Opus Genetics, Inc 10-Q for FY2023 Q1
Opus Genetics, Inc. (IRD)
10-Q
2023-05-15
For: 2023-03-31
View Original
Added on
April 09, 2026
About this 10-Q
Opus Genetics, Inc filed this 10-Q on May 15, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).
Headline figures
Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.75M
- compared with $0 a year earlier
- Net loss
- $5.79M
- compared with a net loss of $6.6M a year earlier
- Diluted EPS
- -$0.28
- compared with -$0.35 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
For the Quarterly Period Ended March 31, 2023
OR
For the transition period from to ________
Commission File Number: 001-34079
(Exact name of Registrant as specified in its charter)
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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Registrant’s Telephone Number, Including Area Code: (248 ) 957-9024
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of outstanding shares of the registrant’s common stock as of May 10, 2023 was 20,952,170 .
OCUPHIRE PHARMA, INC.
FORM 10-Q
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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| Item 1. |
Financial Statements
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Ocuphire Pharma, Inc.
(in thousands, except share amounts and par value)
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As of
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March 31,
2023
(unaudited)
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December 31,
2022
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Assets
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Current assets:
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Cash and cash equivalents
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$
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$
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Prepaids and other current assets
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Short-term investments
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Total current assets
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Property and equipment, net
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Total assets
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$
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$
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Liabilities and stockholders’ equity
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Current liabilities:
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Accounts payable
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$
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$
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Accrued expenses
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Total current liabilities
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Warrant liabilities
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Total liabilities
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Commitments and contingencies (Note 3 and Note 8)
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Stockholders’ equity
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Preferred stock, par value $
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Common stock, par value $
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Additional paid-in capital
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Accumulated deficit
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(
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(
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Total stockholders’ equity
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Total liabilities and stockholders’ equity
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$
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$
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See accompanying notes.
Ocuphire Pharma, Inc.
(in thousands, except share and per share amounts)
(Unaudited)
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Three Months Ended
March 31,
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2023
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2022
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| License and collaborations revenue |
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| Operating expenses: |
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General and administrative
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Research and development
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Total operating expenses
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Loss from operations
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Interest expense
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Fair value change in warrant liabilities
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Other income (expense), net
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Loss before income taxes
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Benefit (provision) for income taxes
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Net loss
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Other comprehensive loss, net of tax
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Comprehensive loss
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$
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Net loss per share:
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Basic and diluted (Note 10)
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$
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$
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Number of shares used in per share calculations:
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Basic and diluted
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See accompanying notes.
Ocuphire Pharma, Inc.
(in thousands, except share amounts)
(Unaudited)
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Common Stock
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Additional
Paid–In
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Accumulated
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Total
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Shares
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Amount
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Capital
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Deficit
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Equity
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Balance at December 31, 2021
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$
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$
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$
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Issuance of common stock in connection with the at-the-market program
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Stock–based compensation
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Net and comprehensive loss
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Balance at March 31, 2022
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$
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$
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$
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Balance at December 31, 2022
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$
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$
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$
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Issuance costs
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Stock–based compensation
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Exercise of warrants
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Net and comprehensive loss
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Balance at March 31, 2023
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$
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$
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$
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$
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See accompanying notes.
Ocuphire Pharma, Inc.
(in thousands)
(Unaudited)
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Three Months Ended
March 31,
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2023
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2022
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Operating activities
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Net loss
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$
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Adjustments to reconcile net loss to net cash used in operating activities:
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Stock-based compensation
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Depreciation
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Fair value change in warrant liabilities
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Unrealized loss from short-term investments
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Change in assets and liabilities:
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Accounts receivable
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Contract asset
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Prepaid expenses and other assets
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Accounts payable
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Accrued and other liabilities
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Net cash used in operating activities
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Investing activities
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Net cash used in investing activities
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Financing activities
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Proceeds from issuance of common stock in connection with the at-the-market program
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Exercise of stock options
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Net cash provided by financing activities
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Net decrease in cash and cash equivalents
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Cash and cash equivalents at beginning of period
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Cash and cash equivalents at end of period
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Supplemental disclosure of cash flow information:
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Cash paid for income taxes
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$
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$
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Cash paid for interest
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$
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$
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Supplemental non-cash financing transactions:
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Unpaid issuance and deferred offering costs
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$
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$
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See accompanying notes.
| 1. |
Company Description and Summary of Significant Accounting Policies
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Nature of Business
Ocuphire Pharma, Inc. (the “Company” or “Ocuphire”) is a clinical-stage ophthalmic
biopharmaceutical company focused on developing novel therapies for the treatment of unmet needs of patients with retinal and refractive eye disorders.
The Company’s lead retinal
product candidate, APX3330, is a twice-a-day oral tablet designed to target multiple pathways relevant to retinal and choroidal (the vascular layer of the eye) diseases such as diabetic retinopathy (“DR”) and diabetic macular edema
(“DME”) which, if left untreated, can result in permanent visual acuity loss and eventual blindness. The Company has also in-licensed APX2009 and APX2014, which are second-generation product candidates and analogs of APX3330.
In November 2022, the Company entered into a license and collaboration agreement (the “Nyxol License
Agreement”) with FamyGen Life Sciences, Inc. (acquired by Viatris, Inc. (“Viatris”) in January 2023) pursuant to which it granted Viatris an exclusive license to develop, manufacture, import, export and commercialize its
refractive product candidate phentolamine ophthalmic solution 0.75% (Nyxol® Eye Drops or “Nyxol”). Nyxol is a once-daily eye drop formulation of phentolamine mesylate designed to reduce pupil diameter and improve visual acuity.
Nyxol can potentially be used across multiple indications such as treatment of pharmacologically-induced mydriasis (“RM”) (dilation of the pupil), presbyopia (age-related blurry near vision) and dim light or night vision
disturbances (“DLD”) (halos, glares and starbursts).
Reverse Merger with Rexahn
On June 17, 2020, Ocuphire, Rexahn Pharmaceuticals, Inc. (“Rexahn”), Razor Merger
Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Rexahn (“Merger Sub”), entered into an Agreement and Plan of Merger and Reorganization, as amended on June 29, 2020 (as amended, the “Merger Agreement”), pursuant to
which, among other things, and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, Merger Sub would merge with and into Ocuphire, with Ocuphire continuing as a wholly-owned subsidiary of
Rexahn and the surviving corporation of the merger (the “Merger”). The Merger closed on November 5, 2020. Upon completion of the Merger, Rexahn changed its name to Ocuphire Pharma, Inc. and changed its ticker symbol on the Nasdaq
Capital Market to “OCUP”.
The Company’s headquarters is located in Farmington Hills, Michigan.
Global Economic
Conditions
Generally, worldwide economic conditions remain uncertain,
particularly due to the effects of the conflict between Russia and Ukraine, disruptions in the banking system and financial markets, lingering COVID‑19 pandemic and
increased inflation. The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past and at times have adversely affected the Company’s access to capital and increased the
cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, the Company’s future cost of equity or debt capital and
access to the capital markets could be adversely affected.
Additionally, the Company’s operating results could be materially impacted by changes in the overall
macroeconomic environment and other economic factors. Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the conflict in Ukraine, disruptions
in the banking system and financial markets, and steps taken by governments and central banks, particularly in response to the COVID-19 pandemic as well as other stimulus and spending programs, have led to higher inflation,
which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates.
Basis of Presentation
The accompanying condensed financial statements have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted
accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.
The December 31, 2022 condensed balance sheet was derived from audited financial statements,
and may not include all disclosures required by GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed financial statements should be read in
conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2022.
In the opinion of management, all adjustments, consisting of only normal recurring adjustments
that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating
results for the full fiscal year or any future periods.
On December 31, 2021, the Company merged its wholly-owned subsidiary, OcuSub Inc,
with and into the Company, with the Company remaining as the surviving entity. The merger of the Company’s wholly-owned subsidiary did not have a financial impact in the periods presented. Upon close of this merger, the Company did not
have any remaining entities that required consolidation for financial statement reporting purposes. All significant intercompany accounts and transactions were eliminated in the preparation of the condensed financial statements prior to the December 31, 2021 merger with OcuSub Inc.
Liquidity
The accompanying condensed financial statements have been prepared on the basis that the Company will continue as a going concern.
From its inception, the Company has devoted substantially all of its efforts to drug development and conducting clinical trials.
As of March 31, 2023, the Company had $39.0
million in cash and cash equivalents. The Company believes its current available cash and cash equivalents will be sufficient to fund the Company’s planned expenditures and meet its obligations for at least 12 months following May 15,
2023, which is the date that these condensed financial statements are being issued.
In the future, the Company may need to raise additional funds until it is able to generate sufficient revenues to fund its
development activities. The Company’s future operating activities, coupled with its plans to raise capital or issue debt financing, may provide additional liquidity in the future, however these actions are not solely within the control
of the Company and the Company is unable to predict the ultimate outcome of these actions to generate the liquidity ultimately required.
Use of Estimates
The preparation of condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the amounts reported in the condensed financial statements and accompanying notes. Actual results could differ from those estimates.
Segment Information
Operating segments are components of an enterprise for which separate financial information
is available and is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The
Company’s Chief Executive Officer views the Company’s operations and manages its business in one operating segment, which is
the business of development of products related to vision performance and health. Accordingly, the Company has a single reporting segment.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of 90 days or less at the time of deposit to be cash equivalents.
Concentration
of Credit Risk
Financial
instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash is held or managed by one financial institution in the United States. Amounts on deposit exceed
federally insured limits. Management believes that the financial institution is financially sound, and accordingly, minimal credit risk exists with respect to the financial institution. In addition, the Company limits its exposure
through the kind, quality and concentration of its investments. As of March 31, 2023, the Company had deposits that exceeded federally insured amounts by $38.7 million.
Short-term Investments
The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and
are recorded on a settlement date basis. The Company’s short-term investments are comprised of equity securities, which in accordance with the fair value hierarchy described below are recorded at fair value using Level l inputs on the
balance sheets. Subsequent changes in fair values are recorded in other income (expense), net on the condensed statements of comprehensive loss. The Company classifies investments available to fund current operations as current assets
on its balance sheets. The Company did no t recognize any impairments on its investments to date through March 31, 2023.
Revenue Recognition
The Company follows the provisions of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers. The
guidance provides a five-step model to determine how revenue is recognized. The Company has entered into license agreements which have revenue recognition implications (See Note 9 – License and Collaboration Agreements).
In determining the appropriate amount of revenue to be recognized, the Company performs the following steps: (i) identification of
the contracts with a customer; (ii) determination of the performance obligations in the contract; (iii) measurement of the transaction price, including potential constraints on variable consideration; (iv) allocation of the transaction
price to the performance obligations based on estimated stand-alone selling prices; and (v) recognition of revenue when (or as) the Company satisfies a performance obligation.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. Performance obligations may include license rights, development
and other services. Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the
arrangement. If the Company cannot reasonably estimate when its performance obligations are either completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue
is then recognized over the remaining estimated period of performance using the cumulative catch-up method.
As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the
stand-alone selling price of each performance obligation identified in the contract. The Company uses key assumptions to determine the stand-alone selling price, which may include forecasted revenues, development timelines,
reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. The Company allocates the total transaction price to each performance obligation based on the relative standalone selling
prices of the promised goods or service underlying each performance obligation.
Licenses of intellectual property and research and development services: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues
from non-refundable, up-front fees allocated to the license when the license is transferred to the customer, and the customer can use and benefit from the license. For licenses that are bundled with other obligations, such as research
and development services, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over
time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. For research and development services
that are distinct from a license transfer obligation, the Company determines whether the services are satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of
recognizing revenue from such services. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.
Milestone payments: At the
inception of each arrangement that includes milestone payments, the Company evaluates whether the milestones are considered probable of being achieved and estimates the amount to be included in the transaction price using the most
likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission) is included in the transaction price. Milestone payments that are not
within the control of the Company, such as approvals from regulators, are not considered probable of being achieved until such contingency occurs (such as receipt of those approvals).
Royalties: For arrangements that
include sales-based royalties, including milestone payments based on the level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the
related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
Contract Asset
The Company recognizes a contract asset when goods or services are transferred to the
customer before the customer pays or before payment is due, excluding any amounts presented as an accounts receivable. The Company recorded a contract asset in connection with a license and collaboration agreement in the amount of $2.5 million as of March 31, 2023. See Note 9- License and Collaboration Agreements.
Accounts Receivable and Allowances for Doubtful Accounts
The Company records a provision for doubtful accounts, when appropriate,
based on historical experience and a detailed assessment of the collectability of its accounts receivable. In estimating the allowance for doubtful accounts, the Company considers, among other factors, the aging of the accounts
receivable, its historical write-offs, the credit worthiness of each customer, and economic conditions that could affect the collectability of the balances in the future. Account balances are charged off against the allowance when
the Company believes that it is probable that the receivable will not be recovered. Actual write-offs may be in excess of the Company’s estimated allowance. The Company has no t incurred any bad debt expense to date and no
General and Administrative Expenses
General and administrative expenses (“G&A”) consist primarily of personnel-related costs, including salaries and stock-based
compensation costs, for personnel in functions not directly associated with research and development activities. Other significant costs include legal fees relating to intellectual property and corporate matters, professional fees for
accounting and tax services, settlement costs with third parties and other services provided by business consultants.
Research and Development
Research and development expenses (“R&D”) consist of costs incurred in performing research and development activities, including
compensation for research and development employees and consultants, costs associated with preclinical studies and clinical trials, regulatory activities, manufacturing activities to support clinical activities, license fees, fees paid to
external service providers that conduct certain research and development, and an allocation of R&D related overhead expenses. R&D costs include costs that are reimbursed under the Nyxol License
Agreement.
Other Income
(Expense), net
Other income (expense), net reflected in this line item includes payments made by the Company in connection with the Contingent Value Rights Agreement discussed
further below with former Rexahn shareholders. In addition, other income (expense), net includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments and
reimbursements in connection with grants and other sources when they occur.
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with the provisions of the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC 718”), Compensation — Stock Compensation. Accordingly, compensation costs related to equity instruments granted are recognized at the grant date fair value. The Company records forfeitures
when they occur. Stock-based compensation arrangements to non-employees are accounted for in accordance with the applicable provisions of ASC 718.
Warrant Liabilities
The Company assumed Rexahn warrants issued prior to the Merger. The Company accounts for these warrants as a liability while outstanding at fair value during
periods when certain provisions preclude equity accounting treatment for these instruments. The change in fair value of the warrant liabilities while outstanding are recognized as a component of the fair value change in warrant
liabilities line item in the condensed statements of comprehensive loss.
Fair Value Measurements
The Company follows accounting guidance that emphasizes that fair value is a market-based
measurement, not an entity-specific measurement. Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”
Fair value measurements are defined on a three-level hierarchy:
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Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets;
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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
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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.
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As of March 31, 2023 and December 31, 2022, the fair values of cash and cash equivalents, accounts receivable, contract asset,
prepaid and other assets, accounts payable, accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The fair value of the short-term investments, while outstanding, were based
on observable Level 1 inputs in the form of quoted market prices from a major stock exchange. The fair value of the warrant liabilities, while outstanding, were based on a Black-Scholes option model using Level 3 inputs. There were no
The fair value of financial instruments measured on a
recurring basis is as follows (in thousands):
|
As of March 31, 2023
|
||||||||||||||||
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
|
Assets:
|
||||||||||||||||
| Short-term investments |
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
As of December 31, 2022
|
||||||||||||||||
|
Description
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
|
Assets:
|
||||||||||||||||
|
Short-term investments
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
|
Total assets at fair value
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
The following table provides a roll-forward of short-term investments measured at fair value
on a recurring basis using observable level 1 inputs for the three months ended March 31, 2023 and 2022 (in thousands):
|
2023
|
2022
|
|||||||
|
Short-term investments
|
||||||||
|
Balance as of beginning of period
|
$
|
|
$
|
|
||||
|
Unrealized loss
|
(
|
)
|
(
|
)
|
||||
|
Balance as of end of period
|
$
|
|
$
|
|
||||
The following table provides a roll-forward of the warrant liabilities measured at fair value on a recurring basis using
unobservable level 3 inputs for the three months ended March 31, 2023 and 2022 (in thousands):
|
2023
|
2022
|
|||||||
|
Warrant liabilities
|
||||||||
|
Balance as of beginning of period
|
$
|
|
$
|
|
||||
|
Change in fair value of warrant liabilities
|
|
|
||||||
|
Balance as of end of period
|
$
|
|
$
|
|
|
|||
The fair value of the warrant liabilities associated with the Rexahn warrants was de minimis during the periods presented. See Note 2
- Merger.
There were no
Recent Accounting Pronouncements
In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial
Instruments – Credit Losses”. The ASU sets forth a current expected credit loss (“CECL”) model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical
experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some
off-balance sheet credit exposures. The Company adopted this ASU on January 1, 2023 and it did not have a significant impact on its condensed financial statements.
In August 2020, FASB issued ASU 2020-06, Debt—Debt with
Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which, among other
things, provides guidance on how to account for contracts on an entity’s own equity. This ASU eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for
certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, this ASU modifies how particular convertible instruments and certain contracts that may be
settled in cash or shares impact the diluted EPS computation. The amendments in this ASU are effective for public business entities that meet the definition of a Securities and Exchange Commission (“SEC”) filer, excluding entities
eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal
years beginning after December 15, 2023, including interim periods within those fiscal years. The Company adopted this ASU on January 1, 2023 and the adoption did not have a material impact on its condensed financial statements.
In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) - Disclosures
by Business Entities about Government Assistance, to increase the transparency of government assistance including the disclosure of the types of assistance, an entity’s accounting for the assistance, and the effect of the assistance on an
entity’s financial statements. The amendments in this ASU are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. The Company adopted this guidance on January
1, 2022 and it did not have a material impact to the condensed financial statements.
| 2. |
Merger
|
On November 5, 2020, the Company completed the Merger transaction with Rexahn. In connection
with the Merger, the Company, Shareholder Representatives Services LLC, as representative of the Rexahn stockholders prior to the Merger, and Olde Monmouth Stock Transfer Co., Inc., as the rights agent, entered into a Contingent Value
Rights Agreement (the “CVR Agreement”).
Pursuant to the terms of the Merger
and the CVR Agreement, Rexahn stockholders of record as of immediately prior to the effective time of the Merger received one
contingent value right (“CVR”) for each share of Rexahn common stock held.
Each CVR entitles such holders to
receive, for each calendar quarter (each, a “CVR Payment Period”) during the 15 -year period after the Closing (the “CVR Term”),
an amount equal to the following:
| ● |
|
| ● |
|
| ● |
|
The CVRs are not transferable, except in certain limited circumstances, will not be certificated or evidenced by
any instrument, will not accrue interest and will not be registered with the SEC or listed for trading on any exchange. The CVR Agreement will continue in effect until the later of the end of the CVR Term and the payment of all amounts
payable thereunder. As of March 31, 2023, no payments subject to the CVR had been received beyond those previously reported in
the second and third quarters of calendar year 2021. In addition, no milestones had been accrued as there were no
Former Rexahn Warrants
Following the closing of the Merger,
231,433 outstanding, unexercised Rexahn warrants to purchase common stock remained outstanding, the majority of which were
subsequently repurchased according to the terms of the original warrant agreements. As of March 31, 2023, 60,713 of the Rexahn
warrants remained outstanding with exercise prices ranging from $38.40 to $136.80 per share with an average remaining contractual life of 0.8
years.
|
3.
|
Commitments and Contingencies
|
Apexian Sublicense Agreement
On January 21, 2020, the Company entered into a sublicense agreement with Apexian Pharmaceuticals, Inc., pursuant to which it obtained exclusive
worldwide patent and other intellectual property rights. In exchange for the patent and other intellectual rights, the Company agreed to certain milestone payments and royalty payments on future sales (See Note 8 — Apexian Sublicense
Agreement). As of March 31, 2023, there was sufficient uncertainty with regard to any future cash milestone payments under the sublicense agreement, and as such, no liabilities were recorded related to the sublicense agreement.
Facility Leases
The Company
has a short-term non-cancellable facility lease (the “HQ Lease”) for its operations and headquarters. The HQ Lease qualified for the short-term lease exception under ASC 842, Leases. The monthly base rent, as amended, for the HQ Lease is
approximately $3,000 . The rent expense associated with the HQ Lease amounted to $9,000 and $12,000 during the
three months ended March 31, 2023 and 2022, respectively. The total remaining expected rental payments under the HQ Lease amount to $27,000
through its current expiration date of December 31, 2023.
Other
In the ordinary course of business, from time to time, the Company may be subject to a broad range of claims and legal proceedings that relate to contractual
allegations, patent infringement and other claims. In addition, the Company from time to time may be potentially committed to reimburse third parties for costs incurred associated with business development related transactions upon the
achievement of certain milestones. The Company establishes accruals when applicable for matters and commitments which it believes losses are probable and can be reasonably estimated. To date, no loss contingency for such matters and
potential commitments have been recorded. Although it is not possible to predict with certainty the outcome of these matters or potential commitments, the Company is of the opinion that the ultimate resolution of these matters and
potential commitments will not have a material adverse effect on its results of operations or financial position.
| 4. |
Supplemental Balance Sheet Information
|
Prepaid and Other Assets
Prepaid and other assets consist of the following (in
thousands):
|
March 31,
2023
|
December 31,
2022
|
|||||||
|
Prepaids
|
$
|
|
$
|
|
||||
|
Other
|
|
|
||||||
|
Total prepaids and other assets
|
$
|
|
$
|
|
||||
Property and Equipment, net
Property and equipment held for use by category are presented in the
following table (in thousands):
|
March 31,
2023
|
December 31,
2022
|
|||||||
|
Equipment
|
$
|
|
$
|
|
||||
|
Furniture
|
|
|
||||||
|
Total property and equipment
|
|
|
|
|
||||
|
Less accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
|
Property and equipment, net
|
$
|
|
$
|
|
||||
Depreciation
expense was $1
Accrued Expenses
Accrued expenses consist of the following (in thousands):
|
March 31,
|
December 31,
|
|||||||
|
2023
|
2022
|
|||||||
|
Income taxes
|
$
|
|
$
|
|
||||
|
Payroll
|
|
|
||||||
|
Professional services
|
|
|
||||||
|
R&D services and supplies
|
||||||||
|
Other
|
|
|
||||||
|
Total
|
$
|
|
$
|
|
||||
Short-Term Loan
The Company entered into an unsecured short-term loan (the “Loan”) agreement in the amount of
$0.6 million in November 2021 related to financing an insurance policy. The Loan was payable in six monthly installments of $108 ,000
beginning in December 2021. The Loan had an annual interest rate of 5.5 % per annum. Interest expense in the amount of $5 ,000 was recognized in connection with the Loan during the three months ended March 31, 2022. No interest expense was recognized during the three months ended March 31, 2023.
| 5. |
Related Party Transactions
|
On April 8, 2022, Ocuphire entered into a consulting agreement with Jay Pepose, a director of the Company. The consulting agreement provided for $10,000 a month in cash payments, effective as of April 1, 2022. Additionally, on April 8, 2022, in connection with the consulting arrangement, Dr. Pepose received a stock option grant for 50,000 options, 25 % vested on March 31, 2023, with the remainder vesting in equal monthly installments over
36 months. The consulting agreement was amended on September 19, 2022 to provide for vesting acceleration for stock-based awards in the event of a change
in control. The consulting agreement was also amended effective December 1, 2022 to increase the cash payment to $25,000 per
month. The Company incurred related consulting expenses of $75,000 during the three months ended March 31, 2023. There were no related consulting expenses incurred during the three months ended March 31, 2022. As of March 31, 2023 and December 31, 2022, $50,000 and $25,000 of the
related consulting expenses were unpaid, respectively.
.
| 6. |
Stockholders’ Equity
|
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 three months ended March 31, 2022, 336,544 shares of common stock were sold under the
2021 ATM for gross proceeds in the amount of $1.2 million before deducting issuance expenses, including the placement agent’s
fees, legal and accounting expenses, in the amount of $35,000 . There were no sales of common stock under the 2021 ATM during the three-month period ended March 31, 2023.
Registered Direct Offering
On June 4, 2021, the Company entered into a placement agency agreement 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”). The RDO Warrants are equity classified, 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 March 31, 2023, 1,538,461 RDO Warrants
were outstanding.
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 March 31, 2023. The Series A Warrants were accounted for and classified as equity on the accompanying condensed 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 at March 31, 2023 as the remaining 17,869 warrants were exercised for shares of common stock during the first quarter of 2023. The Series B Warrants were accounted for and classified as equity on the accompanying
condensed balance sheets while outstanding.
| 7. |
Stock-based Compensation
|
Stock-based
compensation expense was included in general and administrative and research and development costs as follows in the accompanying condensed statements of comprehensive loss for the three-month periods indicated below (in thousands):
|
March 31,
|
||||||||
|
2023
|
2022
|
|||||||
|
General and administrative
|
$
|
|
$
|
|
||||
|
Research and development
|
|
|
||||||
|
Total stock-based compensation
|
$
|
|
$
|
|
||||
Ocuphire Stock Options
Inducement Plan
On February 22, 2021, the Company
adopted the Ocuphire Pharma, Inc. Inducement Plan (the “Inducement Plan”), pursuant to which the Company reserved 325,258
shares of its common stock to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company
within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules.
2020 Equity
Incentive Plan
The stockholders of the Company approved the 2020 Equity
Incentive Plan (the “2020 Plan”) for stock-based awards. The 2020 Plan became effective on November 5, 2020. Under the 2020 Plan, (i) 1,000,000
new shares of common stock were reserved for issuance and (ii) up to 70,325 additional shares of common stock may be issued,
consisting of (A) shares that remain available for the issuance of awards under prior equity plans and (B) shares of common stock subject to outstanding stock options or other awards covered by prior equity plans that have been cancelled or
expire on or after the date that the 2020 Plan became effective. The 2020 Plan permits the grant of incentive and non-statutory stock options, appreciation rights, restricted stock, restricted stock units, performance stock and net loss
awards, and other stock‑based awards.
2018 Equity Incentive Plan
Prior to the 2020 Plan, the Company had adopted a 2018
Equity Incentive Plan (the “2018 Plan”) in April 2018 under which 1,175,000 shares of the Company’s common stock were reserved
for issuance to employees, directors and consultants. Upon the effective date of the 2020 Plan, no additional shares were
available for issuance under the 2018 Plan.
2020 Plan
Evergreen Provision
Under the 2020 Plan, the shares reserved automatically
increase on January 1 of each year, for a period of not more than ten years from the date the 2020 Plan is approved by the
stockholders of the Company, commencing on January 1, 2021 and ending on (and including) January 1, 2030, by an amount equal to 5 %
of the shares of common stock outstanding as of December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board of Directors may act prior to January 1st of a given year to provide that there will be no January 1
increase in the share reserve for such year or that the increase in the share reserve for such year will be a lesser number of shares of common stock than would otherwise occur pursuant to the preceding sentence. On January 1, 2023, 1,043,066 shares were added to the 2020 Plan as a result of the evergreen provision.
Stock Options
During the three months ended March 31, 2023 and 2022, 665,383 and 552,305 options were
granted to officers, employees and consultants, respectively, generally vesting over a five (5 ) to forty-eight (48 ) month period. The Company recognized $500 ,000
and $417 ,000 in stock-based compensation expense related to stock options during the three months ended March 31, 2023 and 2022,
respectively. As of March 31, 2023 and December 31, 2022, 3,601,427 and 2,936,044 stock options were outstanding, respectively.
The weighted average fair value per share of options
granted during the three months ended March 31, 2023 and 2022 was $2.75 and $2.29 , respectively. The Company measures the fair value of stock options with service‑based vesting criteria to employees, directors, consultants and directors on the
date of grant using the Black‑Scholes option pricing model. The Company does not have sufficient share trading history to support an internal calculation of volatility and expected term. As such, the Company has used a weighted average
volatility considering the volatilities of several guideline companies.
For purposes of identifying similar entities, the
Company considered characteristics such as industry, length of trading history, and stage of life cycle. The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The average
expected life of the options was based on the contractual term for agreements that allow for exercise of vested options through the end of the contractual term upon termination of continuous service, and for all other agreements, was based
on the midpoint between the vesting date and the end of the contractual term according to the “simplified method” as described in Staff Accounting Bulletin 110. The risk-free interest rate is determined by reference to implied yields
available from U.S. Treasury securities with a remaining term equal to the expected life assumed at the date of grant. The Company records forfeitures when they occur.
The weighted average assumptions used in the
Black‑Scholes option pricing model are as follows during the three months ended March 31, 2023 and 2022:
|
2023
|
2022
|
|||||||
|
Expected stock price volatility
|
|
%
|
|
%
|
||||
|
Expected life of options (years)
|
|
|
||||||
|
Expected dividend yield
|
|
% |
|
%
|
||||
|
Risk free interest rate
|
|
%
|
|
%
|
||||
During the
three months ended March 31, 2023 and 2022, 246,068 and 62,698 stock options vested, respectively. The weighted average fair value per share of options vesting during the three months ended March 31, 2023 and 2022 was $2.44 and $2.90 , respectively. During the three months ended March 31, 2023 and 2022, zero and 24,309 stock options were exercised, respectively, with an intrinsic value of zero and $59,000 , respectively. During the three months ended
March 31, 2023 and 2022, zero and 8,288
options were forfeited, respectively.
Restricted
Stock Units
During the
three months ended March 31, 2023, the Company granted an aggregate of 291,584 restricted stock units (“RSUs”) to certain
officers and employees under the 2020 Plan. The weighted average grant date fair value of the RSUs granted during the three months ended March 31, 2023 was $3.50 per unit. The RSUs vest over a four year period with 25 percent vesting annually on each anniversary of the grant date, subject to the recipient’s continued service on such dates.
During the
three months ended March 31, 2023, no RSUs vested and no RSUs were forfeited during this period. The total expense for the three months ended March 31, 2023 related to these RSUs was $57 ,000.
Common Stock Issued for Services
The Company
granted stock for services in the amount of 68,646 and 8,024 common shares during the three months ended March 31, 2023 and 2022, respectively, to four and two board members during these periods, respectively, who
elected to receive their board retainers in the form of stock for services. The stock-based compensation related to these services amounted to $247 ,000
and $28 ,000 during the three months ended March 31, 2023 and 2022, respectively.
General
As of March
31, 2023, 912,373 No shares were available for future issuance under the 2018 Plan. Unrecognized stock-based compensation cost was $4.9 million as of March 31, 2023. The unrecognized stock-based expense is expected to be recognized over a weighted average period of 1.7 years.
| 8. |
Apexian Sublicense Agreement
|
On January
21, 2020, the Company entered into a sublicense agreement (as amended on June 4, 2020, the “Apexian Sublicense Agreement”) with Apexian, pursuant to which it obtained exclusive worldwide patent and other intellectual property rights that
constitute a Ref-1 Inhibitor program relating to therapeutic applications to treat disorders related to ophthalmic and diabetes mellitus conditions. The lead compound in the Ref-1 Inhibitor program is APX3330, which the Company intends to
develop as an oral tablet therapeutic to treat diabetic retinopathy initially, and potentially later to treat diabetic macular edema, geographic atrophy and wet age-related macular degeneration. In connection with the Apexian Sublicense
Agreement, the Company issued a total of 891,422 shares of its common stock to Apexian and to certain affiliates of Apexian in
calendar year 2020. As a result of the common stock issued pursuant to the Apexian Sublicense Agreement, Apexian is considered by Ocuphire to be a related party.
The Company
also agreed to make one-time milestone payments under the Apexian Sublicense Agreement for each of the first ophthalmic indication and the first diabetes mellitus indication for the development and regulatory milestones, and once for each
of several sales milestones. These milestone payments include (i) payments for specified developmental and regulatory milestones (including completion of the first Phase 2 trial and the first Phase 3 pivotal trial in the United States, and
filing and achieving regulatory approval from the FDA for the first New Drug Application for a compound) totaling up to $11
million in the aggregate and (ii) payments for specified sales milestones of up to $20 million in the aggregate, which net sales
milestone payments are payable once, upon the first achievement of such milestone. Lastly, the Company also agreed to make a royalty payment equal to a single-digit percentage of its net sales of products associated with the covered patents
under the Apexian Sublicense Agreement. If it is not terminated pursuant to its terms, the Apexian Sublicense Agreement shall remain in effect until expiration of the last to expire of the covered patents.
None of the milestone or royalty payments were triggered or deemed probable as of March 31, 2023 or December 31, 2022.
|
9.
|
License and Collaboration Agreements
|
Nyxol License Agreement
On November 6, 2022, the Company entered into the Nyxol License Agreement, pursuant to which it granted Famy an
exclusive, perpetual, sub-licensable license to develop, manufacture, import, export and commercialize (i) Nyxol for treating (a) reversal of mydriasis, (b) night vision disturbances or dim light vision, and (c) presbyopia, and (ii) Nyxol and
low dose pilocarpine for treating presbyopia (together, the “Nyxol Products”) worldwide except for certain countries and jurisdictions in Asia (the “Viatris Territory”). The Company retains the exclusive right to develop, manufacture, have
manufactured, import, export and commercialize the Product outside of the Viatris Territory. In January 2023, Famy was acquired by Viatris Inc., and Viatris has assumed all of Famy’s obligations under the Nyxol License Agreement.
Under the terms
of the Nyxol License Agreement, the Company in partnership with Viatris, will develop the Nyxol Products in the United States. Viatris will reimburse the Company for budgeted costs related to the development of the Nyxol Products through FDA
approval. Viatris will be responsible for developing the Nyxol Products in countries and jurisdictions in the Viatris Territory outside of the United States. The parties established a joint steering committee, which oversees and makes
decisions regarding the development of the Nyxol Products. The committee is composed of an equal number of representatives of Viatris and Ocuphire. Viatris will commercialize the Nyxol Products in the Viatris Territory for each indication
that receives regulatory approval.
Pursuant to the
Nyxol License Agreement, the Company received a one-time non-refundable cash payment of $35 million in November 2022 for the
exclusive, perpetual, sub-licensable license to develop, manufacture, import, export and commercialize the Nyxol Products in the Viatris Territory. In addition, with respect to each Nyxol Product, the Company will be eligible to receive
potential additional payments of up to $130 million in the aggregate upon achieving certain specified regulatory or net sales
milestones, with the first potential payment of $10 million to be made following approval by the FDA of Nyxol for reversal of
mydriasis. The Company will also receive tiered royalties, starting at low double-digit royalties up to low twenty percent
royalties, based on the aggregate annual net sales of all Nyxol Products in the United States, and will receive low double digit royalties based on all annual net sales in the Viatris Territory outside of the United States. The royalty
payments will continue on a country-by-country basis from the date of the first commercial sale of the first Nyxol Product in a country of the Viatris Territory until December 31, 2040.
Either party may
terminate the Nyxol License Agreement upon written notice in the case of the other party’s material breach (subject to applicable cure periods) or if the other party becomes subject to an insolvency event. In addition, the Company may
terminate the agreement in its entirety if Viatris or its affiliates commences an action challenging the validity, enforceability or scope of any of Ocuphire’s patents that are exclusively licensed under the Nyxol License Agreement.
Additionally, if Viatris determines not to pursue development or commercialization of a Product in a country or jurisdiction in the Viatris Territory, Viatris may terminate the license with respect to such Product in such country or
jurisdiction.
Both Ocuphire and
Viatris have agreed to indemnify the other party against certain losses and expenses relating to any breach of the indemnifying party’s obligations, representations, warranties or covenants under the Nyxol License Agreement.
The Nyxol License
Agreement was accounted for under the provisions of ASC 606. In accordance with the provisions under ASC 606, the Company identified two
distinct performance obligations at the effective date: (1) the license to its intellectual property (“license transfer”) and (2) research and development services.
The aggregate
transaction price associated with the Nyxol License Agreement, as adjusted for variable consideration subsequent to December 31, 2022, was $40.0
million which comprised the Initial License Transfer fee of $35.0 million and the $5.0 million payment anticipated under the research and development services that were not subject to cancellation. The transaction price was allocated between performance
obligations based on their relative standalone selling price (“SSP”). The performance obligations for research and development services through the non-cancellation period were fully met by the Company as of March 31, 2023.
The SSP for the
license transfer and for the research and development services was determined to be $ 287.8 million and $5.0 million, respectively. The SSP for the license transfer was determined based on a discounted royalty cash flow approach, taking into
consideration assumptions, including projected worldwide net profit for each of the respective programs based on probability assessments, projections based on internal forecasts, industry data, and information from other guideline companies
within the same industry and other relevant factors. The SSP for the research and development services was determined using a cost plus margin approach, based on anticipated expenditure outlays within the first 120 -day non-cancellation window. On a relative SSP basis, $39.3 million and $0.7 million of the transaction price was allocated to
the license transfer and to the research and development services obligations, respectively.
Recognition of Revenue
The Company
determined that the licenses transferred represented functional intellectual property. As such, the revenue related to the licenses was recognized at the point in time in which the license/know-how was delivered to Viatris (as successor to
Famy) which occurred during the fourth quarter of 2022. The Company determined that revenue related to the research and development services constrained to the 120 -day non-cancellation period was to be recognized over time as the services are rendered based on an estimated percentage of completion input model.
Revenue
recognized under the Nyxol License Agreement during the three months ended March 31, 2023 was $1.7 million.
Regulatory Milestones under the Nyxol License Agreement
The Company has
evaluated the regulatory milestones that may be received in connection with the Nyxol License Agreement. There is uncertainty that the events to obtain the regulatory milestones will be achieved given the nature of clinical development and
the stage of the development of the Products. The remaining regulatory milestones will be constrained until it is probable that a significant revenue reversal will not occur.
Sales Milestone and Royalty Payments
Sales milestones
and royalties relate predominantly to a license of intellectual property granted to Viatris and are determined by sales or usage-based thresholds. The sales milestones and royalties are accounted for under the royalty recognition constraint
and will be accounted for as constrained variable consideration. The Company applies the royalty recognition constraint for each commercial milestone and will not recognize revenue for each until the subsequent sale of a licensed product
(achievement of each) occurs.
Each of the
remaining regulatory and sales milestone performance obligations and royalty payments were fully constrained as of March 31, 2023 and no
revenue was recognized.
A reconciliation of the closing balance of the contract asset associated with the Nyxol License
Agreement is as follows as of March 31, 2023 (in thousands):
|
Contract Asset
|
||||
|
Balance as of December 31, 2022
|
$
|
|
||
|
Revenue recognized
|
|
|||
|
Reclassification to accounts receivable related to costs billed under the Nyxol License Agreement
|
(
|
)
|
||
|
Balance as of March 31, 2023
|
$
|
|
||
The remaining amounts in the contract asset as of March 31, 2023 attributed to the research and development services are expected to be settled during the second quarter of 2023.
BioSense License and Assignment Agreement
On March 10, 2020, pre-Merger, Rexahn entered into an amendment to its collaboration and license agreement, (as amended, the “BioSense
License and Assignment Agreement”) with BioSense to advance the development and commercialization of RX-3117 for all human uses in the Republic of Singapore, China, Hong Kong, Macau, and Taiwan (the “BioSense Territory”). Under the terms of
the BioSense License and Assignment Agreement, the Company (i) granted BioSense an exclusive license to develop and commercialize pharmaceutical products containing RX-3117 as a single agent for all human uses in the BioSense Territory and
(ii) assigned and transferred all of the former Rexahn patents and patent applications related to RX-3117 in the BioSense Territory. The upfront payment consisted of an aggregate of $1,650,000 , of which $1,550,000 was paid to Rexahn prior to
the Merger and the remaining $100,000 during calendar year 2021.
Under the BioSense License and Assignment Agreement, the Company is eligible
to receive additional milestone payments in an aggregate of up to $84,500,000 upon the achievement of development, regulatory and commercial goals and will also be eligible to receive tiered royalties at low double-digit rates on annual net sales in the BioSense
Territory. The Company determined that none of the milestone payments under the BioSense License and Assignment Agreement were probable of payment as of March 31, 2023, and as a result, no revenue related to the milestones was recognized as the achievement of events entitling the Company to any milestone payments were highly susceptible to factors
outside of the Company’s control. Future sales-based royalties related to the exclusive license to develop RX-3117 will be recognized in the period the underlying sales transaction occurs.
Payments received under the BioSense License and Assignment Agreement are subject to the
CVR Agreement described in Note 2 – Merger.
Processa License Agreement
On June 16, 2021, the
Company entered into a license agreement (the “Processa License Agreement”) with Processa Pharmaceuticals, Inc. (“Processa”), pursuant to which the Company has agreed to grant Processa an exclusive license to develop, manufacture and commercialize RX-3117 globally, excluding the BioSense Territory.
Processa will make future payments to the Company upon the achievement of certain
development and regulatory milestones, which primarily consist of dosing a patient in pivotal trials or having a drug indication approved by a regulatory authority in the United States or another country. In addition, Processa will pay the
Company mid-single-digit royalties based on annual sales under the license and will make one -time sales milestone payments based on
the achievement during a calendar year of certain thresholds for annual sales. Processa is also required to give the Company 32 % of
any milestone payments received based on any sub-license agreement Processa may enter into with respect to the Processa License Agreement. The Company determined that none of the milestone payments under the Processa License Agreement were
probable of payment as of March 31, 2023, and as a result, no revenue related to the milestones was recognized, as the achievement
of events entitling the Company to any milestone payments were highly susceptible to factors outside of the Company’s control.
Processa is required to use commercially reasonable efforts, at its sole cost and expense, to conduct development
activities in one or more countries, including meeting specific diligence milestones that consist
of: (i) first patient administered drug in a clinical trial of a licensed product prior to the three (3 ) year anniversary of the
effective date; and (ii) first patient administered drug in a pivotal clinical trial of a licensed product or first patient administered drug in a clinical trial for a second indication of a licensed product prior to the five (5 ) year anniversary of the effective date. Either party may terminate the agreement in the event of a material breach of the agreement that has not
been cured following written notice and a 120 -day opportunity to cure such breach, and Processa may terminate the agreement for any
reason upon 120 days prior written notice to Ocuphire.
Future payments received under the Processa License Agreement will be subject to the CVR Agreement described in Note 2–
Merger.
| 10. |
Net loss per share
|
Basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding
during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed
exercise of any common stock equivalents, if dilutive. The Company’s warrants, stock options, RSUs and any unissued common stock for services, while outstanding, are considered common stock equivalents for this purpose. Diluted earnings
is computed utilizing the treasury method for the warrants, stock options, RSUs and any unissued common stock for services. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion
would be anti-dilutive given the net loss reported for the periods presented.
The following
potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three-month periods ended presented below:
|
March 31,
|
||||||||
|
2023
|
2022
|
|||||||
|
Series A, Series B, and RDO warrants
|
|
|
||||||
|
Stock options
|
|
|
||||||
| RSUs | ||||||||
|
Unissued common stock for services
|
|
|
||||||
|
Former Rexahn warrants
|
|
|
||||||
|
Former Rexahn options
|
|
|
||||||
|
11.
|
Income Taxes
|
The effective
tax rate for the three months ended March 31, 2023 and 2022 was zero no
The Company’s corporate returns are subject to examination for tax years beginning in 2019 for federal income tax purposes and subject to examination in various state jurisdictions. The Company does not have any reserves for
income taxes that represent the Company’s potential liability for uncertain tax positions.
|
12.
|
Deferred Compensation Plan
|
Effective October 1st, 2021, the Company began offering a 401(k) plan (“401K Plan”) to its employees. All employees are eligible to participate in the 401K Plan. The Company makes matching contributions equal to 100 % on the first 3 % of compensation that is deferred as an
elective deferral and an additional 50 % on the next 2 % of compensation. The Company’s matching contributions are made on a payroll-by-payroll basis. During the three months ended March 31, 2023 and 2022, the Company contributed $34,000 and $25,000 to the 401K Plan, respectively.
| 13. |
Subsequent Events
|
On April 19, 2023, the Company terminated the employment of Mina Sooch, the President and Chief
Executive Officer of the Company, and appointed Richard Rodgers as the Company’s interim President and Chief Executive Officer. In connection with the appointment of Richard Rodgers as interim President and Chief Executive Officer of the
Company, the Company and Mr. Rodgers entered into a letter agreement concerning Mr. Rodgers’s services (the “Letter Agreement”). The Letter Agreement provides that Mr. Rodgers will receive a $40,000 monthly salary, and that Mr. Rodgers is eligible for potential prorated bonus at the discretion of the Board, at the end of his term. Mr. Rodgers also received
50,000 restricted stock units under the Company’s 2020 Equity Incentive Plan which will vest 12 months following the grant date.
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes included in Part I
“Financial Information”, Item I “Financial Statements” of this Quarterly Report on Form 10-Q (the “Report”) and the audited financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended December 31,
2022.
Forward-Looking Statements
Certain statements contained in this Report are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance. We
may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms, and similar expressions that
convey uncertainty of future events or outcomes to identify these forward-looking statements.
These forward-looking statements reflect our management’s beliefs and views with respect to future events, are based on estimates and assumptions as of the date of this Report and are subject to
risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in these forward-looking statements. We discuss many of these risks in greater detail under Part I, Item 1A “Risk
Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent reports filed with or furnished to the Securities and Exchange Commission (the “SEC”). Moreover, we operate in a very competitive and rapidly changing
environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
Any forward-looking statement made by us in this Report speaks only as of the date hereof or as of the date specified herein. We undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable laws or regulations.
Overview
We are a clinical-stage ophthalmic biopharmaceutical company focused on developing novel therapies for the treatment of unmet needs of patients with retinal and refractive eye disorders.
APX3330
Our lead retinal product candidate, APX3330, is a twice-a-day oral tablet designed to target multiple pathways relevant to retinal and choroidal (the vascular layer of the eye) diseases such as
diabetic retinopathy (“DR”) and diabetic macular edema (“DME”) which, if left untreated, can result in permanent visual acuity loss and eventual blindness. DR is a disease resulting from diabetes in which chronically elevated blood sugar levels
cause progressive damage to blood vessels in the retina. DME is a severe form of DR which involves leakage of protein and fluid into the macula, the central portion of the retina, causing swelling and vascular damage. Prior to our in-licensing
this product candidate, APX3330 had been studied by other sponsors in a total of 11 clinical trials (6 Phase 1 and 5 Phase 2) in a total of over 420 healthy volunteers or patients (with over 340 APX3330-treated) for inflammatory (hepatic) and
oncology indications, and had demonstrated evidence of target engagement, pharmacokinetics, durability, and favorable safety and tolerability. We also in-licensed APX2009 and APX2014, which are second-generation product candidates and analogs of
APX3330. In January 2023, we reported top-line efficacy and safety results from the ZETA-1 Phase 2 trial conducted in 103 subjects (51 treated with 600 mg daily dose of APX3330) in DR, including moderately severe non-proliferative DR (“NPDR”) and
mild proliferative DR (“PDR”), as well as patients with DME without loss of central vision. Although the ZETA-1 clinical trial did not meet the primary endpoint of % of patients with a ≥ 2-step improvement in Early Treatment of Diabetic
Retinopathy Study (ETDRS) diabetic retinopathy severity scale (DRSS) at week 24 in the study eye, statistical significance was achieved on a key pre-specified secondary endpoint of preventing clinically meaningful progression of diabetic
retinopathy (defined by binocular 3 or more steps worsening on the DRSS scale, calculated as the sum of changes in each eye) after 24 weeks of treatment. Given the systemic delivery of APX3330, an endpoint that evaluates the effects on both eyes
is a potential FDA registration endpoint for future trials. The binocular DRSS endpoint will be confirmed at an End-of-Phase 2 (EOP2) meeting with the FDA in the second half of 2023. APX3330 demonstrated favorable safety and tolerability in the
ZETA-1 trial, consistent with the safety data from the prior 11 clinical trials. Treatment-related adverse events were uncommon, and most were mild in severity. There were no treatment-related serious adverse events. No changes were observed in
liver, kidney, or heart function. There were no treatment-related effects on hematologic or blood chemistry evaluations.
Nyxol
In November 2022, we entered into a license and collaboration agreement (the “Nyxol License Agreement”) with FamyGen Life Sciences, Inc. (acquired
by Viatris, Inc. (“Viatris”) in January 2023) pursuant to which we granted Viatris an exclusive license to develop, manufacture, import, export and commercialize our refractive product candidate
phentolamine ophthalmic solution 0.75% (Nyxol® Eye Drops or “Nyxol”).
Nyxol is a once-daily eye drop formulation of phentolamine mesylate designed to reduce pupil diameter and improve visual acuity. Nyxol can potentially be used across multiple indications such as
treatment of pharmacologically-induced mydriasis (“RM”) (dilation of the pupil), presbyopia (age-related blurry near vision) and dim light or night vision disturbances (“DLD”) (halos, glares and starbursts). Our management believes these multiple
indications potentially represent a significant market opportunity. Nyxol has been studied in a total of 12 clinical trials (3 Phase 1, 5 Phase 2 and 4 Phase 3) in a total of over 1100 patients (with over 650 Nyxol-treated) and has demonstrated
promising clinical data across the three targeted refractive indications.
We reported positive top-line data from Phase 3 trials in RM: MIRA-2 in March 2021, MIRA-3 in March 2022 and MIRA-4 in April 2022. We also
reported positive top-line data from a Phase 2 trial of Nyxol for treatment of presbyopia, both as monotherapy and with low-dose pilocarpine (pilocarpine
hydrochloride ophthalmic solution 0.4%, “LDP”) as adjunctive therapy (VEGA-1). We reported top-line data from a Phase 3 trial in DLD in May 2022 (LYNX-1). We submitted a new drug application (“NDA”) to the U.S. Food and Drug
Administration (“FDA”) in November 2022 under the 505(b)(2) pathway for Nyxol for RM with a Prescription Drug User Fee Act (PDUFA) goal date of September 28, 2023. The first phase 3 registration trial of Nyxol for the treatment of presbyopia
(VEGA-2), as monotherapy and with LDP as adjunctive therapy, was started in late December 2022, and topline results from this trial are expected in late 2023. Funded by our partner Viatris, registration trials are planned for presbyopia (VEGA-3) and DLD (LYNX-2), as well as a supportive long-term safety trial for both chronic
indications (LYRA-1).
As part of its our strategy, we will continue to explore opportunities to acquire additional ophthalmic assets and seek strategic partners for late-stage development, regulatory preparation, and commercialization of
drugs in key global markets.
Strategic Outlook
We will continue to explore opportunities to acquire additional ophthalmic assets and to seek strategic partners for late-stage development, regulatory preparation and
commercialization of APX3330 in key global markets. To date, our primary activities have been conducting research and development activities, planning clinical trials, performing business and financial planning, recruiting personnel and raising
capital. We do not have any products approved for sale, and we do not expect to consistently generate significant revenues, other than license and collaborations revenue, until, and unless, the FDA or other regulatory authorities approve and we
successfully commercialize APX3330. Until such time, if ever, as we can consistently generate substantial product revenue, we expect to finance our cash needs through a combination of equity and debt financings as well as through
collaborations, strategic alliances and licensing arrangements.
Through March 31, 2023, we have funded our operations primarily through equity financings that totaled $54.1 million in gross proceeds, of which $21.15 million was received
in connection with the merger (“Merger”) with Rexahn Pharmaceuticals, Inc. (“Rexahn”) and through the issuance of convertible notes in private placements that totaled $8.5 million in gross proceeds net cash. In addition, we recently received a
one-time non-refundable licensee fee payment of $35.0 million and reimbursement for costs related to development in connection with the Nyxol License Agreement.
Our net loss was $5.8 million for the three months ended March 31, 2023 as compared to a net loss of $6.6 million for the three months ended March 31, 2022. As of March
31, 2023, we had an accumulated deficit of $77.3 million. Furthermore, we anticipate that our expenses will increase as we:
|
•
|
continue clinical trials for APX3330, Nyxol and for any other product candidate in our future pipeline;
|
|
•
|
continue preclinical studies for APX3330, Nyxol and for any other product candidate in our future pipeline;
|
|
•
|
develop additional product candidates that we identify, in-license or acquire;
|
|
•
|
seek regulatory approvals for any product candidates that successfully complete clinical trials;
|
|
•
|
contract to manufacture our product candidates;
|
|
•
|
maintain, expand and protect our intellectual property portfolio;
|
|
•
|
hire additional staff, including clinical, scientific, operational and financial personnel, to execute our business plan;
|
|
•
|
add operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts;
|
|
•
|
continue to operate as a public company; and
|
|
•
|
establish on our own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval.
|
Our net income (loss) will likely continue to fluctuate significantly from quarter to quarter and year to year, depending on the timing of our preclinical studies, clinical trials, expenditures on other research
and development activities (and reimbursement thereof), and from potential milestone payments received from and revenue earned under the Nyxol License Agreement or any other license and collaboration agreements that we enter into, and potential
payments we that may become payable from time to time under the Apexian Sublicense Agreement.
Recent Developments
Clinical Milestones
APX3330
In January 2023, we announced topline efficacy and safety results from ZETA-1, a Phase 2b trial of APX3330 in diabetic
retinopathy patients. In ZETA-1, APX3330 demonstrated statistical significance on a key pre-specified endpoint, binocular DRSS worsening, which is a potential registration
endpoint for DR. These results, along with a favorable systemic and ocular safety profile, support our plans to move forward to an End-of-Phase 2 meeting with the FDA.
Nyxol
In January 2023, we announced the initiation of the VEGA-2
Phase 3 pivotal trial, the first of two Phase 3 registration trials intended to support a presbyopia indication for Nyxol alone and Nyxol with LDP. Topline results from this trial are expected in late 2023. Funded by our partner Viatris, registration trials are planned for presbyopia (VEGA-3) and DLD
(LYNX-2), as well as a supportive long-term safety trial for both chronic indications (LYRA-1).
Regulatory Update
In January 2023, we announced that the FDA has accepted for review the NDA for Nyxol for the treatment of pharmacologically-induced mydriasis (RM). The FDA assigned
a Prescription Drug User Fee Act (PDUFA) action date of September 28, 2023. Upon approval of Nyxol for RM by the FDA, Viatris would owe Ocuphire a $10 million milestone payment under the Nyxol License Agreement.
Global Economic Conditions
Generally, worldwide economic conditions remain uncertain, particularly due to the effects of the conflict between Russia and Ukraine, disruptions in the banking system and
financial markets, lingering COVID-19 pandemic and increased inflation. The general economic and capital market conditions both in the U.S. and worldwide, have been volatile in the past and at times have adversely affected our access to capital
and increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, our future cost of equity or debt capital and access to the
capital markets could be adversely affected.
Additionally, our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors. Changes in economic
conditions, supply chain constraints, logistics challenges, labor shortages, the conflict in Ukraine, disruptions in the banking system and financial markets, and steps taken by governments and central banks, particularly in response to the
COVID-19 pandemic as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates.
Financial Operations Overview
License and Collaborations Revenue
License and collaborations revenue to date was derived from a one-time non-refundable payment and reimbursement of expenses earned under the Nyxol License
Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and Processa Pharmaceuticals, Inc. (“Processa”) in connection with the Rexahn RX-3117 drug compound. We anticipate that we will recognize
revenue as we earn reimbursement for research and development services in connection with the Nyxol License Agreement and we may earn additional revenues from potential milestone and royalty payments from the agreements with Viatris,
BioSense, Processa, or from other license agreements entered into the future; however, the attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.
To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until regulatory approval is
obtained and commercialization begins for APX3330 or Nyxol. If we fail to complete the development of APX3330, Nyxol, or any other product candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory approval, our
ability to generate significant revenue would be compromised.
Operating Expenses
Ocuphire’s operating expenses are classified into two categories: general and administrative and research and development.
General and Administrative Expenses
General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation costs, for personnel in
functions not directly associated with research and administrative activities. Other significant costs include insurance coverage for directors and officers and other property and liability exposures, legal fees relating to intellectual
property and corporate matters, professional fees for accounting and tax services, other services provided by business consultants and legal settlements.
Research and Development Expenses
To date, our research and development expenses have related primarily to the clinical stage development of APX3330 and Nyxol. Research and development expenses consist of
costs incurred in performing research and development activities, including compensation and benefits for research and development employees and costs for consultants, costs associated with preclinical studies and clinical trials, regulatory
activities, manufacturing activities to support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead expenses.
Pursuant to the Nyxol License Agreement, our budgeted research and development expenses related to the development of Nyxol are fully reimbursed by Viatris. However, all
research and development costs, including those related to Nyxol, are expensed as incurred and costs incurred by third parties are expensed as the contracted work is performed. We accrue for costs incurred as the services are being provided by
monitoring the status of the study or project, and the invoices are received from our external service providers. We adjust our accrual as actual costs become known. Research and development activities are central to our business model.
We expect that APX3330 and Nyxol will have higher development costs during the later stages of clinical development, as compared to costs incurred during their earlier
stages of development, primarily due to the increased size and duration of the later-stage clinical trials. We expect our research and development expenses to increase over the next several years. However, it is difficult for us to determine
with certainty the duration, costs and timing to complete our current or future preclinical programs and clinical trials of APX3330, Nyxol, and other product candidates. The duration, costs and timing of clinical trials and development of
APX3330, Nyxol and other product candidates will depend on a variety of factors that include, but are not limited to, the following:
| • |
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.
|
Interest Expense
Interest expense consists of interest costs on principal related to a short-term loan (related to financing an insurance policy) during the period it was outstanding. The
short-term loan had an annual interest rate of 5.5%. The short-term loan was fully repaid in May 2022.
Fair Value Change in Warrant Liabilities
The fair value change in warrant liabilities consists of the change in the fair value of the warrant liabilities during the period they are outstanding.
Other Income (Expense), net
Other income (expense), net reflected in this line item includes payments made by us in connection with the Contingent Value Rights Agreement (the “CVR Agreement”) with
former Rexahn shareholders. In addition, other income (expense), net also includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments and reimbursements in connection with
grants and other sources when they occur.
Provision for Income Taxes
Provision for income taxes consists of federal and state income taxes in the United States, as well as deferred income taxes and changes in related valuation allowance reflecting the net tax
effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A full valuation allowance has been provided on the net deferred tax assets as
of March 31, 2023 and December 31, 2022.
Results of Operations
Comparison of Three Months Ended March 31, 2023 and 2022
The following table summarizes Ocuphire’s operating results for the periods indicated (in thousands):
|
For the Three Months Ended
|
||||||||||||
|
March 31,
|
||||||||||||
|
2023
|
2022
|
Change
|
||||||||||
|
License and collaborations revenue
|
$
|
1,749
|
$
|
—
|
$
|
1,749
|
||||||
|
Operating expenses:
|
||||||||||||
|
General and administrative
|
2,285
|
1,736
|
549
|
|||||||||
|
Research and development
|
5,595
|
4,772
|
823
|
|||||||||
|
Total operating expenses
|
7,880
|
6,508
|
1,372
|
|||||||||
|
Loss from operations
|
(6,131
|
)
|
(6,508
|
)
|
377
|
|||||||
|
Interest expense
|
—
|
(5
|
)
|
5
|
||||||||
|
Fair value change in warrant liabilities
|
—
|
—
|
—
|
|||||||||
|
Other income (expense), net
|
340
|
(82
|
)
|
422
|
||||||||
|
Loss before income taxes
|
(5,791
|
)
|
(6,595
|
)
|
804
|
|||||||
|
Provision for income taxes
|
—
|
—
|
||||||||||
|
Net loss
|
$
|
(5,791
|
)
|
$
|
(6,595
|
)
|
$
|
804
|
||||
License and Collaborations Revenue
License and collaborations revenue was $1.7 million for the three months ended March 31, 2023. There was no license and collaboration revenue during the three months ended March 31, 2022.
Revenue during the first quarter of 2023 was derived from the reimbursement of research and development services under the Nyxol License Agreement.
General and Administrative
General and administrative expenses for the three months ended March 31, 2023 were $2.3 million compared to $1.7 million for the three months ended March 31, 2022. The increase period over period
of $0.5 million was primarily attributable to an increase in stock-based compensation of $0.2 million, professional services of $0.1 million, legal support of $0.2 million and business development activities of $0.1 million, offset in part by a
decrease in payroll and insurance costs of $0.1 million on a net basis. General and administrative expenses included $0.5 million and $0.3 million in stock-based compensation expense during the three months ended March 31, 2023 and 2022,
respectively.
Research and Development
Research and development expenses for the three months ended March 31, 2023 were $5.6 million compared to $4.8 million for the three months ended March 31, 2022. The $0.8 million increase was
primarily attributable to increased manufacturing activities for Nyxol and APX3330 period over period as well as increased payroll and consulting costs during the current period. Research and development expenses also included $0.3 million and
$0.1 million in stock-based compensation expense during the three months ended March 31, 2023 and 2022, respectively.
Interest Expense
Interest expense for the three months ended March 31, 2022 of $5,000 was comprised of interest on principal related to a short-term loan (related to financing an insurance policy). There was no
interest expense during the current three month period.
Fair Value Change in Warrant Liabilities
The fair value change in warrant liabilities was de minimis during the three months ended March 31, 2023 and 2022 associated with the Rexahn warrants.
Other Income (Expense), net
During the three months ended March 31, 2023, Ocuphire had other income (expense), net of $0.3 million related to interest income related to our cash and cash equivalents on-hand of
$367,000, offset in part by net unrealized losses from our short-term investments of $27,000.
During the three months ended March 31, 2022, Ocuphire had other income (expense), net of $(82,000) stemming principally from net unrealized losses from our short-term
investments of $84,000, offset in part by interest income related to cash and cash equivalents on-hand of $2,000.
Liquidity and Capital Resources
Capital Resources
As of March 31, 2023, our principal sources of liquidity consisted of cash and cash equivalents of $39.0 million. We believe that our cash on hand will be sufficient to fund our
operations for at least twelve months beyond the date of this filing. As of March 31, 2023, our cash and cash equivalents on-hand were held largely at one large financial institution.
Historical Capital Resources
Our primary source of cash to fund our operations has been various equity offerings in the amount of $54.1 million and the issuance of convertible notes in the amount of $8.5 million, inclusive
of the promissory notes exchanged for Ocuphire convertible notes. In addition, during the fourth quarter of 2022, we received a one-time non-refundable cash payment of $35.0 million and recently received reimbursement for costs related to
development in connection with the Nyxol License Agreement.
At-The-Market Program
On February 4, 2021, we filed a Form S-3 shelf registration under the Securities Act 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 our sole discretion, securities having an aggregate offering price of up to $125 million. In connection with the 2021 Shelf, on March 11, 2021, we entered into a sales agreement with
JonesTrading Institutional Services LLC (“JonesTrading”) under which we may offer and sell, from time to time at our sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of our common stock having an aggregate
offering price of up to $40 million (the “ATM”). A total of 4,627,870 shares of common stock were sold under the ATM for net proceeds through September 2022 in the amount of $17.3 million. No shares of common stock were sold under the ATM
during the fourth quarter of 2022 or during the first quarter of 2023.
Registered Direct Offering
On June 4, 2021, we entered into a placement agency agreement 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 our common stock and warrants to purchase 1,538,461 shares of our common stock (the “RDO Warrants”) at an offering price of $4.875 per share and 0.50 RDO Warrants, for gross proceeds of
$15.0 million, before deducting AGP’s fees and related offering expenses in the amount of $1.1 million. The purchase agreement contains customary representations, warranties and agreements by the Ocuphire, customary conditions to closing,
indemnification obligations of Ocuphire, other obligations of the parties and termination provisions.
The RDO Warrants have an exercise price of $6.09 per share, are exercisable upon the initial issuance date of June 8, 2021, and will expire five years
following the initial exercise date. 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 common stock outstanding immediately after giving effect to such exercise; provided,
however, that upon prior notice to us, the holder may increase or decrease the beneficial ownership limitation, provided further that in no event shall the beneficial ownership limitation exceed 9.99%. As of March 31, 2023, 1,538,461
RDO Warrants were still outstanding. The offering of the securities was made pursuant to our effective shelf registration statement on Form S-3.
Pre-Merger Financing
Securities Purchase Agreement
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 directors of Ocuphire Pharma, Inc. prior to the Merger, and one director
of Rexahn, upon closing of the Merger (the “Pre-Merger Financing”). Pursuant to the Pre-Merger Financing, (i) Ocuphire issued and sold to the investors shares of common stock of Ocuphire Pharma, Inc. prior to the Merger (the “Initial Shares”)
which converted pursuant to the exchange ratio in the Merger into an aggregate of 1,249,996 shares (the “Converted Initial Shares”) of common stock, (ii) Ocuphire deposited into escrow, for the benefit of the Investors, additional shares of
common stock of Ocuphire Pharma, Inc. prior to the Merger (the “Additional Shares”) which converted pursuant to the exchange ratio in the Merger into an aggregate of 3,749,992 shares of common stock (the “Converted Additional Shares”), which
Converted Additional Shares were delivered (or became deliverable) to the investors on November 19, 2020, and (iii) we agreed to issue to each investor on the tenth trading day following the consummation of the Merger (x) Series A Warrants
representing the right to acquire shares of common stock equal to the sum of (A) the Converted Initial Shares purchased by the investor, (B) the Converted Additional Shares delivered or deliverable to the investor, without giving effect to any
limitation on delivery contained in the Securities Purchase Agreement and (C) the initial number of shares of common stock, if any, underlying the Series B Warrants issued to the Investor and (y) additional warrants to purchase shares of common
stock.
Waiver Agreements
Effective February 3, 2021, each investor that invested in the Pre-Merger Financing (each, a “Holder”) entered into a Waiver Agreement with the Company (collectively, the “Waiver Agreements”).
Pursuant to the Waiver Agreements, the Holders and Ocuphire agreed to waive certain rights, finalize the exercise price and number of Series A Warrants and Series B Warrants, eliminate certain financing restrictions, extend the term of certain
leak-out agreements, and, in the case of certain Holders, grant certain registration rights for the shares underlying the warrants.
The Waiver Agreements provide for the permanent waiver of the full ratchet anti-dilution provisions, contained in the Series A Warrants (as certain of the anti-dilution provisions had
previously caused liability accounting treatment for the Series A Warrants). Upon the effective date of the Waiver Agreement, the Series A Warrants were reclassified to equity.
Pursuant to the Waiver Agreements, the number of shares underlying all of the Series B Warrants was fixed to 1,708,335 in the aggregate with respect to all Holders.
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). As of March 31, 2023, 5,665,838 Series A Warrants were still
outstanding.
At issuance, the Series A Warrants contained certain provisions that could have resulted in a downward adjustment of the initial exercise price and an upward adjustment in the number of shares
underlying the warrants if Ocuphire were to have issued or sold, or made an agreement to issue or sell, any shares of common stock for a price lower than the exercise price then in effect. Pursuant to the terms of the Waiver Agreements, these
provisions are no longer in effect.
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). The Series B Warrants were initially exercisable for 665,836 shares of
common stock in the aggregate (without giving effect to any limitation on exercise contained therein) and ultimately became exercisable for 1,708,335 shares of common stock upon execution of the Waiver Agreements. As of March 31, 2023, none of
the Series B Warrants remained outstanding.
At issuance, the Series B Warrants contained certain provisions that could have resulted in the issuance of additional Series B Warrants depending on the dollar volume-weighted average prices of a share of Common
Stock during a 45-trading day Reset Period. Pursuant to the terms of the Waiver Agreements, those provisions were no longer in effect.
Ocuphire Convertible Notes
From May 2018 through March 2020, we issued convertible notes (the “Ocuphire convertible notes”) for aggregate gross proceeds of $8.5 million, inclusive of the promissory notes exchanged for
Ocuphire convertible notes. The final closing of the Ocuphire convertible notes occurred on March 10, 2020. The Ocuphire convertible notes had an interest rate of 8% per annum. On November 4, 2020, all of
Ocuphire’s outstanding notes were converted into 977,128 shares of Ocuphire common stock in connection with the completion of the Merger.
Cash Flows
The following table summarizes Ocuphire’s cash flows for the periods indicated (in thousands):
|
For the Three Months Ended
|
||||||||
|
March 31,
|
||||||||
|
2023
|
2022
|
|||||||
|
Net cash used in operating activities
|
$
|
(3,646
|
)
|
$
|
(6,170
|
) | ||
|
Net cash provided by (used in) investing activities
|
—
|
—
|
||||||
|
Net cash provided by financing activities
|
—
|
882 | ||||||
|
Net decrease in cash and cash equivalents
|
$
|
(3,646
|
)
|
$
|
(5,288
|
) |
||
Cash Flow from Operating Activities
For the three months ended March 31, 2023, cash used in operating activities of $3.6 million was attributable to a net loss of $5.8 million, partially offset by $0.8 million in non-cash operating
expenses and a net change cash source of $1.3 million in Ocuphire’s net operating assets and liabilities. The non-cash expenses consisted principally of stock-based compensation of $0.8 million and unrealized loss on short-term investments of
$27,000. The change in operating assets and liabilities was primarily attributable to an increase in Ocuphire’s accounts payable and accrued expenses, and by decreases in our contract asset and prepaid expenses, associated with Ocuphire’s
operating expenses under the normal course of business. These net change sources of cash were offset in part by an increase in our accounts receivable during the period.
For the three months ended March 31, 2022, cash used in operating activities of $6.2 million was attributable to a net loss of $6.6 million, partially offset by $0.5 million in non-cash operating
expenses and a net change use of $0.1 million in Ocuphire’s net operating assets and liabilities. The non-cash expenses consisted principally of stock-based compensation of $0.4 million and unrealized loss on short-term investments of $0.1
million. The change in operating assets and liabilities was primarily attributable to a decrease in Ocuphire’s accounts payable and accrued expenses, offset in part by an decrease in prepaid expenses and other assets associated with the
fluctuations of Ocuphire’s operating expenses under the normal course of business.
Cash Flow from Investing Activities
There were no sources or uses from investing activities during the periods presented.
Cash Flow from Financing Activities
Net cash provided by financing activities during the three months ended March 31, 2022 was $0.9 million in connection with the 2021 ATM financing net proceeds of $1.2 million and exercise of
stock options in the amount of $27,000, offset by payments made on the short-term loan of $0.3 million. There was no financing activities during the three months ended March 31, 2023.
Liquidity and Capital Resource Requirements
As of March 31, 2023, we had cash and cash equivalents of $39.0 million. License and collaborations revenue inception to date was derived from
a one-time non-refundable payment of $35 million and reimbursement and expected reimbursement of expenses earned under the Nyxol License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and
Processa Pharmaceuticals, Inc. (“Processa”) in connection with the Rexahn RX-3117 drug compound. We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Nyxol License
Agreement and we may earn additional revenues from future potential milestone and royalty payments from the agreements with Viatris, BioSense, Processa, or from other license agreements entered into the future; however, the attainment of
milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.
To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until regulatory
approval is obtained and commercialization begins for APX3330 or Nyxol. If we fail to complete the development of APX3330, Nyxol, or any other product candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory
approval, our ability to generate significant revenue would be compromised.
To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the
terms of these securities may include liquidation, warrants, or other preferences that adversely affect your rights as a common stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our
ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through future collaborations, strategic alliances or licensing arrangements with pharmaceutical
partners, we may have to relinquish valuable rights to our technologies, future revenue streams or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or through
collaborations, strategic alliances or licensing arrangements when needed, we may be required to delay, limit, reduce or terminate our product development, future commercialization efforts, or grant rights to develop and market our product
candidates that we would otherwise prefer to develop and market ourselves.
Future Capital Requirements
The development of APX3330 is subject to numerous uncertainties, and we have based these estimates on assumptions that may prove to be substantially different
than what we currently anticipate and could result in cash resources being used sooner than what we currently expect. Additionally, the process of advancing early-stage product candidates and testing product candidates in clinical trials is
costly, and the timing of progress in these clinical trials is uncertain. Our ability to successfully transition to profitability will be dependent upon achieving a level of product sales adequate to support our cost structure. We cannot give
any assurance that we will ever be profitable or generate positive cash flow from operating activities.
Contractual Obligations and Commitments
Facility Lease
We lease a facility under a non-cancellable operating lease that expires on December 31, 2023, as amended, for a base rent in the amount of $3,000 per month.
Apexian Sublicense Agreement
On January 21, 2020, we entered into the Apexian Sublicense Agreement, pursuant to which we obtained exclusive worldwide patent and other intellectual
property rights that constitute a Ref-1 Inhibitor program relating to therapeutic applications to treat disorders related to ophthalmic and diabetes mellitus conditions. The lead compound in the Ref-1 Inhibitor program is APX3330, which we
intend to develop as an oral tablet therapeutic to treat DR and DME, and potentially wAMD.
In connection with the Apexian Sublicense Agreement, we issued 843,751 shares of our common stock to Apexian and certain of Apexian’s affiliates.
We agreed to make one-time milestone payments under the Apexian Sublicense Agreement for each of the first ophthalmic indication and the first diabetes
mellitus indication. These milestone payments include (i) payments for specified developmental and regulatory milestones (including completion of the first Phase 2 trial (if such trial meets a primary endpoint) and the first Phase 3 pivotal
trial in the United States, and filing and achieving regulatory approval from the FDA for the first New Drug Application for a compound) totaling up to $11 million in the aggregate and (ii) payments for specified sales milestones of up to $20
million in the aggregate, each of which net sales milestone payments is payable once, upon the first achievement of such milestone.
Lastly, we also agreed to make royalty payments equal to a single-digit percentage of our net sales of products covered by the patents under the Apexian
Sublicense Agreement. None of the milestone or royalty payments were triggered as of the date of this Annual Report.
Other Commitments
In the course of normal operations, we entered into cancellable purchase commitments with our suppliers for various key research, clinical and manufacturing
services. The purchase commitments covered by these arrangements are subject to change based on our research and development efforts.
Other Funding Requirements
As noted above, certain of our cash requirements relate to the funding of our ongoing research and development of APX3330, inclusive of any potential milestone
and royalty obligations under our intellectual property licenses. See “Part I, Item 1— Business—APX3330 Clinical Experience Summary —Ocuphire Clinical Development Plan —Potential Clinical Plans for APX3330—Future In-Licensing and Acquisition
Opportunities—Manufacturing—Apexian Sublicense Agreement— Review and Approval of Drugs in the United States” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of design, development, pre-clinical and
clinical activities that we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to estimate such costs.
Our other cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities. Our other cash requirements
greater than twelve months from various contractual obligations and commitments may include operating leases and contractual agreements with third-party service providers for clinical research, product development, manufacturing,
commercialization, supplies, payroll, equipment maintenance, and audits for periods into calendar year 2024. Refer to Note 3 – Commitments and Contingencies included in Part 1, Item 1 – Financial Statements” of this Report for further detail of our lease obligation and license agreements with regard to the timing of expected future payments.
We expect to satisfy our short-term and long-term obligations through cash on hand, from future equity and debt financings, and from reimbursement payments, potential milestone and royalty payments under the
Nyxol License Agreement and any future collaborations and license agreements, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever.
Critical Accounting Policies and Estimates
Our financial statements are prepared in accordance with U.S. GAAP. These accounting principles require us to make estimates and judgments that can affect the
reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expense during the periods presented. We believe that the estimates and judgments upon which we rely are
reasonably based upon information available to us at the time that we make these estimates and judgments. To the extent that there are material differences between these estimates and actual results, our financial results will be affected. The
accounting policies that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.
Our significant accounting policies are discussed in Note 1 — Company Description and Summary of Significant Accounting Policies, included in “Part I, Item 1 –
Financial Statements and Supplementary Data” of this Report. We believe that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our
reported financial results. These estimates require our most difficult, subjective, or complex judgments because they relate to matters that are inherently uncertain. We have reviewed these critical accounting policies and estimates and related
disclosures with the Audit Committee of our Board of Directors. We have not made any material changes to date, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas
described below.
License and Collaborations Revenue
We account for license and collaborations revenue in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 606, Revenue from Contracts with Customers. The guidance provides a unified model to determine how revenue is recognized. We have entered into license and collaboration agreements which have
revenue recognition implications. We recognize license and collaborations revenue by first allocating the transaction price of a contract to each performance obligation under the contract based on its stand-alone price. The stand-alone price of
each performance obligation is based on its fair value utilizing a discounted cash flow approach, taking into consideration assumptions, including projected worldwide net profit for each of the respective programs based on probability
assessments, projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors. We do not expect to have in the future, significant variable consideration
adjustments related to our existing license and collaborations revenue recognized. For discussion about the determination of license and collaborations revenue, see Note 9 — License and Collaboration Agreements included in Part 1, Item 1 –
Financial Statements” of this Report.
Warrant Liabilities
Following the Merger, Ocuphire assumed Rexahn warrants issued prior to the Merger. Ocuphire accounts for these warrants as a liability at fair value as long as certain provisions
precluding equity accounting treatment are present. Ocuphire will continue to adjust the Rexahn warrant liability for changes in fair value until the earlier of the exercise, expiration, or until such time that cash settlement or indexation
provisions are no longer in effect for the Rexahn warrants. We do not expect that the fluctuations in fair value attributed to the Rexahn warrant liability will be significant.
Stock-based Compensation
Ocuphire accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation — Stock
Compensation. Accordingly, compensation costs related to equity instruments granted are recognized at the grant date fair value which is not subject to remeasurement. We record equity instrument
forfeitures when they occur. For discussions about the application of grant date fair value associated with our stock-based compensation, see Note 7 — Stock-based Compensation included in “Part 1, Item 1 – Financial Statements” of this Report.
Income Tax Assets and Liabilities
A full valuation allowance has been provided on our net deferred tax assets given the uncertainty of future taxable income and other related factors impacting
the realizability of our remaining net deferred tax assets. For additional information, see Note 12 — Income Taxes included in “Part II, Item 8 – Financial Statements and Supplementary Data” in our Annual Report filed on Form 10-K for the
year ended December 31, 2022, and see Note 11 — Income Taxes included in “Part 1, Item 1 – Financial Statements” of this Report.
Contingencies
We are subject to numerous contingencies arising in the ordinary course of business, including obligations related to certain license agreements. For
additional information, see Note 3 — Commitments and Contingencies included in “Part 1, Item 1 – Financial Statements” of this Report.
Recent Accounting Pronouncements
Refer to Note 1— “Company Description and Summary of Significant Accounting Policies” to our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report for
a discussion of recently issued accounting pronouncements.
| Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Not applicable for smaller reporting companies.
| Item 4. |
Controls and Procedures
|
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information we are required to disclose in our Exchange Act reports is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure.
We designed and evaluated our disclosure controls and procedures recognizing that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance and
not absolute assurance of achieving the desired control objectives. Also, the design of a control system must reflect the fact that there are resource constraints and that the benefits of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been
detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is based, in part, upon certain
assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Under the supervision of and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of our disclosure
controls and procedures, as such term is defined in Rules 13a-15(e) and 15(d)- 15(e) promulgated under the Exchange Act as of March 31, 2023. Based on this evaluation, our principal executive officer and principal financial officer concluded that
our disclosure controls and procedures were effective as of March 31, 2023.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended March 31, 2023, that have materially
affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| Item 1. |
Legal Proceedings
|
From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our
management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Other than as set forth below, there have been no material changes in our risk factors previously disclosed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended
December 31, 2022. You should carefully consider the risks and uncertainties described below and therein.
| Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
None.
| Item 3. |
Defaults Upon Senior Securities
|
None.
| Item 4. |
Mine Safety Disclosures
|
Not applicable to our Company.
| Item 5. |
Other Information
|
None.
| Item 6. |
Exhibits
|
|
EXHIBIT
NUMBER
|
DESCRIPTION OF DOCUMENT
|
|
|
Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Appendix G to the Registrant’s Definitive Proxy Statement on Schedule 14A, filed on April 29, 2005).
|
||
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on May 5,
2017).
|
||
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on August 30,
2018).
|
||
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on April 12,
2019).
|
||
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on November 6, 2020).
|
||
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K, filed on November 6, 2020).
|
||
|
Second Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.3 to the Registrant’s Current Report on Form 8-K, filed on November 6, 2020).
|
||
|
First Amendment to Second Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 10, 2022).
|
||
|
Second Amendment to Second Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on June 17, 2022).
|
||
|
Interim President and CEO Consulting Letter Agreement by and between Ocuphire Pharma, Inc. and Richard Rodgers, dated April 20, 2023.
|
||
|
Non-Employee Director Compensation Policy.
|
||
|
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 and 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.
|
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
| + |
Indicates management contract or compensatory plan.
|
| * |
Documents are furnished not filed.
|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
|
Dated: May 15, 2023
|
||
| Ocuphire Pharma, Inc. | ||
|
By:
|
/s/ Richard J. Rodgers
|
|
|
Richard J. Rodgers
|
||
|
Interim Chief Executive Officer
|
||
|
(Principal Executive Officer)
|
||
|
By:
|
/s/ Amy Rabourn
|
|
|
Amy Rabourn
|
||
|
Senior Vice President of Finance
|
||
|
(Principal Financial Officer)
|
31
Exhibit 10.1
April 20, 2023
Richard Rodgers
| Re: |
Ocuphire Pharma, Inc. Interim President and CEO Consulting Letter Agreement
|
Dear Richard:
You have agreed to serve as Interim President and Chief Executive Officer (“Interim CEO”) of Ocuphire Pharma, Inc. (the “Company”) during the Company’s search for a permanent President and Chief Executive
Officer (“Successor CEO”). This letter agreement (the “Agreement”)
sets forth the terms of your consulting role as the Company’s Interim CEO and is effective as of April 20, 2023 (the “Effective Date”).
1. Position. In your position as Interim CEO, you will report to the Company’s Board of Directors (the “Board”).
By signing this Agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you from performing your duties for the Company. While you serve as Interim CEO, you will also continue
to serve on the Board.
2. Term. From the Effective Date, your position as Interim CEO may continue, at the latest, until the date on which a Successor CEO is hired and commences employment with the Company (the
“Interim Term”). Notwithstanding the foregoing, your engagement is “at will” and may be terminated by either party immediately upon written notice to the
other party. The Company expects that you will remain on the Board as a non-employee director following the end of the Interim Term.
3. Compensation and Benefits. During the Interim Term, the Company will pay you a consulting fee of Forty Thousand ($40,000.00) per month, payable at such times as the Company’s normal
payroll. The Board has discretion to provide you with a prorated Bonus at the end of the Interim Term.
4. Expenses. During the Interim Term, the Company will reimburse you for all reasonable and necessary expenses incurred by you in connection with your performance of services as Interim
CEO on behalf of the Company.
5. Required Forms. You will be required, as a condition of your consulting role with the Company, to sign all of the Company’s standard forms applicable to new consultants.
6. Tax Matters. All forms of compensation referred to in this Agreement are subject to applicable withholding and taxes and other deductions required by law. Notwithstanding the
foregoing, (i) you are solely responsible for, and agree to file, on a timely basis, all tax returns and payments required to be filed with, or made to, any federal, state or local tax authority with respect to the performance of services and
receipt of fees under this Agreement; (ii) you agree to comply with all applicable federal, state, local, and foreign laws governing self-employed individuals, including laws requiring the payment of taxes, such as income and employment taxes,
and social security, disability, and other contributions; and (iii) no part of your compensation will be subject to withholding by the Company for the payment of any social security, federal, state or any other employee payroll taxes.
7. Independent Contractor Relationship. Your relationship with the Company is that of an independent contractor, and nothing in this Agreement is intended to, or should be construed to,
create a partnership, agency, joint venture or employment relationship. As Interim CEO, you will have authority to make binding decisions and contractual commitments on behalf of the Company consistent with authority granted by the Board. You
will not be entitled to benefits based on work performed under this Agreement provided by the Company to its employees and waive any right to said Company employee benefits.
8. Entire Agreement. This Agreement supersedes and replaces any prior agreements, representations or understandings (whether written, oral, implied or otherwise) between you and the
Company, and constitutes the complete agreement between you and the Company, regarding your engagement as Interim CEO. This Agreement may not be amended or modified, except by an express written agreement signed by both you and the Chairman of
the Board. The terms of this Agreement and the resolution of any disputes as to the meaning, effect, performance or validity of this Agreement or arising out of, related to, or in any way connected with, this Agreement, your engagement with the
Company or any other relationship between you and the Company will be governed by Delaware law, excluding laws relating to conflicts or choice of law. In any action between the parties arising out of or relating to any such disputes, each of the
parties irrevocably and unconditionally consents and submits to the exclusive jurisdiction and venue of the state and federal courts in the state of Michigan.
If the above terms are acceptable and in accordance with your understanding, please countersign this Agreement below and return it to us.
[SIGNATURE PAGE FOLLOWS]
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Very truly yours,
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Ocuphire Pharma, Inc.
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By:
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/s/ Cam Gallagher
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Cam Gallagher
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Chairman of the Board
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Dated: April 20, 2023
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ACKNOWLEDGED AND AGREED:
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By:
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/s/ Richard Rodgers
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Richard Rodgers
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Dated:April 20, 2023
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SIGNATURE PAGE
INTERIM PRESIDENT AND CEO CONSULTING LETTER AGREEMENT
Exhibit 10.2
OCUPHIRE PHARMA, INC.
SECOND AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
Effective Date: January 1, 2023
Each member of the Board of Directors (the “Board”)
of Ocuphire Pharma, Inc., a Delaware corporation (the “Company”) who is not also serving as an employee of the Company or any of its subsidiaries (each such member, an “Non-Employee Director”) will receive the compensation described in this Amended and Restated Non-Employee Director Compensation Policy (this “Policy”). A Non-Employee Director may decline all or any portion of his or her compensation by giving notice to the Company prior to the date cash is to be paid or equity awards are to be granted, as the case may be.
This Policy will be effective as of January 1, 2023 (the “Effective Date”). This Policy may be amended at any time in the sole discretion of the
Board, or by the Compensation Committee of the Board (the “Compensation Committee”) at the recommendation of the Board. Unless otherwise defined
herein, capitalized terms used in this Policy will have the meaning given to such terms in the Company’s 2020 Equity Incentive Plan or if such plan is no longer in use, the meaning given to such terms or any similar terms in the primary successor
to such plan (in either case, the “Plan”).
ANNUAL CASH COMPENSATION
Commencing on the Effective Date, each Non-Employee Director will receive the cash compensation set forth below for service on the Board. The annual
cash compensation amounts will be payable in equal quarterly installments, in arrears no later than 30 days following the end of each quarter in which the service occurred (each, a “Quarterly Date”). Each annual retainer set forth below will be pro-rated based on days served in the applicable fiscal year of the Company, with the pro-rated amount paid for the first fiscal
quarter of the Company in which the Non-Employee Director provides the service, and regular full quarterly payments to be paid thereafter. All annual cash fees are vested upon payment.
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1.
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Annual Board Service Retainer:
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(a)
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All Non-Employee Directors: $42,000
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(b)
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Chair of the Board (as applicable): $36,750 (in addition to above)
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(c)
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Lead Independent Director (as applicable): $20,000 (in addition to above)
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2.
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Annual Committee Member Service Retainer:
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(a)
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Member of the Audit Committee: $10,000
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(b)
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Member of the Compensation Committee: $7,500
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(c)
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Member of the Nominating and Corporate Governance Committee: $5,000
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3.
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Annual Committee Chair Service Retainer (in lieu of Committee Member Service Retainer):
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(a)
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Chair of the Audit Committee: $20,000
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(b)
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Chair of the Compensation Committee: $15,000
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(c)
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Chair of the Nominating and Corporate Governance Committee: $10,000
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1
EQUITY COMPENSATION
Equity awards will be granted under the Plan. All stock options granted under this Policy will be Nonstatutory Stock Options (as defined in the
Plan), with a term of ten years from the date of grant (subject to earlier termination upon a termination of the Non-Employee Director’s Continuous Service (as defined in the Plan)) and an exercise price per share equal to 100% of the Fair Market
Value (as defined in the Plan) of a share of the Company’s common stock on the date of grant.
1. Automatic Equity Grants.
(a) Initial Grant for New Directors. Without any further action of the Board, each person who, after the Effective Date, is elected or appointed for
the first time to be a Non-Employee Director will automatically, upon the date of his or her initial election or appointment to be a Non-Employee Director, be granted a Nonstatutory Stock Option to purchase shares of common stock with an
approximate target value on the date of grant equal to $180,000 (the “Initial Grant”). Each Initial Grant will vest in a series of three
successive equal annual installments over the three-year period measured from the date of grant, subject to the Non-Employee Director’s Continuous Service through each applicable vesting date.
(b) Annual Grant. On the date of each annual stockholder meeting of the Company following the Effective Date, each Non-Employee Director automatically, and without
further action by the Board or Compensation Committee of the Board, will be granted an annual equity award with an approximate target value on the date of grant equal to $90,000 (the “Annual Grant”). 40% of the target value of the Annual Grant will be issued in the form of a Nonstatutory Stock Option and 60% of the target value of the Annual Grant will be issued in the form of
a Restricted Stock Unit Award. Each Annual Grant will vest upon the earlier of the one (1) year anniversary of the grant date or the day prior to the Company’s next annual meeting occurring after the grant date, subject to the Non-Employee
Director’s Continuous Service through the vesting date.
The number of Restricted Stock Units to be granted to each Non-Employee Director will be determined by dividing the target value by the 30-trading
day average closing price of the Common Stock on the Nasdaq Stock Market, ending on the trading day immediately preceding the grant date, rounded to the nearest whole share. The number of shares of Common Stock underlying the Stock Options to be
granted to each Non-Employee Director will be calculated in accordance with the Black-Scholes option pricing model utilizing the 30-trading day average closing price of the Common Stock on the Nasdaq Stock Market, ending on the trading day
immediately preceding the grant date, rounded to the nearest whole share.
2. Change in Control.
Notwithstanding the foregoing vesting schedules, for each Non-Employee Director who remains in Continuous Service with the Company until immediately prior to the closing of a Change in Control (as defined in the Plan), the shares subject to his
or her then-outstanding equity awards that were granted pursuant to the Director Compensation Policy will become fully vested immediately prior to the closing of such Change in Control.
3. Remaining Terms. The remaining
terms and conditions of each stock option, including transferability, will be as set forth in the Company’s standard stock option grant notice and related stock option agreement under the Plan, in the form adopted from time to time by the
Board.
2
4. Elections to Receive a Stock Award in Lieu of Annual Cash Retainers.
(a) Retainer Grant. For the year in which the
Effective Date occurs and each year of the Company thereafter, each Non-Employee Director may elect (such election, a “Retainer Grant Election”)
to forego receiving payment of all (but not less than all) of the compensation he or she is otherwise eligible to receive in cash under the heading “Annual Cash Compensation” of this Policy for the period to which this Retainer Grant Election
applies commencing on the Retainer Grant Measurement Date (as defined below) and ending on the last day of the fiscal year of the Company (each such period, a “Retainer Grant Measurement Period”) and receive a fully vested Stock Award instead (each, a “Retainer Grant”)
but only if the Retainer Grant Election is timely made in accordance with the requirements of this Section 4. If a Non-Employee Director timely makes a Retainer Grant
Election pursuant to Section 4(b) below, on the Retainer Grant Measurement Date (as defined below), such Non-Employee Director will be automatically, and without any further
action by the Board or the Compensation Committee, granted a Retainer Grant covering a number of shares of common stock equal to (a) the aggregate amount of cash compensation under the heading “Annual Cash Compensation” of this Policy that such
Non-Employee Director is eligible to receive for the applicable Retainer Grant Measurement Period divided by (b) the average Fair Market Value of a share of Common Stock for the 30 consecutive market trading days ending on and including the
last trading day prior to the grant date of such Retainer Grant, rounded down to the nearest whole unit. For purposes of this Policy, “Retainer
Grant Measurement Date” means the first day of the fiscal year of the Company to which the Retainer Grant Election applies or such other date as established by the Board or Compensation Committee for any fiscal year. Each Retainer
Grant will be fully vested.
(b) Election Mechanics. Unless otherwise determined by the Board or the Compensation Committee, for any Retainer Grant Election to
be effective, it must be submitted to Amy Rabourn, Vice President of Finance, Ocuphire Pharma, Inc. via email to: arabourn@ocuphire.com (or such other individual as the
Company designates) (i) prior to the Retainer Grant Measurement Date, or (ii) within 30 days after the Non-Employee Director first becomes eligible to participate in this Policy. A Non-Employee Director may only make a Retainer Grant Election
during a period in which the Company is not in a quarterly or special blackout period and the Non-Employee Director is not aware of any material non-public information. Any Retainer Grant Election will be irrevocable, and will be subject to
such rules, conditions and procedures as shall be determined by the Board or the Compensation Committee, in its sole discretion, which rules, conditions and procedures shall at all times comply with the requirements of Code Section 409A, unless
otherwise specifically determined by the Board or the Compensation Committee. Retainer Grant Elections shall be made pursuant to a form of election in substantially the form attached hereto as Exhibit A or such other form as approved by the Board or the Compensation Committee. A Non-Employee Director who fails to make a timely Retainer Grant Election will not receive a Retainer Grant and instead will
receive the cash compensation under the heading “Annual Cash Compensation” of this Policy.
5. Non-Employee Director Compensation Limit. Notwithstanding anything herein to the contrary, the cash compensation and equity compensation that each Non-Employee Director is entitled to receive under this Policy shall be subject to the limits set
forth in Section 3(d) of the Plan.
3
EXPENSES
The Company will reimburse Non-Employee Directors for ordinary, necessary and reasonable out-of-pocket travel expenses to cover in-person attendance
at and participation in Board and committee meetings; provided, that the Non-Employee Director timely submits to the Company appropriate documentation
substantiating such expenses in accordance with the Company’s travel and expense policy, as in effect from time to time.
Approved by the Board of Directors: April 19, 2023
4
EXHIBIT A
OCUPHIRE PHARMA, INC.
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
Retainer Grant Election Form
For Non-Employee Directors
Please complete and return this Retainer Grant Election Form (this “Election Form”), as described below, for existing non-employee directors: on or before December 31 of each year and for new
non-employee directors: within 30 days following the date you join the Board (the “Submission Deadline”), to Amy Rabourn, Vice President of Finance, Ocuphire Pharma, Inc. via email to: arabourn@ocuphire.com.
Neither the provision of this Election Form nor your completion of this Election Form represents a commitment by the Company to grant an award to
you. The grant of an award remains subject to the terms of the Company’s Amended and Restated Non-Employee Director Compensation Policy as may be hereinafter amended (the “Policy”). Terms not otherwise defined herein shall have the meaning set forth in the Policy or the Plan, as applicable.
I understand that my Election Form will become irrevocable effective as of the Submission Deadline.
| 1. |
PERSONAL INFORMATION
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(Please print):
Participant Name: (the “Participant”)
| 2. |
RETAINER GRANT ELECTION
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By signing below, I elect to forego receiving payment of all (but not less than all) of the compensation I am otherwise eligible to receive in cash
under the heading “Annual Cash Compensation” of the Policy for the period to which the Retainer Grant Election applies commencing on [______]1 and ending on [______]2 and to receive a Retainer Grant in lieu thereof. If I do not timely submit a properly completed Election Form, I will not receive the applicable Retainer Grant and will instead receive
the applicable cash compensation under the heading “Annual Cash Compensation” of the Policy.
| 3. |
PARTICIPANT ACKNOWLEDGEMENTS AND SIGNATURE
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| (a) |
I agree to all of the terms and conditions of this Election Form.
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| (b) |
I acknowledge that I have received and read a copy of the Plan’s prospectus and that I am familiar with the terms and provisions of the Plan.
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1
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Applicable Retainer Grant Measurement Date.
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2
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Last day of the fiscal year of the Company to which the Retainer Grant Election applies.
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EXHIBIT A-1
| (c) |
I agree to the right of the Board or the Compensation Committee to amend or terminate my election under this Election Form at any time and for any reason, with or without notice; provided
that such termination or amendment is performed in compliance with Section 409A (as determined by Company legal counsel in its sole and absolute discretion).
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| (d) |
I understand, acknowledge and agree that the Board or the Compensation Committee has the discretion to make all determinations and decisions regarding any elections set forth on this
Election Form.
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| (e) |
I understand that this Election Form and the elections made hereunder are intended to comply with the requirements of Section 409A so the Retainer Gran issuable will not be subject to the
tax acceleration and additional penalty taxes imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. If applicable, I understand that I am solely responsible for any accelerated income taxes and additional
taxes and tax penalties imposed by Section 409A.
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| (f) |
I also understand that this Election Form and the elections made hereunder will in all respects be subject to the terms and conditions of the Policy, the applicable Award Agreement and
the Plan, as applicable. Should any inconsistency exist between this Election Form, the Policy, the Plan, the Award Agreement under which an Award was granted, and/or any applicable law, then the provisions of either the applicable law
(including, but not limited to, Section 409A) or the Plan will control, with the Plan subordinated to the applicable law and the Award Agreement and the Policy subordinated to this Election Form.
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By signing this Election Form, I authorize the implementation of the above elections. I understand that my retainer grant election is irrevocable effective as of the
Submission Deadline and may not be changed in the future, except in accordance with the requirements of Section 409A and the procedures specified by the Board or the Compensation Committee.
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Signed:______________________
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Date: _________________________, ______
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Participant
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Agreed to and accepted:
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Ocuphire Pharma, Inc.,
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By:________________________
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Date: _________________________, ______
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IMPORTANT DEADLINE:
Please remember that if you wish to make any election set forth on this Election Form, then the properly completed Election Form must be signed by you and returned ON OR BEFORE THE SUBMISSION DEADLINE to Amy Rabourn, Vice President of Finance,
Ocuphire Pharma, Inc. via email to: arabourn@ocuphire.com.
EXHIBIT A-2
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a) OR 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES OXLEY ACT OF 2002
I, Richard J. Rodgers, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2023 of Ocuphire Pharma, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures
to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting
that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal
control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
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Date: May 15, 2023
|
||
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/s/ Richard J. Rodgers
|
||
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Name:
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Richard J. Rodgers
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Title:
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Interim Chief Executive Officer
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(Principal Executive Officer)
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Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a) OR 15d-14(a), AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES OXLEY ACT OF 2002
I, Amy Rabourn, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2023 of Ocuphire Pharma,
Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 15, 2023
|
||
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/s/ Amy Rabourn
|
||
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Name:
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Amy Rabourn
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Title:
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Senior Vice President of Finance
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|
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(Principal Financial Officer)
|
||
Exhibit 32.1
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)
In connection with the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “Report”) of Ocuphire
Pharma, Inc., a Delaware corporation (the “Company”) as filed with the Securities and Exchange Commission, Richard J. Rodgers, as Interim Chief Executive Officer of the Company, and Amy Rabourn, as Senior Vice President of Finance of the Company,
each hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that to the best of her knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Richard J. Rodgers
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Richard J. Rodgers
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Interim Chief Executive Officer
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(Principal Executive Officer)
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/s/ Amy Rabourn
|
|
|
Amy Rabourn
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|
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Senior Vice President of Finance
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(Principal Financial Officer)
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Dated: May 15, 2023
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