Convertible Secured Promissory Notes	9 Months Ended
Sep. 30, 2012
Convertible Secured Promissory Notes	Note 6. Convertible Secured Promissory Notes On July 25, 2012, Opexa issued a total of $4,085,000 in principal amount of secured convertible promissory notes (“Notes”) to third parties and related parties, of which an aggregate of $630,000 was issued to related parties (See Note 7). The Notes mature on July 25, 2014 and accrue interest at the rate of 12% per annum, compounded annually. Interest is payable semi-annually on June 30 and December 31 in either cash or registered shares of common stock, at Opexa’s election. The Notes are secured by substantially all of Opexa’s assets and are convertible into a new class of non-voting Series A convertible preferred stock. The Notes can be converted into Series A convertible preferred stock at the option of the investors at a price of $100.00 per share, subject to certain limitations and adjustments. Additionally, Opexa can elect to convert the Notes into Series A convertible preferred stock if (i) Opexa’s common stock closes at or above $2.50 per share for 20 consecutive trading days or (ii) Opexa achieves certain additional funding milestones to continue its clinical trial program. These milestones include (x) executing a strategic agreement with a partner or potential partner by which Opexa will receive a minimum of $5 million to partially fund, or an option to partner with Opexa for, its Phase II clinical trial for Tcelna in patients with SPMS and (y) receiving a minimum of $25 million in additional capital (including the Note offering proceeds) from any partner, potential partner or any other source. The Series A convertible preferred stock accrues dividends at the rate of 8% per annum, which are cumulative and payable semi-annually on June 30 and December 31 in either cash or registered shares of common stock at Opexa’s election. The Series A convertible preferred stock has a liquidation preference of $100.00 per share, entitling holders to payment from the assets of the Company available for distribution to its shareholders before any payment is made to the holders of the common stock. The Series A convertible preferred stock participates in any dividends or other distributions on shares of common stock (other than dividends payable in shares of common stock) along with the common stock. The Series A convertible preferred stock is convertible into shares of Opexa’s common stock at the option of the holders at a price of $0.80 per share, subject to certain limitations and adjustments. Additionally, Opexa can elect to convert the Series A convertible preferred stock into common stock if Opexa’s common stock closes at or above $4.00 per share for 20 consecutive trading days. If, as of December 31, 2012, Opexa has not entered into a strategic agreement with a partner or potential partner pursuant to which Opexa has or will receive at least $5 million in funding for use toward the clinical development of Tcelna or in return for granting a license, other rights, or an option to license or otherwise acquire rights with respect to Tcelna, the then applicable Series A convertible preferred stock conversion price will be adjusted in the event of the closing of the first down-round financing following July 25, 2012 for the issuance of common stock or common stock equivalents, to the price per share at which Opexa sells securities in such financing, subject to a floor of $0.780625. As part of the security interest in all of Opexa’s assets granted to the noteholders, $1,000,000 of the proceeds are maintained in a controlled account (see Note 4). The noteholders were granted certain registration rights for the shares of underlying common stock. The Notes were analyzed for a beneficial conversion feature and Opexa concluded that a beneficial conversion feature exists. The beneficial conversion feature was measured using the commitment-date stock price and was determined to be $1,497,634, of which $230,969 was attributable to related parties. This amount was recorded as a debt discount and is amortized to interest expense over the term of the Notes. Opexa also analyzed the Notes for derivative accounting consideration and determined that derivative accounting does not apply. In connection with the issuance of the Notes, Opexa also issued Series I warrants to the noteholders to purchase an aggregate of 3,829,689 shares of Opexa’s common stock at $1.25 per share, subject to certain limitations and adjustments. The warrants have a five-year term and are exercisable after six months from the date of issuance. Opexa can redeem the warrants at $0.01 per share if its common stock closes at or above $2.50 per share for 20 consecutive trading days. In the event Opexa issues shares of common stock or common stock equivalents at a price less than the then current warrant exercise price, then the warrant exercise price will be reduced to the price at which Opexa issues such shares, subject to a warrant exercise floor price of $0.64 per share. If an adjustment to the warrant exercise price would otherwise go below the warrant exercise price floor, but for the floor limit, the number of warrant shares for which the warrant is exercisable may be increased by a factor equal to the warrant exercise price floor dividend by the lower price, subject to an aggregate increase cap of 50% of the original number of warrant shares. As a result, Opexa accounted for these reset provisions in accordance with Accounting Standards Codification (“ASC”) ASC 815-40, which requires Opexa to record the warrants as a derivative liability at the grant date and to record changes in fair value relating to the warrants at each subsequent balance sheet date. The initial fair value of the warrant liabilities of $2,314,635, together with the beneficial conversion feature of $1,497,634 were recognized as a debt discount and are amortized to interest expense over the term of the Notes using the effective interest method. The amortized debt discount for the quarter-ended September 30, 2012 was $34,600 and Opexa recognized $136,889 as a derivative loss due to the change in fair value of the liability. The unamortized discount as of September 30, 2012 amounted to $3,777,668.

Note 6. Convertible Secured Promissory Notes

On July 25, 2012, Opexa issued a total of $4,085,000 in principal amount of secured convertible promissory notes (“Notes”) to third parties and related parties, of which an aggregate of $630,000 was issued to related parties (See Note 7). The Notes mature on July 25, 2014 and accrue interest at the rate of 12% per annum, compounded annually. Interest is payable semi-annually on June 30 and December 31 in either cash or registered shares of common stock, at Opexa’s election. The Notes are secured by substantially all of Opexa’s assets and are convertible into a new class of non-voting Series A convertible preferred stock. The Notes can be converted into Series A convertible preferred stock at the option of the investors at a price of $100.00 per share, subject to certain limitations and adjustments. Additionally, Opexa can elect to convert the Notes into Series A convertible preferred stock if (i) Opexa’s common stock closes at or above $2.50 per share for 20 consecutive trading days or (ii) Opexa achieves certain additional funding milestones to continue its clinical trial program. These milestones include (x) executing a strategic agreement with a partner or potential partner by which Opexa will receive a minimum of $5 million to partially fund, or an option to partner with Opexa for, its Phase II clinical trial for Tcelna in patients with SPMS and (y) receiving a minimum of $25 million in additional capital (including the Note offering proceeds) from any partner, potential partner or any other source.

The Series A convertible preferred stock accrues dividends at the rate of 8% per annum, which are cumulative and payable semi-annually on June 30 and December 31 in either cash or registered shares of common stock at Opexa’s election. The Series A convertible preferred stock has a liquidation preference of $100.00 per share, entitling holders to payment from the assets of the Company available for distribution to its shareholders before any payment is made to the holders of the common stock. The Series A convertible preferred stock participates in any dividends or other distributions on shares of common stock (other than dividends payable in shares of common stock) along with the common stock. The Series A convertible preferred stock is convertible into shares of Opexa’s common stock at the option of the holders at a price of $0.80 per share, subject to certain limitations and adjustments. Additionally, Opexa can elect to convert the Series A convertible preferred stock into common stock if Opexa’s common stock closes at or above $4.00 per share for 20 consecutive trading days. If, as of December 31, 2012, Opexa has not entered into a strategic agreement with a partner or potential partner pursuant to which Opexa has or will receive at least $5 million in funding for use toward the clinical development of Tcelna or in return for granting a license, other rights, or an option to license or otherwise acquire rights with respect to Tcelna, the then applicable Series A convertible preferred stock conversion price will be adjusted in the event of the closing of the first down-round financing following July 25, 2012 for the issuance of common stock or common stock equivalents, to the price per share at which Opexa sells securities in such financing, subject to a floor of $0.780625.

As part of the security interest in all of Opexa’s assets granted to the noteholders, $1,000,000 of the proceeds are maintained in a controlled account (see Note 4). The noteholders were granted certain registration rights for the shares of underlying common stock.

The Notes were analyzed for a beneficial conversion feature and Opexa concluded that a beneficial conversion feature exists. The beneficial conversion feature was measured using the commitment-date stock price and was determined to be $1,497,634, of which $230,969 was attributable to related parties. This amount was recorded as a debt discount and is amortized to interest expense over the term of the Notes. Opexa also analyzed the Notes for derivative accounting consideration and determined that derivative accounting does not apply.

In connection with the issuance of the Notes, Opexa also issued Series I warrants to the noteholders to purchase an aggregate of 3,829,689 shares of Opexa’s common stock at $1.25 per share, subject to certain limitations and adjustments. The warrants have a five-year term and are exercisable after six months from the date of issuance. Opexa can redeem the warrants at $0.01 per share if its common stock closes at or above $2.50 per share for 20 consecutive trading days. In the event Opexa issues shares of common stock or common stock equivalents at a price less than the then current warrant exercise price, then the warrant exercise price will be reduced to the price at which Opexa issues such shares, subject to a warrant exercise floor price of $0.64 per share. If an adjustment to the warrant exercise price would otherwise go below the warrant exercise price floor, but for the floor limit, the number of warrant shares for which the warrant is exercisable may be increased by a factor equal to the warrant exercise price floor dividend by the lower price, subject to an aggregate increase cap of 50% of the original number of warrant shares. As a result, Opexa accounted for these reset provisions in accordance with Accounting Standards Codification (“ASC”) ASC 815-40, which requires Opexa to record the warrants as a derivative liability at the grant date and to record changes in fair value relating to the warrants at each subsequent balance sheet date.

The initial fair value of the warrant liabilities of $2,314,635, together with the beneficial conversion feature of $1,497,634 were recognized as a debt discount and are amortized to interest expense over the term of the Notes using the effective interest method. The amortized debt discount for the quarter-ended September 30, 2012 was $34,600 and Opexa recognized $136,889 as a derivative loss due to the change in fair value of the liability. The unamortized discount as of September 30, 2012 amounted to $3,777,668.