Delaware
|
11-3516358
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $0.0001 par value per share
|
NYSE American
|
Large Accelerated Filer
|
☐
|
Accelerated Filer
|
☐
|
Non-Accelerated Filer
|
☐
|
Smaller reporting company
|
☑
|
Emerging growth company
|
☐
|
Class
|
Outstanding as of March 7, 2019
|
|
Common Stock, $0.0001 par value per share
|
48,282,995 shares
|
· |
our understandings and beliefs regarding the role of certain biological mechanisms and processes in cancer;
|
· |
our product candidates being in early stages of development, including in preclinical development;
|
· |
our ability to develop product candidates for orphan indications to take advantage of certain incentives provided by the U.S. Food and Drug Administration;
|
· |
our ability to transition from our initial focus on developing product candidates for orphan indications to candidates for more highly prevalent indications;
|
· |
our ability to successfully and timely complete clinical trials for our product candidates in clinical development;
|
· |
uncertainties related to the timing, results and analyses related to our product candidates in preclinical development;
|
· |
our ability to obtain the necessary U.S. and foreign regulatory approvals for our product candidates;
|
· |
our reliance on third-party contract research organizations and other investigators and collaborators for certain research and development services;
|
· |
our ability to maintain or engage third-party manufacturers to manufacture, supply, store and distribute supplies of our product candidates for our clinical trials;
|
· |
our ability to form strategic alliances and partnerships with pharmaceutical companies and other partners for sales and marketing of our product candidates, if approved;
|
· |
demand for and market acceptance of our product candidates, if approved;
|
· |
the scope and validity of our intellectual property protection for our product candidates and our ability to develop our candidates without infringing the intellectual
property rights of others;
|
· |
our lack of profitability and the need for additional capital to operate our business; and
|
· |
other risks and uncertainties, including those set forth herein under the caption “Risk Factors” and those detailed from time to time in our filings with the Securities
and Exchange Commission.
|
Page
|
|||
PART I
|
1
|
||
Item 1
|
1
|
||
Item 1A
|
22
|
||
Item 1B
|
46
|
||
Item 2
|
46
|
||
Item 3
|
46
|
||
Item 4
|
46
|
||
PART II
|
47
|
||
Item 5
|
47
|
||
Item 6
|
48
|
||
Item 7
|
49
|
||
Item 7A
|
57
|
||
Item 8
|
57
|
||
Item 9
|
57
|
||
Item 9A
|
57
|
||
Item 9B
|
59
|
||
PART III
|
60
|
||
Item 10
|
60
|
||
Item 11
|
60
|
||
Item 12
|
60
|
||
Item 13
|
60
|
||
Item 14
|
60
|
||
Item 15
|
61
|
||
Item 16
|
61
|
||
66
|
· |
RX-3117 is a novel, investigational oral small molecule nucleoside compound.
Once intracellularly activated (phosphorylated) by the enzyme UCK2, it is incorporated into the DNA or RNA of cells and inhibits both DNA and RNA synthesis, which induces apoptotic cell death of tumor cells. Because UCK2 is
overexpressed in multiple human tumors, but has a very limited presence in normal tissues, RX-3117 offers the potential for a targeted anti-cancer therapy with an improved efficacy and safety profile, and we believe it has therapeutic
potential in a broad range of cancers, including pancreatic, bladder, colon, lung and cervical cancer. In January 2018, we reported final data from a Phase 2a clinical trial of RX-3117 in patients with relapsed or refractory
metastatic pancreatic cancer. In this trial evidence of tumor shrinkage was observed in some patients with metastatic pancreatic cancer that was resistant to gemcitabine and who had failed on multiple prior treatments. In this
study, 31% of patients experienced progression free survival for two months or more and five patients, or 12%, had disease stabilization for greater than four months. RX-3117 is currently being evaluated in a Phase 2a clinical trial
in combination with Celgene’s ABRAXANE® (paclitaxel protein-bound particles for injectable suspension) as a first-line treatment in patients newly diagnosed with metastatic pancreatic cancer. Preliminary safety and efficacy
data from this trial reported in January 2019 showed a 38% overall response rate in the 24 patients who had at least one scan on treatment and were included in the preliminary evaluation of overall response. The trial began dosing
patients in this study in November 2017 and reached the target enrollment of 40 patients in February 2019. RX-3117 has received “orphan drug designation” from the U.S. Food and Drug Administration (“FDA”) and from the European
Commission (“EC”) for pancreatic cancer. RX-3117 is also being evaluated in a Phase 2a clinical trial in advanced bladder cancer. We presented updated preliminary safety and efficacy data from this trial in February 2019.
|
· |
RX-5902 is a potential first-in-class small molecule modulator of the Wnt/beta-catenin pathway which plays a key role in cancer cell proliferation and tumor growth.
RX-5902 modulates the pathway through inhibition of phosphorylated p68, a protein that helps to transport beta-catenin from the cytoplasm into the cell nucleus. Once inside the nucleus, beta-catenin turns on various oncogenes,
thereby promoting cancer cell proliferation and tumor growth. We believe that by inhibiting phosphorylated p68, RX-5902 hinders the transport of beta-catenin into the nucleus and reduces the activation of cancer genes. In addition,
multiple preclinical models have shown that RX-5902 activates the immune system against cancer and enhances the ability of immune cells to infiltrate the tumor and kill tumor cells. In preclinical models of colorectal and triple
negative breast cancer (“TNBC”), the effects of RX-5902 were observed to be synergistic with other immunotherapy agents such as checkpoint inhibitors. We have evaluated RX-5902 in a Phase 1 dose escalation study in patients with a
diverse range of metastatic, treatment-refractory tumors, including breast, ovarian, colorectal, and neuro-endocrine tumors. In February 2017, we initiated a Phase 2a clinical trial of RX-5902 in patients with metastatic TNBC. In
August 2018, we entered into a collaboration with Merck Sharp & Dohme B.V. (“Merck”) to evaluate the combination of RX-5902 and Merck’s anti-PD-1 therapy, KEYTRUDA® (pembrolizumab) in a Phase 2 trial in patients with
metastatic TNBC. In December 2018, we ceased enrollment in the ongoing Phase 2a monotherapy trial of RX-5902 in TNBC to focus RX-5902 development activities on planning the proposed combination trial with KEYTRUDA. We are currently
evaluating the development strategy for RX-5902 and may or may not proceed with this trial.
|
· |
RX-0301 is a potential best-in-class, potent inhibitor of the protein kinase Akt-1, which we believe plays a critical role in cancer cell proliferation, survival,
angiogenesis, metastasis and drug resistance. RX-0301 is the subject of a research and development collaboration with Zhejiang Haichang Biotechnology Co., Ltd. (“Haichang”) for the development of RX-0301 to conduct certain
preclinical and clinical activities through completion of a Phase 2a proof-of-concept clinical trial in hepatocellular carcinoma (“HCC”). RX-0301 is being developed as a nano-liposomal formulation of RX-0201 (Archexin®)
using Haichang’s proprietary QTsome™ technology. Rexahn was previously developing RX-0201 for the treatment of renal cell carcinoma (“RCC”). In February 2018, in response to the changing treatment landscape for metastatic RCC over
the prior two years with the approval of new therapies by the FDA, we announced plans to discontinue the internally funded programs of RX-0201 and ceased enrolling patients in a Phase 2a proof-of-concept clinical trial of RX-0201 in
patients with metastatic RCC. RX-0301 is currently in preclinical development.
|
· |
Effective treatments for metastatic cancer: There is a need for better
treatments to prolong life and improve survival in patients diagnosed with late-stage cancers. In many cases, early stage cancer can be effectively treated with surgery and/or radiation and adjuvant drug treatment. However, once the
tumor has metastasized, current treatments are usually not curative.
|
· |
Long-term management of cancers: Surgery, radiation therapy or chemotherapy may
not result in long-term remission, although surgery and radiation therapies are considered effective methods for some cancers. There is a need for more effective drugs and adjuvant therapies to treat relapsed and refractory cancers.
|
· |
Multi-drug resistance: Multi-drug resistance is a major obstacle to effectively
treating various cancers with chemotherapy.
|
· |
Debilitating toxicity by chemotherapy: Chemotherapy as a mainstay of cancer treatment can induce severe adverse reactions and toxicities, adversely affecting quality of life or life itself.
|
· |
Expedited Regulatory or Commercialization Pathways. Drugs for life-threatening
diseases such as cancer are often candidates for fast track designation, breakthrough therapy designation, priority review and accelerated approval, each of which may lead to approval sooner than would otherwise be the case.
|
· |
Favorable Environment for Formulary Access and Reimbursement. We believe cancer
drugs with proven efficacy would gain rapid market uptake, formulary listing and third-party payor reimbursement. Drugs with orphan designations are generally reimbursed by third-party payors because there are few, if any,
alternatives.
|
· |
Low Marketing Costs. We believe the marketing of new drugs to oncologists can
be accomplished with a smaller sales force and lower related costs than a sales force that markets widely to primary care physicians and general practitioners.
|
· |
Advance our existing product candidates through late-stage clinical trials, generating meaningful clinical results;
|
· |
Work with U.S. and foreign regulatory authorities for expeditious, efficient development pathways toward registration;
|
· |
Use our industry relationships and experience to source, evaluate and in-license well-characterized product candidates to continue pipeline development; and
|
· |
Identify potential commercial or distribution partners for our products in relevant territories.
|
· |
developing drugs;
|
· |
undertaking preclinical testing and human clinical trials;
|
· |
obtaining FDA and other regulatory approvals of drugs;
|
· |
formulating and manufacturing drugs; and
|
· |
launching, marketing and selling drugs.
|
· |
The federal Anti-Kickback Law, which prohibits, among other things, knowingly or willingly offering, paying, soliciting or receiving remuneration, directly or indirectly,
in cash or in kind, to induce or reward the purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any health care items or service for which payment may be made, in whole or in part, by federal
healthcare programs such as Medicare and Medicaid. This statute has been interpreted to apply to arrangements between pharmaceutical companies on one hand and prescribers, purchasers and formulary managers on the other. Liability
may be established under the federal Anti-Kickback Law without proving actual knowledge of the statute or specific intent to violate it. In addition, the government may assert that a claim including items or services resulting from a
violation of the federal Anti-Kickback Law constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Although there are a number of statutory exemptions and regulatory safe harbors to the federal
Anti-Kickback Law protecting certain common business arrangements and activities from prosecution or regulatory sanctions, the exemptions and safe harbors are drawn narrowly, and practices that do not fit squarely within an exemption
or safe harbor, or for which no exception or safe harbor is available, may be subject to scrutiny.
|
· |
The federal civil False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, a false or
fraudulent claim for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly concealing or knowingly and
improperly avoiding, decreasing or concealing an obligation to pay money to the federal government. Many pharmaceutical and other healthcare companies have been investigated and have reached substantial financial settlements with the
federal government under the civil False Claims Act for a variety of alleged improper marketing activities, including: providing free product to customers with the expectation that the customers would bill federal programs for the
product; providing sham consulting fees, grants, free travel and other benefits to physicians to induce them to prescribe the company’s products; and inflating prices reported to private price publication services, which are used to
set drug payment rates under government healthcare programs. In addition, in recent years the government has pursued civil False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted as
a result of the marketing of their products for unapproved, and thus non-reimbursable, uses. Pharmaceutical and other healthcare companies also are subject to other federal false claim laws, including, among others, federal criminal
healthcare fraud and false statement statutes that extend to non-government health benefit programs.
|
· |
Analogous state and local laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving
healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance
guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; and state and foreign laws that require drug manufacturers to report
information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
|
· |
The federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics, and medical
supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of
value to physicians and teaching hospitals, as well as ownership and investment interests held in the company by physicians and their immediate family members. Beginning in 2022, applicable manufacturers also will be required to
report information regarding payments and transfers of value provided to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
|
· |
The federal Foreign Corrupt Practices Act of 1997 and other similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from
providing money or anything of value to officials of foreign governments, foreign political parties or international organizations with the intent to obtain or retain business or seek a business advantage. Recently, there has been a
substantial increase in anti-bribery law enforcement activity by U.S. regulators, with more frequent and aggressive investigations and enforcement proceedings by both the Department of Justice and the U.S. Securities and Exchange
Commission (the “SEC”). Violations of United States or foreign laws or regulations could result in the imposition of substantial fines, interruptions of business, loss of supplier, vendor or other third-party relationships,
termination of necessary licenses and permits and other legal or equitable sanctions. Other internal or government investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as
a consequence.
|
· |
continued preclinical development and clinical trials for our current and new product candidates;
|
· |
finding and maintaining suitable partnerships to help us research, develop and commercialize product candidates;
|
· |
efforts to seek regulatory approvals for our product candidates;
|
· |
implementing additional internal systems and infrastructure;
|
· |
in-licensing additional technologies to develop; and
|
· |
hiring additional personnel or entering into relationships with third parties to perform functions that we are unable to perform on our own.
|
· |
successfully conducting preclinical and clinical trials;
|
· |
obtaining regulatory approval;
|
· |
formulating and manufacturing products; and
|
· |
conducting sales and marketing activities.
|
· |
the cost of preclinical studies and clinical trials may be greater than we anticipate;
|
· |
delay or failure in reaching agreement with the FDA or a foreign regulatory authority on the design of a given trial, or in obtaining authorization to commence a trial;
|
· |
delay or failure in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;
|
· |
delay or failure in obtaining approval of an IRB to conduct a clinical trial at a given site;
|
· |
withdrawal of clinical trial sites from our clinical trials, including as a result of changing standards of care or the ineligibility of a site to participate;
|
· |
delay or failure in recruiting and enrolling study subjects;
|
· |
delay or failure in having subjects complete a clinical trial or return for post-treatment follow up;
|
· |
clinical sites or investigators deviating from trial protocol, failing to conduct the trial in accordance with applicable regulatory requirements, or dropping out of a
trial;
|
· |
inability to identify and maintain a sufficient number of trial sites;
|
· |
failure of third-party CROs to meet their contractual obligations or deadlines;
|
· |
the need to modify a study protocol;
|
· |
negative or inconclusive results during clinical trials, including the emergence of dosing issues, unforeseen safety issues or lack of effectiveness;
|
· |
changes in the standard of care of the indication being studied;
|
· |
reliance on third-party suppliers for the clinical trial supply of product candidates;
|
· |
inability to monitor patients adequately during or after treatment;
|
· |
lack of sufficient funding to finance the clinical trials; and
|
· |
changes in governmental regulations or administrative action.
|
· |
disagreement with the design or implementation of our clinical trials;
|
· |
failure to demonstrate to the authority’s satisfaction that the product candidate is safe and effective for the proposed indication;
|
· |
failure of clinical trial results to meet the level of statistical significance required for approval;
|
· |
failure to demonstrate that the product’s benefits outweigh its risks;
|
· |
disagreement with our interpretation of preclinical or clinical data; and
|
· |
inadequacies in the manufacturing facilities or processes of third-party manufacturers.
|
· |
we may suspend marketing of such product;
|
· |
regulatory authorities may withdraw their approvals of such product;
|
· |
regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit the commercial success of such products;
|
· |
we may be required to develop a REMS for such product or, if a REMS is already in place, to incorporate additional requirements under the REMS, or to develop a similar
strategy as required by a comparable foreign regulatory authority;
|
· |
we may be required to conduct post-market studies;
|
· |
we could be sued and held liable for harm caused to subjects or patients; and
|
· |
our reputation may suffer.
|
· |
awareness of a drug’s availability and benefits;
|
· |
perceptions by members of the health care community, including physicians, about the safety and effectiveness of our drugs;
|
· |
pharmacological benefit and cost-effectiveness of our products relative to competing products;
|
· |
availability of reimbursement for our products from government or other third-party payors;
|
· |
effectiveness of marketing and distribution efforts by us and our licensees and distributors, if any; and
|
· |
the price at which we sell our products.
|
· |
the federal Anti-Kickback Law prohibits persons from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or
indirectly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for the furnishing or arranging for the furnishing, or the purchase, lease or order, or arranging for or recommending purchase, lease
or order, any good or service for which payment may be made under a federal healthcare program such as Medicare and Medicaid;
|
· |
the federal civil False Claims Act imposes penalties, including through civil whistleblower or qui tam actions, against individuals or entities for, among other things,
knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement material to an obligation to pay money to the government or knowingly concealing
or knowingly and improperly avoiding, decreasing, or concealing an obligation to pay money to the federal government;
|
· |
HIPAA imposes criminal liability for knowingly and willfully executing a scheme to defraud any healthcare benefit program, knowingly and willfully embezzling or stealing
from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, or knowingly and willfully making false statements relating to healthcare matters;
|
· |
HIPAA and its implementing regulations also impose obligations on certain covered entity health care providers, health plans and health care clearinghouses as well as
their business associates that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and
transmission of individually identifiable health information;
|
· |
the federal Physician Payment Sunshine Act, being implemented as the Open Payments Program, which requires manufacturers of drugs, devices, biologics, and medical
supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to direct or indirect payments and other transfers of
value to physicians and teaching hospitals (and certain other practitioners beginning in 2022), as well as ownership and investment interests held in the company by physicians and their immediate family members; and
|
· |
analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims
involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary
compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to certain healthcare providers; state and foreign laws that require drug manufacturers
to report information related to clinical trials, or information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws that govern the
privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
|
· |
developing drugs;
|
· |
undertaking preclinical testing and human clinical trials;
|
· |
obtaining FDA and other regulatory approvals of drugs;
|
· |
formulating and manufacturing drugs; and
|
· |
launching, marketing and selling drugs.
|
· |
We may be unable to contract with third-party manufacturers on acceptable terms, or at all, because the number of potential manufacturers is limited. Potential
manufacturers of any product candidate that is approved will be subject to FDA compliance inspections and any new manufacturer would have to be qualified to produce our products;
|
· |
Our third-party manufacturers might be unable to formulate and manufacture our drugs in the volume and of the quality required to meet our clinical and commercial needs,
if any;
|
· |
Our third-party manufacturers may not perform as agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials
through completion or to successfully produce, store and distribute our commercial products, if approved;
|
· |
Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and other government agencies to ensure compliance with cGMP and other government
regulations and corresponding foreign standards. We do not have direct control over third-party manufacturers’ compliance with these regulations and standards, but we may ultimately be responsible for any of their failures;
|
· |
If any third-party manufacturer makes improvements in the manufacturing process for our products, we may not own, or may have to share, the intellectual property rights
to such improvements; and
|
· |
A third-party manufacturer may gain knowledge from working with us that could be used to supply one of our competitors with a product that competes with ours.
|
· |
the degree and range of protection any patents will afford us against competitors, including whether third parties find ways to invalidate or otherwise circumvent our
licensed patents;
|
· |
if and when patents will issue in the United States or any other country;
|
· |
whether or not others will obtain patents claiming aspects similar to those covered by our licensed patents and patent applications;
|
· |
whether we will need to initiate litigation or administrative proceedings to protect our intellectual property rights, which may be costly whether we win or lose;
|
· |
whether any of our patents will be challenged by our competitors alleging invalidity or unenforceability and, if opposed or litigated, the outcome of any administrative
or court action as to patent validity, enforceability or scope;
|
· |
whether a competitor will develop a similar compound that is outside the scope of protection afforded by a patent or whether the patent scope is inherent in the claims
modified due to interpretation of claim scope by a court;
|
· |
whether there were activities previously undertaken by a licensor that could limit the scope, validity or enforceability of licensed patents and intellectual property; or
|
· |
whether a competitor will assert infringement of its patents or intellectual property, whether or not meritorious, and what the outcome of any related litigation or
challenge may be.
|
· |
obtain licenses, which may not be available on commercially reasonable terms, if at all;
|
· |
redesign our products or processes to avoid infringement;
|
· |
stop using the subject matter claimed in patents held by others, which could cause us to lose the use of one or more of our product candidates;
|
· |
pay damages; or
|
· |
defend litigation or administrative proceedings that may be costly whether we win or lose and that could result in a substantial diversion of our management resources.
|
· |
the announcement of new products or product enhancements by us or our competitors;
|
· |
changes in our relationships with our licensors or other strategic partners;
|
· |
developments concerning intellectual property rights and regulatory approvals;
|
· |
variations in our and our competitors’ results of operations;
|
· |
changes in earnings estimates or recommendations by securities analysts;
|
· |
changes in the structure of healthcare payment systems; and
|
· |
developments and market conditions in the pharmaceutical and biotechnology industries.
|
For the Year Ended December 31,
|
||||||||||||||||||||
Statement of Operations Data:
|
2018
|
2017
|
2016
|
2015
|
2014
|
|||||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Expenses:
|
||||||||||||||||||||
General and administrative
|
7,428,615
|
6,639,421
|
6,324,236
|
6,115,210
|
6,253,328
|
|||||||||||||||
Research and development
|
13,109,058
|
10,715,296
|
10,089,149
|
12,148,226
|
7,015,901
|
|||||||||||||||
Total expenses
|
20,537,673
|
17,354,717
|
16,413,385
|
18,263,436
|
13,269,229
|
|||||||||||||||
Loss from operations
|
(20,537,673
|
)
|
(17,354,717
|
)
|
(16,413,385
|
)
|
(18,263,436
|
)
|
(13,269,229
|
)
|
||||||||||
Other Income (Expense), net
|
6,169,143
|
(7,939,786
|
)
|
7,106,040
|
3,878,880
|
(5,252,372
|
)
|
|||||||||||||
Net Loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
$
|
(9,307,345
|
)
|
$
|
(14,384,556
|
)
|
$
|
(18,521,601
|
)
|
|||||
Net Loss per share, basic and diluted
|
$
|
(0.44
|
)
|
$
|
(0.92
|
)
|
$
|
(0.43
|
)
|
$
|
(0.79
|
)
|
$
|
(1.05
|
)
|
|||||
Weighted average shares outstanding, basic and diluted
|
32,915,377
|
27,390,527
|
21,744,740
|
18,238,822
|
17,610,697
|
|||||||||||||||
As of December 31,
|
||||||||||||||||||||
Balance Sheet Data:
|
2018
|
2017
|
2016
|
2015
|
2014
|
|||||||||||||||
Cash, Cash Equivalents, and Marketable Securities
|
$
|
14,725,821
|
$
|
26,831,095
|
$
|
20,315,580
|
$
|
23,439,526
|
$
|
32,698,296
|
||||||||||
Working Capital(1)
|
$
|
12,747,118
|
$
|
24,901,710
|
$
|
19,041,597
|
$
|
22,000,046
|
$
|
30,970,020
|
||||||||||
Total Assets
|
$
|
16,042,926
|
$
|
28,287,881
|
$
|
21,043,532
|
$
|
24,805,029
|
$
|
33,533,060
|
||||||||||
Warrant Liabilities
|
$
|
2,307,586
|
$
|
7,853,635
|
$
|
1,573,366
|
$
|
2,739,163
|
$
|
3,768,351
|
||||||||||
Accumulated Deficit
|
$
|
(154,687,242
|
)
|
$
|
(140,318,712
|
)
|
$
|
(115,024,209
|
)
|
$
|
(105,716,864
|
)
|
$
|
(91,332,308
|
)
|
|||||
Total Stockholders’ Equity
|
$
|
10,562,890
|
$
|
16,768,596
|
$
|
17,058,462
|
$
|
18,775,548
|
$
|
26,580,491
|
||||||||||
Common shares outstanding
|
37,527,420
|
31,725,114
|
23,736,878
|
19,741,378
|
17,825,331
|
(1) |
Working Capital defined as current assets less current liabilities
|
· |
CROs and investigative sites in connection with clinical studies;
|
· |
vendors in connection with product manufacturing, development, and distribution of clinical supplies; and
|
· |
vendors in connection with preclinical development activities.
|
For the Year Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Clinical Candidates:
|
||||||||
RX-3117
|
$
|
6,126,200
|
$
|
4,559,200
|
||||
RX-5902
|
3,104,400
|
2,019,700
|
||||||
RX-0201
|
651,200
|
535,700
|
||||||
Preclinical, Personnel and Overhead
|
3,227,258
|
3,600,696
|
||||||
Total Research and Development Expenses
|
$
|
13,109,058
|
$
|
10,715,296
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Net Cash Used in Operating Activities
|
$
|
(18,838,638
|
)
|
$
|
(15,420,055
|
)
|
||
Net Cash Provided By (Used In) Investing Activities
|
11,910,996
|
(9,372,778
|
)
|
|||||
Net Cash Provided by Financing Activities
|
6,772,789
|
22,113,514
|
||||||
Net Decrease in Cash and Cash Equivalents
|
$
|
(154,853
|
)
|
$
|
(2,679,319
|
)
|
· |
the progress of our product development activities;
|
· |
the number and scope of our product development programs;
|
· |
the progress of our preclinical and clinical trial activities;
|
· |
the progress of the development efforts of parties with whom we have entered into collaboration agreements;
|
· |
our ability to maintain current collaboration programs and to establish new collaboration arrangements;
|
· |
the costs involved in prosecuting and enforcing patent claims and other intellectual property rights; and
|
· |
the costs and timing of regulatory approvals.
|
· |
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and the dispositions of our assets;
|
· |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and the board of directors; and
|
· |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect
on the financial statements.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
(a) |
The following documents are filed as a part of this Annual Report:
|
(1)
|
The following documents are filed as a part of this Annual Report:
|
|||
Report of Baker Tilly Virchow Krause, LLP
|
F-1
|
|||
Balance Sheet as of December 31, 2018 and December 31, 2017
|
F-2
|
|||
Statement of Operations for the year ended December 31, 2018 and 2017
|
F-3
|
|||
Statement of Comprehensive Loss for the year ended December 31, 2018 and 2017
|
F-4
|
|||
Statement of Stockholders’ Equity for the year ended December 31, 2018 and 2017
|
F-5
|
|||
Statement of Cash Flows for the year ended December 31, 2018 and 2017
|
F-6
|
|||
Notes to the Financial Statements
|
F-7
|
|||
(2)
|
All financial statement schedules have been omitted because they are not applicable or not required or because the information is included
elsewhere in the financial statements or the Notes thereto.
|
|||
(3)
|
See the accompanying Index to Exhibits filed as a part of this Annual Report, which list is incorporated by reference in this Item.
|
(b) |
See the accompanying Index to Exhibits filed as a part of this Annual Report.
|
(c) |
Other schedules are not applicable.
|
Amended and Restated Certificate of Incorporation, filed as Appendix G to the
Company’s Definitive Proxy Statement on Schedule 14A filed on April 29, 2005, is incorporated herein by reference.
|
|
Certificate of Amendment of Amended and Restated Certificate of Incorporation,
filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on May 5, 2017, is incorporated herein by reference.
|
|
Amended and Restated Bylaws, as amended, through March 21, 2014, filed as Exhibit
3.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, is incorporated herein by reference.
|
|
Specimen Certificate for the Company’s Common Stock, par value $.0001 per share,
filed as Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on November 6, 2015, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on February 26, 2016, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on September 14, 2016, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on June 7, 2017, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on October 13, 2017, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on October 19, 2018, is incorporated herein by reference.
|
|
Form of Common Stock Purchase Warrant, filed as Exhibit 4.1 to the Company’s
Current Report on Form 8-K filed on January 25, 2019, is incorporated herein by reference.
|
|
Rexahn Pharmaceuticals, Inc. Stock Option Plan, as amended, filed as Exhibit 4.4
to the Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Form of Stock Option Grant Agreement for Employees, filed as Exhibit 4.5.1 to the
Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Form of Stock Option Grant Agreement for Non-Employee Directors and Consultants,
filed as Exhibit 4.5.2 to the Company’s Registration Statement on Form S-8 (File No. 333-129294) filed on October 28, 2005, is incorporated herein by reference.
|
|
Rexahn Pharmaceuticals, Inc. 2013 Stock Option Plan, as amended and restated,
filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 10, 2016, is incorporated herein by reference.
|
|
First Amendment to the Rexahn Pharmaceuticals, Inc. 2013 Stock Option Plan, as
amended and restated as of June 9, 2016, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 13, 2017, is incorporated herein by reference.
|
Form of Stock Option Grant Agreement under the Rexahn Pharmaceuticals, Inc. 2013
Stock Option Plan filed as Exhibit 10.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 is incorporated herein by reference.
|
|
Form of Restricted Stock Unit Agreement under the Rexahn Pharmaceuticals, Inc. 2013 Stock Option Plan.
|
|
Employment Agreement, dated as of September 9, 2010, by and between Rexahn
Pharmaceuticals, Inc. and T. H. Jeong, filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on September 10, 2010, is incorporated herein by reference.
|
|
Separation, Transition and General Release Agreement, dated as of December 11,
2017, by and between Rexahn Pharmaceuticals, Inc. and Tae Heum (Ted) Jeong, filed as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, is incorporated herein by reference.
|
|
Employment Agreement, dated as of February 4, 2013, by and between Rexahn
Pharmaceuticals, Inc. and Peter Suzdak, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 22, 2013, is incorporated herein by reference.
|
|
Separation, Transition and General Release Agreement, dated as of November 14,
2018, by and between Rexahn Pharmaceuticals, Inc. and Peter Suzdak, filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 16, 2018, is herein incorporated by reference.
|
|
Employment Agreement, dated as of February 2, 2015, by and between Rexahn
Pharmaceuticals, Inc. and Ely Benaim, M.D., filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2015, is incorporated herein by reference.
|
|
Employment Agreement, dated as of July 6, 2016, by and between Rexahn
Pharmaceuticals, Inc. and Lisa Nolan, Ph.D., filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016, is incorporated herein by reference.
|
|
Employment Agreement, dated as of January 2, 2018, by and between Rexahn
Pharmaceuticals, Inc. and Douglas Swirsky, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 4, 2018 is incorporated herein by reference.
|
|
Amendment to Employment Agreement, dated as of November 14, 2018, by and between
Rexahn Pharmaceuticals, Inc. and Douglas Swirsky, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 16, 2018 is incorporated herein by reference.
|
|
Lease Agreement, dated June 5, 2009, by and between Rexahn Pharmaceuticals, Inc.
and The Realty Associates Fund V, L.P., filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2009, is incorporated herein by reference.
|
|
First Amendment to Lease Agreement, dated as of June 7, 2013, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, is incorporated herein by reference.
|
Second Amendment to Lease Agreement, dated as of July 26, 2014, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2014, is incorporated herein by reference.
|
|
Third Amendment to Lease Agreement, dated as of May 6, 2015, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2015, is incorporated herein by reference.
|
|
Fourth Amendment to Lease Agreement, dated as of April 4, 2016, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016, is incorporated herein by reference.
|
|
Fifth Amendment to Lease Agreement, dated as of April 13, 2017, by and between
Rexahn Pharmaceuticals, Inc. and SG Plaza Holdings, LLC, filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of November 6, 2015, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 6, 2015, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of February 26, 2016, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 26, 2016, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of September 14, 2016, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on September 14, 2016, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of June 6, 2017, by and between
Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 7, 2017, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of October 13, 2017, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 13, 2017, is incorporated herein by reference.
|
|
Form of Securities Purchase Agreement, dated as of October 17, 2018, by and
between Rexahn Pharmaceuticals, Inc. and the purchasers identified on the signature pages thereto, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 19, 2018, is incorporated herein by reference.
|
|
Clinical Trial Collaboration and Supply Agreement, dated August 13, 2018, by and
between Merck Sharp & Dohme B.V., and Rexahn Pharmaceuticals, Inc., filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018, is herein incorporated by reference.
|
Consent of Baker Tilly Virchow Krause, LLP, independent registered public accounting firm
|
|
Power of Attorney
|
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
|
|
Certification of Chief Executive Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Calculation Linkbase
|
101.DEF
|
XBRL Taxonomy Definition Linkbase
|
101.LAB
|
XBRL Taxonomy Label Linkbase
|
101.PRE
|
XBRL Taxonomy Presentation Linkbase
|
REXAHN PHARMACEUTICALS, INC.
|
|||
By:
|
/s/ Douglas J. Swirsky
|
||
Douglas J. Swirsky
|
|||
Chief Executive Officer and President
|
Name
|
Title
|
Date
|
|
/s/ Douglas J. Swirsky
|
President, Chief Executive Officer and Director (Principal Executive, Financial and Accounting Officer)
|
March 7, 2019
|
|
Douglas J. Swirsky
|
|||
/s/ Peter Brandt*
|
Chairman
|
March 7, 2019
|
|
Peter Brandt
|
|||
/s/ Charles Beever*
|
Director
|
March 7, 2019
|
|
Charles Beever
|
|||
/s/ Kwang Soo Cheong*
|
Director
|
March 7, 2019
|
|
Kwang Soo Cheong
|
|||
/s/ Ben Gil Price*
|
Director
|
March 7, 2019
|
|
Ben Gil Price
|
|||
/s/ Richard J. Rodgers*
|
Director
|
March 7, 2019
|
|
Richard J. Rodgers
|
|||
/s/ Lara Sullivan*
|
Director
|
March 7, 2019
|
|
Lara Sullivan
|
December 31, 2018
|
December 31, 2017
|
|||||||
ASSETS
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
8,744,301
|
$
|
8,899,154
|
||||
Marketable securities
|
5,981,520
|
17,931,941
|
||||||
Prepaid expenses and other current assets
|
1,173,847
|
1,304,541
|
||||||
Total Current Assets
|
15,899,668
|
28,135,636
|
||||||
Security Deposits
|
30,785
|
30,785
|
||||||
Equipment, Net
|
112,473
|
121,460
|
||||||
Total Assets
|
$
|
16,042,926
|
$
|
28,287,881
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$
|
3,152,550
|
$
|
3,233,926
|
||||
Deferred Research and Development Arrangement
|
-
|
375,000
|
||||||
Other Liabilities
|
19,900
|
56,724
|
||||||
Warrant Liabilities
|
2,307,586
|
7,853,635
|
||||||
Total Liabilities
|
5,480,036
|
11,519,285
|
||||||
Commitments and Contingencies (note 15)
|
||||||||
Stockholders’ Equity:
|
||||||||
Preferred stock, par value $0.0001, 10,000,000 authorized shares, none issued and outstanding
|
-
|
-
|
||||||
Common stock, par value $0.0001, 75,000,000 and 50,000,000 authorized shares, 37,527,420 and
31,725,114 issued and outstanding
|
3,753
|
3,173
|
||||||
Additional paid-in capital
|
165,264,215
|
157,141,021
|
||||||
Accumulated other comprehensive loss
|
(17,836
|
)
|
(56,886
|
)
|
||||
Accumulated deficit
|
(154,687,242
|
)
|
(140,318,712
|
)
|
||||
Total Stockholders’ Equity
|
10,562,890
|
16,768,596
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
16,042,926
|
$
|
28,287,881
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Revenues:
|
$
|
-
|
$
|
-
|
||||
Expenses:
|
||||||||
General and administrative
|
7,428,615
|
6,639,421
|
||||||
Research and development
|
13,109,058
|
10,715,296
|
||||||
Total Expenses
|
20,537,673
|
17,354,717
|
||||||
Loss from Operations
|
(20,537,673
|
)
|
(17,354,717
|
)
|
||||
Other Income (Expense)
|
||||||||
Interest income
|
254,344
|
207,003
|
||||||
Other income
|
368,750
|
-
|
||||||
Unrealized gain (loss) on fair value of warrants
|
5,546,049
|
(7,594,162
|
)
|
|||||
Financing expense
|
-
|
(552,627
|
)
|
|||||
Total Other Income (Expense)
|
6,169,143
|
(7,939,786
|
)
|
|||||
Net Loss Before Provision for Income Taxes
|
(14,368,530
|
)
|
(25,294,503
|
)
|
||||
Provision for income taxes
|
-
|
-
|
||||||
Net Loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
||
Net loss per share, basic and diluted
|
$
|
(0.44
|
)
|
$
|
(0.92
|
)
|
||
|
||||||||
Weighted average number of shares outstanding, basic and diluted
|
32,915,377
|
27,390,527
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Net Loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
||
Unrealized gain (loss) on available-for-sale securities
|
39,050
|
(50,764
|
)
|
|||||
Comprehensive Loss
|
$
|
(14,329,480
|
)
|
$
|
(25,345,267
|
)
|
Common Stock
|
||||||||||||||||||||||||
Number of
Shares
|
Amount
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Accumulated
Other
Comprehensive
Loss
|
Total
Stockholders’
Equity
|
|||||||||||||||||||
Balances at January 1, 2017
|
23,736,878
|
$
|
2,374
|
$
|
132,086,419
|
$
|
(115,024,209
|
)
|
$
|
(6,122
|
)
|
$
|
17,058,462
|
|||||||||||
Issuance of common stock and units, net of issuance costs
|
6,295,613
|
630
|
10,495,217
|
-
|
-
|
10,495,847
|
||||||||||||||||||
Common stock issued in exchange for services
|
15,000
|
2
|
31,198
|
-
|
-
|
31,200
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
1,044,167
|
-
|
-
|
1,044,167
|
||||||||||||||||||
Stock options exercised
|
25,000
|
2
|
77,498
|
-
|
-
|
77,500
|
||||||||||||||||||
Stock warrants exercised
|
1,652,623
|
165
|
13,406,522
|
-
|
-
|
13,406,687
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
(25,294,503
|
)
|
-
|
(25,294,503
|
)
|
||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
(50,764
|
)
|
(50,764
|
)
|
||||||||||||||||
Balances at
December 31, 2017
|
31,725,114
|
$
|
3,173
|
$
|
157,141,021
|
$
|
(140,318,712
|
)
|
$
|
(56,886
|
)
|
$
|
16,768,596
|
|||||||||||
Issuance of common stock and units, net of issuance costs
|
5,769,231
|
577
|
6,872,212
|
-
|
-
|
6,872,789
|
||||||||||||||||||
Common stock issued in exchange for services
|
15,000
|
1
|
22,649
|
-
|
-
|
22,650
|
||||||||||||||||||
Stock-based compensation
|
-
|
-
|
1,228,335
|
-
|
-
|
1,228,335
|
||||||||||||||||||
Common stock issued from vested restricted stock units
|
18,075
|
2
|
(2
|
)
|
-
|
-
|
-
|
|||||||||||||||||
Net loss
|
-
|
-
|
-
|
(14,368,530
|
)
|
-
|
(14,368,530
|
)
|
||||||||||||||||
Other comprehensive gain
|
-
|
-
|
-
|
-
|
39,050
|
39,050
|
||||||||||||||||||
Balances at December 31, 2018
|
37,527,420
|
$
|
3,753
|
$
|
165,264,215
|
$
|
(154,687,242
|
)
|
$
|
(17,836
|
)
|
$
|
10,562,890
|
For the Year Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(14,368,530
|
)
|
$
|
(25,294,503
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Compensatory stock
|
22,650
|
31,200
|
||||||
Depreciation and amortization
|
48,211
|
42,358
|
||||||
Amortization of premiums and discounts on marketable securities, net
|
39,251
|
52,012
|
||||||
Stock-based compensation
|
1,228,335
|
1,044,167
|
||||||
Amortization and termination of deferred research and development arrangement
|
(375,000
|
)
|
(75,000
|
)
|
||||
Unrealized (gain) loss on fair value of warrants
|
(5,546,049
|
)
|
7,594,162
|
|||||
Financing expense
|
-
|
552,627
|
||||||
Amortization of deferred lease incentive
|
(12,443
|
)
|
(12,444
|
)
|
||||
Deferred rent
|
(24,381
|
)
|
(10,036
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Prepaid expenses and other assets
|
230,694
|
(696,024
|
)
|
|||||
Accounts payable and accrued expenses
|
(81,376
|
)
|
1,351,426
|
|||||
Net Cash Used in Operating Activities
|
(18,838,638
|
)
|
(15,420,055
|
)
|
||||
Cash Flows from Investing Activities:
|
||||||||
Purchase of equipment
|
(39,224
|
)
|
(75,168
|
)
|
||||
Purchase of marketable securities
|
-
|
(21,017,610
|
)
|
|||||
Redemption of marketable securities
|
11,950,220
|
11,720,000
|
||||||
Net Cash Provided by (Used In) Investing Activities
|
11,910,996
|
(9,372,778
|
)
|
|||||
Cash Flows from Financing Activities:
|
||||||||
Issuance of common stock and units, net of issuance costs
|
6,872,789
|
16,681,921
|
||||||
Payment of deferred offering costs
|
(100,000
|
)
|
-
|
|||||
Proceeds from exercise of stock warrants
|
-
|
5,354,093
|
||||||
Proceeds from exercise of stock options
|
-
|
77,500
|
||||||
Net Cash Provided by Financing Activities
|
6,772,789
|
22,113,514
|
||||||
Net Decrease in Cash and Cash Equivalents
|
(154,853
|
)
|
(2,679,319
|
)
|
||||
Cash and Cash Equivalents – beginning of period
|
8,899,154
|
11,578,473
|
||||||
Cash and Cash Equivalents - end of period
|
$
|
8,744,301
|
$
|
8,899,154
|
||||
Supplemental Cash Flow Information
|
||||||||
Non-cash financing and investing activities:
|
||||||||
Warrants issued
|
$
|
4,841,830
|
$
|
6,738,701
|
||||
Warrant liability extinguishment from exercise of warrants
|
$
|
-
|
$
|
8,052,594
|
1. |
Operations and Organization
|
2.
|
Summary of Significant Accounting Policies
|
Life
|
Depreciation Method
|
||
Furniture and fixtures
|
7 years
|
straight line
|
|
Office equipment
|
5 years
|
straight line
|
|
Lab equipment
|
5-7 years
|
straight line
|
|
Computer equipment
|
3-5 years
|
straight line
|
|
Leasehold improvements
|
3-5 years
|
straight line
|
3.
|
Marketable Securities
|
December 31, 2018
|
||||||||||||||||
Cost
|
Gross
Unrealized
|
Gross
Unrealized
|
Fair
|
|||||||||||||
Basis
|
Gains
|
Losses
|
Value
|
|||||||||||||
Corporate Bonds
|
$
|
5,999,356
|
$
|
-
|
$
|
(17,836
|
)
|
$
|
5,981,520
|
December 31, 2017
|
||||||||||||||||
Cost
|
Gross
Unrealized
|
Gross
Unrealized
|
Fair
|
|||||||||||||
Basis
|
Gains
|
Losses
|
Value
|
|||||||||||||
Commercial Paper
|
$
|
3,241,005
|
$
|
-
|
$
|
(2,505
|
)
|
$
|
3,238,500
|
|||||||
Corporate Bonds
|
14,747,822
|
-
|
(54,381
|
)
|
14,693,441
|
|||||||||||
Total Marketable Securities
|
$
|
17,988,827
|
$
|
-
|
$
|
(56,886
|
)
|
$
|
17,931,941
|
4.
|
Prepaid Expenses and Other Current Assets
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Deposits on contracts
|
$
|
618,417
|
$
|
793,940
|
||||
Prepaid expenses and other current assets
|
555,430
|
510,601
|
||||||
$
|
1,173,847
|
$
|
1,304,541
|
5.
|
Equipment, Net
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Furniture and fixtures
|
$
|
82,686
|
$
|
82,686
|
||||
Office and computer equipment
|
159,489
|
171,724
|
||||||
Lab equipment
|
447,653
|
445,134
|
||||||
Leasehold improvements
|
131,762
|
133,762
|
||||||
Total equipment
|
821,590
|
833,306
|
||||||
Less: Accumulated depreciation and amortization
|
(709,117
|
)
|
(711,846
|
)
|
||||
Net carrying amount
|
$
|
112,473
|
$
|
121,460
|
6. |
Accounts Payable and Accrued Expenses
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Trade payables
|
$
|
547,519
|
$
|
895,638
|
||||
Accrued expenses
|
140,637
|
95,416
|
||||||
Accrued research and development contract costs
|
1,782,131
|
1,435,109
|
||||||
Payroll liabilities
|
682,263
|
807,763
|
||||||
$
|
3,152,550
|
$
|
3,233,926
|
7. |
Deferred Research and Development Arrangement
|
8.
|
Other Liabilities
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Deferred lease incentive
|
$
|
154,660
|
$
|
154,660
|
||||
Less accumulated amortization
|
(148,438
|
)
|
(135,995
|
)
|
||||
Balance
|
$
|
6,222
|
$
|
18,665
|
9. |
Net Loss per Common Share
|
10. |
Common Stock
|
Gross Proceeds:
|
$
|
10,000,003
|
||
Allocated to warrant liabilities
|
3,673,168
|
|||
Allocated to common stock and additional paid-in capital
|
6,326,835
|
|||
Total allocated gross proceeds:
|
$
|
10,000,003
|
Gross Proceeds:
|
$
|
8,000,007
|
||
Allocated to warrant liabilities
|
2,360,459
|
|||
Allocated to common stock and additional paid-in capital
|
5,639,548
|
|||
Total allocated gross proceeds:
|
$
|
8,000,007
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Compensatory shares issued
|
15,000
|
15,000
|
||||||
Aggregate market value
|
$
|
22,650
|
$
|
31,200
|
11.
|
Stock-Based Compensation
|
For the Year Ended
December 31,
|
||||||||
2018
|
2017
|
|||||||
Statement of operations line item:
|
||||||||
General and administrative
|
$
|
883,855
|
$
|
765,726
|
||||
Research and development
|
344,480
|
278,441
|
||||||
Total
|
$
|
1,228,335
|
$
|
1,044,167
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Black-Scholes assumptions
|
||||||||
Expected dividend yield
|
0
|
%
|
0
|
%
|
||||
Expected volatility
|
69-73
|
%
|
69-79
|
%
|
||||
Risk-free interest rate
|
2.3-2.9
|
%
|
1.7-2.0
|
%
|
||||
Expected term (in years)
|
5.5-6 years
|
5.5-6 years
|
Number of
Options
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding, January 1, 2018
|
1,814,231
|
$
|
5.33
|
7.1 years
|
$
|
53,883
|
|||||||
Granted
|
1,483,185
|
$
|
1.60
|
||||||||||
Exercised
|
-
|
$
|
-
|
||||||||||
Expired
|
(56,000
|
)
|
$
|
14.04
|
|||||||||
Cancelled
|
(169,695
|
)
|
$
|
3.14
|
|||||||||
Outstanding, December 31, 2018
|
3,071,721
|
$
|
3.49
|
7.8 years
|
$
|
-
|
|||||||
Exercisable, December 31, 2018
|
1,493,365
|
$
|
5.39
|
6.2 years
|
$
|
-
|
2018
|
||||||||
Number of
Options
|
Weighted Average Fair
Value at Grant Date
|
|||||||
Unvested at January 1, 2018
|
727,543
|
$
|
2.39
|
|||||
Granted
|
1,483,185
|
$
|
1.04
|
|||||
Vested
|
(513,177
|
)
|
$
|
2.67
|
||||
Cancelled
|
(119,195
|
)
|
$
|
1.49
|
||||
Unvested at December 31, 2018
|
1,578,356
|
$
|
1.10
|
Number of RSUs
|
Weighted
Average Grant
Date Fair Value
|
|||||||
Outstanding, January 1, 2018
|
47,300
|
$
|
1.84
|
|||||
Granted
|
-
|
$
|
-
|
|||||
Vested and Released
|
(18,075
|
)
|
$
|
1.84
|
||||
Cancelled
|
(12,500
|
)
|
$
|
1.84
|
||||
Outstanding, December 31, 2018
|
16,725
|
$
|
1.84
|
12.
|
Warrants
|
Number of Warrants:
|
|||||||||||||
Warrant Issuance
|
December 31,
2018
|
December 31,
2017
|
Exercise
Price
|
Expiration
Date
|
|||||||||
Liability-classified Warrants
|
|||||||||||||
July 2013 Investor Warrants
|
-
|
200,000
|
$
|
5.90
|
July 2018
|
||||||||
October 2013 Investor Warrants
|
-
|
231,732
|
$
|
5.75
|
Oct. 2018
|
||||||||
January 2014 Investor Warrants
|
476,193
|
476,193
|
$
|
12.80
|
Jan. 2019
|
||||||||
November 2015 Investor Warrants
|
1,250,001
|
1,250,001
|
$
|
5.30
|
May 2021
|
||||||||
November 2015 Placement Agent Warrants
|
3,334
|
3,334
|
$
|
5.30
|
Nov. 2020
|
||||||||
March 2016 Investor Warrants
|
607,806
|
607,806
|
$
|
4.20
|
Sept. 2021
|
||||||||
September 2016 Investor Warrants
|
805,000
|
805,000
|
$
|
3.00
|
Mar. 2022
|
||||||||
June 2017 Investor Warrants
|
1,515,152
|
1,515,152
|
$
|
4.00
|
Dec. 2022
|
||||||||
June 2017 Placement Agent Warrants
|
181,818
|
181,818
|
$
|
4.13
|
Jun. 2022
|
||||||||
October 2017 Investor Warrants
|
1,632,654
|
1,632,654
|
$
|
2.85
|
Apr. 2023
|
||||||||
October 2017 Placement Agent Warrants
|
195,919
|
195,919
|
$
|
3.06
|
Oct. 2022
|
||||||||
Total liability classified warrants
|
6,667,877
|
7,099,609
|
|||||||||||
Equity-classified Warrants
|
|||||||||||||
October 2018 Investor Warrants
|
5,769,231
|
-
|
$
|
1.67
|
Apr. 2024
|
||||||||
October 2018 Placement Agent Warrants
|
346,154
|
-
|
$
|
1.63
|
Oct. 2023
|
||||||||
Total equity-classified warrants
|
6,115,385
|
-
|
|||||||||||
Total outstanding warrants
|
12,783,262
|
7,099,609
|
Number of Warrants
|
||||||||||||||||
Liability-
classified
|
Equity-
classified
|
Total
|
Weighted
average exercise
price
|
|||||||||||||
Balance, January 1
|
7,099,609
|
-
|
7,099,609
|
$
|
4.55
|
|||||||||||
Issued during the period
|
-
|
6,115,385
|
6,115,385
|
$
|
1.67
|
|||||||||||
Exercised during the period
|
-
|
-
|
-
|
$
|
-
|
|||||||||||
Expired during the period
|
(431,732
|
)
|
-
|
(431,732
|
)
|
$
|
5.82
|
|||||||||
Balance, December 31
|
6,667,877
|
6,115,385
|
12,783,262
|
$
|
4.55
|
Fair Value as of:
|
||||||||
Warrant Issuance:
|
December 31, 2018
|
December 31, 2017
|
||||||
July 2013 Investor Warrants
|
$
|
-
|
$
|
8,762
|
||||
October 2013 Investor Warrants
|
-
|
26,288
|
||||||
January 2014 Investor Warrants
|
-
|
29,257
|
||||||
November 2015 Investor Warrants
|
234,918
|
1,260,050
|
||||||
November 2015 Placement Agent Warrants
|
435
|
2,936
|
||||||
March 2016 Investor Warrants
|
160,099
|
697,554
|
||||||
September 2016 Investor Warrants
|
333,834
|
1,054,083
|
||||||
June 2017 Investor Warrants
|
623,324
|
1,981,864
|
||||||
June 2017 Placement Agent Warrants
|
65,149
|
221,591
|
||||||
October 2017 Investor Warrants
|
801,551
|
2,305,552
|
||||||
October 2017 Placement Agent Warrants
|
88,276
|
265,698
|
||||||
Total:
|
$
|
2,307,586
|
$
|
7,853,635
|
December 31, 2018
|
December 31, 2017
|
|||||||
Trading market prices
|
$
|
0.93
|
$
|
2.02
|
||||
Estimated future volatility
|
105
|
%
|
104
|
%
|
||||
Dividend
|
-
|
-
|
||||||
Estimated future risk-free rate
|
2.35-2.53
|
%
|
2.14-2.45
|
%
|
||||
Equivalent volatility
|
99-104
|
%
|
85-104
|
%
|
||||
Equivalent risk-free rate
|
2.51-2.55
|
%
|
1.30-1.89
|
%
|
For the Year Ended December 31,
|
||||||||
2018
|
2017
|
|||||||
Expired and Fully Exercised Warrants
|
$
|
-
|
$
|
(855,000
|
)
|
|||
July 2013 Investor Warrants
|
8,762
|
(6,702
|
)
|
|||||
October 2013 Investor Warrants
|
26,288
|
(22,580
|
)
|
|||||
January 2014 Investor Warrants
|
29,257
|
(28,543
|
)
|
|||||
November 2015 Investor Warrants
|
1,025,132
|
(999,550
|
)
|
|||||
November 2015 Placement Agent Warrants
|
2,501
|
(365,748
|
)
|
|||||
March 2016 Investor Warrants
|
537,455
|
(2,708,163
|
)
|
|||||
September 2016 Investor Warrants
|
720,249
|
(4,571,872
|
)
|
|||||
June 2017 Investor Warrants
|
1,358,540
|
1,691,304
|
||||||
June 2017 Placement Agent Warrants
|
156,442
|
212,729
|
||||||
October 2017 Investor Warrants
|
1,504,001
|
54,907
|
||||||
October 2017 Placement Agent Warrants
|
177,422
|
5,056
|
||||||
Total:
|
$
|
5,546,049
|
$
|
(7,594,162
|
)
|
13.
|
Income Taxes
|
December 31,
|
December 31,
|
|||||||
2018
|
2017
|
|||||||
Net Operating Loss Carryforwards
|
$
|
41,184,000
|
$
|
35,805,000
|
||||
Stock Compensation Expense
|
1,608,000
|
1,458,000
|
||||||
Book tax differences on assets and liabilities
|
195,000
|
365,000
|
||||||
Valuation Allowance
|
(42,987,000
|
)
|
(37,628,000
|
)
|
||||
Net Deferred Tax Assets
|
$
|
-
|
$
|
-
|
14.
|
Collaboration Agreements
|
15.
|
Commitments and Contingencies
|
a) |
The Company has contracted with various vendors for research and development services, with terms
that require payments over the term of the agreements, usually ranging from two to 36 months. The costs to be incurred are estimated and are subject to revision. As of December 31, 2018, the total estimated cost to complete
these agreements was approximately $6,340,000. All of these agreements may be terminated by either party upon appropriate notice as stipulated in the
respective agreements.
|
b) |
On June 22, 2009, the Company entered into a License Agreement with Korea Research Institute of Chemical Technology (“KRICT”) to acquire the rights to all
intellectual property related to quinoxaline-piperazine derivatives that were synthesized under a Joint Research Agreement. The initial license fee was $100,000, all of which was paid as of December 31, 2009. The agreement
with KRICT calls for a one-time milestone payment of $1,000,000 within 30 days after the first achievement of marketing approval of the first commercial product arising out of or in connection with the use of KRICT’s
intellectual property. As of December 31, 2018, the milestone has not occurred.
|
c) |
Office Space Lease
|
For the year ending December 31:
|
2019
|
176,080
|
|||
|
2020
|
34,468
|
|||
Total
|
$
|
210,548
|
d) |
The Company has established a 401(k) plan for its employees. The Company has elected to match 100% of the first 3% of an employee’s compensation plus 50% of an
additional 2% of the employee’s deferral. Expense related to this matching contribution aggregated to $120,558 and $123,145, for the years ended December 31, 2018 and 2017 respectively.
|
e) |
In July 2013, the Company entered into an exclusive license agreement with the University of Maryland, Baltimore for a novel drug delivery platform. The agreement
required the Company to make payments to the University of Maryland if any products from the licensed delivery platform would have achieved development milestones. In December 2018, the Company terminated the license
agreement. At the time of termination, no development milestones had occurred.
|
f) |
In October 2013, the Company signed an exclusive license agreement with the Ohio State Innovation Foundation, for a novel oligonucleotide drug delivery platform.
The agreement required the Company to make payments to the Ohio State Innovation Foundation if any products from the licensed delivery platform would have achieved development milestones. In December 2018, the Company
terminated the license agreement. At the time of termination, no development milestones had occurred.
|
g) |
On February 5, 2018, the Company and Next BT terminated the research collaboration agreement between the Company and Rexgene. In exchange for Next BT terminating
its rights to RX-0201 in Asia, the Company agreed to pay Next BT a royalty in the low single digits of any net sales of RX-0201 the Company makes in Asia and 50% of the Company’s licensing revenue related to licensing of RX-0201
in Asia, up to an aggregate of $5,000,000.
|
16.
|
Fair Value Measurements
|
Level 1 Inputs
|
—
|
Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;
|
|
Level 2 Inputs
|
—
|
Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or
indirectly;
|
|
Level 3 Inputs
|
—
|
Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.
|
Fair Value Measurements at December 31, 2018
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Corporate Bonds
|
$
|
5,981,520
|
$
|
-
|
$
|
5,981,520
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
2,307,586
|
$
|
-
|
$
|
-
|
$
|
2,307,586
|
Fair Value Measurements at December 31, 2017
|
||||||||||||||||
Total
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Assets:
|
||||||||||||||||
Commercial Paper
|
3,238,500
|
-
|
3,238,500
|
-
|
||||||||||||
Corporate Bonds
|
14,693,441
|
-
|
14,693,441
|
-
|
||||||||||||
Total Assets:
|
$
|
17,931,941
|
$
|
-
|
$
|
17,931,941
|
$
|
-
|
||||||||
Liabilities:
|
||||||||||||||||
Warrant Liabilities
|
$
|
7,853,635
|
$
|
-
|
$
|
-
|
$
|
7,853,635
|
Warrant Liabilities
|
||||
Balance at January 1, 2018
|
$
|
7,853,635
|
||
Additions
|
-
|
|||
Unrealized gains, net
|
(5,546,049
|
)
|
||
Transfers out of level 3
|
-
|
|||
Balance at December 31, 2018
|
$
|
2,307,586
|
Warrant Liabilities
|
||||
Balance at January 1, 2017
|
$
|
1,573,366
|
||
Additions
|
6,738,701
|
|||
Unrealized losses, net
|
7,594,162
|
|||
Transfers out of level 3
|
(8,052,594
|
)
|
||
Balance at December 31, 2017
|
$
|
7,853,635
|
17.
|
Select Quarterly Data (Unaudited)
|
2018
|
||||||||||||||||
For the Quarter Ended
|
||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Expenses
|
5,885,855
|
5,001,441
|
4,683,907
|
4,966,470
|
||||||||||||
Loss from Operations
|
(5,885,855
|
)
|
(5,001,441
|
)
|
(4,683,907
|
)
|
(4,966,470
|
)
|
||||||||
Other Income (Expense), net
|
3,810,982
|
1,163,173
|
(654,912
|
)
|
1,849,900
|
|||||||||||
Net Loss
|
$
|
(2,074,873
|
)
|
$
|
(3,838,268
|
)
|
$
|
(5,338,819
|
)
|
$
|
(3,116,570
|
)
|
||||
Net Loss per share, basic and diluted
|
$
|
(0.07
|
)
|
$
|
(0.12
|
)
|
$
|
(0.17
|
)
|
$
|
(0.09
|
)
|
2017
|
||||||||||||||||
For the Quarter Ended
|
||||||||||||||||
March 31
|
June 30
|
September 30
|
December 31
|
|||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Expenses
|
3,953,241
|
4,283,925
|
4,219,322
|
4,898,229
|
||||||||||||
Loss from Operations
|
(3,953,241
|
)
|
(4,283,925
|
)
|
(4,219,322
|
)
|
(4,898,229
|
)
|
||||||||
Other Income (Expense), net
|
(17,657,783
|
)
|
5,230,981
|
3,181,250
|
1,305,766
|
|||||||||||
Net Income (Loss)
|
$
|
(21,611,024
|
)
|
$
|
947,056
|
$
|
(1,038,072
|
)
|
$
|
(3,592,463
|
)
|
|||||
Net Income (Loss) per share, basic
|
$
|
(0.91
|
)
|
$
|
0.04
|
$
|
(0.04
|
)
|
$
|
(0.12
|
)
|
|||||
Net Income (Loss) per share, diluted
|
$
|
(0.91
|
)
|
$
|
0.03
|
$
|
(0.04
|
)
|
$
|
(0.12
|
)
|
18.
|
Subsequent Events
|
Grantee:
|
||
Grant Date:
|
||
Number of Restricted Stock Units:
|
||
Vesting:
|
So long as Grantee shall be employed by the Company and
Grantee shall not have violated the provisions of this Agreement, and further subject to the provisions of the Plan and this Agreement, Grantee shall become vested in the Shares as follows:
|
|
Grantee:
|
Date:
|
||||
(Signature)
|
|||||
Company:
|
Date:
|
||||
(Signature)
|
|||||
Title:
|
Signature
|
Title
|
Date
|
|
/s/ Douglas J. Swirsky
|
Chief Executive Officer, President and Director
|
March 5, 2019
|
|
Douglas J. Swirsky
|
|||
/s/ Peter Brandt
|
Chairman
|
March 5, 2019
|
|
Peter Brandt
|
|||
/s/ Charles Beever
|
Director
|
March 5, 2019
|
|
Charles Beever
|
|||
/s/ Kwang Soo Cheong
|
Director
|
March 5, 2019
|
|
Kwang Soo Cheong
|
|||
/s/ Ben Gil Price
|
Director
|
March 6, 2019
|
|
Ben Gil Price
|
|||
/s/ Richard J. Rodgers
|
Director
|
March 5, 2019
|
|
Richard J. Rodgers
|
|||
/s/ Lara Sullivan
|
Director
|
March 5, 2019
|
|
Lara Sullivan
|
1. |
I have reviewed this Annual Report on Form 10-K of Rexahn Pharmaceuticals, 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. |
I am 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 my 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 my 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 my 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 annual 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. |
I have disclosed, based on my 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.
|
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Dated: March 7, 2019
|
By:
|
/s/ Douglas J. Swirsky
|
|
Douglas J. Swirsky,
|
|||
Chief Executive Officer and President
|
* |
This Certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title
18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This Certification shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise stated in such filing.
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Mar. 07, 2019 |
Jun. 30, 2018 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Entity Registrant Name | REXAHN PHARMACEUTICALS, INC. | ||
Entity Central Index Key | 0001228627 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Trading Symbol | rnn | ||
Entity Public Float | $ 44,699,663 | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 48,282,995 |
Balance Sheet (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Balance Sheet [Abstract] | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 75,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 37,527,420 | 31,725,114 |
Common Stock, Shares, Outstanding | 37,527,420 | 31,725,114 |
Statement Of Operations - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Statement Of Operations [Abstract] | ||
Revenues: | ||
Expenses: | ||
General and administrative | 7,428,615 | 6,639,421 |
Research and development | 13,109,058 | 10,715,296 |
Total Expenses | 20,537,673 | 17,354,717 |
Loss from Operations | (20,537,673) | (17,354,717) |
Other Income (Expense) | ||
Interest income | 254,344 | 207,003 |
Other income | 368,750 | |
Unrealized gain (loss) on fair value of warrants | 5,546,049 | (7,594,162) |
Financing expense | (552,627) | |
Total Other Income (Expense) | 6,169,143 | (7,939,786) |
Net Loss Before Provision for Income Taxes | (14,368,530) | (25,294,503) |
Provision for income taxes | ||
Net Loss | $ (14,368,530) | $ (25,294,503) |
Net loss per share, basic and diluted | $ (0.44) | $ (0.92) |
Weighted average number of shares outstanding, basic and diluted | 32,915,377 | 27,390,527 |
Statement Of Comprehensive Loss - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Statement Of Comprehensive Loss [Abstract] | ||
Net Loss | $ (14,368,530) | $ (25,294,503) |
Unrealized gain (loss) on available-for-sale securities | 39,050 | (50,764) |
Comprehensive Loss | $ (14,329,480) | $ (25,345,267) |
Operations And Organization |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Operations And Organization [Abstract] | |
Operations And Organization | 1.Operations and Organization Rexahn Pharmaceuticals, Inc. (the “Company”), a Delaware corporation, is a biopharmaceutical company whose principal operations are the development of innovative treatments for cancer. The Company had an accumulated deficit of $154,687,242 at December 31, 2018 and anticipates incurring losses through fiscal year 2019 and beyond. The Company has not yet generated commercial revenues and has funded its operations to date through the sale of shares of its common stock and warrants, exercises of stock warrants, interest income from cash, cash equivalents and marketable securities, and proceeds from reimbursed research and development costs. The Company believes that its cash, cash equivalents and marketable securities, including the proceeds from its underwritten public offering in January 2019 as described in Note 18, will be sufficient to cover its cash flow requirements for its current activities for at least for the next 12 months from the date these financial statements were issued. Management believes it has the capability of managing the Company’s operations within existing cash available by focusing on select research and development activities, selecting projects in conjunction with potential financings and milestones, and efficiently managing its general and administrative affairs.
|
Summary Of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | ||||||||||||||||||||||
Summary Of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||
Summary Of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results may ultimately differ from these estimates. These estimates are reviewed periodically and as adjustments become necessary, they are reported in earnings in the period in which they become available. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and short‑term investments purchased with remaining maturities of three months or less at acquisition. Marketable Securities Marketable securities are considered “available-for-sale” in accordance with Financial Statement Accounting Board (“FASB”) Accounting Standards Codification (“ASC”) 320, “Debt and Equity Securities,” and thus are reported at fair value in the Company’s accompanying balance sheet, with unrealized gains and losses excluded from earnings and reported as a separate component of stockholders’ equity. Amounts reclassified out of accumulated other comprehensive loss into realized gains and losses are accounted for on the basis of specific identification and are included in other income or expense in the statement of operations. The Company classifies such investments as current on the balance sheet as the investments are readily marketable and available for use in the Company’s current operations.
Equipment Equipment is stated at cost less accumulated depreciation. Depreciation, based on the lesser of the term of the lease or the estimated useful life of the assets, is provided as follows:
Fair Value of Financial Instruments The carrying amounts reported in the accompanying financial statements for cash and cash equivalents and accounts payable and accrued expenses approximate fair value because of the short‑term maturity of these financial instruments. The fair value of warrant liabilities is discussed in Note 12, and the fair value of marketable securities and certain other assets and liabilities is discussed in Note 16. Warrants The Company classifies its stock warrants as either liability or equity instruments in accordance with ASC 480, “Distinguishing Liabilities from Equity” (ASC 480), depending on the specific terms of the warrant agreement. Warrants that the Company may be required to redeem through payment of cash or other assets outside its control are classified as liabilities pursuant to ASC 480 and are initially and subsequently measured at their estimated fair values. Stock warrants are also classified as warrant liabilities in accordance with ASC 815, “Derivatives and Hedging” (ASC 815) if the warrant contains terms that could require “net cash settlement” and therefore, do not meet the conditions necessary for equity classification according to ASC 815. Warrant instruments that could require “net cash settlement” in the absence of express language precluding such settlement are initially classified as warrant liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash. The Company will continue to record liability-classified warrants at fair value until the warrants are exercised, expire or are amended in a way that would no longer require these warrants to be classified as a liability. For additional discussion on warrants, see Note 12. Research and Development Research and development costs are expensed as incurred. Research and development expenses consist primarily of third party service costs under research and development agreements, salaries and related personnel costs, including stock-based compensation, costs to acquire pharmaceutical products and product rights for development and amounts paid to contract research organizations, hospitals and laboratories for the provision of services and materials for drug development and clinical trials. Costs incurred in obtaining the licensing rights to technology in the research and development stage that have no alternative future uses and are for unapproved product compounds are expensed as incurred.
Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. ASC 740 requires that a valuation allowance be established when it is more likely than not that all portions of a deferred tax asset will not be realized. A review of all positive and negative evidence needs to be considered, including a company’s current and past performance, the market environment in which the company operates, length of carryback and carryforward periods and existing contracts that will result in future profits. Income tax expense is recorded for the amount of income tax payable or refundable for the period, increased or decreased by the change in deferred tax assets and liabilities during the period. As a result of the Company’s significant cumulative losses, the Company determined that it was appropriate to establish a valuation allowance for the full amount of net deferred tax assets. The calculation of the Company’s tax liabilities involves the inherent uncertainty associated with the application of complex tax laws. The Company is subject to examination by various taxing authorities. The Company believes that, as a result of its loss carryforward sustained to date, any examination would result in a reduction of its net operating losses rather than a tax liability. As such, the Company has not provided for any additional taxes that would be estimated under ASC 740. Stock-Based Compensation In accordance with ASC 718, “Stock Compensation,” compensation costs related to share-based payment transactions, including employee stock options, are to be recognized in the financial statements. In addition, the Company adheres to the guidance set forth within U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 107, which provides the Staff’s views regarding the interaction between ASC 718 and certain SEC rules and regulations, and provides interpretations with respect to the valuation of share-based payments for public companies. For additional discussion on stock-based compensation, see Note 11. Concentration of Credit Risk ASC 825, “Financial Instruments,” requires disclosure of any significant off balance sheet risk and credit risk concentration. The Company does not have significant off‑balance sheet risk or credit concentration. The Company maintains cash and cash equivalents with major financial institutions. From time to time the Company has funds on deposit with commercial banks that exceed federally insured limits. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At December 31, 2018, the Company’s uninsured cash balance was $8,494,301. Management does not consider this to be a significant credit risk as the banks are large, established financial institutions.
Reclassification Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year presentation with no material impact on the financial statements. Recent Accounting Pronouncements Affecting the Company Revenue from Contracts with Customers In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. generally accepted accounting standards. The standard’s core principle is that a company should recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services and provides a revenue recognition framework in accordance with this principle. On August 12, 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year to December 15, 2017 for annual reporting periods beginning after that date and interim periods therein. The Company adopted this guidance for the quarterly reporting period ended March 31, 2018, using the modified retrospective method. As the Company does not have revenue contracts, the adoption of this guidance did not have a material impact on the operating results of the Company, there were no significant changes to disclosures and there was no cumulative adjustment to the opening balance of retained earnings as of January 1, 2018. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company elected not to early adopt the standard, and therefore, will adopt the standard on January 1, 2019. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We are not electing the hindsight practical expedient. We will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. We estimate adoption of the standard will result in recognition of additional net lease assets and lease liabilities, after the effect of the lease modifications discussed in Note 18, the amount of both of which will not be material, , and there will be no impact on the accumulated deficit. We do not believe the new standard will have a notable impact on our liquidity.
|
Marketable Securities |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities |
3. Marketable Securities
The following table shows the Company’s marketable securities’ adjusted cost, gross unrealized gains and losses, and fair value by significant investment category as of December 31, 2018 and 2017:
The Company typically invests in highly rated securities, with the primary objective of minimizing the potential risk of principal loss. As of December 31, 2018, the Company had six corporate bonds with an aggregate fair value of $5,981,520 and unrealized losses of $17,836, all of which have been unrealized losses for greater than 12 months. The Company does not intend to sell its marketable securities in an unrealized loss position. Based upon the Company’s securities’ fair value relative to the cost, high ratings and volatility of fair value, the Company considers the declines in market value of its marketable securities to be temporary in nature and does not consider any of its investments other-than-temporarily impaired, and anticipates that it will recover the entire amortized cost basis. As of December 31, 2018, all of the Company’s marketable securities are due to mature in less than one year.
|
Prepaid Expenses And Other Current Assets |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses And Other Current Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses And Other Current Assets | 4. Prepaid Expenses and Other Current Assets
Deposits on contracts consist of deposits on research and development contracts for services that had not been incurred as of the balance sheet date. Prepaid expenses and other assets include prepaid general and administrative expenses, such as insurance, rent, investor relations fees and compensatory stock issued for services not yet incurred as of the balance sheet date.
|
Equipment, Net |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equipment, Net | 5. Equipment, Net
|
Accounts Payable And Accrued Expenses |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable And Accrued Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable And Accrued Expenses | 6.Accounts Payable and Accrued Expenses
|
Deferred Research And Development Arrangement |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Deferred Research And Development Arrangement [Abstract] | |
Deferred Research And Development Arrangement | 7. Deferred Research and Development Arrangement Rexgene Biotech Co., Ltd.
In 2003, the Company entered into a collaborative research agreement with Rexgene Biotech Co., Ltd. (“Rexgene”), which agreed to assist the Company with the research, development and clinical trials necessary for registration of the Company’s product candidate RX-0201 in Asia. In accordance with the agreement, Rexgene paid the Company a one-time fee of $1,500,000 in 2003. The agreement provided that it would expire upon the later of (i) 20 years after the date of the agreement or (ii) the expiration of the patents relating to RX-0201. The amortization reduces research and development expenses for the periods presented. The payment from Rexgene was used in the cooperative funding of the costs of development of RX-0201. On February 5, 2018, the Company and NEXT BT Co. Ltd. (“Next BT”), the successor in interest to Rexgene, terminated the agreement. In exchange for Next BT terminating its rights to RX-0201 in Asia, the Company agreed to pay Next BT a royalty in the low single digits of any net sales of RX-0201 the Company makes in Asia and 50% of the Company’s licensing revenue related to the licensing of RX-0201 in Asia, up to an aggregate of $5,000,000. Upon termination of the agreement, the unamortized deferred research and development arrangement liability of $368,750 was eliminated and recognized as other income. The Company historically used 20 years as its basis for recognition and accordingly research and development expenses were reduced by $6,250 for the period beginning January 1, 2018 up to the agreement’s termination. For the year ended December 31, 2017, $75,000 was reduced from research and development expenses.
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Other Liabilities |
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Other Liabilities | 8. Other Liabilities Deferred Lease Incentive In accordance with the Company’s office lease agreement, as amended and further discussed in Note 15, the Company has been granted leasehold improvement allowances from the lessor to be used for the construction cost of improvements to the leased property. The Company accounted for the benefit of the leasehold improvement allowance as a reduction of rental expense over the term of the office lease. The following table sets forth the cumulative deferred lease incentive:
Deferred Rent
The lease agreement, as amended, provided for an initial annual base rent with annual increases over the lease term. The Company recognizes rental expense on a straight-line basis over the term of the lease, which resulted in a deferred rent liability of $13,678 and $38,059 as of December 31, 2018 and 2017, respectively.
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Net Loss Per Common Share |
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Dec. 31, 2018 | |
Net Loss Per Common Share [Abstract] | |
Net Loss Per Common Share | 9.Net Loss per Common Share Basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. Diluted loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding, plus the number of common share equivalents that would be dilutive. As of December 31, 2018 and 2017, there were stock options, restricted stock units and warrants to acquire, in the aggregate, 15,871,708 and 8,961,140 shares of the Company’s common stock, respectively, that are potentially dilutive. However, diluted loss per share for all periods presented is the same as basic loss per share for those periods because the inclusion of common share equivalents would be anti-dilutive.
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Common Stock |
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Common Stock | 10.Common Stock The following transactions occurred during the years ended December 31, 2018 and 2017: Reverse Stock Split On May 5, 2017, the Company effected a one-for-ten reverse stock split of the outstanding shares of the Company’s common stock, together with a corresponding proportional reduction in the number of authorized shares of the Company’s capital stock. All share and per share amounts of common stock, stock options, stock warrants and restricted stock units have been restated for periods to give retroactive effect to the reverse stock split. Authorized Shares On August 30, 2018, the Company’s stockholders approved an increase in the Company’s authorized shares of stock from 50,000,000 to 75,000,000. Public Offerings June 2017 On June 12, 2017 the Company closed a registered direct public offering of 3,030,304 shares of common stock and warrants to purchase up to 1,515,152 shares of common stock. The common stock and warrants were sold in units, consisting of a share of common stock and a warrant to purchase 0.5 shares of common stock, at a price of $3.30 per unit, with an exercise price for the warrants of $4.00 per share. The total gross proceeds of the offering were $10,000,003. The warrants issued became exercisable December 12, 2017, and will remain exercisable until December 12, 2022 and were recorded as liabilities at fair value. A summary of the allocation of the proceeds of the offering is shown below:
The Company also issued warrants to purchase up to an aggregate 181,818 shares of common stock to the placement agent in the offering. The closing costs for the offering of $1,193,052 included $434,320 for the placement agent warrants and $758,732 for placement agent and other fees. Based on the estimated fair value of the stock and warrants in the units, the Company allocated $333,050 to financing expense for the warrants and $860,002 as stock issuance costs.
October 2017 On October 17, 2017 the Company closed a registered direct public offering of 3,265,309 shares of common stock and warrants to purchase up to 1,632,654 shares of common stock. The common stock and warrants were sold in units, consisting of a share of common stock and a warrant to purchase 0.5 shares of common stock, at a price of $2.45 per unit, with an exercise price for the warrants of $2.85 per share. The total gross proceeds of the offering were $8,000,007. The warrants issued became exercisable April 17, 2018 and will remain exercisable until April 17, 2023 and were recorded as liabilities at fair value. A summary of the allocation of the proceeds of the offering is shown below:
The Company also issued warrants to purchase up to an aggregate 195,919 shares of common stock to the placement agent in the offering. The closing costs for the offering of $830,111 included $270,754 for the placement agent warrants and $559,357 for placement agent and other fees. Based on the estimated fair value of the stock and warrants in the units, the Company allocated $219,577 to financing expense for the warrants and $610,534 as stock issuance costs. October 2018 On October 19, 2018, the Company closed a registered direct offering of 5,769,231 shares of common stock and warrants to purchase up to 5,769,231 shares of common stock, resulting in gross proceeds to the Company of approximately $7,500,000. The common stock and warrants were sold in units, consisting of a share of common stock and a warrant to purchase a share of common stock, at a price of $1.30 per unit, with an exercise price for the warrants of $1.67 per share. The warrants will become exercisable April 19, 2019 and will remain exercisable through April 19, 2024. The Company also issued warrants to purchase up to 346,154 shares of the Company’s common stock, at an exercise price of $1.625 per share, to designees of the placement agent in the offering. The warrants issued to the investors and to the placement agent are classified as equity instruments. The closing costs of this offering of $896,117 included $286,906 for the placement agent warrants and $627,211 in placement agent and other fees that are recorded as a reduction of the gross proceeds of the offering.
Compensatory Shares The Company issued restricted shares to a vendor in exchange for services. The table below summarizes the shares issued and related market value:
Stock Warrant and Stock Option Exercises During the year ended December 31, 2017, warrant holders exercised warrants to purchase shares of the Company’s common stock for cash of $5,354,093 and the Company issued 1,652,623 shares. During the year ended December 31, 2017, a stock option holder exercised options to purchase shares of the Company’s common stock for cash of $77,500 and the Company issued 25,000 shares. Restricted Stock Units During the year ended December 31, 2018, the Company issued 18,075 shares resulting from the vesting of restricted stock units (“RSUs”).
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Stock-Based Compensation |
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Stock-Based Compensation | 11. Stock-Based Compensation As of December 31, 2018, the Company had 3,071,721 options to purchase common stock and 16,725 RSUs outstanding. On June 10, 2013, the Company’s stockholders voted to approve the Rexahn Pharmaceuticals, Inc. 2013 Stock Option Plan (the “2013 Plan”). Under the 2013 Plan, the Company grants equity awards to key employees, directors and consultants of the Company. On June 9, 2016, the Company’s stockholders voted to approve an amendment and restatement of the 2013 Plan, including to provide for awards of restricted stock and restricted stock units. The Company initially reserved 1,700,000 shares of common stock for issuance pursuant to the 2013 Plan, and on April 11, 2017, the Company’s stockholders approved an increase of 1,700,000 shares of common stock reserved for issuance pursuant to the 2013 Plan. As of December 31, 2018, there were 2,790,721 options and 16,725 RSUs outstanding under the 2013 Plan, and 573,729 shares were available for issuance. On August 5, 2003, the Company established a stock option plan (the “2003 Plan”). Under the 2003 Plan, the Company granted stock options to key employees, directors and consultants of the Company. With the adoption of the 2013 Plan, no new stock options may be issued under the 2003 Plan, but previously issued options under the 2003 Plan remain outstanding until their expiration. As of December 31, 2018, there were 269,000 outstanding options under the 2003 Plan. In March 2016, the Company granted to a third party an option to purchase up to 12,000 shares of the Company’s common stock. Of the Company’s outstanding options as of December 31, 2018, these were the only options that were not issued pursuant to the 2013 Plan or the 2003 Plan. Accounting for Awards Stock-based compensation expense is the estimated fair value of options and RSUs granted amortized on a straight-line basis over the requisite vesting service period for the entire portion of the award. Total stock-based compensation recognized by the Company for the years ended December 31, 2018 and 2017 is as follows:
No income tax benefit has been recognized in the statement of operations for stock-based compensation arrangements as the Company has provided for a 100% valuation allowance on its net deferred tax assets.
Summary of Stock Option Transactions There were 1,483,185 stock options granted at exercise prices ranging from $1.09 to $2.29, with an aggregate fair value of $1,540,866, during the year ended December 31, 2018. There were 483,260, stock options granted at exercise prices ranging from $1.84 to $6.18, with an aggregate fair value of $738,937 during the year ended December 31, 2017. For the majority of the grants to employees, the vesting period is 25% on the first anniversary of the grant date and, thereafter, one thirty-sixth of the remaining option vests in equal installments on the first business day of each month until fully vested. Options generally expire ten years from the date of grant. For the majority of grants to non-employee consultants of the Company, the vesting period is between one and three years, subject to the fulfillment of certain conditions in the individual stock agreements, or 100% upon the occurrence of certain events specified in the individual stock agreements. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. The Company took into consideration guidance under ASC 718 and SAB 107 when reviewing and updating assumptions. Significant assumptions are determined as follows: Expected Term. The expected term is estimated using the simplified method whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. Volatility. Volatility is based on the historical trading volatility of the Company’s stock on the date of grant for a period consistent with the expected term. Risk-Free Interest Rate. The risk-free interest rate is based on the zero-coupon U.S. Treasury instruments on the date of grant with a maturity date consistent with the expected term of the Company’s stock option grants. Expected Dividend. To date, the Company has not declared or paid any cash dividends and do not have any plans to do so in the future. Therefore, the Company used an expected dividend yield of zero. The assumptions made in calculating the fair values of options are as follows:
The following table summarizes share-based transactions:
There were no stock options exercised during the year ended December 31, 2018. The total intrinsic value of options exercised was $97,872 for the year ended December 31, 2017. The weighted average fair value of options granted was $1.04 and $1.53 for the years ended December 31, 2018 and 2017, respectively. A summary of the Company’s unvested options as of December 31, 2018 and changes during the year ended December 31, 2018 is presented below:
As of December 31, 2018, there was $1,393,837 of total unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average vesting period of 2.9 years.
Summary of Restricted Stock Unit Transactions The fair value of an RSU award is the closing price of the Company’s common stock on the date of grant. A summary of RSU activity for the year ended December 31, 2018 is as follows:
As of December 31, 2018, there was $21,774 of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted average vesting period of 2.2 years.
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Warrants |
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Warrants | 12. Warrants The following table summarizes the Company’s outstanding warrants to purchase common stock as of December 31, 2018 and 2017:
The following table summarizes the Company’s warrant activity for the year ended December 31, 2018:
At December 31, 2018, the weighted average remaining contractual life of the outstanding warrants was 4.2 years. Accounting for Liability-classified Warrants The warrants issued to investors in the November 2015, March 2016 and September 2016 offerings contain a provision for net cash settlement in the event of a fundamental transaction (contractually defined to include a merger, sale of substantially all assets, tender offer or share exchange). Pursuant to the November 2015, March 2016, and September 2016 warrants, if a fundamental transaction occurs, then the warrant holder has the option to receive cash, equal to the fair value of the remaining unexercised portion of the warrant. In addition, the warrants from these three offerings and the June 2017 and October 2017 warrants contain a cashless exercise provision that is exercisable only in the event that a registration statement is not effective. That provision may not be operative if an effective registration statement is not available because an exemption under the U.S. securities laws may not be available to issue unregistered shares. As a result, net cash settlement may be required, and these warrants require liability classification. ASC 820 provides requirements for disclosure of liabilities that are measured at fair value on a recurring basis in periods subsequent to the initial recognition. Fair values for warrants were determined using the Binomial Lattice (“Lattice”) valuation technique. The Lattice model provides for dynamic assumptions regarding volatility and risk-free interest rates within the total period to maturity. Accordingly, within the contractual term, the Company provided multiple date intervals over which multiple volatilities and risk-free interest rates were used. These intervals allow the Lattice model to project outcomes along specific paths that consider volatilities and risk-free rates that would be more likely in an early exercise scenario. Significant assumptions are determined as follows: Trading market values—Published trading market values; Exercise price—Stated exercise price; Term—Remaining contractual term of the warrant; Volatility—Historical trading volatility for periods consistent with the remaining terms; and Risk-free rate—Yields on zero coupon government securities with remaining terms consistent with the remaining terms of the warrants. Due to the fundamental transaction provision, which could provide for early redemption of the warrants, the model also considered the probability the Company would enter into a fundamental transaction during the remaining term of the warrant. Because the Company is not yet achieving positive cash flow, management believes the probability of a fundamental transaction occurring over the term of the warrant is unlikely and therefore estimates the probability of entering into a fundamental transaction to be 5%. For valuation purposes, the Company also assumed that if such a transaction did occur, it was more likely to occur towards the end of the term of the warrants. The significant unobservable inputs used in the fair value measurement of the warrants include management’s estimate of the probability that a fundamental transaction may occur in the future. Significant increases (decreases) in the probability of occurrence would result in a significantly higher (lower) fair value measurement.
The following table summarizes the fair value of the warrants as of the respective balance sheet dates:
The assumptions used in calculating the fair values of the warrants are as follows:
Changes in the fair value of the warrant liabilities, carried at fair value, as reported as “unrealized gain (loss) on fair value of warrants” in the statement of operations:
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Income Taxes |
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Income Taxes | 13. Income Taxes No provision for federal and state income taxes was required for the years ended December 31, 2018 and 2017 due to the Company’s operating losses and increased deferred tax asset valuation allowance. At December 31, 2018 and 2017, the Company had unused net operating loss carry-forwards of approximately $147,086,000 and $127,877,000 respectively, portions of which expire at various dates beginning in 2021. Some of this amount may be subject to annual limitations under certain provisions of the Internal Revenue Code related to “changes in ownership.” As of December 31, 2018 and 2017, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, because significant utilization of such amounts is not presently expected in the foreseeable future. Deferred tax assets and valuation allowances consist of:
The Company files income tax returns in the U.S. federal and Maryland state jurisdictions. Tax years for fiscal 2015 through 2018 are open and potentially subject to examination by the federal and Maryland state taxing authorities.
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Collaboration Agreements |
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Collaboration Agreements [Abstract] | |
Collaboration Agreements | 14. Collaboration Agreements
Merck Sharp & Dohme B.V. On August 16, 2018, the Company entered into a clinical trial collaboration and supply agreement (the “Collaboration Agreement”) with Merck Sharp & Dohme B.V. (“Merck”) to conduct a Phase 2 clinical trial to evaluate the safety and efficacy of the combination of RX-5902 with Merck’s anti-PD‑1 therapy, KEYTRUDA (pembrolizumab), in patients with metastatic triple negative breast cancer (TNBC). Under the terms of the Collaboration Agreement, the Company will sponsor the clinical trial and Merck will supply the Company with KEYTRUDA for use in the trial at no cost to the Company. The Collaboration Agreement provides that the Company and Merck will jointly own clinical data generated from the clinical trial. The Company is currently evaluating the development strategy for RX-5902 and may or may not proceed with this trial. Zhejiang Haichang Biotechnology Co., Ltd. On February 8, 2018, the Company entered into a research and development collaboration agreement with Zhejiang Haichang Biotechnology Co., Ltd. (“Haichang”) under which Haichang will develop RX-0301, a nano-liposomal formulation of RX-0201, using its proprietary QTsome™ technology and will conduct certain preclinical and clinical activities through completion of a Phase 2a proof-of-concept clinical trial in hepatocellular carcinoma in China.
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Commitments And Contingencies |
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Commitments And Contingencies | 15.Commitments and Contingencies a)The Company has contracted with various vendors for research and development services, with terms that require payments over the term of the agreements, usually ranging from two to 36 months. The costs to be incurred are estimated and are subject to revision. As of December 31, 2018, the total estimated cost to complete these agreements was approximately $6,340,000. All of these agreements may be terminated by either party upon appropriate notice as stipulated in the respective agreements. b)On June 22, 2009, the Company entered into a License Agreement with Korea Research Institute of Chemical Technology (“KRICT”) to acquire the rights to all intellectual property related to quinoxaline-piperazine derivatives that were synthesized under a Joint Research Agreement. The initial license fee was $100,000, all of which was paid as of December 31, 2009. The agreement with KRICT calls for a one-time milestone payment of $1,000,000 within 30 days after the first achievement of marketing approval of the first commercial product arising out of or in connection with the use of KRICT’s intellectual property. As of December 31, 2018, the milestone has not occurred. c)Office Space Lease On June 5, 2009, the Company entered into a commercial lease agreement for 5,466 square feet of office space in Rockville, Maryland. The lease was amended on June 7, 2013 to extend the term until June 30, 2019. On July 26, 2014, the lease was amended to add 1,727 square feet of office space, for a term beginning on September 1, 2014 and ending on August 31, 2015. The lease of additional space was subsequently renewed through June 30, 2019. Under the lease agreement, the Company pays its allocable portion of real estate taxes and common area operating charges. Rent paid under the Company’s lease during the years ended December 31, 2018 and 2017 was $213,321 and $206,667, respectively. Laboratory Lease On April 20, 2015, the Company signed a five-year lease agreement for 2,552 square feet of laboratory space commencing on July 1, 2015 and ending on June 30, 2020. Under the lease agreement, the Company pays its allocable portion of real estate taxes and common area operating charges. Rent paid under this lease during the years ended December 31, 2018 and 2017 was $65,953 and $64,032, respectively.
Future rental payments over the next five years for all leases are as follows:
d)The Company has established a 401(k) plan for its employees. The Company has elected to match 100% of the first 3% of an employee’s compensation plus 50% of an additional 2% of the employee’s deferral. Expense related to this matching contribution aggregated to $120,558 and $123,145, for the years ended December 31, 2018 and 2017 respectively. e)In July 2013, the Company entered into an exclusive license agreement with the University of Maryland, Baltimore for a novel drug delivery platform. The agreement required the Company to make payments to the University of Maryland if any products from the licensed delivery platform would have achieved development milestones. In December 2018, the Company terminated the license agreement. At the time of termination, no development milestones had occurred. f) In October 2013, the Company signed an exclusive license agreement with the Ohio State Innovation Foundation, for a novel oligonucleotide drug delivery platform. The agreement required the Company to make payments to the Ohio State Innovation Foundation if any products from the licensed delivery platform would have achieved development milestones. In December 2018, the Company terminated the license agreement. At the time of termination, no development milestones had occurred. g)On February 5, 2018, the Company and Next BT terminated the research collaboration agreement between the Company and Rexgene. In exchange for Next BT terminating its rights to RX-0201 in Asia, the Company agreed to pay Next BT a royalty in the low single digits of any net sales of RX-0201 the Company makes in Asia and 50% of the Company’s licensing revenue related to licensing of RX-0201 in Asia, up to an aggregate of $5,000,000.
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Fair Value Measurements |
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Fair Value Measurements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 16. Fair Value Measurements ASC 820 defines fair value 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, not adjusted for transaction costs. ASC 820 also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are described below:
The following tables present assets and liabilities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy. There have been no changes in the methodologies used at December 31, 2018 and 2017.
The fair value of the Company’s Level 2 marketable securities is determined by using quoted prices from independent pricing services that use market data for comparable securities in active or inactive markets. A variety of data inputs, including benchmark yields, interest rates, known historical trades and broker dealer quotes are used with pricing models to determine the quoted prices. The fair value methodology for the warrant liabilities is disclosed in Note 12. The carrying amounts reported in the financial statements for cash and cash equivalents (Level 1), and accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. The following table sets forth a reconciliation of changes in the years ended December 31, 2018 and 2017 in the fair value of the liabilities classified as Level 3 in the fair value hierarchy:
Additions consist of the fair value of warrant liabilities upon issuance. Transfers out of Level 3 for warrant liabilities consist of warrant exercises, where the liability is converted to additional paid-in capital upon exercise. The Company’s policy is to recognize transfers in and transfers out as of the actual date of the event or change in circumstance that caused the transfer.
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Select Quarterly Data |
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Select Quarterly Data | 17. Select Quarterly Data (Unaudited)
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Subsequent Events |
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Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events On January 25, 2019, the Company closed an underwritten public offering of 10,750,000 shares of common stock and warrants to purchase up to 10,750,000 shares of common stock, resulting in gross proceeds to the Company of approximately $8,600,000. The common stock and warrants were sold in units, consisting of a share of common stock and a warrant to purchase a share of common stock, at a price of $0.80 per unit, with an exercise price for the warrants of $0.80 per share. The warrants were immediately exercisable and will remain exercisable until January 25, 2024. Since December 31, 2018, the Company granted 374,968 stock options to officers and other employees. The Company terminated its laboratory lease agreement on February 4, 2019 and surrendered the premises on February 28, 2019.
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Summary Of Significant Accounting Policies (Policies) |
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Summary Of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Actual results may ultimately differ from these estimates. These estimates are reviewed periodically and as adjustments become necessary, they are reported in earnings in the period in which they become available.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and short‑term investments purchased with remaining maturities of three months or less at acquisition.
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Marketable Securities | Marketable Securities Marketable securities are considered “available-for-sale” in accordance with Financial Statement Accounting Board (“FASB”) Accounting Standards Codification (“ASC”) 320, “Debt and Equity Securities,” and thus are reported at fair value in the Company’s accompanying balance sheet, with unrealized gains and losses excluded from earnings and reported as a separate component of stockholders’ equity. Amounts reclassified out of accumulated other comprehensive loss into realized gains and losses are accounted for on the basis of specific identification and are included in other income or expense in the statement of operations. The Company classifies such investments as current on the balance sheet as the investments are readily marketable and available for use in the Company’s current operations.
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Equipment | Equipment Equipment is stated at cost less accumulated depreciation. Depreciation, based on the lesser of the term of the lease or the estimated useful life of the assets, is provided as follows:
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amounts reported in the accompanying financial statements for cash and cash equivalents and accounts payable and accrued expenses approximate fair value because of the short‑term maturity of these financial instruments. The fair value of warrant liabilities is discussed in Note 12, and the fair value of marketable securities and certain other assets and liabilities is discussed in Note 16.
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Warrants | Warrants The Company classifies its stock warrants as either liability or equity instruments in accordance with ASC 480, “Distinguishing Liabilities from Equity” (ASC 480), depending on the specific terms of the warrant agreement. Warrants that the Company may be required to redeem through payment of cash or other assets outside its control are classified as liabilities pursuant to ASC 480 and are initially and subsequently measured at their estimated fair values. Stock warrants are also classified as warrant liabilities in accordance with ASC 815, “Derivatives and Hedging” (ASC 815) if the warrant contains terms that could require “net cash settlement” and therefore, do not meet the conditions necessary for equity classification according to ASC 815. Warrant instruments that could require “net cash settlement” in the absence of express language precluding such settlement are initially classified as warrant liabilities at their estimated fair values, regardless of the likelihood that such instruments will ever be settled in cash. The Company will continue to record liability-classified warrants at fair value until the warrants are exercised, expire or are amended in a way that would no longer require these warrants to be classified as a liability. For additional discussion on warrants, see Note 12.
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Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development expenses consist primarily of third party service costs under research and development agreements, salaries and related personnel costs, including stock-based compensation, costs to acquire pharmaceutical products and product rights for development and amounts paid to contract research organizations, hospitals and laboratories for the provision of services and materials for drug development and clinical trials. Costs incurred in obtaining the licensing rights to technology in the research and development stage that have no alternative future uses and are for unapproved product compounds are expensed as incurred.
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Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740, “Income Taxes”. Deferred tax assets and liabilities are recorded for differences between the financial statement and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates. ASC 740 requires that a valuation allowance be established when it is more likely than not that all portions of a deferred tax asset will not be realized. A review of all positive and negative evidence needs to be considered, including a company’s current and past performance, the market environment in which the company operates, length of carryback and carryforward periods and existing contracts that will result in future profits. Income tax expense is recorded for the amount of income tax payable or refundable for the period, increased or decreased by the change in deferred tax assets and liabilities during the period. As a result of the Company’s significant cumulative losses, the Company determined that it was appropriate to establish a valuation allowance for the full amount of net deferred tax assets. The calculation of the Company’s tax liabilities involves the inherent uncertainty associated with the application of complex tax laws. The Company is subject to examination by various taxing authorities. The Company believes that, as a result of its loss carryforward sustained to date, any examination would result in a reduction of its net operating losses rather than a tax liability. As such, the Company has not provided for any additional taxes that would be estimated under ASC 740.
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Stock-Based Compensation | Stock-Based Compensation In accordance with ASC 718, “Stock Compensation,” compensation costs related to share-based payment transactions, including employee stock options, are to be recognized in the financial statements. In addition, the Company adheres to the guidance set forth within U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin (“SAB”) No. 107, which provides the Staff’s views regarding the interaction between ASC 718 and certain SEC rules and regulations, and provides interpretations with respect to the valuation of share-based payments for public companies. For additional discussion on stock-based compensation, see Note 11.
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Concentration of Credit Risk | Concentration of Credit Risk ASC 825, “Financial Instruments,” requires disclosure of any significant off balance sheet risk and credit risk concentration. The Company does not have significant off‑balance sheet risk or credit concentration. The Company maintains cash and cash equivalents with major financial institutions. From time to time the Company has funds on deposit with commercial banks that exceed federally insured limits. The balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At December 31, 2018, the Company’s uninsured cash balance was $8,494,301. Management does not consider this to be a significant credit risk as the banks are large, established financial institutions.
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Reclassification | Reclassification Certain amounts in the prior year’s financial statements have been reclassified to conform to the current year presentation with no material impact on the financial statements.
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Recent Accounting Pronouncements Affecting the Company | Recent Accounting Pronouncements Affecting the Company Revenue from Contracts with Customers In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. generally accepted accounting standards. The standard’s core principle is that a company should recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services and provides a revenue recognition framework in accordance with this principle. On August 12, 2015, the FASB issued ASU 2015-14, which deferred the effective date of ASU 2014-09 by one year to December 15, 2017 for annual reporting periods beginning after that date and interim periods therein. The Company adopted this guidance for the quarterly reporting period ended March 31, 2018, using the modified retrospective method. As the Company does not have revenue contracts, the adoption of this guidance did not have a material impact on the operating results of the Company, there were no significant changes to disclosures and there was no cumulative adjustment to the opening balance of retained earnings as of January 1, 2018. Leases In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 and early adoption is permitted. The Company elected not to early adopt the standard, and therefore, will adopt the standard on January 1, 2019. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We are not electing the hindsight practical expedient. We will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will recognize those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. We estimate adoption of the standard will result in recognition of additional net lease assets and lease liabilities, after the effect of the lease modifications discussed in Note 18, the amount of both of which will not be material, , and there will be no impact on the accumulated deficit. We do not believe the new standard will have a notable impact on our liquidity.
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Summary Of Significant Accounting Policies (Tables) |
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Summary Of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||
Schedule Of Estimated Useful Lives |
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Marketable Securities (Tables) |
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Cost And Fair Value Of Marketable Securities |
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Prepaid Expenses And Other Current Assets (Tables) |
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Prepaid Expenses And Other Current Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Prepaid Expenses And Other Current Assets |
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Equipment, Net (Tables) |
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Equipment, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Equipment, Net |
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Accounts Payable And Accrued Expenses (Tables) |
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Accounts Payable And Accrued Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Accounts Payable And Accrued Expenses |
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Other Liabilities (Tables) |
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Other Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Deferred Lease Incentive |
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Common Stock (Tables) |
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Summary Of Issuances |
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Summary Of Allocation Of Proceeds From Offering |
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Summary Of Allocation Of Proceeds From Offering |
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Stock-Based Compensation (Tables) |
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Summary Of Stock Compensation Expense |
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Schedule Of Assumptions Made In Calculating The Fair Value Of Options |
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Summary Of Share-Based Transactions |
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Summary Of Unvested Shares |
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Summary Of RSU Activity |
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Warrants (Tables) |
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Warrants [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of Warrants Outstanding |
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Summary Of Changes In Warrants Outstanding During The Period |
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Schedule Of Fair Value Of Warrants Issued |
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Schedule Of Assumptions Used In Calculating Fair Value Of Warrants |
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Schedule Of Unrealized Gain/(Loss) On Fair Value Of Warrants |
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Income Taxes (Tables) |
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Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Deferred Tax Assets And Valuation Allowance |
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Commitments And Contingencies (Tables) |
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Schedule Of Future Rental Payments |
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Fair Value Measurements (Tables) |
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Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis |
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Reconciliation Of Changes In The Fair Value Of Liabilities |
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Select Quarterly Data (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Select Quarterly Data [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Select Quarterly Data |
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Operations And Organization (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Operations And Organization [Abstract] | ||
Accumulated deficit | $ 154,687,242 | $ 140,318,712 |
Summary Of Significant Accounting Policies (Narrative) (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 15, 2018 |
Dec. 31, 2017 |
---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Uninsured cash balance | $ 8,494,301 | ||
Accumulated deficit | $ (154,687,242) | $ (140,318,712) | |
Accounting Standards Update 2016-02 [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Accumulated deficit | $ 0 |
Marketable Securities (Narrative) (Details) - Corporate Bonds [Member] |
Dec. 31, 2018
USD ($)
item
|
---|---|
Schedule of Available-for-sale Securities [Line Items] | |
Securities in a loss position, greater than one year | item | 6 |
Fair value, greater than one year | $ 5,981,520 |
Unrealized losses, greater than one year | $ 17,836 |
Marketable Securities (Schedule Of Cost And Fair Value Of Marketable Securities) (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||
Cost Basis | $ 17,988,827 | |
Gross Unrealized Losses | (56,886) | |
Fair Value | 17,931,941 | |
Commercial Paper [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost Basis | 3,241,005 | |
Gross Unrealized Losses | (2,505) | |
Fair Value | 3,238,500 | |
Corporate Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost Basis | $ 5,999,356 | 14,747,822 |
Gross Unrealized Losses | (17,836) | (54,381) |
Fair Value | $ 5,981,520 | $ 14,693,441 |
Prepaid Expenses And Other Current Assets (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Prepaid Expenses And Other Current Assets [Abstract] | ||
Deposits on contracts | $ 618,417 | $ 793,940 |
Prepaid expenses and other current assets | 555,430 | 510,601 |
Total prepaid expenses and other current assets | $ 1,173,847 | $ 1,304,541 |
Equipment, Net (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Total equipment | $ 821,590 | $ 833,306 |
Less: Accumulated depreciation and amortization | (709,117) | (711,846) |
Net carrying amount | 112,473 | 121,460 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment | 82,686 | 82,686 |
Office And Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment | 159,489 | 171,724 |
Lab Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment | 447,653 | 445,134 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total equipment | $ 131,762 | $ 133,762 |
Accounts Payable And Accrued Expenses (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounts Payable And Accrued Expenses [Abstract] | ||
Trade payables | $ 547,519 | $ 895,638 |
Accrued expenses | 140,637 | 95,416 |
Accrued research and development contract costs | 1,782,131 | 1,435,109 |
Payroll liabilities | 682,263 | 807,763 |
Total accounts payable and accrued expenses | $ 3,152,550 | $ 3,233,926 |
Deferred Research And Development Arrangement (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Feb. 05, 2018 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2003 |
|
Deferred Research And Development Arrangement [Abstract] | ||||
Research and development arrangement, one-time fee | $ 1,500,000 | |||
Reduction of research and development expenses | $ 6,250 | $ 75,000 | ||
Research and development period | 20 years | |||
Other income | $ 368,750 | $ 368,750 | ||
Percentage of licensing revenue | 50.00% | |||
Licensing revenue agreement | $ 5,000,000 |
Other Liabilities (Narrative) (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Liabilities [Abstract] | ||
Accrued Rent | $ 13,678 | $ 38,059 |
Other Liabilities (Schedule Of Deferred Lease Incentive) (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Other Liabilities [Abstract] | ||
Deferred lease incentive | $ 154,660 | $ 154,660 |
Less accumulated amortization | (148,438) | (135,995) |
Balance | $ 6,222 | $ 18,665 |
Net Loss Per Common Share (Details) - shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Stock Options, Restricted Stock Units And Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 15,871,708 | 8,961,140 |
Common Stock (Summary Of Allocation Of Proceeds From Offering) (Details) - USD ($) |
Oct. 19, 2018 |
Oct. 17, 2017 |
Jun. 12, 2017 |
---|---|---|---|
Common Stock [Abstract] | |||
Allocated to warrant liabilities | $ 2,360,459 | $ 3,673,168 | |
Allocated to Common stock and additional paid-in capital | 5,639,548 | 6,326,835 | |
Gross Proceeds: | $ 7,500,000 | $ 8,000,007 | $ 10,000,003 |
Common Stock (Summary Of Issuances) (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Common Stock [Abstract] | ||
Compensatory shares issued | 15,000 | 15,000 |
Aggregate market value | $ 22,650 | $ 31,200 |
Stock-Based Compensation (Summary Of Stock Compensation Expense) (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share Based Compensation | $ 1,228,335 | $ 1,044,167 |
General and administrative [Member] | ||
Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share Based Compensation | 883,855 | 765,726 |
Research and development [Member] | ||
Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Share Based Compensation | $ 344,480 | $ 278,441 |
Stock-Based Compensation (Schedule Of Assumptions Made In Calculating The Fair Value Of Options) (Details) - Stock Option [Member] |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Expected volatility, minimum | 69.00% | 69.00% |
Expected volatility, maximum | 73.00% | 79.00% |
Risk free interest rate, minimum | 2.30% | 1.70% |
Risk free interest rate, maximum | 2.90% | 2.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 6 months | 5 years 6 months |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years | 6 years |
Stock-Based Compensation (Summary Of Share-Based Transactions ) (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Number of Options, Exercised | (25,000) | |
Aggregate Intrinsic Value, Outstanding | $ 53,883 | |
Stock Option [Member] | ||
Number of Options, Oustanding | 1,814,231 | |
Number of Options, Granted | 1,483,185 | |
Number of Options, Expired | (56,000) | |
Number of Options, Cancelled | (169,695) | |
Number of Options, Oustanding | 3,071,721 | 1,814,231 |
Weighted Average Exercise Price, Outstanding | $ 5.33 | |
Weighted Average Exercise Price, Granted | 1.60 | |
Weighted average exercise price, Expired | 14.04 | |
Weighted Average Exercise Price, Cancelled | 3.14 | |
Weighted Average Exercise Price, Outstanding | $ 3.49 | $ 5.33 |
Weighted Average Remaining Contractual Term, Outstanding | 7 years 9 months 18 days | 7 years 1 month 6 days |
Number of Options, Exercisable | 1,493,365 | |
Weighted Average Exercise Price, Exercisable | $ 5.39 | |
Weighted Average Remaining Contractual Term, Exercisable | 6 years 2 months 12 days |
Stock-Based Compensation (Summary Of Unvested Shares) (Details) - Stock Option [Member] |
12 Months Ended |
---|---|
Dec. 31, 2018
$ / shares
shares
| |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Number of Options, Granted | 1,483,185 |
Nonvested Options [Member] | |
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items] | |
Number of Options, Unvested | 727,543 |
Number of Options, Granted | 1,483,185 |
Number of Options, Vested | (513,177) |
Number of Options, Cancelled | (119,195) |
Number of Options, Unvested | 1,578,356 |
Weighted Average Fair Value at Grant Date, Unvested | $ / shares | $ 2.39 |
Weighted Average Fair Value at Grant Date, Granted | $ / shares | 1.04 |
Weighted Average Fair Value at Grant Date, Vested | $ / shares | 2.67 |
Weighted Average Fair Value at Grant Date, Cancelled | $ / shares | 1.49 |
Weighted Average Fair Value at Grant Date, Unvested | $ / shares | $ 1.10 |
Stock-Based Compensation (Summary Of RSU Activity) (Details) - Restricted Stock Units (RSUs) [Member] |
12 Months Ended |
---|---|
Dec. 31, 2018
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of RSUs, Outstanding | shares | 47,300 |
Number of RSUs, Granted | shares | |
Number of RSUs, Vested and Released | shares | (18,075) |
Number of RSUs, Cancelled | shares | (12,500) |
Number of RSUs, Outstanding | shares | 16,725 |
Weighted Average Grant Date Fair Value, Outstanding | $ / shares | $ 1.84 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | |
Weighted Average Grant Date Fair Value, Vested and Released | $ / shares | 1.84 |
Weighted Average Grant Date Fair Value, Cancelled | $ / shares | 1.84 |
Weighted Average Grant Date Fair Value, Outstanding | $ / shares | $ 1.84 |
Warrants (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Warrants [Abstract] | |
Average remaining contractual life of warrants outstanding | 4 years 2 months 12 days |
Probability of entering into a fundamental transaction | 5.00% |
Warrants (Schedule Of Assumptions Used In Calculating Fair Value Of Warrants) (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Class of Warrant or Right [Line Items] | ||
Trading market prices | $ 0.93 | $ 2.02 |
Estimated future volatility | 105.00% | 104.00% |
Dividend | ||
Minimum [Member] | ||
Class of Warrant or Right [Line Items] | ||
Estimated future risk-free rate | 2.35% | 2.14% |
Equivalent volatility | 99.00% | 85.00% |
Equivalent risk-free rate | 2.51% | 1.30% |
Maximum [Member] | ||
Class of Warrant or Right [Line Items] | ||
Estimated future risk-free rate | 2.53% | 2.45% |
Equivalent volatility | 104.00% | 104.00% |
Equivalent risk-free rate | 2.55% | 1.89% |
Income Taxes (Narrative) (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Operating Loss Carryforwards [Line Items] | ||
Provision for income taxes | ||
Operating loss carry-forward | $ 147,086,000 | 127,877,000 |
Net operating loss carry-forwards expiration | Dec. 31, 2021 | |
Federal And State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Provision for income taxes | $ 0 | $ 0 |
Income Taxes (Schedule Of Deferred Tax Assets And Valuation Allowance) (Details) - USD ($) |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Income Taxes [Abstract] | ||
Net Operating Loss Carryforwards | $ 41,184,000 | $ 35,805,000 |
Stock Compensation Expense | 1,608,000 | 1,458,000 |
Book tax differences on assets and liabilities | 195,000 | 365,000 |
Valuation Allowance | (42,987,000) | (37,628,000) |
Net Deferred Tax Assets |
Commitments and Contingencies (Schedule Of Future Rental Payments) (Details) |
Dec. 31, 2018
USD ($)
|
---|---|
Commitments And Contingencies [Abstract] | |
2019 | $ 176,080 |
2020 | 34,468 |
Total | $ 210,548 |
Fair Value Measurements (Reconciliation Of Changes In The Fair Value Of Liabilities) (Details) - Warrant Liabilities [Member] - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balance | $ 7,853,635 | $ 1,573,366 |
Additions | 6,738,701 | |
Unrealized (gains) losses, net | (5,546,049) | 7,594,162 |
Transfers out of level 3 | (8,052,594) | |
Balance | $ 2,307,586 | $ 7,853,635 |
Select Quarterly Data (Details) - USD ($) |
3 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Select Quarterly Data [Abstract] | ||||||||||
Revenues: | ||||||||||
Expenses | 4,966,470 | 4,683,907 | 5,001,441 | 5,885,855 | 4,898,229 | 4,219,322 | 4,283,925 | 3,953,241 | 20,537,673 | 17,354,717 |
Loss from Operations | (4,966,470) | (4,683,907) | (5,001,441) | (5,885,855) | (4,898,229) | (4,219,322) | (4,283,925) | (3,953,241) | (20,537,673) | (17,354,717) |
Other Income (Expense), net | 1,849,900 | (654,912) | 1,163,173 | 3,810,982 | 1,305,766 | 3,181,250 | 5,230,981 | (17,657,783) | 6,169,143 | (7,939,786) |
Net Income (Loss) | $ (3,116,570) | $ (5,338,819) | $ (3,838,268) | $ (2,074,873) | $ (3,592,463) | $ (1,038,072) | $ 947,056 | $ (21,611,024) | $ (14,368,530) | $ (25,294,503) |
Net Income (Loss) per share, basic | $ (0.12) | $ (0.04) | $ 0.04 | $ (0.91) | ||||||
Net income (loss) per share, diluted | $ (0.12) | $ (0.04) | $ 0.03 | $ (0.91) | ||||||
Net Loss per share, basic and diluted | $ (0.09) | $ (0.17) | $ (0.12) | $ (0.07) | $ (0.44) | $ (0.92) |
Subsequent Events (Details) - USD ($) |
2 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 25, 2019 |
Oct. 19, 2018 |
Oct. 17, 2017 |
Jun. 12, 2017 |
Mar. 08, 2019 |
Dec. 31, 2018 |
|
Subsequent Event [Line Items] | ||||||
Shares issued | 5,769,231 | 3,265,309 | 3,030,304 | |||
Number of warrants, issued | 5,769,231 | 1,632,654 | 1,515,152 | 6,115,385 | ||
Proceeds from issuance | $ 7,500,000 | $ 8,000,007 | $ 10,000,003 | |||
Share Price | $ 1.30 | $ 2.45 | $ 3.30 | |||
Stock Warrants, Exercise Price | $ 1.67 | $ 2.85 | $ 4.00 | |||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued | 10,750,000 | |||||
Number of warrants, issued | 10,750,000 | |||||
Proceeds from issuance | $ 8,600,000 | |||||
Share Price | $ 0.80 | |||||
Stock Warrants, Exercise Price | $ 0.80 | |||||
Stock Option [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Stock options granted | 1,483,185 | |||||
Stock Option [Member] | The 2013 Plan [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Stock options granted | 374,968 |
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