|
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification Number)
|
|
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
||
|
|
|
Large accelerated filer
|
☐ |
|
☒ |
Accelerated filer
|
☐ |
Smaller reporting company
|
|
Emerging growth company
|
Page
|
||
2 |
||
Item 1.
|
2 |
|
2 |
||
3 |
||
4 |
||
5 |
||
6 |
||
Item 2.
|
20 |
|
Item 3.
|
32 |
|
Item 4.
|
32 |
|
33
|
||
Item 1.
|
33 |
|
Item 1A.
|
33 |
|
Item 2.
|
33 |
|
Item 3.
|
33 |
|
Item 4.
|
33 |
|
Item 5.
|
33 |
|
Item 6.
|
33 |
|
34 |
Item 1. |
Financial Statements
|
As of
|
||||||||
September 30,
2021
|
December 31,
2020
|
|||||||
(unaudited)
|
||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Short-term investments
|
||||||||
Prepaids and other assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and stockholders’ equity (deficit)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Accrued expenses
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Warrant liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (Note 3)
|
||||||||
Stockholders’ equity (deficit)
|
||||||||
Preferred stock, par value $
|
|
|
||||||
Common stock, par value $
|
|
|
||||||
Additional paid-in-capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity (deficit)
|
|
(
|
)
|
|||||
Total liabilities and stockholders’ equity (deficit)
|
$
|
|
$
|
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021 | 2020 | |||||||||||||
Collaborations revenue
|
$ | $ | $ | $ | ||||||||||||
Operating expenses:
|
||||||||||||||||
General and administrative
|
|
|
||||||||||||||
Research and development
|
|
|
||||||||||||||
Acquired in‑process research and development
|
|
|
||||||||||||||
Total operating expenses
|
|
|
||||||||||||||
Loss from operations
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Interest expense
|
|
(
|
)
|
( |
) | |||||||||||
Fair value change of warrant liability and premium conversion derivatives
|
|
|
( |
) | ||||||||||||
Gain on note extinguishment
|
||||||||||||||||
Other income, net
|
|
|
||||||||||||||
Loss before income taxes
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Benefit (provision) for income taxes
|
|
|
||||||||||||||
Net loss
|
(
|
)
|
(
|
)
|
( |
) | ( |
) | ||||||||
Other comprehensive loss, net of tax
|
|
|
||||||||||||||
Comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Net loss per share:
|
||||||||||||||||
Basic and diluted (Note 11)
|
$
|
(
|
)
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | ||||
Number of shares used in per share calculations:
|
||||||||||||||||
Basic and diluted
|
|
|
Common Stock
|
Additional
Paid–In
|
Accumulated
|
Total
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Equity (Deficit)
|
||||||||||||||||
Balance at December 31, 2019
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||
Issuance of common stock in exchange for in-process research and development
|
|
|
|
|
|
|||||||||||||||
Share–based compensation
|
—
|
|
|
|
|
|||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at March 31, 2020
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Gain on note extinguishment (Note 4)
|
—
|
|
|
|
|
|||||||||||||||
Share–based compensation
|
—
|
|
|
|
|
|||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at June 30, 2020
|
|
|
|
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||
Share–based compensation
|
—
|
|||||||||||||||||||
Net and comprehensive loss
|
—
|
( |
) | ( |
) | |||||||||||||||
Balance at September 30, 2020
|
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Balance at December 31, 2020
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||||||
Reclassification of Series A warrant liability to equity
|
—
|
|
|
|
|
|||||||||||||||
Share–based compensation
|
|
|
|
|
|
|||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at March 31, 2021
|
|
|
|
(
|
)
|
|
||||||||||||||
Issuance of common stock and warrants in connection with registered direct offering
|
|
|
|
|
|
|||||||||||||||
Issuance of common stock in connection with the at-the-market program
|
|
|
|
|
||||||||||||||||
Issuance of common stock in connection with settlement with investors
|
|
|
|
|
|
|||||||||||||||
Issuance costs
|
—
|
|
(
|
)
|
(
|
)
|
||||||||||||||
Share–based compensation
|
|
|
|
|
|
|||||||||||||||
Exercise of Series B warrants
|
|
|
|
|
|
|||||||||||||||
Net and comprehensive loss
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Balance at June 30, 2021
|
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||
Issuance of common stock in connection with the at-the-market program
|
||||||||||||||||||||
Issuance costs
|
—
|
( |
) | ( |
) | |||||||||||||||
Share–based compensation
|
||||||||||||||||||||
Exercise of options
|
||||||||||||||||||||
Net and comprehensive loss
|
—
|
( |
) | ( |
) | |||||||||||||||
Balance at September 30, 2021
|
$ | $ | $ | ( |
) | $ |
Nine Months Ended
September 30,
|
||||||||
2021
|
2020
|
|||||||
Operating activities
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Share-based compensation
|
|
|
||||||
Depreciation
|
|
|
||||||
Non-cash acquired in-process research and development
|
|
|
||||||
Non-cash interest on convertible notes
|
|
|
||||||
Non-cash interest on convertible notes – related party
|
|
|
||||||
Non-cash discount amortization on convertible notes
|
|
|
||||||
Non-cash discount amortization on convertible notes – related party
|
|
|
||||||
Fair value change in warrant liabilities and premium conversion derivatives
|
|
(
|
)
|
|||||
Non-cash share settlement with investors
|
||||||||
Receipt of investments related to license agreement
|
( |
) | ||||||
Unrealized gain from short-term investments
|
( |
) | ||||||
Gain on note extinguishment
|
( |
) | ||||||
Change in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
|
|
||||||
Accounts payable
|
|
|
||||||
Accrued and other liabilities
|
(
|
)
|
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Investing activities
|
||||||||
Net cash used in investing activities
|
|
|
||||||
Financing activities
|
||||||||
Proceeds from issuance of common stock – registered direct offering
|
||||||||
Proceeds from issuance of common stock – at-the-market program
|
||||||||
Proceeds from issuance of convertible notes
|
|
|
||||||
Issuance costs | ( |
) | ( |
) | ||||
Deferred offering costs | ( |
) | ||||||
Exercise of stock options
|
|
|
||||||
Net cash provided by financing activities
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
|
(
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
|
||||||
Cash and cash equivalents at end of period
|
$
|
|
$
|
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for income taxes
|
$
|
|
$
|
|
||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Supplemental non-cash financing transactions:
|
||||||||
Non-cash reclassification of Series A warrant liability to equity
|
$
|
|
$
|
|
||||
Bifurcation of premium conversion derivative related to convertible notes
|
$
|
|
$
|
|
||||
Unpaid deferred offering and issuance costs
|
$
|
|
$
|
|
||||
Net change in proceeds receivable from convertible note issuance
|
$
|
|
$
|
|
1. |
Company Description and Summary of Significant Accounting Policies
|
As of September 30, 2021
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Short-term investments |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
As of December 31, 2020
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Liabilities:
|
||||||||||||||||
Warrant liabilities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Total liabilities at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
2021
|
2020
|
|||||||
Short-term Investments
|
||||||||
Balance as of beginning of period
|
$
|
|
$
|
|
||||
Receipt of investments related to license agreement
|
|
|
||||||
Unrealized gain
|
|
|
||||||
Balance as of end of period
|
$
|
|
$
|
|
2021
|
2020
|
|||||||
Warrant liabilities
|
||||||||
Balance as of beginning of period
|
$
|
|
$
|
|
||||
Change in fair value of warrant liability
|
|
|
||||||
Reclassification of Series A warrants from liability to equity
|
(
|
)
|
|
|||||
Balance as of end of period
|
$
|
|
$
|
|
2021
|
2020
|
|||||||
Premium conversion derivatives
|
||||||||
Balance as of beginning of period
|
$
|
|
$
|
|
||||
Value assigned to the underlying derivatives in connection with convertible notes
|
|
|
||||||
Revaluation due to convertible note extinguishment | ( |
) | ||||||
Change in fair value of premium conversion derivatives
|
|
(
|
)
|
|||||
Balance as of end of period
|
$
|
|
$
|
|
2. |
Merger
|
• |
|
• |
|
• |
|
3.
|
Commitments and Contingencies
|
4. |
Supplemental Balance Sheet Information
|
September 30,
2021
|
December 31,
2020
|
|||||||
Prepaids
|
$
|
|
$
|
|
||||
Other
|
|
|
||||||
Total prepaids and other assets
|
$
|
|
$
|
|
September 30,
2021
|
December 31,
2020
|
|||||||
Equipment
|
$
|
|
$
|
|
||||
Furniture
|
|
|
||||||
Total property and equipment
|
|
|
|
|
||||
Less accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Property and equipment, net
|
$
|
|
$
|
|
September 30,
|
December 31,
|
|||||||
2021
|
2020
|
|||||||
R&D services and supplies
|
$
|
|
$
|
|
||||
Payroll
|
|
|
||||||
Professional services
|
|
|
||||||
Other
|
|
|
||||||
Total
|
$
|
|
$
|
|
6. |
Convertible Notes
|
• |
IPO: The Convertible Notes would have automatically
converted into the number of fully paid and non-assessable shares of the Company’s common stock equal to One Hundred and Seventy-Five Percent (
|
• |
CIC: The Convertible Notes would have automatically
converted prior to the effectiveness of such CIC into that number of fully paid and non-assessable shares of the Company’s common stock equal to Two Hundred Percent (
|
• |
Qualified Financing: The Convertible Notes would have automatically
converted into that number of fully paid and non-assessable shares of the Company that were issued by the Company in the Qualified Financing, determined by dividing an amount equal to One Hundred and Seventy-Five Percent (
|
• |
Reverse Merger
(excluding close of Merger with Rexahn): The Convertible Notes would have automatically converted into that number of fully paid and non-assessable shares of the Combined Company whose shares were publicly traded in the United States or other jurisdiction
following the completion of the Reverse Merger (the “Reverse Merger Parent”), determined by dividing an amount equal to One Hundred and Seventy-Five Percent (
|
7. |
Stockholders’ Equity (Deficit)
|
8. |
Share-based Compensation
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
General and administrative
|
$
|
$
|
|
$
|
|
$
|
|
|||||||||
Research and development
|
|
|
|
|
||||||||||||
Total share-based compensation
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Expected stock price volatility
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Expected life of options (years)
|
|
|
|
|
||||||||||||
Expected dividend yield
|
|
%
|
|
%
|
|
%
|
|
%
|
||||||||
Risk free interest rate
|
|
%
|
|
%
|
|
%
|
|
%
|
9. |
Apexian Sublicense Agreement
|
10. |
Related Party Transactions
|
11. |
Net loss per share
|
September 30,
|
||||||||
2021
|
2020
|
|||||||
Warrants
|
|
|
||||||
Stock options
|
|
|
||||||
Unissued stock awards
|
|
|
||||||
Former Rexahn warrants
|
|
|
||||||
Former Rexahn options
|
|
|
12.
|
Income Taxes
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
• |
continues clinical trials for Nyxol, APX3330 and for any other product candidate in its future pipeline;
|
• |
continues preclinical studies for Nyxol, APX3330 and for any other product candidate in its future pipeline;
|
• |
develops additional product candidates that it identifies, in-licenses or acquires;
|
• |
seeks regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
contracts to manufacture its product candidates;
|
• |
establishes on its own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which Ocuphire may obtain regulatory approval;
|
• |
maintains, expands and protects its intellectual property portfolio;
|
• |
hires additional staff, including clinical, scientific, operational and financial personnel, to execute its business plan;
|
• |
adds operational, financial and management information systems and personnel, including personnel to support its product development and potential future commercialization efforts; and
|
• |
continues to operate as a public company.
|
• |
per patient trial costs;
|
• |
the number of patients that participate in the trials;
|
• |
the number of sites included in the trials;
|
• |
the countries in which the trials are conducted;
|
• |
the length of time required to enroll eligible patients;
|
• |
the number of doses that patients receive;
|
• |
the drop-out or discontinuation rates of patients;
|
• |
potential additional safety monitoring or other studies requested by regulatory agencies;
|
• |
the duration of patient follow-up;
|
• |
the phase of development of the product candidate;
|
• |
arrangements with contract research organizations and other service providers; and
|
• |
the efficacy and safety profile of the product candidates.
|
For the Three Months Ended
|
||||||||||||
September 30,
|
||||||||||||
2021
|
2020
|
Change
|
||||||||||
Collaborations revenue
|
$
|
489
|
$
|
—
|
$
|
489
|
||||||
Operating expenses:
|
||||||||||||
General and administrative
|
1,595
|
565
|
1,030
|
|||||||||
Research and development
|
3,126
|
1,383
|
1,743
|
|||||||||
Total operating expenses
|
4,721
|
1,948
|
2,773
|
|||||||||
Loss from operations
|
(4,232
|
)
|
(1,948
|
)
|
(2,284
|
)
|
||||||
Interest expense
|
—
|
(179
|
)
|
179
|
||||||||
Fair value change in warrant liabilities and premium conversion derivatives
|
—
|
879
|
(879
|
)
|
||||||||
Other income, net
|
2
|
—
|
2
|
|||||||||
Loss before income taxes
|
(4,230
|
)
|
(1,248
|
)
|
(2,982
|
)
|
||||||
Provision for income taxes
|
—
|
—
|
—
|
|||||||||
Net loss
|
$
|
(4,230
|
)
|
$
|
(1,248
|
)
|
$
|
(2,982
|
)
|
For the Nine Months Ended
|
||||||||||||
September 30,
|
||||||||||||
2021
|
2020
|
Change
|
||||||||||
Collaborations revenue
|
$
|
589
|
$
|
—
|
$
|
589
|
||||||
Operating expenses:
|
||||||||||||
General and administrative
|
6,707
|
1,508
|
5,199
|
|||||||||
Research and development
|
10,437
|
2,311
|
8,126
|
|||||||||
Acquired in‑process research and development
|
—
|
2,126
|
(2,126
|
)
|
||||||||
Total operating expenses
|
17,144
|
5,945
|
11,199
|
|||||||||
Loss from operations
|
(16,555
|
)
|
(5,945
|
)
|
(10,610
|
)
|
||||||
Interest expense
|
—
|
(1,422
|
)
|
1,422
|
||||||||
Fair value change in warrant liabilities and premium conversion derivatives
|
(33,829
|
)
|
158
|
(33,987
|
)
|
|||||||
Gain on note extinguishment
|
—
|
1,260
|
(1,260
|
)
|
||||||||
Other income, net
|
4
|
9
|
(5
|
)
|
||||||||
Loss before income taxes
|
(50,380
|
)
|
(5,940
|
)
|
(44,440
|
)
|
||||||
Provision for income taxes
|
—
|
—
|
—
|
|||||||||
Net loss
|
$
|
(50,380
|
)
|
$
|
(5,940
|
)
|
$
|
(44,440
|
)
|
• |
continues clinical trials and preclinical studies for Nyxol, APX3330 and for any other product candidate in its future pipeline;
|
• |
develops additional product candidates that it identifies, in-licenses or acquires;
|
• |
seeks regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
contracts to manufacture its product candidates;
|
• |
establishes on its own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which it may obtain regulatory approval;
|
• |
maintains, expands and protects its intellectual property portfolio;
|
• |
hires additional staff, including clinical, scientific, operational and financial personnel, to execute its business plan;
|
• |
adds operational, financial and management information systems and personnel, including personnel to support its product development and potential future commercialization efforts; and
|
• |
continues to operate as a public company.
|
• |
Qualified Financing or IPO: An amount of shares of Ocuphire common stock equal to 135% of the Note Value divided by the per share price of Ocuphire common
stock issued to purchasers in the Qualified Financing or IPO.
|
• |
CIC: An amount of shares of Ocuphire common stock equal to 200% of the Note Value divided by the per share price of Ocuphire common stock based on the
valuation of such CIC.
|
• |
Reverse Merger: Either (i) shares of Ocuphire common stock issued in the Reverse Merger or (ii) equity securities of the Reverse Merger counterparty, in an amount equal to 135% of the Note Value divided by the per share price at which such shares were issued to either stockholders of Ocuphire or stockholders of the Reverse Merger counterparty.
|
• |
IPO: An amount of shares of Ocuphire common stock equal to the greater of: (i) 150% of the Note Value divided by the per share price of Ocuphire common
stock issued to purchasers in the IPO, and (ii) 100% of the Note Value divided by the per share price of $10.37.
|
• |
CIC: An amount of shares of Ocuphire common stock equal to the greater of: (i) 200% of the Note Value divided by the per share price of Ocuphire common
stock based on the valuation of such CIC, and (ii) 100% of the Note Value divided by the per share price of $10.37.
|
• |
Qualified Financing: An amount of shares of Ocuphire common stock equal to 150% of the Note Value divided by the per share price of Ocuphire common stock
issued to purchasers in the Qualified Financing.
|
• |
Reverse Merger: Either shares of Ocuphire common stock issued in the Reverse Merger or equity securities of the Reverse Merger counterparty, in an amount equal to the greater of: (i) 150% of the
Note Value divided by the per share price at which such shares were issued to either stockholders of Ocuphire or stockholders of the Reverse Merger counterparty, and (ii) 100% Note Value divided by the per share price of $10.37.
|
For the Nine Months Ended
|
||||||||
September 30,
|
||||||||
2021
|
2020
|
|||||||
Net cash used in operating activities
|
$
|
(13,724
|
)
|
$
|
(2,439
|
)
|
||
Net cash provided by (used in) investing activities
|
—
|
—
|
||||||
Net cash provided by financing activities
|
19,575
|
1,624
|
||||||
Net increase (decrease) in cash and cash equivalents
|
$
|
5,851
|
$
|
(815
|
)
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Item 6. |
Exhibits
|
EXHIBIT
|
||
NUMBER
|
|
DESCRIPTION OF DOCUMENT
|
Third Lease Amendment, dated as of September 9, 2021, by and between the Company and Duke & Duke
|
||
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
101.INS
|
Inline XBRL Instance Document.
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document.
|
By:
|
/s/ Mina Sooch
|
|
Mina Sooch
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
By:
|
/s/ Amy Rabourn
|
|
Amy Rabourn
|
||
Vice President Finance
|
||
(Principal Financial Officer)
|