Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions

Note 7.  Related Party Transactions

Investors in the July 25, 2012 Note offering included two members of Opexa’s Board of Directors and entities affiliated with a third director (See Note 6). Opexa issued an aggregate of $630,000 in principal amount of Notes to the two directors and an entity for which a third director reports beneficial ownership of Opexa securities. In connection with the issuance of such Notes, Opexa also issued warrants to purchase an aggregate of 590,625 shares of common stock. The fair value of the warrants was $356,969. Opexa also determined the Notes contained a beneficial conversation feature with fair value of $230,969. Opexa recorded a total of $587,939 as debt discount associated with the Notes issued to the related parties and amortized $5,336 as interest expense for the quarter ended September 30, 2012.

On August 15, 2012, Opexa appointed director David E. Jorden as its Acting Chief Financial Officer. As a non-employee officer of Opexa, Mr. Jorden will receive cash compensation of $100,000 per annum for his service. As of September 30, 2012, cash compensation totaling $8,333 was due to Mr. Jorden and is reported as accounts payable-related parties in the consolidated balance sheets.