Delaware
|
001-34079
|
11-3516358
|
||
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
37000 Grand River Avenue, Suite 120
Farmington Hills, MI
|
48335
|
|
(Address of principal executive offices)
|
(Zip Code)
|
N/A
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.0001 par value
|
OCUP
|
Nasdaq Capital Market
|
|
Emerging growth company ☐
|
Item 9.01. |
Financial Statements and Exhibits.
|
(a)
|
Financial Statements of Businesses Acquired.
|
(b) |
Pro Forma Financial Information.
|
(d) |
Exhibits.
|
Exhibit
No.
|
Description
|
|
Agreement and Plan of Merger, dated as of June 17, 2020, by and among Rexahn, Merger Sub and Ocuphire (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 19, 2020).
|
||
First Amendment to Agreement and Plan of Merger and Reorganization, dated as of June 29, 2020, by and among Rexahn, Merger Sub and Ocuphire (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed
with the SEC on July 1, 2020).
|
||
Certificate of Amendment (Reverse Stock Split) to the Certificate of Incorporation of the Company.
|
||
Certificate of Amendment (Name Change) to the Certificate of Incorporation of the Company.
|
||
Second Amended and Restated Bylaws of the Company.
|
||
Amended and Restated Securities Purchase Agreement, dated as of June 29, 2020, by and among the Company, Ocuphire and the investors party thereto (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K,
as filed with the SEC on July 1, 2020).
|
||
Form of Financing Lock-Up Agreement, by and among Rexahn, Ocuphire, and the investors party thereto (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K, as filed with the SEC on July 1, 2020).
|
||
Form of Leak-Out Agreement, by and between Rexahn and the investors party thereto (incorporated by reference from Exhibit 10.3 to the Company’s Current Report on Form 8-K, as filed with the SEC on July 1, 2020).
|
||
Contingent Value Rights Agreement, dated as of November 5, 2020, by and among the Company, Shareholder Representative Services LLC and the Olde Monmouth Stock Transfer Co., Inc.
|
||
Ocuphire Pharma, Inc. 2020 Omnibus Equity Incentive Plan (incorporated by reference from Annex D to the Company’s proxy statement/prospectus/information statement filed with the SEC on September 30, 2020).
|
||
Amended and Restated Employment Agreement by and between Ocuphire Pharma, Inc. and Mina Sooch, to be effective as of the Closing (incorporated by reference from Exhibit 10.27 to the Company’s proxy statement/prospectus/information
statement filed with the SEC on September 30, 2020).
|
||
Amended and Restated Employment Agreement by and between Ocuphire Pharma, Inc. and Bernhard Hoffmann, to be effective as of the Closing (incorporated by reference from Exhibit 10.29 to the Company’s proxy statement/prospectus/information
statement filed with the SEC on September 30, 2020).
|
||
Form of Indemnity Agreement between the Company and each of its directors and executive officers.
|
||
Non-Employee Director Compensation Policy of the Company.
|
||
Code of Business Conduct and Ethics of the Company.
|
||
Letter from Baker Tilly.
|
||
Consent of Ernst & Young, LLP
|
||
Press Release dated November 5, 2020.
|
||
Ocuphire Corporate Presentation.
|
||
Unaudited interim financial statements of Ocuphire.
|
||
Unaudited pro forma condensed combined financial statements.
|
*
|
Previously filed as exhibits to the Form 8-K (filed on November 6, 2020)
|
@ |
Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.
|
+ |
Management contract or compensatory plans or arrangements.
|
OCUPHIRE PHARMA, INC.
|
||
Date: December 30, 2020
|
By:
|
/s/ Mina Sooch
|
Mina Sooch
|
||
President and Chief Executive Officer
|
Condensed Balance Sheets
|
3
|
Condensed Statements of Comprehensive Loss
|
4
|
Condensed Statements of Changes in Stockholders’ Deficit
|
5
|
Condensed Statements of Cash Flows
|
6
|
Notes to Condensed Financial Statements
|
7
|
September 30, 2020
(Unaudited) |
December 31, 2019
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
722,160
|
$
|
1,536,917
|
||||
Proceeds receivable from convertible notes
|
450,000
|
75,000
|
||||||
Proceeds receivable from convertible notes - related parties
|
—
|
50,000
|
||||||
Prepaids and other assets
|
22,708
|
24,022
|
||||||
Deferred costs
|
1,467,649
|
76,165
|
||||||
Total current assets
|
2,662,517
|
1,762,104
|
||||||
Property and equipment, net
|
14,795
|
22,175
|
||||||
Total assets
|
$
|
2,677,312
|
$
|
1,784,279
|
||||
Liabilities and stockholders’ deficit
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
720,779
|
$
|
341,634
|
||||
Accrued liabilities
|
1,765,793
|
621,671
|
||||||
Convertible notes
|
8,445,811
|
4,977,074
|
||||||
Convertible notes from related parties
|
854,065
|
689,756
|
||||||
Premium conversion derivatives
|
300,378
|
2,713,668
|
||||||
Total current liabilities
|
12,086,826
|
9,343,803
|
||||||
Total liabilities
|
12,086,826
|
9,343,803
|
||||||
Commitments and contingencies (Note 2)
|
||||||||
Stockholders’ deficit
|
||||||||
Preferred stock, par value $0.0001; 625,000 shares authorized as of September 30, 2020 and December 31, 2019; no shares issued and outstanding at September 30, 2020 and December 31, 2019.
|
—
|
—
|
||||||
Common stock, par value $0.0001; 5,000,000 shares authorized as of September 30, 2020 and December 31, 2019; 3,543,751 and 2,700,000 shares issued and outstanding at September 30, 2020
and December 31, 2019, respectively.
|
354
|
270
|
||||||
Additional paid-in-capital
|
4,584,852
|
494,909
|
||||||
Accumulated deficit
|
(13,994,720
|
)
|
(8,054,703
|
)
|
||||
Total stockholders’ deficit
|
(9,409,514
|
)
|
(7,559,524
|
)
|
||||
Total liabilities and stockholders’ deficit
|
$
|
2,677,312
|
$
|
1,784,279
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020 | 2019 | |||||||||||||
Operating expenses:
|
||||||||||||||||
General and administrative
|
$
|
565,310
|
$
|
388,309
|
|
$
|
1,507,781
|
$
|
1,165,498
|
|||||||
Research and development
|
1,382,614
|
731,765
|
2,311,175
|
1,560,215
|
||||||||||||
Acquired in‑process research and development
|
—
|
—
|
2,126,253
|
—
|
||||||||||||
Total operating expenses
|
1,947,924
|
1,120,074
|
5,945,209
|
2,725,713
|
||||||||||||
Loss from operations
|
(1,947,924
|
)
|
(1,120,074
|
)
|
(5,945,209
|
)
|
(2,725,713
|
)
|
||||||||
Interest expense
|
(179,048
|
)
|
(618,692
|
)
|
(1,421,672
|
)
|
(938,561
|
)
|
||||||||
Fair value change of premium conversion derivatives
|
879,386
|
(29,592
|
)
|
157,942
|
(161,675
|
)
|
||||||||||
Gain on note extinguishment (Note 4)
|
—
|
—
|
1,260,350
|
—
|
||||||||||||
Other income, net
|
67
|
—
|
8,572
|
—
|
||||||||||||
Loss before income taxes
|
(1,247,519
|
)
|
(1,768,358
|
)
|
(5,940,017
|
)
|
(3,825,949
|
)
|
||||||||
Benefit (provision) for income taxes
|
—
|
—
|
—
|
—
|
||||||||||||
Net loss
|
(1,247,519
|
)
|
(1,768,358
|
)
|
(5,940,017
|
)
|
(3,825,949
|
)
|
||||||||
Other comprehensive loss, net of tax
|
—
|
—
|
—
|
—
|
||||||||||||
Comprehensive loss
|
$
|
(1,247,519
|
)
|
$
|
(1,768,358
|
)
|
|
$
|
(5,940,017
|
)
|
$
|
(3,825,949
|
)
|
|||
Net loss per share:
|
||||||||||||||||
Basic and diluted (Note 9)
|
$
|
($0.35
|
)
|
$
|
($0.66
|
)
|
|
$
|
(1.71
|
)
|
$
|
(1.42
|
)
|
|||
Number of shares used in per share calculations:
|
||||||||||||||||
Basic and diluted
|
3,543,751
|
2,690,364
|
3,482,163
|
2,700,000
|
Common Stock
|
Additional
Paid–In
|
Accumulated
|
Total
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Deficit
|
Deficit
|
||||||||||||||||
Balance at December 31, 2018
|
2,700,000
|
$
|
270
|
$
|
186,799
|
$
|
(1,885,743
|
)
|
$
|
( 1,698,674
|
)
|
|||||||||
Share–based compensation – employee
|
—
|
—
|
65,343
|
—
|
65,343
|
|||||||||||||||
Share–based compensation – non-employee
|
—
|
—
|
20,519
|
—
|
20,519
|
|||||||||||||||
Net and comprehensive loss
|
—
|
—
|
—
|
(944,064
|
)
|
(944,064
|
)
|
|||||||||||||
Balance at March 31, 2019
|
2,700,000
|
270
|
272,661
|
(2,829,807
|
)
|
(2,556,876
|
)
|
|||||||||||||
Share–based compensation – employee
|
—
|
—
|
52,594
|
—
|
52,594
|
|||||||||||||||
Share–based compensation – non-employee
|
—
|
—
|
18,030
|
—
|
18,030
|
|||||||||||||||
Net and comprehensive loss
|
—
|
—
|
—
|
(1,113,527
|
)
|
(1,113,527
|
)
|
|||||||||||||
Balance at June 30, 2019
|
2,700,000
|
270
|
343,285
|
(3,943,334
|
)
|
(3,599,779
|
)
|
|||||||||||||
Share–based compensation – employee
|
—
|
—
|
52,593
|
—
|
52,593
|
|||||||||||||||
Share–based compensation – non-employee
|
—
|
—
|
20,712
|
—
|
20,712
|
|||||||||||||||
Net and comprehensive loss
|
—
|
—
|
—
|
(1,768,358
|
)
|
(1,768,358
|
)
|
|||||||||||||
Balance at September 30, 2019
|
2,700,000
|
$
|
270
|
$
|
416,590
|
$
|
(5,711,692
|
)
|
$
|
(5,294,832
|
)
|
|||||||||
Balance at December 31, 2019
|
2,700,000
|
$
|
270
|
$
|
494,909
|
$
|
(8,054,703
|
)
|
$
|
( 7,559,524
|
)
|
|||||||||
Issuance of common stock in exchange for in-process research and development
|
843,751
|
84
|
2,126,169
|
—
|
2,126,253
|
|||||||||||||||
Share–based compensation
|
—
|
—
|
61,324
|
—
|
61,324
|
|||||||||||||||
Net and comprehensive loss
|
—
|
—
|
—
|
(3,088,316
|
)
|
(3,088,316
|
)
|
|||||||||||||
Balance at March 31, 2020
|
3,543,751
|
354
|
2,682,402
|
(11,143,019
|
)
|
(8,460,263
|
)
|
|||||||||||||
Gain on note extinguishment (Note 4)
|
—
|
—
|
970,628
|
—
|
970,628
|
|||||||||||||||
Share–based compensation
|
—
|
—
|
316,464
|
—
|
316,464
|
|||||||||||||||
Net and comprehensive loss
|
—
|
—
|
—
|
(1,604,182
|
)
|
(1,604,182
|
)
|
|||||||||||||
Balance at June 30, 2020
|
3,543,751
|
354
|
3,969,494
|
(12,747,201
|
)
|
(8,777,353
|
)
|
|||||||||||||
Share–based compensation
|
—
|
—
|
615,358
|
—
|
615,358
|
|||||||||||||||
Net and comprehensive loss
|
—
|
—
|
—
|
(1,247,519
|
)
|
(1,247,519
|
)
|
|||||||||||||
Balance at September 30, 2020
|
3,543,751
|
$
|
354
|
$
|
4,584,852
|
$
|
(13,994,720
|
)
|
$
|
(9,409,514
|
)
|
Nine Months Ended
September 30,
|
||||||||
2020
|
2019
|
|||||||
Operating activities
|
||||||||
Net loss
|
$
|
(5,940,017
|
)
|
$
|
(3,825,949
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Share-based compensation
|
993,146
|
229,791
|
||||||
Depreciation
|
7,380
|
1,515
|
||||||
Non-cash acquired in-process research and development
|
2,126,253
|
—
|
||||||
Non-cash interest on convertible notes
|
432,561
|
160,187
|
||||||
Non-cash interest on convertible notes – related party
|
44,866
|
29,603
|
||||||
Non-cash discount amortization on convertible notes
|
873,518
|
684,015
|
||||||
Non-cash discount amortization on convertible notes – related party
|
70,727
|
64,756
|
||||||
Fair value change in premium conversion derivatives
|
(157,942
|
)
|
161,675
|
|||||
Gain on note extinguishment
|
(1,260,350
|
)
|
—
|
|||||
Change in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
126,314
|
(11,956
|
)
|
|||||
Accounts payable
|
213,810
|
(87,257
|
)
|
|||||
Accrued and other liabilities
|
30,917
|
137,355
|
||||||
Net cash used in operating activities
|
(2,438,817
|
)
|
(2,456,265
|
)
|
||||
Investing activities
|
||||||||
Purchases of property and equipment
|
—
|
(24,937
|
)
|
|||||
Net cash used in investing activities
|
—
|
(24,937
|
)
|
|||||
Financing activities
|
||||||||
Proceeds from issuance of convertible notes
|
1,747,500
|
3,532,500
|
||||||
Proceeds from issuance of convertible notes – related party
|
—
|
223,040
|
||||||
Deferred offering costs
|
(123,201
|
)
|
—
|
|||||
Issuance costs attributed to convertible notes
|
(239
|
)
|
(1,698
|
)
|
||||
Net cash provided by financing activities
|
1,624,060
|
3,753,842
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(814,757
|
)
|
1,272,640
|
|||||
Cash and cash equivalents at beginning of period
|
1,536,917
|
451,342
|
||||||
Cash and cash equivalents at end of period
|
$
|
722,160
|
$
|
1,723,982
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for income taxes
|
$
|
—
|
$
|
—
|
||||
Cash paid for interest
|
$
|
—
|
$
|
—
|
||||
Supplemental non-cash financing transactions:
|
||||||||
Bifurcation and modification of premium conversion derivatives related to convertible notes
|
$
|
831,172
|
$
|
1,099,609
|
||||
Non-cash change in deferred offering costs
|
$
|
1,268,283
|
$
|
—
|
||||
Unpaid issuance costs attributed to convertible notes
|
$
|
10,256
|
$
|
—
|
||||
Proceeds receivable from convertible note issuance
|
$
|
450,000
|
$
|
—
|
• |
Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets;
|
• |
Level 2 inputs: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, whether directly or indirectly, for substantially the full term of the
asset or liability; and
|
• |
Level 3 inputs: Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or
liability at the measurement date.
|
As of September 30, 2020
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Liabilities:
|
||||||||||||||||
Premium conversion derivatives
|
$
|
300,378
|
$
|
—
|
$
|
—
|
$
|
300,378
|
||||||||
Total liabilities at fair value
|
$
|
300,378
|
$
|
—
|
$
|
—
|
$
|
300,378
|
As of December 31, 2019
|
||||||||||||||||
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Liabilities:
|
||||||||||||||||
Premium conversion derivatives
|
$
|
2,713,668
|
$
|
—
|
$
|
—
|
$
|
2,713,668
|
||||||||
Total liabilities at fair value
|
$
|
2,713,668
|
$
|
—
|
$
|
—
|
$
|
2,713,668
|
2020
|
2019
|
|||||||
Premium conversion derivatives
|
||||||||
Balance as of beginning of period
|
$
|
2,713,668
|
$
|
304,712
|
||||
Value assigned to the underlying derivatives in connection with convertible notes
|
831,172
|
1,099,609
|
||||||
Revaluation due to convertible note extinguishment
|
(3,086,520
|
)
|
—
|
|||||
Change in fair value of premium conversion derivatives
|
(157,942
|
)
|
161,675
|
|||||
Balance as of end of period
|
$
|
300,378
|
$
|
1,565,996
|
September 30,
2020
|
December 31,
2019
|
|||||||
Equipment
|
$
|
20,175
|
$
|
20,175
|
||||
Furniture
|
4,762
|
4,762
|
||||||
Total property and equipment
|
24,937
|
24,937
|
||||||
Less accumulated depreciation
|
(10,142
|
)
|
(2,762
|
)
|
||||
Property and equipment, net
|
$
|
14,795
|
$
|
22,175
|
September 30,
2020
|
December 31,
2019
|
|||||||
Deferred offering and issuance costs
|
$
|
1,170,020
|
$
|
—
|
||||
Payroll
|
401,342
|
350,082
|
||||||
Professional services
|
194,350
|
262,397
|
||||||
Other
|
81
|
9,192
|
||||||
Total
|
$
|
1,765,793
|
$
|
621,671
|
• |
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 (175%) times Note Value divided by the per share price such shares were issued to purchasers of the Company’s equity securities in the IPO rounded to the nearest whole
share.
|
• |
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 (200%) of the Note Value divided by the per share price of the Company’s common stock at which the Company’s common stock was valued in such
CIC (after giving effect to such conversion). The Convertible Note holder would have been entitled to the same contractual rights and would have been bound by the same restrictions and obligations as the other stockholders of the Company
in such CIC.
|
• |
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 (175%) times the Note Value by the per share price such shares
of the Company were issued to purchasers of the Company’s equity securities in the Qualified Financing, rounded to the nearest whole share. The Convertible Note holder would have been entitled to the same contractual rights and would
have been bound by the same restrictions and obligations as the other purchasers of shares in the Qualified Financing. A Qualified Financing was defined as a sale and issuance of capital stock of the Company (or its successor) in a single
transaction or series of related transactions resulting in gross proceeds to the Company of not less than $5,000,000 (including new equity investment of at least $1,000,000 plus the sum of the outstanding principal amount of the
Convertible Notes being so converted under this provision).
|
• |
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 (175%) times the Note Value divided by the per share price at which such shares were issued by the Reverse Merger Parent in such Reverse Merger, rounded to the nearest whole
share. The Convertible Note holder would have been entitled to the same contractual rights and would have been bound by the same restrictions and obligations as the other stockholders of the Company in the Reverse Merger.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
General and administrative
|
$
|
224,120
|
$
|
42,735
|
$
|
425,581
|
$
|
132,960
|
||||||||
Research and development
|
391,238
|
30,570
|
567,565
|
96,831
|
||||||||||||
Total share-based compensation
|
$
|
615,358
|
$
|
73,305
|
$
|
993,146
|
$
|
229,791
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Expected stock price volatility
|
87.6
|
%
|
87.2
|
%
|
94.8
|
%
|
86.0
|
%
|
||||||||
Expected life of options (years)
|
10.0
|
5.3
|
10.0
|
5.3
|
||||||||||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
||||||||
Risk free interest rate
|
0.7
|
%
|
1.6
|
%
|
0.7
|
%
|
1.9
|
%
|
2020
|
2019
|
|||||||
Stock options
|
1,175,000
|
510,219
|
• |
90% of all payments received by Rexahn or its affiliates during such CVR Payment Period from or on behalf of BioSense Global LLC (BioSense) pursuant to that certain License and Assignment Agreement, dated
as of February 25, 2019, by and between BioSense and Rexahn, as amended by Amendment No. 1, dated August 24, 2019, and as further amended by Amendment No. 2, dated March 10, 2020, minus certain permitted deductions;
|
• |
90% of all payments received by Rexahn or its affiliates during such CVR Payment Period from or on behalf of Zhejiang HaiChang Biotechnology Co., Ltd. (HaiChang) pursuant to that certain Exclusive License
Agreement, dated as of February 8, 2020, by and between HaiChang and Rexahn, minus certain permitted deductions; and
|
• |
75% of the sum of (i) all cash consideration paid by a third party to Rexahn or its affiliates during the applicable CVR Payment Period in connection with the grant, sale or transfer of rights to Rexahn’s
pre-Closing intellectual property (other than a grant, sale or transfer of rights involving a sale or disposition of the post-Merger combined company) that is entered into during the 10-year period after the Closing (Parent IP Deal), plus
(ii) with respect to any non-cash consideration received by Rexahn or its affiliates from a third party during the applicable CVR Payment Period in connection with any Parent IP Deal, all amounts received by Rexahn and its affiliates for
such non-cash consideration at the time such non-cash consideration is monetized by Rexahn or its affiliates, minus (iii) certain permitted deductions.
|
Rexahn
|
Ocuphire
|
Pro forma
Adjustments
|
Notes
|
Pro forma
Combined
|
||||||||||||||||
Assets
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
8,079,511
|
$
|
722,160
|
$
|
19,101,250
|
I,L
|
|
$
|
27,902,921
|
||||||||||
Proceeds receivable from convertible notes
|
—
|
450,000
|
(450,000
|
)
|
H |
—
|
||||||||||||||
Prepaid expenses and other current assets
|
573,635
|
22,708
|
450,000
|
H |
1,046,343
|
|||||||||||||||
Deferred offering costs
|
—
|
1,467,649
|
(1,467,649
|
) |
K |
—
|
||||||||||||||
Total current assets
|
8,653,146
|
2,662,517
|
17,633,601
|
28,949,264
|
||||||||||||||||
Property and equipment, net
|
48,757
|
14,795
|
(25,648
|
)
|
J |
37,904
|
||||||||||||||
Right-of-use assets
|
106,126
|
—
|
(106,126
|
) |
J |
—
|
||||||||||||||
Deposits
|
25,681
|
—
|
—
|
25,681
|
||||||||||||||||
Total assets
|
$
|
8,833,710
|
$
|
2,677,312
|
$
|
17,501,827
|
$
|
29,012,849
|
||||||||||||
Liabilities and Stockholders’ Equity (Deficit)
|
||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable and accrued expenses
|
$
|
2,258,481
|
$
|
2,486,572
|
$
|
4,278,485
|
F,G
|
$
|
9,023,538
|
|||||||||||
Deferred revenue
|
650,000
|
—
|
(650,000
|
)
|
J |
—
|
||||||||||||||
Convertible notes
|
—
|
9,299,876
|
(9,299,876
|
)
|
A,B
|
—
|
||||||||||||||
Premium conversion derivative
|
—
|
300,378
|
(300,378
|
)
|
A |
—
|
||||||||||||||
Operating lease liabilities
|
100,397
|
—
|
—
|
100,397
|
||||||||||||||||
Total current liabilities
|
3,008,878
|
12,086,826
|
(5,971,769
|
)
|
9,123,935
|
|||||||||||||||
Warrant liabilities
|
110,781
|
—
|
(107,123
|
) |
E |
3,658
|
||||||||||||||
Total liabilities
|
3,119,659
|
12,086,826
|
(6,078,892
|
)
|
9,127,593
|
|||||||||||||||
Stockholders’ Equity (Deficit):
|
||||||||||||||||||||
Preferred stock
|
—
|
—
|
—
|
—
|
||||||||||||||||
Common stock
|
448
|
354
|
(93
|
)
|
O |
709
|
||||||||||||||
Additional paid-in capital
|
173,537,703
|
4,584,852
|
(128,249,398
|
) |
M |
49,873,157
|
||||||||||||||
Accumulated deficit
|
(167,824,100
|
) |
(13,994,720
|
) |
151,830,210
|
N |
(29,988,610
|
) |
||||||||||||
Total stockholders’ equity (deficit)
|
5,714,051
|
(9,409,514
|
23,580,719
|
19,885,256
|
||||||||||||||||
Total liabilities and stockholders’ equity (deficit)
|
$ |
8,833,710
|
$ |
2,677,312
|
$ |
17,501,827
|
$ |
29,012,849
|
Rexahn
|
Ocuphire
|
Pro Forma
Adjustments
|
Notes
|
Pro Forma
Combined
|
||||||||||||||||
Revenues:
|
||||||||||||||||||||
Revenue
|
$
|
1,150,000
|
$
|
—
|
$
|
—
|
$
|
1,150,000
|
||||||||||||
Total revenues
|
1,150,000
|
—
|
—
|
1,150,000
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||||||
General and administrative
|
4,729,211
|
1,507,781
|
(2,140,381
|
)
|
Q,S |
4,096,611
|
||||||||||||||
Research and development
|
837,991
|
2,311,175
|
—
|
3,149,166
|
||||||||||||||||
Acquired in-process research and development
|
—
|
2,126,253
|
—
|
2,126,253
|
||||||||||||||||
Total operating expenses
|
5,567,202
|
5,945,209
|
(2,140,381
|
)
|
9,372,030
|
|||||||||||||||
Loss from operations
|
(4,417,202
|
)
|
(5,945,209
|
)
|
2,140,381
|
(8,222,030
|
)
|
|||||||||||||
Interest expense
|
—
|
(1,421,672
|
)
|
1,421,672
|
R |
—
|
||||||||||||||
Fair value change in warrant liability and premium conversion derivative
|
(126,457
|
)
|
157,942
|
(157,942
|
)
|
R |
(126,457
|
)
|
||||||||||||
Gain on note extinguishment
|
—
|
1,260,350
|
(1,260,350
|
)
|
R |
—
|
||||||||||||||
Interest income
|
42,235
|
8,572
|
—
|
50,807
|
||||||||||||||||
Net loss
|
$
|
(4,501,424
|
)
|
$
|
(5,940,017
|
)
|
$
|
2,143,761
|
$
|
(8,297,680
|
)
|
|||||||||
Net loss per share, basic and diluted
|
$
|
(4.40
|
)
|
$
|
(1.71
|
)
|
$
|
(1.20
|
)
|
|||||||||||
Weighted average common shares outstanding, basic and diluted
|
1,023,304
|
(1
|
)
|
3,482,163
|
2,421,936
|
P |
6,927,403
|
(1)
|
Adjusted for 1-for-4 Rexahn Reverse Stock Split
|
Rexahn
|
Ocuphire
|
Pro Forma
Adjustments
|
Notes
|
Pro Forma
Combined
|
||||||||||||||||
Revenues:
|
||||||||||||||||||||
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||||
Total revenues
|
—
|
—
|
—
|
—
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||||||
General and administrative
|
5,738,227
|
1,820,477
|
(488,069
|
)
|
Q,S
|
7,070,635
|
||||||||||||||
Research and development
|
5,476,776
|
2,372,502
|
—
|
7,849,278
|
||||||||||||||||
Acquired in-process research and development
|
—
|
—
|
—
|
—
|
||||||||||||||||
Total operating expenses
|
11,215,003
|
4,192,979
|
(488,069
|
)
|
14,919,913
|
|||||||||||||||
Loss from operations
|
(11,215,003
|
) |
(4,192,979
|
)
|
488,069
|
(14,919,913
|
)
|
|||||||||||||
Interest expense
|
—
|
(1,409,096
|
)
|
1,409,096
|
R
|
—
|
||||||||||||||
Fair value change in warrant liability and premium conversion derivative
|
2,265,869
|
(499,414
|
)
|
499,414
|
R |
|
2,265,869
|
|||||||||||||
Interest income
|
313,700
|
510
|
—
|
314,210
|
||||||||||||||||
Other
|
—
|
(67,981
|
)
|
—
|
(67,981
|
)
|
||||||||||||||
Net loss
|
$
|
(8,635,434
|
) |
$
|
(6,168,960
|
)
|
$
|
2,396,579
|
$
|
(12,407,815
|
)
|
|||||||||
Net loss per share, basic and diluted
|
$
|
(8.72
|
) |
$
|
(2.29
|
)
|
$
|
(2.22
|
)
|
|||||||||||
Weighted average common shares outstanding, basic and diluted
|
990,041
|
(1 |
)
|
2,692,793
|
1,916,768
|
P
|
5,599,602
|
(1)
|
Adjusted for 1-for-4 Rexahn Reverse Stock Split
|
1.
|
Description of Transaction
|
2.
|
Estimated Purchase Price
|
Estimated number of shares of the combined company to be owned by Rexahn’s stockholders(i)
|
1,120,800
|
|||
Multiplied by the fair value per share of Rexahn’s common stock(ii)
|
$
|
8.32
|
||
Total
|
|
9,325,056
|
||
Rexahn warrants assumed in merger
|
191,332
|
|||
Rexahn stock options assumed in merger
|
27
|
|||
Estimated transaction costs
|
1,780,907
|
|||
Total estimated purchase price
|
$
|
11,297,322
|
Net assets as of September 30, 2020
|
$
|
6,343,058
|
||
In process research and development(iii)
|
4,954,264
|
|||
Total estimated purchase price
|
$
|
11,297,322
|
(i) |
The final purchase price is be determined based in part on the number of shares of Rexahn common stock and the value of Rexahn Warrants and Rexahn Options outstanding immediately prior to the merger. For purposes of this unaudited pro
forma condensed combined financial information, the estimated number of shares represents 1,120,800 shares of Rexahn common stock outstanding as adjusted for a 1-for-4 Rexahn Reverse Stock Split that is to be effected prior to consummation of
the merger.
|
(ii) |
The estimated purchase price was based on the Rexahn September 30, 2020 closing price as reported on the Nasdaq Capital Market as adjusted for a 1-for-4 Rexahn Reverse Stock Split that was effected prior to consummation of the merger. The final purchase price arising from the actual transaction costs, the number of shares and fair value of Rexahn common stock as well as the fair value of Rexahn Warrants and Rexahn Options outstanding
immediately prior to the Closing could result in a total purchase price different from that assumed in this unaudited pro forma condensed combined financial information, and that difference may be material. Therefore, the estimated
consideration expected to be transferred reflected in this unaudited pro forma condensed combined financial information does not purport to represent what the actual consideration transferred will be upon completion of the merger. The actual
purchase price will fluctuate until the Closing, and the final valuation of the purchase consideration could differ significantly from the current estimate.
|
(iii) |
IPR&D represents the research and development projects of Rexahn which were in-process, but not yet completed, and which Ocuphire plans to advance. This includes the development of RX-3117, RX-0301 and RX-0047. Current accounting
standards require that the fair value of IPR&D projects acquired in an asset acquisition with no alternative future use be allocated a portion of the consideration transferred and charged to expense at the acquisition date. The acquired
assets did not have outputs or employees. The actual purchase price allocated to IPR&D will fluctuate until the Closing, and the final valuation of the IPR&D consideration could differ significantly from the current estimate.
|
3.
|
Pro Forma Adjustments
|
A. |
To reflect the conversion of the Ocuphire convertible notes (principal and accrued interest) and the application of premium conversion derivatives into shares of Rexahn common stock prior to the merger, in accordance with the terms of the
Note Conversion Agreement.
|
B. |
To record the remaining debt discount amortization expense on the Ocuphire convertible notes. The accelerated debt discount amortization expense is not reflected in the pro forma statements of operations because it does not have a
continuing impact. Adjustments to convertible notes are as follows:
|
September 30,
2020
|
||||
Conversion of Ocuphire’s convertible notes principal and interest (A)
|
$
|
(9,299,876
|
)
|
|
Debt discount amortization expense on Ocuphire’s convertible notes payable (B)
|
—
|
|||
Total
|
$
|
(9,299,876
|
)
|
C. |
To reflect accounting treatment of Ocuphire convertible notes conversion into common stock as a loss on extinguishment in connection with the merger. The loss on extinguishment is not reflected in the pro forma statements of operations
because it does not have a continuing impact.
|
D. |
To record the estimated fully vested fair value of Rexahn Options assumed in connection with the merger.
|
E. |
To reflect the estimated fair value of Rexahn Warrants assumed in connection with the merger (including both liability and equity classified portions), and assuming holders of Rexahn Warrants do not exercise their right to exchange their
Rexahn Warrants for cash in an amount equal to the Black-Scholes value of such warrants calculated as set forth therein and in accordance with the terms of such Rexahn Warrants.
|
F. |
To record Rexahn’s estimated transaction costs, such as severance and benefits, advisory fees and transactional fees, that were not incurred as of September 30, 2020. The Rexahn transaction costs are not reflected in the pro forma
statements of operations because they do not have a continuing impact.
|
G. |
To record Ocuphire’s estimated transaction costs, such as legal, accounting, advisory and other transactional fees, that were not incurred as of September 30, 2020. The Ocuphire transaction costs are not reflected in the pro forma
statements of operations because they do not have a continuing impact.
|
September 30,
2020
|
||||
Rexahn’s estimated transaction costs (F)
|
$
|
3,965,228
|
||
Ocuphire’s estimated transaction costs (G)
|
313,257
|
|||
Total
|
$
|
4,278,485
|
H. |
To reclassify proceeds receivable from convertible notes to other current assets as a result of the note conversions into Ocuphire common stock in connection with the merger.
|
I. |
To reflect the Pre-Merger Financing upon Closing for a total of $21.15 million in gross proceeds, less issuance costs of approximately $1.6 million. The accounting treatment under Accounting Standards Codification (ASC) 480 – Distinguishing Liabilities from Equity and ASC 815 – Derivatives and Hedging is in process related to the Pre-Merger Financing, including the accounting
classification of the Investor Warrants and Converted Additional Shares. For purposes of these pro formas, the Pre-Merger Financing has been classified as equity. Upon close of the Pre-Merger Financing, certain cash settlement provisions,
registration requirements, or other adjustments not afforded to other stockholders, may result in the Investor Warrants and Converted Additional Shares being accounted for as a liability on the balance sheet until all of the settlement
contingencies are resolved for those instruments. The liability accounting impact would result in some of the Pre-Merger Financing, currently classified in the pro formas as equity, to be reclassified as a liability on the condensed combined
balance sheet. In addition, any liability recognized for the Pre-Merger Financing would be subject to remeasurement at fair value as of each reporting period with offsetting impacts of the fair value changes to the statement of operations.
|
J. |
To adjust Rexahn’s historical financial statements to give pro forma effect to events in connection with the merger that include: 1) the elimination of Rexahn’s historical common stock, paid-in-capital and accumulated deficit balances; 2)
the elimination of Rexahn’s deferred revenue liability given the non-assumption of the obligation post-merger; and 3) the write-down of Rexahn’s facility lease and property and equipment reported values to reflect their fair value based on
their anticipated non-usage post-merger.
|
K. |
To reflect the following impacts to the historical financial statements to give pro forma effect to events in connection with the merger that include: 1) the expensing of Rexahn’s IPR&D; 2) the capitalization of the fair value of the
estimated number of common shares, warrants and stock options of the combined company to be owned by Rexahn Stockholders as adjusted for the 1-for-4 Rexahn Reverse Stock Split; 3) the impact of transaction costs impacting the estimated
purchase price of the merger; and 4) to reflect the impact of the Exchange Ratio to the outstanding common shares of the combined company. The IPR&D expense is not reflected in the pro forma statements of operations because it does not
have a continuing impact.
|
L. |
To reflect milestone payments due to Apexian upon Closing.
|
M. |
Adjustments to additional-paid-in-capital are as follows:
|
September 30,
2020
|
||||
Conversion of Ocuphire’s convertible notes and accrued interest (A)
|
$
|
9,299,784
|
||
To reflect application of premium conversion derivatives (A)
|
300,378
|
|||
To reflect extinguishment loss on convertible notes (C)
|
6,674,399
|
|||
Eliminate Rexahn’s pre-merger additional paid-in-capital balance (J)
|
(173,537,703
|
)
|
||
To reflect the fair value of Rexahn’s remaining common stock post-merger (K)
|
9,324,944
|
|||
To reflect assumption of Rexahn warrants post-merger (E)
|
187,674
|
|||
To reflect assumption of Rexahn stock options post-merger (D)
|
27
|
|||
To reflect impact of Exchange Ratio to pre-merger Ocuphire shares (K)
|
(33
|
)
|
||
To reflect Ocuphire pre-merger financing in connection with the merger (I)
|
|
19,501,132
|
|
|
Total
|
$
|
(128,429,398
|
)
|
N.
|
Adjustments to accumulated deficit are as follows:
|
September 30,
2020
|
||||
To reflect extinguishment loss on convertible notes (C)
|
$
|
(6,674,399
|
)
|
|
Rexahn’s estimated transaction costs (F)
|
(3,965,228
|
)
|
||
Milestone payment to Apexian (L)
|
(400,000
|
)
|
||
Eliminate Rexahn’s pre-merger accumulated deficit balance (J)
|
167,824,100
|
|||
To reflect impact of non-equity related Rexahn acquisition cost (G) (K)
|
(4,954,263
|
)
|
||
Total
|
$
|
151,830,210
|
O.
|
Adjustments to common stock par value are as follows:
|
September 30,
2020
|
||||
Conversion of Ocuphire’s convertible notes into common stock (A)
|
$
|
92
|
||
To reflect Ocuphire pre-merger financing in connection with the merger (I)
|
118
|
|||
Eliminate Rexahn’s pre-merger common stock balance (J)
|
(448
|
)
|
||
To reflect impact of Exchange Ratio to pre-merger Ocuphire shares (K)
|
33
|
|||
To reflect Rexahn’s ownership in the combined company (K)
|
112
|
|||
Total
|
$
|
(93
|
)
|
P. |
The pro forma combined basic and diluted net loss per share calculations have been adjusted to reflect the pro forma net loss for the nine months ended September 30, 2020 and for the year ended December 31, 2019. In addition, the number of
shares used in calculating the pro forma combined basic and diluted net loss per share has been adjusted to reflect the estimated total number of shares of common stock of the combined company that would be outstanding on a weighted-average
basis as of the closing of the merger. The following table is a reconciliation of the Company’s historical basic and diluted loss per share to its pro forma basic and diluted loss per share for the nine months ended September 30, 2020 and for
the year ended December 31, 2019.
|
Nine Months
Ended
September 30,
2020
|
Year Ended
December 31,
2019
|
||||||||
Basic and Diluted Loss Per Share:
|
|||||||||
As reported (Rexahn) and as adjusted for Rexahn Reverse Stock Split
|
a/d
|
$
|
(4.40
|
)
|
$
|
(8.72
|
)
|
||
As reported (Ocuphire)
|
b/e
|
$
|
(1.71
|
)
|
$
|
(2.29
|
)
|
||
Pro forma
|
c/f
|
$
|
(1.20
|
)
|
$
|
(2.22
|
)
|
||
Net loss :
|
|||||||||
As reported (Rexahn)
|
a
|
$
|
(4,501,424
|
)
|
$
|
(8,635,434
|
)
|
||
As reported (Ocuphire)
|
b
|
(5,940,017
|
)
|
(6,168,960
|
)
|
||||
Add: Rexahn’s transaction costs expensed through the statement of operations (Q)
|
2,113,368
|
447,077
|
|||||||
Add: Depreciation and amortization expenses associated with Rexahn operations (S)
|
27,013
|
40,992
|
|||||||
Add: Interest expense associated with Ocuphire’s convertible notes (R)
|
1,421,672
|
1,409,096
|
|||||||
Add: Fair Value adjustment related to Ocuphire premium conversion derivatives (R)
|
(157,942
|
)
|
499,414
|
||||||
Subtract: Gain on note extinguishment (R)
|
(1,260,350
|
)
|
—
|
||||||
Pro forma
|
c
|
$
|
(8,297,680
|
)
|
$
|
(12,407,815
|
)
|
||
Basic and Diluted Weighted Average Shares:
|
|||||||||
As reported (Rexahn) and as adjusted for Rexahn Reverse Stock Split
|
d
|
1,023,304
|
990,041
|
||||||
As reported (Ocuphire)
|
e
|
3,482,163
|
2,692,793
|
||||||
Add: Application of the estimated Exchange Ratio of 1.0579 to Ocuphire’s weighted average common shares outstanding
|
201,617
|
155,913
|
|||||||
Add: Conversion of Ocuphire’s convertible notes and accrued interest upon closing of the merger as adjusted for the Exchange Ratio of 1.0579
|
970,347
|
510,883
|
|||||||
Add: Close of Ocuphire private placement common stock and warrant financing upon closing of the merger as adjusted for the Exchange Ratio of 1.0579
|
1,249,972
|
1,249,972
|
|||||||
Pro forma
|
f
|
6,927,403
|
5,599,602
|
Q. |
To reflect the elimination of Rexahn’s transaction costs expensed through the statement of operations for the year ended December 31, 2019 and for the nine month period ended September 30, 2020.
|
R. |
To reverse interest expense and fair value of changes in premium conversion derivatives and gain on note extinguishment associated with the Ocuphire convertible notes. The pro forma income statement assumes conversion of the notes at the
beginning of the period presented.
|
S. |
To reflect the elimination of the historical Rexahn depreciation and amortization expense in the historical period that will not have a continuing impact on the pro forma statement of operations.
|