Stockholders' Equity |
12 Months Ended | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | |||||||||||||||||||||
| Stockholders' Equity [Abstract] | |||||||||||||||||||||
| Stockholders' Equity |
Lincoln Park Purchase
Agreement
On August 10, 2023, the Company entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Purchase Agreement”). The Purchase Agreement provides that, subject to the terms and conditions set forth therein, the Company has the sole right, but not the obligation, to direct Lincoln Park to purchase up to $50 million of shares of the Company’s common stock from time to time over the 30-month term of the Purchase Agreement. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park (the “Registration Rights Agreement”), pursuant to which the Company agreed to register the resale of the shares of the Company’s common stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a registration statement. Upon the execution of the Purchase Agreement, the Company issued 246,792 shares of the Company’s common stock to Lincoln Park with a fair value of $1.0 million as consideration for its commitment to purchase shares of the Company’s common stock under the Purchase Agreement which was recorded as a component of financing costs in the accompanying statements of comprehensive (loss) income during the year ended December 31, 2023. Lincoln Park has agreed not to cause or engage in any manner whatsoever in any direct or indirect short selling or hedging of the Company’s common stock. In addition to the commitment shares referenced above, a total of 1,300,000 shares of the Company’s common stock were sold under the Purchase Agreement for net proceeds through December 31, 2023 in the amount of $4.5 million. Lastly, the Company incurred issuance costs of $152,000, consisting of investor expense reimbursement and legal costs, during the year ended December 31, 2023 which were recorded as a component of financing costs in the accompanying statements of comprehensive (loss) income during the year ended December 31, 2023. No shares of the Company’s common stock were sold under the Purchase Agreement prior to the third quarter of 2023. Under the Purchase Agreement on any business day selected by the Company, the Company may direct Lincoln Park to purchase up to 50,000 shares of its common stock on such business day (or the purchase date) (a “Regular Purchase”), provided that the closing sale price of the Company’s common stock on Nasdaq on the applicable purchase date is not below $0.25 and subject to other adjustments. A Regular Purchase may be increased to up to (i) 60,000 shares if the closing sale price of the Company’s common stock on Nasdaq is not below $5.00 on the applicable purchase date and (ii) 70,000 shares if the closing sale price of the Company’s common stock on Nasdaq is not below $7.50 on the applicable purchase date. The Company may direct Lincoln Park to purchase shares in Regular Purchases as often as every business day. The purchase price per share for each such Regular Purchase will be equal to the lesser of:
In addition, the Company may also direct Lincoln Park, on any business day on which the Company has submitted a Regular Purchase notice for the maximum amount allowed for such Regular Purchase, to purchase an additional amount of the Company’s common stock (an “Accelerated Purchase”) of up to the lesser of:
The purchase price per share for each such Accelerated Purchase will be equal to 96.5% of the lower of:
The Company may also direct Lincoln Park, on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been delivered to Lincoln Park in accordance with the Purchase Agreement, to purchase an additional amount of the Company’s common stock (an “Additional Accelerated Purchase”) as described in the Purchase Agreement. The pricing and settlement provisions in the Purchase Agreement result in the recognition of a derivative liability accounted for on a fair value basis under the provisions of ASC 815 - Derivatives and Hedging. A Monte Carlo simulation model was used to estimate future stock pricing and purchase activity to determine the fair value of the derivative liability as of the August 10, 2023 commencement date and again as of December 31, 2023. As of August 10, 2023 and December 31, 2023, the inputs used to determine fair value of the derivative liability included the Company’s Nasdaq closing stock price of $4.14 and $3.01 per share, respectively, a stock volatility rate of 82.5% and 77.5%, respectively, an expected term of 2.5 years and 2.1 years, respectively, and a risk-free interest rate of 4.6% and 4.2%, respectively. Lastly, the fair value of the derivative liability took into account future purchase decisions based on economic considerations and relevant stock issuance rules/limitations. The fair value change in the derivative liability was recorded in the fair value change in derivative liabilities line item in the accompanying statements of comprehensive (loss) income during the year ended December 31, 2023. At-The-Market
Program
On February 4, 2021, Ocuphire filed a Form S-3 shelf registration under the Securities Act of 1933 which was declared effective by the SEC on February 12, 2021 (the “2021 Shelf”) under which the
Company may offer and sell, from time to time in its sole discretion, securities having an aggregate offering price of up to $125
million. In connection with the 2021 Shelf, on March 11, 2021, Ocuphire entered into a sales agreement with JonesTrading Institutional Services LLC (“JonesTrading”) under which the Company may offer and sell, from time to time at its sole
discretion, to or through JonesTrading, acting as agent and/or principal, shares of its common stock having an aggregate offering price of up to $40
million (the “2021 ATM”). During the years ended December 31, 2023 and 2022, 1,417,446 and 1,848,980 shares of common stock were sold under the ATM for aggregate gross proceeds in the amount of $4.7 million and $4.4 million, respectively, before
deducting issuance expenses, including the placement agent’s fees, legal and accounting expenses, in the amount of $136,000 and $133,000, respectively. See Note 13 – Subsequent Events.
Registered Direct Offering
On June 4, 2021, the Company entered into a placement agency agreement for a registered direct offering (“RDO”) with A.G.P./Alliance Global Partners (“AGP”). Pursuant to the terms of the
placement agency agreement, AGP on June 8, 2021 sold an aggregate of 3,076,923 shares of the Company’s common stock and warrants to purchase 1,538,461 shares of the Company’s common stock (the “RDO Warrants”) at an offering price of $4.875 per one share and 0.50 RDO Warrants, for gross proceeds of approximately $15.0 million, before AGP’s fees and related offering expenses in the amount of approximately $1.1 million. The proceeds were allocated between the relative fair values of common stock and warrants at the sale date. The purchase agreement contains customary representations, warranties and agreements by the
Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties and termination provisions. The RDO was made pursuant to the Company’s 2021 shelf registration.
The RDO Warrants have an exercise price of $6.09 per share, are exercisable from the
initial issuance date of June 8, 2021, and will expire five years following the initial issuance date. As of December 31, 2023, 1,538,461 RDO Warrants were outstanding.
Subject to limited
exceptions, a holder of a RDO Warrant will not have the right to exercise any portion of its RDO Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of a holder prior to the date of issuance, 9.99%)
of the number of shares of the Company’s common stock outstanding immediately after giving effect to such exercise; provided, however, that upon prior notice to the Company, the holder may increase or decrease the beneficial ownership
limitation, provided further that in no event shall the beneficial ownership limitation exceed 9.99%.
Pre-Merger Financing
On June 17, 2020, Ocuphire, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as amended and restated, the “Securities Purchase Agreement”). Pursuant to the Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $300,000 invested by five directors of Ocuphire Pharma, Inc., prior to the Merger and one director of Rexahn upon closing of the Merger (the “Pre-Merger Financing”). The Pre-Merger Financing also included the issuance of Series A Warrants and Series B Warrants discussed further below. Series A Warrants The Series A Warrants were issued on November 19, 2020 at an initial exercise price of $4.4795 per share, were immediately exercisable upon issuance and have a term of five years from the date of issuance. The Series A Warrants are exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein) and were outstanding as of December 31, 2023. The Series A Warrants were accounted for and classified as equity on the accompanying balance sheets. Series B Warrants The Series B Warrants had an exercise price of $0.0001, were exercisable upon issuance and would have expired on the day following the later to occur of (i) the Reservation Date (as defined therein) or (ii) the date on which the investor’s Series B Warrants would have been exercised in full (without giving effect to any limitation on exercise contained therein). None of the Series B Warrants were outstanding as of December 31, 2023. During the year ended December 31, 2023 and 2022, 17,869 and 60,832 warrants were exercised for shares of common stock, respectively. The Series B Warrants were accounted for and classified as equity on the accompanying balance sheets while outstanding. |