EQUITY

107 Months Ended

Dec. 31, 2011

EQUITY

NOTE 8—EQUITY

During 2003, equity related transactions were as follows:

· 525,000 shares of common stock were sold for $1,000.

· 170,625 shares were reacquired for $325 and canceled.

· Additional contributions to capital of $56,360 resulted from the discounted value to notes payable due to warrants and beneficial conversion features attached to convertible notes was issued in 2003.

During 2004, equity related transactions were as follows:

· 2,250 shares of common stock were sold for $9,000.

· 206,500 shares of common stock valued at their then fair value of $849,000 were issued to employees and consultants for their services.

· 24,269 shares of common stock valued at their then fair value of $427,075 were issued to the University of Chicago per the terms of a license agreement. See Note 11 for details.

· 99,740 shares of common stock were issued for net liabilities of $147,733 pursuant to the 2004 reorganization.

· 250,000 shares of common stock valued at their then fair value of $23,750,000 were issued to Opexa Pharmaceuticals, Inc. stockholders.

· 16,100 shares of common stock with a relative fair value of $288,366 were issued to noteholders as their additional shares for their subscription investment.

· 60,750 shares of common stock were issued to noteholders for the conversion of $248,370 of principal and interest from convertible notes.

· 8,000 shares of common stock were cancelled pursuant to the terms of an employment separation agreement.

· Additional contributions to capital of $2,704,351 resulted from the discounted value to notes payable from warrants and beneficial conversion features attached to convertible notes.

· Employee stock option compensation expense was $123,333 for 2004.

During 2005, equity related transactions were as follows:

· 389,451 shares of common stock with warrants to purchase 1,070,993 shares were sold for $5,841,769. The relative fair value of the common stock was $1,103,714 and the relative fair value of the warrants was $4,738,055. Offering costs of $495,552 related to shares issued were charged to additional paid in capital.

· 45,168 shares of common stock with a relative fair value of $999,074 were issued to noteholders as their additional shares for their subscription investment.

· 565,858 shares of common stock were issued to noteholders for the conversion of $6,124,859 of principal and $525,513 interest from convertible notes.

· 2,300 shares of common stock valued at their fair value of $161,000 were issued to noteholders for the conversion of $51,930 of principal and interest from the notes.

· 29,194 shares of common stock were issued to the University of Chicago per the terms of a license agreement. These shares were recorded at $1,868,384. See Note 11 for details.

· 24,000 shares of common stock valued at their fair value of $1,012,400 were issued to consultants for their services.

· Additional contributions to capital of $2,265,052 relating to the discounted value to notes payable from warrants, beneficial conversion features attached to convertible notes.

· Employee stock option compensation expense was $2,487,741 for 2005.

· Non-employee stock option compensation expense was $2,373,888 for 2005.

· Transition of warrants from equity instruments to liability instruments in the amount of $10,658,496 was recorded.

During 2006, equity related transactions were as follows:

· In March 2006, 34,829 shares of common stock were issued to settle an outstanding accounts payable in the amount of $180,000.

· In April 2006, Opexa sold 4,600,000 shares of its common stock and warrants to purchase 2,300,000 shares of Opexa’s common stock for $23 million. Opexa paid $1,846,481 for the commissions and fees related to this offering and granted to its brokers warrants to purchase 213,720 shares of common stock at an exercise price of $5.00 per share. These warrants are not callable and have a cashless exercise option.

· Employee stock option compensation expense was $2,749,617 for 2006.

· Non-employee stock option compensation expense was $1,568,966 for 2006.

During 2007, equity related transactions were as follows:

· Employee stock option compensation expense was $1,876,103 for 2007.

· Non-employee stock option compensation expense was $845,275 for 2007.

During 2008, equity related transactions were as follows:

· In February 2008, Opexa sold 3,500,000 shares of common stock and 4,025,000 Series E warrants in a public offering for approximately $7.6 million. Opexa paid approximately $1.2 million for the underwriter discounts, commissions and other expenses related to this offering and granted to the underwriter warrants to purchase 350,000 shares of common stock at a price of $2.40 per share and an option to acquire 350,000 Series E warrants at a price of $0.18 per Series E warrant.

· In August, Opexa sold 2,003,874 shares of common stock and Series F warrants to purchase 2,003,874 shares of common stock in a private offering to certain institutional and accredited investors for approximately $3.0 million. Opexa paid approximately $100,000 in expenses related to this offering.

· 45,200 shares of restricted common stock valued at $48,965 were issued to Board members as compensation for their Board services.

· Employee stock option compensation expense was $1,467,364 for 2008.

· Non-employee stock option compensation expense was $434,207 for 2008.

During 2009, equity related transactions were as follows:

· In December 2009, Opexa sold 2,550,000 shares of its common stock and warrants to purchase 1,275,000 shares of Opexa’s common stock for $5.1 million. Opexa paid $310,500 for the commissions related to this offering and granted broker warrants to purchase 89,250 shares of common stock at an exercise price of $2.50 per share. These warrants are not callable and have a cashless exercise option.

· 60,400 shares of common stock were issued in connection with the exercise of stock options.

· 48,200 shares of common stock were issued in connection with the exercise of Series E warrants.

· 472,968 shares of common stock were issued in connection with the exercise of Series F warrants

· 98,796 shares of common stock were issued in connection with the exercise of broker warrants.

· On November 11, 2009, the Company’s stockholders approved an amendment to the Articles of Incorporation reducing the par value of the common stock from $.50 to $.01 per share. As a result of the reduction in par value, the “Common stock” account was reduced by $6,329,888 and the “Additional paid-in capital” account was increased by the same amount in the accompanying Statements of Changes in Stockholders’ Equity.

During 2010, equity related transactions were as follows:

· In June 2010, 2,760,181 shares of common stock were issued to noteholders for the conversion of $1,302,000 of principal and $78,091 of accrued interest from the 10% Convertible Promissory Notes.

· 141,520 shares of common stock were issued in connection with the exercise of stock options.

· 34,001 shares of common stock were issued in connection with the cashless exercise of broker warrants.

· 55,000 shares of common stock valued at their fair value of $64,350 were issued to a consultant in exchange for services.

During 2011, equity related transactions were as follows:

· In January 2011, 384,759 shares of common stock were sold under the Continuous Offering Program Agreement dated May 14, 2010 (the “ATM Agreement”) for net proceeds of $1,066,266.  Compensation and fees totaling $10,826 was paid to the placement agent with respect to the shares sold.  The ATM Agreement was subsequently terminated by Opexa on February 7, 2011.

· In February 2011, an aggregate of 4,146,500 units were sold in a public offering, with each unit consisting of one share of common stock and a warrant to purchase four-tenths (0.40) of a share of common stock, at a price to the public of $2.05 per unit, for gross proceeds of $8,500,325. The shares of common stock and warrants were immediately separable and were issued separately such that no units were issued. The warrants were exercisable immediately upon issuance, having a five-year term and an exercise price of $2.61 per share. Net proceeds from this offering were approximately $7,551,891, after deducting underwriting discounts and commissions and other estimated offering expenses. The offering closed on February 11, 2011.

· 50,305 shares of common stock valued at their fair value of $87,028 were issued to a consultant in exchange for services.