
|
16,768,596
|
||||||||||||||||
Common stock issued in exchange for services
|
1,250
|
-
|
22,650
|
-
|
-
|
22,650
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
845,210
|
-
|
-
|
845,210
|
||||||||||||||||||
Common stock issued from vested restricted stock units
|
983
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(11,251,960
|
)
|
-
|
(11,251,960
|
)
|
||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
27,399
|
27,399
|
||||||||||||||||||
Balances at September 30, 2018
|
2,641,552
|
$
|
264
|
$
|
158,011,790
|
$
|
(151,570,672
|
)
|
$
|
(29,487
|
)
|
$
|
6,411,895
|
For the Nine Months Ended
September 30,
|
||||||||
2019
|
2018
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(6,766,510
|
)
|
$
|
(11,251,960
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Compensatory stock
|
-
|
22,650
|
||||||
Depreciation and amortization
|
31,460
|
37,204
|
||||||
Loss on sale of equipment
|
9,594
|
-
|
||||||
Amortization of premiums and discounts on marketable securities, net
|
(86,770
|
)
|
35,110
|
|||||
Stock-based compensation
|
379,348
|
845,210
|
||||||
Amortization and termination of deferred research and development arrangement
|
-
|
(375,000
|
)
|
|||||
Unrealized gain on fair value of warrants
|
(2,183,714
|
)
|
(3,752,131
|
)
|
||||
Amortization of deferred lease incentive
|
-
|
(9,332
|
)
|
|||||
Deferred rent
|
-
|
(17,542
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
333,132
|
149,643
|
||||||
Accounts payable and accrued expenses
|
(1,786,335
|
)
|
97,720
|
|||||
Deferred revenue
|
1,500,000
|
-
|
||||||
Other, net
|
5,215
|
-
|
||||||
Net Cash Used in Operating Activities
|
(8,564,580
|
)
|
(14,218,428
|
)
|
||||
Cash Flows from Investing Activities:
|
||||||||
Purchase of equipment
|
(19,383
|
)
|
(39,224
|
)
|
||||
Sale of equipment
|
5,500
|
-
|
||||||
Purchase of marketable securities
|
(8,887,566
|
)
|
-
|
|||||
Redemption of marketable securities
|
9,000,000
|
9,950,220
|
||||||
Net Cash Provided by Investing Activities
|
98,551
|
9,910,996
|
||||||
Cash Flows from Financing Activities:
|
||||||||
Issuance of common stock and units, net of issuance costs
|
7,653,828
|
-
|
||||||
Net Cash Provided by Financing Activities
|
7,653,828
|
-
|
||||||
Net Decrease in Cash and Cash Equivalents
|
(812,201
|
)
|
(4,307,432
|
)
|
||||
Cash and Cash Equivalents – beginning of period
|
8,744,301
|
8,899,154
|
||||||
Cash and Cash Equivalents - end of period
|
$
|
7,932,100
|
$
|
4,591,722
|
||||
Supplemental Cash Flow Information
|
||||||||
Operating cash flows paid for amounts included in the measurement of lease liabilities
|
$
|
158,962
|
$
|
-
|
||||
Non-cash financing and investing activities:
|
||||||||
Warrants issued
|
$
|
4,735,913
|
$
|
-
|
||||
Operating lease right-of-use assets obtained in exchange for lease obligations:
|
$
|
380,935
|
$
|
-
|
1. |
Operations and Organization
|
2.
|
Recent Accounting Pronouncements Affecting the Company
|
3. |
Marketable Securities
|
September 30, 2019
|
||||||||||||||||
Cost
Basis
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Commercial Paper
|
$
|
3,974,793
|
$
|
5,037
|
$
|
-
|
$
|
3,979,830
|
||||||||
Corporate Bonds
|
1,998,899
|
2,811
|
-
|
2,001,710
|
||||||||||||
Total Marketable Securities
|
$
|
5,973,692
|
$
|
7,848
|
$
|
-
|
$
|
5,981,540
|
December 31, 2018
|
||||||||||||||||
Cost
Basis
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
|||||||||||||
Corporate Bonds
|
$
|
5,999,356
|
$
|
-
|
$
|
(17,836
|
)
|
$
|
5,981,520
|
4. |
Prepaid Expenses and Other Current Assets
|
September 30,
2019
|
December 31,
2018
|
|||||||
Deposits on contracts
|
$
|
115,857
|
$
|
618,417
|
||||
Prepaid expenses and other current assets
|
606,360
|
555,430
|
||||||
$
|
722,217
|
$
|
1,173,847
|
5. |
Equipment, Net
|
September 30,
2019
|
December 31,
2018
|
|||||||
Furniture and fixtures
|
$
|
67,650
|
$
|
82,686
|
||||
Office and computer equipment
|
178,872
|
159,489
|
||||||
Lab equipment
|
-
|
447,653
|
||||||
Leasehold improvements
|
116,403
|
131,762
|
||||||
Total equipment
|
362,925
|
821,590
|
||||||
Less: Accumulated depreciation and amortization
|
(277,623
|
)
|
(709,117
|
)
|
||||
Net carrying amount
|
$
|
85,302
|
$
|
112,473
|
6. |
Accounts Payable and Accrued Expenses
|
September 30,
2019
|
December 31,
2018
|
|||||||
Trade payables
|
$
|
363,331
|
$
|
547,519
|
||||
Accrued expenses
|
95,850
|
140,637
|
||||||
Accrued research and development contract costs
|
636,564
|
1,782,131
|
||||||
Payroll liabilities
|
270,470
|
682,263
|
||||||
$
|
1,366,215
|
$
|
3,152,550
|
7. |
Collaboration Agreements
|
8. |
Leases
|
Right-of-Use Assets
|
$
|
233,936
|
||
Operating Lease Liabilities
|
||||
Current
|
$
|
135,052
|
||
Long Term
|
100,397
|
|||
Total Operating Lease Liabilities
|
$
|
235,449
|
Year Ending December 31:
|
||||
2019 (excluding the nine months ended September 30, 2019)
|
$
|
25,508
|
||
2020
|
154,961
|
|||
2021
|
78,437
|
|||
Minimum lease payments
|
258,906
|
|||
Less: Imputed interest
|
(23,457
|
)
|
||
Present value of minimum lease payments
|
235,449
|
|||
Less: current maturities of lease obligations
|
(135,052
|
)
|
||
Long-term lease obligations
|
$
|
100,397
|
9. |
Net Loss per Common Share
|
10. |
Common Stock
|
11. |
Stock-Based Compensation
|
For the Three Months
Ended
September 30,
|
For the Nine Months
Ended
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Statement of operations line item:
|
||||||||||||||||
General and administrative
|
$
|
84,378
|
$
|
188,920
|
$
|
320,776
|
$
|
579,924
|
||||||||
Research and development
|
6,317
|
92,562
|
58,572
|
265,286
|
||||||||||||
Total
|
$
|
90,695
|
$
|
281,482
|
$
|
379,348
|
$
|
845,210
|
For the Nine Months Ended September 30,
|
||||||||
2019
|
2018
|
|||||||
Black-Scholes assumptions
|
||||||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected volatility
|
74-75
|
%
|
69-72
|
%
|
||||
Risk-free interest rate
|
1.9-2.6
|
%
|
2.3-2.8
|
%
|
||||
Expected term (in years)
|
5.5-6 years
|
5.5-6 years
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding, January 1, 2019
|
255,922
|
$
|
41.88
|
7.8 years
|
$
|
-
|
|||||||
Granted
|
52,465
|
$
|
6.41
|
||||||||||
Exercised
|
-
|
$
|
-
|
||||||||||
Expired
|
(2,080
|
)
|
$
|
97.78
|
|||||||||
Cancelled
|
(86,654
|
)
|
$
|
33.71
|
|||||||||
Outstanding, September 30, 2019
|
219,653
|
$
|
36.06
|
7.4 years
|
$
|
-
|
|||||||
Exercisable, September 30, 2019
|
122,150
|
$
|
54.95
|
6.0 years
|
$
|
-
|
2019
|
||||||||
Number of
Options
|
Weighted Average Fair
Value at Grant Date
|
|||||||
Unvested at January 1, 2019
|
131,531
|
$
|
13.19
|
|||||
Granted
|
52,465
|
$
|
4.20
|
|||||
Vested
|
(35,194
|
)
|
$
|
16.26
|
||||
Cancelled
|
(51,299
|
)
|
$
|
11.47
|
||||
Unvested at September 30, 2019
|
97,503
|
$
|
8.16
|
Number of RSUs
|
Weighted
Average Grant
Date Fair Value |
|||||||
Outstanding, January 1, 2019
|
1,394
|
$
|
22.08
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Vested and Released
|
(464
|
)
|
$
|
22.08
|
||||
Cancelled
|
(930
|
)
|
$
|
22.08
|
||||
Outstanding, September 30, 2019
|
-
|
$
|
-
|
12.
|
Warrants
|
Number of Warrants:
|
|||||||||||||
Warrant Issuance
|
September 30,
2019
|
December 31,
2018
|
Exercise Price
|
Expiration
Date
|
|||||||||
Liability-classified Warrants
|
|||||||||||||
January 2014 Investors
|
-
|
39,683
|
$
|
153.60
|
Jan. 2019
|
||||||||
November 2015 Investors
|
104,168
|
104,168
|
$
|
63.60
|
May 2021
|
||||||||
November 2015 Placement Agent
|
279
|
279
|
$
|
63.60
|
Nov. 2020
|
||||||||
March 2016 Investors
|
50,651
|
50,651
|
$
|
50.40
|
Sept. 2021
|
||||||||
September 2016 Investors
|
67,084
|
67,084
|
$
|
36.00
|
Mar. 2022
|
||||||||
June 2017 Investors
|
126,264
|
126,264
|
$
|
48.00
|
Dec. 2022
|
||||||||
June 2017 Placement Agent
|
15,153
|
15,153
|
$
|
49.50
|
June 2022
|
||||||||
October 2017 Investors
|
136,058
|
136,058
|
$
|
34.20
|
Apr. 2023
|
||||||||
October 2017 Placement Agent
|
16,327
|
16,327
|
$
|
36.72
|
Oct. 2022
|
||||||||
Total liability classified warrants
|
515,984
|
555,667
|
|||||||||||
Equity-classified Warrants
|
|||||||||||||
October 2018 Investors
|
480,771
|
480,771
|
$
|
20.04
|
Apr. 2024
|
||||||||
October 2018 Placement Agent
|
28,848
|
28,848
|
$
|
19.50
|
Oct. 2023
|
||||||||
January 2019 Investors
|
895,886
|
-
|
$
|
9.60
|
Jan. 2024
|
||||||||
Total equity-classified warrants
|
1,405,505
|
509,619
|
|||||||||||
Total outstanding warrants
|
1,921,489
|
1,065,286
|
Number of Warrants
|
||||||||||||||||
Liability-
classified
|
Equity-
classified
|
Total
|
Weighted
average
exercise price
|
|||||||||||||
Balance, January 1, 2019
|
555,667
|
509,619
|
1,065,286
|
$
|
37.52
|
|||||||||||
Issued during the period
|
-
|
895,886
|
895,886
|
$
|
9.60
|
|||||||||||
Exercised during the period
|
-
|
-
|
-
|
$
|
-
|
|||||||||||
Expired during the period
|
(39,683
|
)
|
-
|
(39,683
|
)
|
$
|
153.60
|
|||||||||
Balance, September 30, 2019
|
515,984
|
1,405,505
|
1,921,489
|
$
|
22.10
|
Fair Value as of:
|
|||||||||
Warrant Issuance:
|
September 30, 2019
|
December 31, 2018
|
|||||||
November 2015 Investors
|
$
|
1,205
|
$
|
234,918
|
|||||
November 2015 Placement Agent
|
-
|
435
|
|||||||
March 2016 Investor
|
6,140
|
160,099
|
|||||||
September 2016 Investors
|
15,370
|
333,834
|
|||||||
June 2017 Investors
|
35,714
|
623,324
|
|||||||
June 2017 Placement Agent
|
2,881
|
65,149
|
|||||||
October 2017 Investors
|
57,196
|
801,551
|
|||||||
October 2017 Placement Agent
|
5,366
|
88,276
|
|||||||
Total:
|
$
|
123,872
|
$
|
2,307,586
|
September 30, 2019
|
December 31, 2018
|
||||||||
Trading market prices
|
$
|
2.05
|
$
|
11.16
|
|||||
Estimated future volatility
|
104
|
%
|
105
|
%
|
|||||
Dividend
|
-
|
-
|
|||||||
Estimated future risk-free rate
|
1.42-1.57
|
%
|
2.35-2.53
|
%
|
|||||
Equivalent volatility
|
98-117
|
%
|
99-104
|
%
|
|||||
Equivalent risk-free rate
|
1.70-1.80
|
%
|
2.51-2.55
|
%
|
|||||
Fundamental transaction likelihood
|
50
|
%
|
5
|
%
|
|||||
Fundamental transaction timing
|
March 2020
|
End of warrant term
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Expired Warrants
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
64,307
|
||||||||
November 2015 Investors
|
9,560
|
5,971
|
233,713
|
860,772
|
||||||||||||
November 2015 Placement Agent
|
-
|
211
|
435
|
2,345
|
||||||||||||
March 2016 Investors
|
6,286
|
(38,943
|
)
|
153,959
|
401,092
|
|||||||||||
September 2016 Investors
|
28,382
|
(109,915
|
)
|
318,464
|
461,570
|
|||||||||||
June 2017 Investors
|
69,660
|
(178,869
|
)
|
587,610
|
922,342
|
|||||||||||
June 2017 Placement Agent
|
5,804
|
(22,518
|
)
|
62,268
|
105,822
|
|||||||||||
October 2017 Investors
|
112,729
|
(331,671
|
)
|
744,355
|
828,906
|
|||||||||||
October 2017 Placement Agent
|
10,439
|
(34,331
|
)
|
82,910
|
104,975
|
|||||||||||
Total:
|
$
|
242,860
|
$
|
(710,065
|
)
|
$
|
2,183,714
|
$
|
3,752,131
|
13.
|
Income Taxes
|
September 30,
2019
|
December 31,
2018
|
|||||||
Net Operating Loss Carryforwards
|
$
|
43,268,000
|
$
|
41,184,000
|
||||
Stock Compensation Expense
|
1,291,000
|
1,608,000
|
||||||
Book Tax Differences on Assets and Liabilities
|
509,000
|
195,000
|
||||||
Valuation Allowance
|
(45,068,000
|
)
|
(42,987,000
|
)
|
||||
Net Deferred Tax Assets
|
$
|
-
|
$
|
-
|
14. |
Commitments and Contingencies
|
a) |
The Company has contracted with various vendors for services, with terms that require payments over the terms of the agreements, usually ranging from two to 36 months. The costs to be incurred are
estimated and are subject to revision. As of September 30, 2019, the total estimated cost to complete these agreements was approximately $2,420,000. All of these agreements may be terminated by either party upon appropriate notice
as stipulated in the respective agreements.
|
b) |
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 property related to
quinoxaline-piperazine derivatives that were synthesized under a Joint Research Agreement. 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 property. As of September 30, 2019, the milestone has not occurred.
|
c) |
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 $16,355 and $29,425 for the three months ended September 30, 2019 and 2018, respectively, and $62,740 and $99,702 for
the nine months ended September 30, 2019 and 2018, respectively.
|
d) |
On February 5, 2018, the Company and NEXT BT Co. Ltd (“Next BT”) terminated a research collaboration agreement between the Company and Rexgene Biotech Co., Ltd, a predecessor in interest to Next BT.
The Company agreed to pay Next BT a royalty in the low single digits of any net sales of RX-0201 the Company makes in Asia and 50% of the Company’s licensing revenue related to licensing of RX-0201 in Asia, up to an aggregate of
$5,000,000. As of September 30, 2019, the Company has not made any royalty payments to Next BT.
|
15.
|
Fair Value Measurements
|
Fair Value Measurements at September 30, 2019
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Commercial Paper
|
$
|
3,979,830
|
$
|
-
|
$
|
3,979,830
|
$
|
-
|
||||||||
Corporate Bonds
|
2,001,710
|
-
|
2,001,710
|
-
|
||||||||||||
Total Assets:
|
$
|
5,981,540
|
$
|
-
|
$
|
5,981,540
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
123,872
|
$
|
-
|
$
|
-
|
$
|
123,872
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Corporate Bonds
|
$
|
5,981,520
|
$
|
-
|
$
|
5,981,520
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
2,307,586
|
$
|
-
|
$
|
-
|
$
|
2,307,586
|
|
Warrant Liabilities
|
|||
Balance at January 1, 2019
|
$
|
2,307,586
|
||
Unrealized gains, net
|
(2,183,714
|
)
|
||
Balance at September 30, 2019
|
$
|
123,872
|
• |
uncertainties about the exploration and evaluation of strategic alternatives, including that they may not result in a definitive
transition or enhance shareholder value and may create a distraction or uncertainty that may adversely affect our operating results, business, or investor perceptions;
|
• |
uncertainties about the paths of our programs and our ability to evaluate and identify a path forward for those programs, particularly given the constraints we have as a small company with limited
financial, personnel and other operating resources;
|
• |
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 preclinical development;
|
• |
our ability 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 preclinical development;
|
• |
our ability 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 development, 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 and in our Annual Report on Form 10-K for the year ended December 31, 2018 under the caption “Risk Factors” and
those detailed from time to time in our filings with the Securities and Exchange Commission.
|
• |
RX-3117 is a novel, investigational oral, small molecule nucleoside compound. Once intracellularly activated (phosphorylated) by the enzyme UCK2, it is incorporated into the DNA or RNA of cells and inhibits both DNA and RNA
synthesis, which induces apoptotic cell death of tumor cells. RX-3117 is currently being evaluated in a Phase 2a clinical trial in combination with Celgene’s Abraxane® (paclitaxel protein-bound particles for injectable suspension)
as a first-line treatment in patients newly diagnosed with metastatic pancreatic cancer. The trial reached its target enrollment in February 2019. As of July 24, 2019, an overall response rate of 23% had been observed in 40
patients that had at least one scan on treatment. Preliminary and unaudited data indicates that the median progression free survival for patients in the study is approximately 5.4 months. Complete data from the trial is expected
to be available in 2020. While no additional trials are currently planned in metastatic pancreatic cancer, we are evaluating development options for RX-3117 in other indications.
|
• |
RX-5902 is a potential first-in-class small molecule modulator of the Wnt/beta-catenin pathway which plays a key role in cancer cell proliferation and tumor growth. In August 2018, we entered into a collaboration with Merck
Sharp & Dohme B.V. (“Merck”) to evaluate the combination of RX-5902 and Merck’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in a Phase 2 trial in
patients with metastatic triple negative breast cancer. We are currently evaluating the development strategy for RX-5902 and may or may not proceed with this trial.
|
• |
RX-0301 is a potential best-in-class, potent inhibitor of the synthesis of the protein kinase Akt-1, which we believe plays a critical role in cancer cell proliferation, survival, angiogenesis, metastasis, and drug resistance.
RX-0301 is the subject of a research and development collaboration with Zhejiang Haichang Biotechnology Co., Ltd. (“Haichang”) for the development of RX-0301 to conduct certain preclinical and clinical activities through completion
of a Phase 2a proof-of-concept clinical trial in hepatocellular carcinoma. RX-0301 is currently in preclinical development. Haichang expects to file an investigational new drug application with the Food and Drug Administration in
2020.
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Clinical Candidates:
|
||||||||||||||||
RX-3117
|
$
|
609,800
|
$
|
1,405,900
|
$
|
2,746,200
|
$
|
5,002,800
|
||||||||
RX-5902
|
245,100
|
632,200
|
775,300
|
2,496,200
|
||||||||||||
RX-0201
|
-
|
82,100
|
171,100
|
399,100
|
||||||||||||
|
||||||||||||||||
Preclinical, Personnel and Overhead
|
276,518
|
767,755
|
1,329,449
|
2,480,981
|
||||||||||||
Total Research and Development Expenses
|
$
|
1,131,418
|
$
|
2,887,955
|
$
|
5,022,049
|
$
|
10,379,081
|
Exhibit No.
|
Description
|
|
Amendment No. 1 to Collaboration and License Agreement, dated as of August 24, 2019, between BioSense Global LLC and Rexahn Pharmaceuticals, Inc., as filed as
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 29, 2019, is herein incorporated by reference.
|
||
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) / 15d-14(a).
|
||
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101
|
The following materials from Rexahn Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q, formatted in Extensible Business Reporting Language (“XBRL”): (i) Condensed Balance Sheet; (ii) Condensed
Statement of Operations; (iii) Condensed Statement of Comprehensive Loss; (iv) Condensed Statement of Stockholders’ Equity; (v) Condensed Statement of Cash Flows; and (vi) Notes to the Financial Statements.
|
REXAHN PHARMACEUTICALS, INC.
|
||
(Registrant)
|
||
By:
|
/s/ Douglas J. Swirsky
|
|
Date: November 6, 2019
|
Douglas J. Swirsky
|
|
Chief Executive Officer and President
|
||
(principal executive, financial and accounting officer)
|