Quarterly report pursuant to Section 13 or 15(d)

Common Stock

v2.4.0.8
Common Stock
9 Months Ended
Sep. 30, 2013
Common Stock [Abstract]  
Common Stock

11.Common Stock

The following transactions occurred from March 19, 2001 (inception) to September 30, 2013:

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.

 

These share purchases were negotiated by the parties at various dates prior to the August 10, 2001 share issuance date.

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. 

The appointed trustees are senior management of the Company who, together with their existing shares, control a majority of the voting power of the Company.

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, Corp (“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 Corporate Road Show Com Inc. (“CRS”) 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 of 1993, as amended, 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 will entitle 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 valueThe Company revalues these liabilities each reporting period, with the unrealized (loss) gain recorded as other income (expense).

A summary of the allocation of the proceeds of the offering is shown below:

 

 

 

 

 

 

 

 

 

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 will entitle 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.  The Company revalues these liabilities each reporting period, with the unrealized (loss)/gain recorded as other income (expense).

A summary of the allocation of the proceeds of the offering is shown below: 

 

 

 

 

 

 

 

 

 

 

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.

The closing costs included 142,857 warrants valued at $122,257 and were recorded as a financing expense. All warrants issued from this purchase agreement are recorded as liabilities at fair value.

The Company incurred a derivative loss upon issuance of these warrants, as the fair value of the warrants at inception was greater than the proceeds received from the investor.  The derivative loss was combined with unrealized gains (losses) for the year ended December 31, 2009.

    A summary of the allocation of the proceeds of the offering is shown below: 

 

 

 

 

 

 

 

 

 

 

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, and 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.

A summary of the allocation of the proceeds of the offering is shown below: 

 

 

 

 

 

 

 

 

 

 

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.

The following table lists the issuances of shares by the Company under the consulting agreement:

 

 

 

 

 

 

 

 

 

 

 

 

 

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 

 

The market value of these shares was recorded as an expense and is reflected in general and administrative expenses in the Company’s statement of operations.  The agreements were terminated by the Company on November 11, 2010.

 

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.

A summary of the allocation of the proceeds of the offering is shown below: 

 

 

 

 

 

 

 

 

 

 

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.

The closing costs of $977,434 included 880,000 warrants valued at $163,096, and $814,338 for underwriter’s discounts and professional and other fees.   Based upon the estimated fair value of the stock and warrants in the units, the Company allocated $332,108 as financing expense, and $645,326 as stock issuance costs.

A summary of the allocation of the proceeds of the offering is shown below:

 

 

 

 

 

 

 

 

 

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. 

The closing costs of $637,334 included 456,000 warrants valued at $110,489, and $526,845 for placement agent and other fees.  Based upon the estimated fair value of the stock and warrants in the units, the Company allocated $112,559 to financing expense and $524,775 as stock issuance costs.

A summary of the allocation of the proceeds of the offering is shown below:

 

 

 

 

 

 

 

 

 

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.