OPEXA THERAPEUTICS, INC., 10-K filed on 3/15/2016
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2015
Mar. 10, 2016
Jun. 30, 2015
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
OPEXA THERAPEUTICS, INC. 
 
 
Entity Central Index Key
0001069308 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Amendment Flag
false 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Is Entity a Well-known Seasoned Issuer?
No 
 
 
Is Entity a Voluntary Filer?
No 
 
 
Is Entity's Reporting Status Current?
Yes 
 
 
Entity Filer Category
Smaller Reporting Company 
 
 
Entity Public Float
 
 
$ 22,589,234 
Entity Common Stock, Shares Outstanding
 
6,986,971 
 
Document Fiscal Period Focus
FY 
 
 
Document Fiscal Year Focus
2015 
 
 
Consolidated Balance Sheets (USD $)
Dec. 31, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 12,583,764 
$ 9,906,373 
Other current assets
995,067 
758,943 
Total current assets
13,578,831 
10,665,316 
Property & equipment, net of accumulated depreciation of $2,443,600 and $2,099,389, respectively
837,867 
1,098,104 
Other long-term assets
38,939 
Total assets
14,416,698 
11,802,359 
Current liabilities:
 
 
Accounts payable
739,850 
702,494 
Accrued expenses
1,008,077 
1,049,513 
Deferred revenue
2,905,165 
1,230,746 
Notes payable - Insurance
148,344 
149,671 
Total current liabilities
4,801,436 
3,132,424 
Long term liabilities:
 
 
Deferred revenue
1,230,748 
Total liabilities
4,801,436 
4,363,172 
Stockholders' equity:
 
 
Preferred stock, no par value, 10,000,000 shares authorized, none issued and outstanding
Common stock, $0.01 par value, 150,000,000 shares authorized, 6,982,909 and 3,529,344 shares issued and outstanding
69,829 
35,293 
Additional paid in capital
162,884,919 
148,724,102 
Accumulated deficit
(153,339,486)
(141,320,208)
Total stockholders' equity
9,615,262 
7,439,187 
Total liabilities and stockholders' equity
$ 14,416,698 
$ 11,802,359 
Consolidated Balance Sheets (Parenthetical) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Property & equipment, accumulated depreciation
$ 2,443,600 
$ 2,099,389 
Preferred stock, no par value
$ 0 
$ 0 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
150,000,000 
150,000,000 
Common stock, shares issued
6,982,909 
3,529,344 
Common stock, shares outstanding
6,982,909 
3,529,344 
Consolidated Statements of Operations (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Revenue:
 
 
Option Revenue
$ 2,556,329 
$ 1,271,895 
Research and development
10,039,496 
12,118,629 
General and administrative
4,258,147 
3,833,370 
Depreciation and amortization
351,403 
387,779 
Loss on disposal of fixed assets
1,167 
Operating loss
(12,093,884)
(15,067,883)
Interest income, net
5,911 
13,473 
Other income and expense, net
68,695 
2,147 
Net loss
$ (12,019,278)
$ (15,052,263)
Basic and diluted loss per share
$ (2.05)
$ (4.33)
Weighted average shares outstanding
5,854,438 
3,477,628 
Consolidated Statements of Changes in Stockholders' Equity (USD $)
Common Stock [Member]
Additional Paid In Capital [Member]
Accumulated Deficit
Total
Beginning Balance, Amount at Dec. 31, 2013
$ 34,433 
$ 146,810,786 
$ (126,267,945)
$ 20,577,274 
Beginning Balance, Shares at Dec. 31, 2013
3,443,257 
 
 
 
Shares issued for services, Shares
21,285 
 
 
 
Shares issued for services, Amount
212 
305,891 
306,103 
Cancellation of fractional shares, Amount
 
 
 
Shares sold for cash, Shares
64,802 
 
 
 
Shares sold for cash, Amount
648 
647,527 
648,175 
Exercise of warrants, Amount
 
 
 
Option expense
959,898 
959,898 
Net loss
(15,052,263)
(15,052,263)
Ending Balance, Amount at Dec. 31, 2014
35,293 
148,724,102 
(141,320,208)
7,439,187 
Ending Balance, Shares at Dec. 31, 2014
3,529,344 
 
 
 
Shares issued for services, Shares
13,379 
 
 
 
Shares issued for services, Amount
134 
78,079 
78,213 
Cancellation of fractional shares, Shares
(1,365)
 
 
 
Cancellation of fractional shares, Amount
(13)
(5,015)
(5,028)
Shares sold for cash, Shares
3,440,448 
 
 
 
Shares sold for cash, Amount
34,404 
13,247,631 
13,282,035 
Exercise of warrants, Shares
1,103 
 
 
 
Exercise of warrants, Amount
11 
4,399 
4,410 
Option expense
835,723 
835,723 
Net loss
(12,019,278)
(12,019,278)
Ending Balance, Amount at Dec. 31, 2015
$ 69,829 
$ 162,884,919 
$ (153,339,486)
$ 9,615,262 
Ending Balance, Shares at Dec. 31, 2015
6,982,909 
 
 
 
Consolidated Statements of Cash Flows (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Cash flows from operating activities
 
 
Net loss
$ (12,019,278)
$ (15,052,263)
Adjustments to reconcile net loss to net cash used in operating activities
 
 
Shares issued for services
78,213 
306,103 
Depreciation
351,403 
387,779 
Option expense
835,723 
959,898 
Loss on disposal of fixed assets
1,167 
Changes in:
 
 
Other current assets
(87,780)
513,304 
Accounts payable
37,356 
6,339 
Accrued expenses
(191,107)
(183,477)
Deferred revenue
443,671 
138,727 
Other long-term assets
38,939 
(1,271,895)
Net cash used in operating activities
(10,511,693)
(14,195,485)
Cash flows from investing activities
 
 
Purchase of property & equipment
(92,333)
(190,859)
Net cash provided by (used in) investing activities
(92,333)
(190,859)
Cash flows from financing activities
 
 
Common stock and warrants sold for cash, net of offering costs
13,282,035 
648,175 
Cash generated from exercise of warrants
4,410 
Repurchase of fractional shares
(5,028)
Net cash provided by financing activities
13,281,417 
648,175 
Net change in cash and cash equivalents
2,677,391 
(13,738,169)
Cash and cash equivalents at beginning of period
9,906,373 
23,644,542 
Cash and cash equivalents at end of period
12,583,764 
9,906,373 
Cash paid for:
 
 
Income tax
Interest
$ 2,315 
$ 1,983 
1. BUSINESS OVERVIEW AND SUMMARY OF ACCOUNTING POLICIES
BUSINESS OVERVIEW AND SUMMARY OF ACCOUNTING POLICIES

Description of Business.  Opexa Therapeutics, Inc. (“Opexa”, “we”, “our”, or “the Company”) was initially incorporated as Sportan United Industries, Inc. (“Sportan”) in Texas in March 1991. In June 2004, PharmaFrontiers Corp. (“PharmaFrontiers”) was acquired by Sportan in a transaction accounted for as a reverse acquisition.  In October 2004, PharmaFrontiers acquired all of the outstanding stock of Opexa Pharmaceuticals, Inc. (“Opexa Pharmaceuticals”), a biopharmaceutical company that previously acquired the exclusive worldwide license from Baylor College of Medicine to an patient specific, autologous T-cell immunotherapy, Tcelna® (formerly known as Tovaxin), for the initial treatment of multiple sclerosis (MS). In June 2006, the Company changed its name to Opexa Therapeutics, Inc. from PharmaFrontiers Corp. and, in January 2007, Opexa Therapeutics, Inc., the parent, merged with its wholly owned subsidiary, Opexa Pharmaceuticals with Opexa Therapeutics, Inc. being the surviving company.

 

In September 2012, Opexa initiated a Phase IIb clinical trial of Tcelna in patients with secondary progressive MS (“SPMS”). Previously, in September 2008, the Company completed a Phase IIb clinical study of Tcelna in the relapsing-remitting MS (“RRMS”) indication.

 

Opexa operates in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products require approval from, and are subject to, ongoing oversight by the Food and Drug Administration, or FDA, in the United States, by the European Medicines Agency, or EMA, in the E.U. and by comparable agencies in other countries. Obtaining approval for a new therapeutic product is never certain and may take many years and may involve expenditure of substantial resources.  Tcelna is in development stage and Opexa has not applied for a Biologics License Application (BLA) for Tcelna with the FDA nor a similar regulatory licensure in any other country, and thus Tcelna is not approved to be marketed in any country.

 

Reverse Stock Split.  On September 28, 2015, Opexa effected a one-for-eight reverse stock split of its common stock (the “1:8 Reverse Stock Split”) which decreased the number of common shares issued and outstanding from approximately 54.3 million shares to approximately 6.8 million shares. The number of authorized shares of common stock and preferred stock remained the same following the 1:8 Reverse Stock Split.

 

Unless otherwise noted, impacted amounts included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock splits as if such stock splits occurred on the first day of the first period presented. Impacted amounts include shares of common stock issued and outstanding, shares underlying warrants and stock options, shares reserved, exercise prices of warrants and options, and loss per share. There was no impact on the amount of preferred or common stock authorized resulting from the 1:8 Reverse Stock Split.

 

Principles of Consolidation.  The consolidated financial statements include the accounts of Opexa and its wholly owned subsidiary, Opexa Hong Kong Limited (“Opexa Hong Kong”).  Opexa Hong Kong was formed in the Hong Kong Special Administrative Region during 2012 in order to facilitate potential development collaborations in the pan-Asian region.  Presently, Opexa Hong Kong has not entered into any agreements and has not recognized any revenues as of December 31, 2015. All intercompany transactions and balances between Opexa and Opexa Hong Kong are eliminated in consolidation.

 

Use of Estimates in Financial Statement Preparation. 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, 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. Actual results could differ from those estimates.

 

Certain Risks and Concentrations. Opexa is exposed to risks associated with foreign currency transactions insofar as it has used U.S. dollars to fund Opexa Hong Kong’s bank account denominated in Hong Kong dollars.  As the net position of the unhedged Opexa Hong Kong bank account fluctuates, Opexa’s earnings may be negatively affected.  In addition, the reported carrying value of the Company’s Hong Kong dollar-denominated assets and liabilities that remain in Opexa Hong Kong will be affected by fluctuations in the value of the U.S. dollar as compared to the Hong Kong dollar.  Opexa currently does not utilize forward exchange contracts or any type of hedging instruments to hedge foreign exchange risk as Opexa believes that its overall exposure is relatively limited.  As of December 31, 2015, Opexa Hong Kong reported cash and cash equivalents of $9,999 in converted U.S. dollars and does not have any reported liabilities in the consolidated balance sheets.

 

    Revenue Recognition.  Opexa recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“FASB ASC”) 605, “Revenue Recognition.” ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

 

    On February 4, 2013, Opexa entered into an Option and License Agreement (the “Merck Serono Agreement”) with Ares Trading SA (“Merck Serono”), a wholly owned subsidiary of Merck Serono S.A.  Pursuant to the terms, Merck Serono has an option to acquire an exclusive, worldwide (excluding Japan) license of Opexa’s Tcelna® program for the treatment of multiple sclerosis (“MS”).  Tcelna is currently in a Phase IIb clinical trial in patients with Secondary Progressive MS (“SPMS”). The option may be exercised by Merck Serono prior to or upon Opexa’s completion of the Phase IIb Trial.

 

Opexa received an upfront payment of $5 million for granting the option. If the option is exercised, Merck Serono would pay the Company an upfront license fee of $25 million unless Merck Serono is unable to advance directly into a Phase III clinical trial of Tcelna for SPMS without a further Phase II clinical trial (as determined by Merck Serono), in which event the upfront license fee would be $15 million. After exercising the option, Merck Serono would be solely responsible for funding development, regulatory and commercialization activities for Tcelna in MS, although the Company would retain an option to co-fund certain development in exchange for increased royalty rates.  The Company would also retain rights to Tcelna in Japan, certain rights with respect to the manufacture of Tcelna, and rights outside of MS.

 

Opexa recognized revenues from nonrefundable, up-front $5 million option fees related to the Merck Serono Agreement on a straight-line basis over the estimated option exercise period which coincides with the expected completion term of Opexa’s current Phase IIb clinical trial for Tcelna in patients with SPMS.  Opexa is required to make estimates regarding the clinical trial timelines which impact the period over which the option exercise may occur.  Opexa’s estimates regarding the option exercise period were adjusted in 2014 once the enrollments for the Abili-T clinical trial were completed.  This adjustment was made on a prospective basis beginning in the periods in which the change was identified and resulted in a decrease in the amount of revenue we recognized on a quarterly basis from the Merck Serono Agreement.  No changes to estimates for the option exercise milestone were made in 2015.  The expected completion term for revenue recognition is December 2016.

 

On March 9, 2015 Opexa entered into a First Amendment of Option and License Agreement with Merck Serono, to amend the Merck Serono Agreement (the “Merck Serono Amendment”).  Opexa received $3 million in consideration for the activities described below:

 

●  Opexa will create a detailed Pre-Phase III Plan (including a GANTT chart containing key tasks, decision points, timing, budget and milestones) documenting all of the activities necessary for laboratory facilities both in the U.S. and Europe to reach operational readiness by the end of December 2016 (e.g., review and identification of a preferred contract manufacturing organization in Europe; set-up, identification and qualification of third parties for raw materials; validation of laboratory facilities in the U.S. and Europe; and a hiring plan for key personnel).  For Europe, the Pre-Phase III Plan would address the creation of a dedicated lab to support a Phase III trial, and for the U.S., the Pre-Phase III Plan would address the expansion of existing capabilities and infrastructure for a Phase III trial. The Joint Steering Committee (“JSC”) established pursuant to the Merck Serono Agreement will be responsible for reviewing, approving and ultimately overseeing Opexa’s completion of the Pre-Phase III Plan, which approval may not be unreasonably withheld or delayed.  The JSC will meet at least quarterly to advise and make specific recommendations with respect to the Pre-Phase III Plan.  In the event the JSC has not approved the Pre-Phase III Plan prior to the end of the Option Period (as defined in the Merck Serono Agreement), the Option Period will be extended for 60 days following approval of the Pre-Phase III Plan by the JSC.

 

●  Opexa will provide Merck Serono updates and analysis on a blinded basis, grouped in patient batches according to Opexa’s analysis timetable, on the progress of Opexa’s immune monitoring program (the “Program”) being conducted in conjunction with Opexa’s ongoing Abili-T clinical trial, with such updates and analysis to be shared with Merck Serono within 30 days of Opexa’s initial assessment of such information.  Opexa will inform Merck Serono of any existing or future external bioinformatics vendor used by Opexa for the Program, and Merck Serono will have the right, at its expense, to review current and future data storage and integrity measures for the on-going Abili-T clinical trial.

 

Opexa evaluated the Merck Serono Amendment and determined that the $3 million payment from Merck Serono has stand-alone value.  Opexa’s continuing performance obligations, in connection with the $3 million payment, include the creation of the Pre-Phase III Plan and delivery of updates and analysis relating to the Program.  As a stand-alone value term in the Merck Serono Amendment, the $3 million payment is determined to be a single unit of accounting, and is recognized as revenue on a straight-line basis over the period equivalent to the expected completion of the Pre-Phase III Plan in December 2016.  Opexa includes the unrecognized portion of the $3 million as deferred revenue on the consolidated balance sheets.

 

Cash and Cash Equivalents. For purposes of the consolidated statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less. The primary objectives for the fixed income investment portfolio are liquidity and safety of principal. Investments are made with the objective of achieving the highest rate of return consistent with these two objectives. Opexa’s investment policy limits investments to certain types of instruments issued by institutions primarily with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer.

 

Supplies Inventory. Supplies inventory during 2014 and 2015 included reagents and supplies that will be used to manufacture Tcelna and placebo product in Opexa’s Phase IIb clinical study.  Opexa amortized these prepaid reagents and supplies to research and development expenses in the consolidated statements of operations over the period that these supplies were used. The supplies inventory was fully amortized as of December 31, 2014.  During 2015, a single custom reagent that will be used primarily for the NMO program and other Pre-Phase III activities is captured as custom reagents and reported under Other Current Assets due to its material cost and three-year shelf life. Upon consumption, the cost of this reagent will be amortized to research and development expenses in the consolidated statements of operations.

 

Long-lived Assets. Property and equipment are stated on the basis of historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Major renewals and improvements are capitalized, while minor replacements, maintenance and repairs are charged to current operations. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount.

 

Deferred costs.  Opexa incurs costs in connection with a debt or equity offering or in connection with the proceeds pursuant to an execution of a strategic agreement.  These costs are recorded as deferred offering or deferred financing costs in the consolidated balance sheets.  Such costs may consist of legal, accounting, underwriting fees and other related items incurred through the date of the debt or equity offering or the date of the execution of the strategic agreement.  Costs in connection with a debt offering are amortized to interest expense over the term of the note instrument.  Costs in connection with the execution of a strategic agreement in which an initial upfront payment is received are offset to the gain recognized in the consolidated statements of operations. Additional paid in capital includes costs recorded as an offset to proceeds in connection with the completion of an equity offering.  Any remaining deferred offering costs that exist upon the expiration of the equity offering (or ATM program) are written off to expense.

 

Income Taxes. Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes, and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse. A valuation allowance is recorded to reduce the net deferred tax asset to zero because it is more likely than not that the deferred tax asset will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination.

 

Stock-Based Compensation. Opexa accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting is over a 4 year period). Additionally, Opexa accounts for share-based awards to non-employees in accordance with FASB ASC 505, and such awards are expensed over the period in which the related services are rendered at their fair value.

 

Research and Development. Research and development expenses are expensed in the consolidated statements of operations as incurred in accordance with FASB ASC 730, Research and Development.  Research and development expenses include salaries, related employee expenses, clinical trial expenses, research expenses, consulting fees, and laboratory costs. In instances in which the Company enters into agreements with third parties for research and development activities, Opexa may prepay fees for services at the initiation of the contract. Opexa records the prepayment as a prepaid asset in the consolidated balance sheets and amortizes the asset into research and development expense in the consolidated statements of operations over the period of time the contracted research and development services are performed.  Other types of arrangements with third parties may be fixed fee or fee for service, and may include monthly payments or payments upon completion of milestones or deliverables. Opexa expenses the costs of licenses of patents and the prosecution of patents until the issuance of such patents and the commercialization of related products is reasonably assured. Research and development expense for the years ended December 31, 2015 and 2014 was $10,039,496 and $12,118,629, respectively.

 

Foreign Currency Translation and Transaction Gains and Losses.  Opexa records foreign currency translation adjustments and transaction gains and losses in accordance with FASB ASC 830, Foreign Currency Matters.  For the Company’s operations that have a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net loss, but are accumulated in the cumulative foreign currency translation adjustment account as a separate component of stockholders’ equity.  Opexa Hong Kong’s functional currency is deemed to be the US Dollar; consequently, Opexa records transaction gains and losses in its consolidated statements of operations related to the recurring measurement and settlement of foreign currency denominated transactions and balances.

 

Net Loss per Share.  Basic and diluted net loss per share is calculated based on the net loss attributable to common shareholders divided by the weighted average number of shares outstanding for the period excluding any dilutive effects of options, warrants and unvested share awards.

 

Reclassifications. Certain comparative amounts from prior periods have been reclassified to conform to the current year's presentation. These changes did not affect previously reported net loss.

2. CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS

As of December 31, 2015, Opexa invested approximately $11.7 million in a savings account. For the year ended December 31, 2015, the savings account recognized an average market yield of 0.07%.  Interest income of $8,203 from the savings account was recognized for the year ended December 31, 2015 in the consolidated statements of operations.

 

As of December 31, 2015 and 2014, Opexa invested approximately $24,500 in a money market fund investing exclusively in high-quality, short-term money market instruments consisting of U.S. government obligations and repurchase agreements collateralized by the U.S. Government. While this fund seeks current income while preserving capital and liquidity, the fund is subject to risk, including U.S. government obligations risk, and is not federally insured or guaranteed by or obligations of the Federal Deposit Insurance Corporation or any other agency. For the years ended December 31, 2015 and 2014, the money market fund recognized an average market yield of 0.01%. Interest income of $3 was recognized for the year ended December 31, 2015 in the consolidated statements of operations.

 

3. OTHER CURRENT ASSETS
OTHER CURRENT ASSETS

Other current assets consisted of the following at December 31, 2015 and 2014:

 

Description  2015  2014
Custom reagents  $496,269   $—   
Deferred offering costs   28,876    259,989 
Prepaid expenses   469,922    498,954 
Total Other Current Assets  $995,067   $758,943 

 

    Custom reagents include a single custom reagent that will be used primarily for the NMO program and other Pre-Phase III research activities.  Upon consumption, the cost of this reagent will be amortized to research and development expenses in the consolidated statements of operations.

 

    Deferred offering costs at December 31, 2015 include $28,876 in costs incurred from third parties in connection with the renewal of the Company’s shelf registration statement.  Deferred offering costs at December 31, 2014 included $238,154 in costs incurred from third parties in connection with the implementation of a $1.5 million & $15 million purchase agreement in November 2012 pursuant to which Opexa had the right (now terminated) to sell to Lincoln Park Capital Fund, LLC (“Lincoln Park”) shares of its common stock, subject to certain conditions and limitations.  Deferred offering costs at December 31, 2014 also included unamortized costs of $21,835 incurred in establishment of the ATM sales agreement in 2013.  These deferred offering costs from 2014 were expensed in 2015 in tandem with the use of the ATM facility and expiration of the respective stock purchase agreements.  The unamortized portion of the ATM deferred offering cost was written off to expense with the expiration of the 2012 shelf registration statement.

 

    Prepaid expenses at December 31, 2015 and 2014 also include costs incurred from third parties in connection with the Merck Serono Agreement (see Note 1).  As of December 31, 2015, the remaining costs of $38,938 in connection with the Merck Serono Agreement that are expected to be amortized over the upcoming twelve month period are capitalized and included in other current assets in the consolidated balance sheets.  There are no remaining costs in connection with the Merck Serono Agreement that are expected to be amortized beyond the upcoming twelve month period.  Also included in prepaid expenses is an advance to Pharmaceutical Research Associates, Inc. (“PRA”), a contract research organization providing services to Opexa, in the amount of $45,365 as well as $31,250 remaining from a prior payment to PRA of $75,000 upon execution of an amendment to Opexa’s agreement with PRA.  The remaining balance in prepaid expenses is attributable to various service and maintenance contracts.

4. PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 2015 and 2014:

 

Description  Life  2015  2014
Computer equipment                   3 years   $193,596   $168,209 
Office furniture and equipment                   5-7 years    247,679    247,679 
Software                   3 years    125,412    116,022 
Laboratory equipment                   7 years    1,120,693    1,100,559 
Leasehold improvements                   5 years    683,295    675,672 
Manufacturing equipment                   7 years    910,792    889,352 
Subtotal        3,281,467    3,197,493 
Less: accumulated depreciation        (2,443,600)   (2,099,389)
Property and equipment, net       $837,867   $1,098,104 

 

Property and equipment is carried at cost less accumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful life of three to seven years, depending upon the type of equipment, except for leasehold improvements which are amortized using the straight-line method over the remaining lease term or the life of the asset, whichever is shorter. The cost of repairs and maintenance is charged as an expense to the consolidated statements of operations as incurred. Depreciation expense totaled $351,403 and $387,779 for the years ended December 31, 2015 and 2014, respectively.

5. OTHER LONG TERM ASSETS
OTHER LONG TERM ASSETS

Other long term assets include costs incurred from third parties in connection with the Merck Serono Agreement (see Note 1). At December 31, 2015 and December 31, 2014 the unamortized costs that are expected to be amortized beyond the upcoming twelve month period amounted to $0 and $38,939, respectively.

6. INCOME TAXES
INCOME TAXES

Opexa uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.

 

At December 31, 2015 and 2014, Opexa had approximately $70 million and approximately $68 million of unused net operating losses (NOLs), respectively, available for carry forward to future years.  For tax purposes, Opexa elects to capitalize research & development expenses and amortize them over a 10-year period.  The unused NOLs begin to expire at December 31, 2025. At December 31, 2015 and 2014, capitalized R&D amounted to $35.3 million and $25.9 million, respectively.

 

At December 31, 2015 and 2014, Opexa had a deferred tax asset which is covered by a full valuation allowance due to uncertainty of Opexa’s ability to generate future taxable income necessary to realize the related deferred tax asset consisting of:

 

Deferred tax asset resulting from:  December 31, 2015  December 31, 2014
Net Operating Loss  $24,806,175   $24,531,026 
Research and development tax credits   2,593,792    1,778,030 
Capitalized research and development costs   11,900,122    8,803,914 
Subtotal   39,300,089    35,112,970 
Less valuation allowance   (39,300,089)   (35,112,970)
Net deferred tax asset  $—     $—   

 

Opexa’s ability to utilize the NOLs is subject to the rules of Section 382 of the Internal Revenue Code. Section 382 generally restricts the use of NOLs after an “ownership change” (generally defined as a greater than 50% change (by value) in the Company’s equity ownership over a three-year period).  The Section 382 limitation is applied annually and is equal to the value of Opexa’s stock on the date of the ownership change, multiplied by a designated federal long-term tax-exempt rate.

7. COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES

In October 2005, Opexa entered into a ten-year lease for its office and research facilities. The facility including the property is leased for a term of ten years with two options for an additional five years each at the then prevailing market rate.  In May 2015, we exercised the option for an additional five year lease. Rent expense in the consolidated statements of operations for the years ended December 31, 2015 and 2014 was approximately $153,000 and $136,000 respectively.  The future minimum lease payments are:

 

Year    Amount  
 2016   $200,000 
 2017    200,000 
 2018    201,250 
 2019    206,250 
 2020    157,500 
 Total future minimum lease payments   $965,000 

 

8. SIGNIFICANT CONTRACTUAL SERVICE AND MILESTONE AGREEMENTS
SIGNIFICANT CONTRACTUAL SERVICE AND MILESTONE AGREEMENTS

In February 2012, Opexa entered into an agreement with PRA pursuant to which PRA provides Opexa with services related to the design, implementation and management of Opexa’s ongoing Phase IIb clinical trial program in SPMS (the “PRA Agreement”). Payments by Opexa to PRA under the PRA Agreement are based on the achievement of certain time and performance milestones as presented in the PRA Agreement. Total payments to PRA during the years ended December 31, 2015 and 2014, which were charged to research and development expense on the consolidated statements of operations, amounted to $1,115,868 and $1,557,824, respectively. Unless terminated by either party without cause on 60 days prior notice or on shorter notice with cause, the initial term of the PRA Agreement is for four years and automatically renews for successive one year terms.

 

Through December 31, 2015, Opexa entered into individual Clinical Trial Agreements with 36 Institutions and 36 principal investigators acting within their employment or agent positions within their clinical institution.  Under the terms of each Clinical Trial Agreement, each of the Investigators will identify and recruit subjects with SPMS meeting certain enrollment requirements and conduct clinical research in conjunction with Opexa’s Phase IIb clinical study, and each of the Institutions will provide appropriate resources and facilities so the Institution’s Investigator can conduct Opexa’s Phase IIb clinical study in a timely and professional manner and according to the terms of the Clinical Trial Agreement. Under the terms of each Clinical Trial Agreement, Opexa paid an upfront cash payment to each Institution for start-up and other costs which were charged directly to expense.  Future payments by Opexa to the Institutions during the term of each Clinical Trial Agreement are based on the achievement of certain performance milestones as presented in each Clinical Trial Agreement. Unless terminated by Opexa without cause with 30 days’ notice, or unless terminated by the Institution, Investigator or Opexa for health or safety reasons, the initial term of the Clinical Trial Agreements with each Institution and Investigator is for the duration of their enrolled subjects in the Phase IIb clinical study.

 

In November of 2014, Opexa entered into an agreement with Parexel International, LLC (“PAREXEL”), a contract research organization, in which PAREXEL will provide Opexa Regulatory Services for the conduct of the Neuromyelitis Optica (“NMO”) program.  In addition, three Institutional agreements were executed in 2014, to provide preclinical research activities. Services include identification, collection and shipping of blood samples to Opexa for research purposes and conduct of preclinical activities.

 

9. EQUITY
EQUITY

           Summary information regarding equity related transactions for the years ended December 31, 2014 and December 31, 2015 is as follows:

 

During 2014, equity related transactions were as follows:

 

●  On February 28, 2014, 13,700 shares of restricted common stock with an aggregate fair value of $199,503 were issued to certain members of Opexa’s management and certain members of the board of directors. Opexa recognized stock based compensation expense of $31,090 and $168,412 related to these shares for the year ended December 31, 2015 and 2014 respectively. The restricted shares issued to management vested in full on the earlier of the first anniversary of the grant date or termination of employment without cause following a change of control. The restricted shares issued to members of the board of directors vested in four quarterly increments beginning on March 31, 2014.

 

●  On March 19, 2014, 750 shares of restricted common stock with an aggregate fair value of $12,000 were issued to a certain member of Opexa’s board of directors. Opexa recognized stock based compensation expense of $2,123 and $9,877 related to these shares for the year ended December 31, 2015 and 2014 respectively. The restricted shares vested in three quarterly increments beginning on June 30, 2014.

 

●  In the third quarter of 2014, Opexa settled sales of 64,801 shares of common stock generating gross and net proceeds including amortization of deferred financing costs of $674,126 and $648,175, respectively, which were issued pursuant to the ATM facility.

 

●  In the fourth quarter of 2014, Opexa issued 6,833 shares of restricted stock with an aggregate fair market value of $50,000 in partial consideration for the performance of services rendered by a consultant pursuant to a consulting agreement dated October 21, 2014.

 

During 2015, equity related transactions were as follows:

 

●  In February 2015, Opexa recognized stock-based compensation expense of $33,213 related to vested shares of restricted common stock issued, on February 28, 2014, to certain members of Opexa’s management and non-employee directors.

 

●  On March 31, 2015, 2,557 shares of restricted common stock with an aggregate fair value of $11,250 were issued to certain non-employee directors for service on Opexa’s Board. Opexa recognized stock-based compensation of $11,250 related to these shares. The shares vested immediately upon grant.

 

●  On April 9, 2015, Opexa issued 3,137,305 shares of common stock and Series M warrants to purchase a like number of shares upon the closing of a rights offering. Opexa raised $13,804,140 in gross proceeds, before expenses, through subscriptions for 3,137,305 units at a price of $4.40 per unit. Net proceeds were $12,095,210 after deduction of related fees and expenses, including dealer-manager fees, totaling $ 1,708,930.

 

●  In June 2015, Opexa issued 953 shares of common stock and received gross proceeds of $3,810 upon the exercise of  Series M warrants to purchase 953 shares of common stock.

 

●  On June 30, 2015, 3,160 shares of restricted common stock with an aggregate fair value of $11,250 were issued to certain non-employee directors for service on Opexa’s Board. Opexa recognized stock-based compensation of $11,250 related to these shares. The shares vested immediately upon grant.

 

●  July 2015, Opexa issued 150 shares of common stock and received gross proceeds of $600 upon the exercise of Series M warrants to purchase 150 shares of common stock.

 

●  At Opexa’s annual meeting on August 28, 2015, shareholders approved an amendment to the Company’s Restated Certificate of Formation to increase the number of authorized shares of common stock from 100 million to 150 million, and the amendment was effect as of September 9, 2015.

 

●  On September 1, 2015, Opexa sold 113,636 shares of common stock for $4.40 per share and issued Series N warrants to purchase a like number of shares for gross and net proceeds of $499,999 upon the closing of tranche one of a private placement. Opexa also agreed to sell and the purchasers agreed to purchase an additional aggregate of $4.5 million of common stock in four additional tranches upon Opexa’s achievement of certain milestones to further the clinical development of OPX-212, Opexa’s autologous T-cell immunotherapy being developed for the treatment of neuromyelitis optica.

 

●  On September 28, 2015, Opexa effected the 1:8 Reverse Stock Split. An aggregate of 1,365 shares of common stock were identified as fractional shares, and cash in the amount of $5,028 was paid in lieu of these fractional shares.  Unless otherwise noted, impacted amounts included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock splits as if such stock splits occurred on the first day of the first period presented. Impacted amounts include shares of common stock issued and outstanding, shares underlying warrants and stock options, shares reserved, exercise prices of warrants and options, and loss per share. There was no impact on the amount of preferred or common stock authorized resulting from the 1:8 Reverse Stock Split.

 

  ●  On September 30, 2015, 3,600 shares of restricted common stock with an aggregate fair value of $11,250 were issued to certain non-employee directors for service on Opexa’s Board. Opexa recognized stock-based compensation of $11,250 related to these shares. The shares vested immediately upon grant.

 

●  On September 30, 2015 Opexa sold an aggregate of 75,000 shares of common stock under the ATM facility for gross and net proceed of $240,143 and $232,934, respectively. These sales settled and shares were issued in October 2015.

 

●  In November 2015, Opexa sold an aggregate of 114,507 shares of common stock under the ATM facility for gross and net proceed of $483,634 and $469,116, respectively. These sales settled and shares were issued in December 2015.

 

●  On December 31, 2015, 4,062 shares of restricted common stock with an aggregate fair value of $11,250 were issued to certain non-employee directors for service on Opexa’s Board. Opexa recognized stock-based compensation of $11,250 related to these shares. The shares vested immediately upon grant.
10. OPTIONS AND WARRANTS
OPTIONS AND WARRANTS

The Board initially adopted the Opexa Therapeutics, Inc. 2010 Stock Incentive Plan on September 2, 2010 for the granting of equity incentive awards to employees, directors and consultants of Opexa, and the Plan was initially approved by the Company’s shareholders on October 19, 2010. On September 25, 2013, the Board approved the Amended and Restated 2010 Stock Incentive Plan (“the 2010 Plan”), and the Company’s shareholders approved the amended 2010 Plan on November 8, 2013, in order to (i) increase the number of shares of common stock reserved for issuance by 375,000 shares and (ii) reset the number of stock-based awards issuable to a participant in any calendar year to align with the increase in the shares reserved. The 2010 Plan is the successor to and continuation of Opexa’s June 2004 Compensatory Stock Option Plan (the “2004 Plan”). The 2004 Plan reserved a maximum of 71,875 shares of common stock for issuance pursuant to incentive stock options and nonqualified stock options granted to employees, directors and consultants. Awards were made as either incentive stock options or nonqualified stock options, with the Board having discretion to determine the number, term, exercise price and vesting of grants made under the 2004 Plan. All outstanding equity awards granted under the 2004 Plan continue to be subject to the terms and conditions as set forth in the agreements evidencing such stock awards and the terms of the 2004 Plan, but no additional awards will be granted under the 2004 Plan subsequent to approval of the 2010 Plan.  The 2010 Plan reserves a maximum of 453,125 shares of common stock for issuance plus the number of shares subject to stock options outstanding under the 2004 Plan that are forfeited or terminate prior to exercise and would otherwise be returned to the share reserves under the 2004 Plan and any reserved shares not issued or subject to outstanding grants, up to a maximum of 64,152 shares.  The 2010 Plan provides for the grant of incentive stock options or nonqualified stock options, as well as restricted stock, stock appreciation rights, restricted stock units and performance awards that may be settled in cash, stock or other property. The Board of Directors or Compensation Committee, as applicable, administers the 2010 Plan and has discretion to determine the recipients, the number and types of stock awards to be granted and the terms and conditions of the stock awards, including the period of their exercisability and vesting. Subject to a limitation on repricing without shareholder approval, the Board or Compensation Committee, as applicable, may also determine the exercise price of options granted under the 2010 Plan.

 

Opexa accounts for stock-based compensation, including options and nonvested shares, according to the provisions of FASB ASC 718, "Share Based Payment.” During the 12 months ended December 31, 2015, Opexa recognized stock-based compensation expense of $835,723. Unamortized stock-based compensation expense as of December 31, 2015 amounted to $1,897,092.

 

Stock Option Activity

 

A summary of the stock option activity for the years 2014 and 2015 are presented below:

 

    Number of Shares     Weighted Avg. Exercise Price    

Weighted Average Remaining Contract Term

(# years)

    Intrinsic Value  
Outstanding at December 31, 2013     145,233     $ 34.39              
Granted     175,417       14.27              
Exercised     -       -              
Forfeited and canceled     (17,816 )     23.86              
Outstanding at December 31, 2014     302,834     $ 23.34       8.0     $ -  
Exercisable at December 31, 2014     120,485     $ 36.52       6.4     $ -  
Granted     135,430       5.22              
Exercised     -       -              
Forfeited and canceled     (20,860 )     13.35              
Outstanding at December 31, 2015     417,404     $ 18.04       7.7     $ -  
Exercisable at December 31, 2015     231,071     $ 23.58       7.0     $ -  

 

Employee Options:

 

Option awards are granted with an exercise price equal to the market price of Opexa’s stock at the date of issuance, generally have a ten-year life, and have various vesting dates that range from no vesting or partial vesting upon date of grant to full vesting on a specified date. Opexa estimates the fair value of stock options using the Black-Scholes option-pricing model and records the compensation expense ratably over the service period.

 

During 2014, performance-based options to purchase an aggregate of 63,765 shares at an exercise price of $14.56 were granted to senior management. These options have a term of ten years and vest 100% upon the earlier of achievement of a performance-based, strategic milestone objective or termination of employment without cause following a change of control. Fair value of $918,554 was calculated using the Black-Scholes option-pricing model.  Variables used in the Black-Scholes option-pricing model for these options include (1) discount rate of 2.65%, (2) expected term of 10 years, (3) expected volatility of 172.33% and (4) zero expected dividends.

 

During 2014, incentive based options to purchase an aggregate of 96,609 shares were granted to employees, at exercise prices ranging from $6.88 to $14.56. These options have terms of ten years and have a vesting schedule of four years. Fair value of $1,324,070 was calculated using the Black-Scholes option-pricing model.  Variables used in the Black-Scholes option-pricing model for these options include (1) discount rate range of 2.26 to 2.79%, (2) expected term of 6.25 years, (3) expected volatility range of 176.37% to 315.10% and (4) zero expected dividends.

 

During 2014, options to purchase 13,110 shares were forfeited and cancelled.

 

Opexa recorded $748,697 stock-based compensation expense to management and employees during 2014, which included the related expense for the options that are expected to vest based on achievement of their related performance conditions. Unamortized stock compensation expense as of December 31, 2014 amounted to $2,239,522.  

 

During 2015, time-based options to purchase an aggregate of 71,462 shares at exercise prices ranging from $3.04 to $6.56 were granted to employees. These options have a term of ten years and have a vesting schedule of the earlier of four years or termination of employment without cause following a change of control. Fair value of $406,713 was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model for these options include (1) discount rate range of 1.95% to 2.19%, (2) expected term of 6.25 years, (3) expected volatility range of 134.18% to 144.83% and (4) zero expected dividends.

 

During 2015, options to purchase 20,860 shares were forfeited and cancelled.

 

Opexa recognized stock based compensation expense of $623,040 for grants made to employees during 2015. Unamortized stock compensation expense as of December 31, 2015 amounted to $1,890,846.

 

Non-Employee Options:

 

During 2014, options to purchase an aggregate of 15,055 shares were granted to directors for service on Opexa’s Board at an exercise price ranging from $14.56 to $16.00. Options to purchase an aggregate of 3,286 shares have terms of 10 years, with 50% of the shares vesting on the grant date and 50% vesting one year from the date of grant. Options to purchase 9,857 shares have terms of 10 years, with 50% of the shares vesting on the grant date and 50% vesting on December 31, 2014. An option to purchase 1,106 shares has a term of 10 years, with quarterly vesting ending on December 31, 2014.   An option to purchase the remaining 806 shares has a term of 10 years, with 33.3% vesting quarterly ending on December 31, 2014.  Fair value of $211,097 was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model for these options include (1) discount rate range of 2.65% to 2.77%, (2) expected term of 5.25 years, (3) expected volatility range of 155% to 157% and (4) zero expected dividends.

 

During 2014, options to purchase 4,718 shares were forfeited and cancelled.

 

Opexa recorded $211,201 of stock-based compensation expense to consultants and directors during 2014. Unamortized stock compensation expense as of December 31, 2014 amounted to $4,086.

 

During 2015, options to purchase an aggregate of 63,968 shares at an exercise price of $4.24 were granted to non-employee directors for service on Opexa’s Board. Options to purchase an aggregate of 44,630 shares will expire on the earlier of 10 years or a change in control of Opexa, with 50% of the shares vesting immediately and 50% vesting on December 31, 2015. Options to purchase an aggregate of 14,875 shares have terms of 10 years, with 50% of the shares vesting immediately and 50% vesting on March 30, 2016. An option to purchase 4,463 shares will expire on the earlier of 10 years or a change in control of Opexa, with vesting in four quarterly increments beginning on June 30, 2015. Fair value of $214,844 was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model for these options include (1) discount rate of 1.95%, (2) expected term of 5.25 years, (3) expected volatility of 107.33% and (4) zero expected dividends.

 

Opexa recognized stock based compensation expense of $212,683 for grants made to non-employee directors during 2015. Unamortized stock compensation expense as of December 31, 2015 amounted to $6,246.

 

Warrant Activity

 

    A summary of warrant activity for 2015 and 2014 is presented below:

 

    Number of Shares     Weighted Avg. Exercise Price    

Weighted Average Remaining Contract Term

(# years)

    Intrinsic Value  
Outstanding at January 1, 2014     383,603     $ 32.96     2.46     -  
Granted     -       -     -     -  
Exercised     -       -     -     -  
Forfeited and canceled     (2,789)       80.00     -     -  
Outstanding at December 31, 2014     380,814       29.92       2.21       -  
Exercisable at December 31, 2014     380,814       29.92       2.21       -  
Outstanding at January 1, 2015     380,814     $ 29.92     2.21     -  
Granted     3,311,128       4.16     -     -  
Exercised     (1,103)       4.00     -     -  
Forfeited and canceled     (27,885)       74.96     -     -  
Outstanding at December 31, 2015     3,662,954       6.30       2.17       -  
Exercisable at December 31, 2015     3,662,954       6.30       2.17       -  

 

   On April 9, 2015, the Company issued Series M warrants to purchase an aggregate of 3,137,305 shares of common stock upon the closing of a rights offering.  The Series M warrants entitle the holders to purchase common stock at an exercise price of (i) $4.00 per share from the date of issuance (April 9, 2015) through June 30, 2016 and (ii) $12.00 per share from July 1, 2016 through their expiration on April 9, 2018.  Pursuant to the anti-dilution provisions of certain of the Company’s outstanding warrants and as a result of the rights offering (i) the per share exercise prices of the Series A, J, K and L warrants were adjusted to $74.96, $8.24, $8.00 and $12.72, respectively, and (ii) Series L warrants to purchase an aggregate of an additional 60,187 shares of common stock were issued.  The Series A warrants expired on June 15, 2015.

 

   On September 1, 2015, the Company issued Series N warrants to purchase an aggregate of 113,636 shares of common stock at an exercise price of (i) $4.00 per share from the date of issuance through June 30, 2016 and (ii) $12.00 per share from July 1, 2016 through their original expiration on April 9, 2018.

11. LICENSES AND GAIN ON EXTINGUISHMENT OF LIABILITY
LICENSES AND GAIN ON EXTINGUISHMENT OF LIABILITY

Stem Cell Technology Agreement

 

In August 2009, Opexa entered into an exclusive agreement with Novartis for the further development of its stem cell technology. This technology, which has generated preliminary data, was in early preclinical development. Under the terms of the agreement, Novartis acquired the stem cell technology from Opexa and Novartis had full responsibility for funding and carrying out all research, development and commercialization activities. Opexa received an upfront cash payment of $3 million at the time the agreement was entered into and subsequently received $0.5 million as a technology transfer milestone fee.

 

In November 2011, Opexa re-acquired the stem cell assets from Novartis in consideration for releasing Novartis with respect to any further payment obligations owed to Opexa by Novartis  In connection with the re-acquisition of the stem cell assets, a related license agreement with the University of Chicago was re-assigned to Opexa. Opexa and the University of Chicago entered into a Fourth Amended and Restated License Agreement in connection with such assignment to Opexa.

 

On August 12, 2014, we provided notice to the University of Chicago of our election to discontinue further prosecution of certain patents relating to the proprietary adult stem cell technology that we licensed from the University of Chicago pursuant to the Fourth Amended and Restated License Agreement dated November 2, 2011. Pursuant to the termination notice, we exercised our contractual option to return the licensed patent rights back to the University of Chicago and terminate the Fourth Amended and Restated License Agreement effective November 10, 2014 in accordance with the terms thereof.

12. SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

On March 2, 2016, the Company announced implementation of a restructuring initiative which included a reduction of approximately 30% of its then full-time workforce of 36 employees in order to reduce operating expenses and conserve cash resources.

 

   On March 14, 2016, the Company entered into an amendment to the September 1, 2015 Stock Purchase Agreement with the purchasers party thereto to extend by six months the original dates for the milestones relating to the subsequent tranches.  As part of the amendment, the expiration date of the Series N warrants issued pursuant thereto was extended from April 9, 2018 to October 9, 2018.

1. BUSINESS OVERVIEW AND SUMMARY OF ACCOUNTING POLICIES (Policies)

Description of Business.  Opexa Therapeutics, Inc. (“Opexa”, “we”, “our”, or “the Company”) was initially incorporated as Sportan United Industries, Inc. (“Sportan”) in Texas in March 1991. In June 2004, PharmaFrontiers Corp. (“PharmaFrontiers”) was acquired by Sportan in a transaction accounted for as a reverse acquisition.  In October 2004, PharmaFrontiers acquired all of the outstanding stock of Opexa Pharmaceuticals, Inc. (“Opexa Pharmaceuticals”), a biopharmaceutical company that previously acquired the exclusive worldwide license from Baylor College of Medicine to an patient specific, autologous T-cell immunotherapy, Tcelna® (formerly known as Tovaxin), for the initial treatment of multiple sclerosis (MS). In June 2006, the Company changed its name to Opexa Therapeutics, Inc. from PharmaFrontiers Corp. and, in January 2007, Opexa Therapeutics, Inc., the parent, merged with its wholly owned subsidiary, Opexa Pharmaceuticals with Opexa Therapeutics, Inc. being the surviving company.

 

In September 2012, Opexa initiated a Phase IIb clinical trial of Tcelna in patients with secondary progressive MS (“SPMS”). Previously, in September 2008, the Company completed a Phase IIb clinical study of Tcelna in the relapsing-remitting MS (“RRMS”) indication.

 

Opexa operates in a highly regulated and competitive environment. The manufacturing and marketing of pharmaceutical products require approval from, and are subject to, ongoing oversight by the Food and Drug Administration, or FDA, in the United States, by the European Medicines Agency, or EMA, in the E.U. and by comparable agencies in other countries. Obtaining approval for a new therapeutic product is never certain and may take many years and may involve expenditure of substantial resources.  Tcelna is in development stage and Opexa has not applied for a Biologics License Application (BLA) for Tcelna with the FDA nor a similar regulatory licensure in any other country, and thus Tcelna is not approved to be marketed in any country.

Reverse Stock Split.  On September 28, 2015, Opexa effected a one-for-eight reverse stock split of its common stock (the “1:8 Reverse Stock Split”) which decreased the number of common shares issued and outstanding from approximately 54.3 million shares to approximately 6.8 million shares. The number of authorized shares of common stock and preferred stock remained the same following the 1:8 Reverse Stock Split.

 

Unless otherwise noted, impacted amounts included in the consolidated financial statements and notes thereto have been retroactively adjusted for the stock splits as if such stock splits occurred on the first day of the first period presented. Impacted amounts include shares of common stock issued and outstanding, shares underlying warrants and stock options, shares reserved, exercise prices of warrants and options, and loss per share. There was no impact on the amount of preferred or common stock authorized resulting from the 1:8 Reverse Stock Split.

 

Principles of Consolidation.  The consolidated financial statements include the accounts of Opexa and its wholly owned subsidiary, Opexa Hong Kong Limited (“Opexa Hong Kong”).  Opexa Hong Kong was formed in the Hong Kong Special Administrative Region during 2012 in order to facilitate potential development collaborations in the pan-Asian region.  Presently, Opexa Hong Kong has not entered into any agreements and has not recognized any revenues as of December 31, 2015. All intercompany transactions and balances between Opexa and Opexa Hong Kong are eliminated in consolidation.

Use of Estimates in Financial Statement Preparation. 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, 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. Actual results could differ from those estimates.

Certain Risks and Concentrations. Opexa is exposed to risks associated with foreign currency transactions insofar as it has used U.S. dollars to fund Opexa Hong Kong’s bank account denominated in Hong Kong dollars.  As the net position of the unhedged Opexa Hong Kong bank account fluctuates, Opexa’s earnings may be negatively affected.  In addition, the reported carrying value of the Company’s Hong Kong dollar-denominated assets and liabilities that remain in Opexa Hong Kong will be affected by fluctuations in the value of the U.S. dollar as compared to the Hong Kong dollar.  Opexa currently does not utilize forward exchange contracts or any type of hedging instruments to hedge foreign exchange risk as Opexa believes that its overall exposure is relatively limited.  As of December 31, 2015, Opexa Hong Kong reported cash and cash equivalents of $9,999 in converted U.S. dollars and does not have any reported liabilities in the consolidated balance sheets.

    Revenue Recognition.  Opexa recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“FASB ASC”) 605, “Revenue Recognition.” ASC 605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) consideration is fixed or determinable; and (4) collectability is reasonably assured.

 

    On February 4, 2013, Opexa entered into an Option and License Agreement (the “Merck Serono Agreement”) with Ares Trading SA (“Merck Serono”), a wholly owned subsidiary of Merck Serono S.A.  Pursuant to the terms, Merck Serono has an option to acquire an exclusive, worldwide (excluding Japan) license of Opexa’s Tcelna® program for the treatment of multiple sclerosis (“MS”).  Tcelna is currently in a Phase IIb clinical trial in patients with Secondary Progressive MS (“SPMS”). The option may be exercised by Merck Serono prior to or upon Opexa’s completion of the Phase IIb Trial.

 

Opexa received an upfront payment of $5 million for granting the option. If the option is exercised, Merck Serono would pay the Company an upfront license fee of $25 million unless Merck Serono is unable to advance directly into a Phase III clinical trial of Tcelna for SPMS without a further Phase II clinical trial (as determined by Merck Serono), in which event the upfront license fee would be $15 million. After exercising the option, Merck Serono would be solely responsible for funding development, regulatory and commercialization activities for Tcelna in MS, although the Company would retain an option to co-fund certain development in exchange for increased royalty rates.  The Company would also retain rights to Tcelna in Japan, certain rights with respect to the manufacture of Tcelna, and rights outside of MS.

 

Opexa recognized revenues from nonrefundable, up-front $5 million option fees related to the Merck Serono Agreement on a straight-line basis over the estimated option exercise period which coincides with the expected completion term of Opexa’s current Phase IIb clinical trial for Tcelna in patients with SPMS.  Opexa is required to make estimates regarding the clinical trial timelines which impact the period over which the option exercise may occur.  Opexa’s estimates regarding the option exercise period were adjusted in 2014 once the enrollments for the Abili-T clinical trial were completed.  This adjustment was made on a prospective basis beginning in the periods in which the change was identified and resulted in a decrease in the amount of revenue we recognized on a quarterly basis from the Merck Serono Agreement.  No changes to estimates for the option exercise milestone were made in 2015.  The expected completion term for revenue recognition is December 2016.

 

On March 9, 2015 Opexa entered into a First Amendment of Option and License Agreement with Merck Serono, to amend the Merck Serono Agreement (the “Merck Serono Amendment”).  Opexa received $3 million in consideration for the activities described below:

 

●  Opexa will create a detailed Pre-Phase III Plan (including a GANTT chart containing key tasks, decision points, timing, budget and milestones) documenting all of the activities necessary for laboratory facilities both in the U.S. and Europe to reach operational readiness by the end of December 2016 (e.g., review and identification of a preferred contract manufacturing organization in Europe; set-up, identification and qualification of third parties for raw materials; validation of laboratory facilities in the U.S. and Europe; and a hiring plan for key personnel).  For Europe, the Pre-Phase III Plan would address the creation of a dedicated lab to support a Phase III trial, and for the U.S., the Pre-Phase III Plan would address the expansion of existing capabilities and infrastructure for a Phase III trial. The Joint Steering Committee (“JSC”) established pursuant to the Merck Serono Agreement will be responsible for reviewing, approving and ultimately overseeing Opexa’s completion of the Pre-Phase III Plan, which approval may not be unreasonably withheld or delayed.  The JSC will meet at least quarterly to advise and make specific recommendations with respect to the Pre-Phase III Plan.  In the event the JSC has not approved the Pre-Phase III Plan prior to the end of the Option Period (as defined in the Merck Serono Agreement), the Option Period will be extended for 60 days following approval of the Pre-Phase III Plan by the JSC.

 

●  Opexa will provide Merck Serono updates and analysis on a blinded basis, grouped in patient batches according to Opexa’s analysis timetable, on the progress of Opexa’s immune monitoring program (the “Program”) being conducted in conjunction with Opexa’s ongoing Abili-T clinical trial, with such updates and analysis to be shared with Merck Serono within 30 days of Opexa’s initial assessment of such information.  Opexa will inform Merck Serono of any existing or future external bioinformatics vendor used by Opexa for the Program, and Merck Serono will have the right, at its expense, to review current and future data storage and integrity measures for the on-going Abili-T clinical trial.

 

Opexa evaluated the Merck Serono Amendment and determined that the $3 million payment from Merck Serono has stand-alone value.  Opexa’s continuing performance obligations, in connection with the $3 million payment, include the creation of the Pre-Phase III Plan and delivery of updates and analysis relating to the Program.  As a stand-alone value term in the Merck Serono Amendment, the $3 million payment is determined to be a single unit of accounting, and is recognized as revenue on a straight-line basis over the period equivalent to the expected completion of the Pre-Phase III Plan in December 2016.  Opexa includes the unrecognized portion of the $3 million as deferred revenue on the consolidated balance sheets.

 

Cash and Cash Equivalents. For purposes of the consolidated statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less. The primary objectives for the fixed income investment portfolio are liquidity and safety of principal. Investments are made with the objective of achieving the highest rate of return consistent with these two objectives. Opexa’s investment policy limits investments to certain types of instruments issued by institutions primarily with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer.

Supplies Inventory. Supplies inventory during 2014 and 2015 included reagents and supplies that will be used to manufacture Tcelna and placebo product in Opexa’s Phase IIb clinical study.  Opexa amortized these prepaid reagents and supplies to research and development expenses in the consolidated statements of operations over the period that these supplies were used. The supplies inventory was fully amortized as of December 31, 2014.  During 2015, a single custom reagent that will be used primarily for the NMO program and other Pre-Phase III activities is captured as custom reagents and reported under Other Current Assets due to its material cost and three-year shelf life. Upon consumption, the cost of this reagent will be amortized to research and development expenses in the consolidated statements of operations.

Long-lived Assets. Property and equipment are stated on the basis of historical cost less accumulated depreciation. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. Major renewals and improvements are capitalized, while minor replacements, maintenance and repairs are charged to current operations. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount.

Deferred costs.  Opexa incurs costs in connection with a debt or equity offering or in connection with the proceeds pursuant to an execution of a strategic agreement.  These costs are recorded as deferred offering or deferred financing costs in the consolidated balance sheets.  Such costs may consist of legal, accounting, underwriting fees and other related items incurred through the date of the debt or equity offering or the date of the execution of the strategic agreement.  Costs in connection with a debt offering are amortized to interest expense over the term of the note instrument.  Costs in connection with the execution of a strategic agreement in which an initial upfront payment is received are offset to the gain recognized in the consolidated statements of operations. Additional paid in capital includes costs recorded as an offset to proceeds in connection with the completion of an equity offering.  Any remaining deferred offering costs that exist upon the expiration of the equity offering (or ATM program) are written off to expense.

Income Taxes. Income tax expense is based on reported earnings before income taxes. Deferred income taxes reflect the impact of temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes, and are measured by applying enacted tax rates in effect in years in which the differences are expected to reverse. A valuation allowance is recorded to reduce the net deferred tax asset to zero because it is more likely than not that the deferred tax asset will not be realized. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon an examination.

Stock-Based Compensation. Opexa accounts for share-based awards issued to employees in accordance with FASB ASC 718. Accordingly, employee share-based payment compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period (generally the vesting is over a 4 year period). Additionally, Opexa accounts for share-based awards to non-employees in accordance with FASB ASC 505, and such awards are expensed over the period in which the related services are rendered at their fair value.

Research and Development. Research and development expenses are expensed in the consolidated statements of operations as incurred in accordance with FASB ASC 730, Research and Development.  Research and development expenses include salaries, related employee expenses, clinical trial expenses, research expenses, consulting fees, and laboratory costs. In instances in which the Company enters into agreements with third parties for research and development activities, Opexa may prepay fees for services at the initiation of the contract. Opexa records the prepayment as a prepaid asset in the consolidated balance sheets and amortizes the asset into research and development expense in the consolidated statements of operations over the period of time the contracted research and development services are performed.  Other types of arrangements with third parties may be fixed fee or fee for service, and may include monthly payments or payments upon completion of milestones or deliverables. Opexa expenses the costs of licenses of patents and the prosecution of patents until the issuance of such patents and the commercialization of related products is reasonably assured. Research and development expense for the years ended December 31, 2015 and 2014 was $10,039,496 and $12,118,629, respectively.

Foreign Currency Translation and Transaction Gains and Losses.  Opexa records foreign currency translation adjustments and transaction gains and losses in accordance with FASB ASC 830, Foreign Currency Matters.  For the Company’s operations that have a functional currency other than the U.S. dollar, gains and losses resulting from the translation of the functional currency into U.S. dollars for financial statement presentation are not included in determining net loss, but are accumulated in the cumulative foreign currency translation adjustment account as a separate component of stockholders’ equity.  Opexa Hong Kong’s functional currency is deemed to be the US Dollar; consequently, Opexa records transaction gains and losses in its consolidated statements of operations related to the recurring measurement and settlement of foreign currency denominated transactions and balances.

Net Loss per Share.  Basic and diluted net loss per share is calculated based on the net loss attributable to common shareholders divided by the weighted average number of shares outstanding for the period excluding any dilutive effects of options, warrants and unvested share awards.

Reclassifications. Certain comparative amounts from prior periods have been reclassified to conform to the current year's presentation. These changes did not affect previously reported net loss.

3. OTHER CURRENT ASSETS (Tables)
Other Current Assets
Description  2015  2014
Custom reagents  $496,269   $—   
Deferred offering costs   28,876    259,989 
Prepaid expenses   469,922    498,954 
Total Other Current Assets  $995,067   $758,943 
4. PROPERTY AND EQUIPMENT (Tables)
Property and Equipment
Description  Life  2015  2014
Computer equipment                   3 years   $193,596   $168,209 
Office furniture and equipment                   5-7 years    247,679    247,679 
Software                   3 years    125,412    116,022 
Laboratory equipment                   7 years    1,120,693    1,100,559 
Leasehold improvements                   5 years    683,295    675,672 
Manufacturing equipment                   7 years    910,792    889,352 
Subtotal        3,281,467    3,197,493 
Less: accumulated depreciation        (2,443,600)   (2,099,389)
Property and equipment, net       $837,867   $1,098,104 
6. INCOME TAXES (Tables)
Schedule of deferred tax assets

Deferred tax asset resulting from:  December 31, 2015  December 31, 2014
Net Operating Loss  $24,806,175   $24,531,026 
Research and development tax credits   2,593,792    1,778,030 
Capitalized research and development costs   11,900,122    8,803,914 
Subtotal   39,300,089    35,112,970 
Less valuation allowance   (39,300,089)   (35,112,970)
Net deferred tax asset  $—     $—   

7. COMMITMENTS AND CONTINGENCIES (Tables)
Future minimum lease payments
Year    Amount  
 2016   $200,000 
 2017    200,000 
 2018    201,250 
 2019    206,250 
 2020    157,500 
 Total future minimum lease payments   $965,000 
10. OPTIONS AND WARRANTS (Tables)
    Number of Shares     Weighted Avg. Exercise Price    

Weighted Average Remaining Contract Term

(# years)

    Intrinsic Value  
Outstanding at December 31, 2013     145,233     $ 34.39              
Granted     175,417       14.27              
Exercised     -       -              
Forfeited and canceled     (17,816 )     23.86              
Outstanding at December 31, 2014     302,834     $ 23.34       8.0     $ -  
Exercisable at December 31, 2014     120,485     $ 36.52       6.4     $ -  
Granted     135,430       5.22              
Exercised     -       -              
Forfeited and canceled     (20,860 )     13.35              
Outstanding at December 31, 2015     417,404     $ 18.04       7.7     $ -  
Exercisable at December 31, 2015     231,071     $ 23.58       7.0     $ -  
    Number of Shares     Weighted Avg. Exercise Price    

Weighted Average Remaining Contract Term

(# years)

    Intrinsic Value  
Outstanding at January 1, 2014     383,603     $ 32.96     2.46     -  
Granted     -       -     -     -  
Exercised     -       -     -     -  
Forfeited and canceled     (2,789)       80.00     -     -  
Outstanding at December 31, 2014     380,814       29.92       2.21       -  
Exercisable at December 31, 2014     380,814       29.92       2.21       -  
Outstanding at January 1, 2015     380,814     $ 29.92     2.21     -  
Granted     3,311,128       4.16     -     -  
Exercised     (1,103)       4.00     -     -  
Forfeited and canceled     (27,885)       74.96     -     -  
Outstanding at December 31, 2015     3,662,954       6.30       2.17       -  
Exercisable at December 31, 2015     3,662,954       6.30       2.17       -  
2. CASH AND CASH EQUIVALENTS (Detail Narratives) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Cash and Cash Equivalents [Abstract]
 
 
Investment in savings account
$ 11,700,000 
 
Percentage of interest recognized from savings account investment
0.07% 
 
Interest income from savings account investment
8,203 
 
Cash and cash equivalents, money market accounts
24,500 
24,500 
Percentage of interest recognized from money market fund
0.01% 
0.01% 
Interest income from money market fund
$ 3 
 
3. OTHER CURRENT ASSETS (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
 
 
Custom reagents
$ 496,269 
$ 0 
Deferred offering costs
28,876 
259,989 
Prepaid expenses
469,922 
498,954 
Other current assets
$ 995,067 
$ 758,943 
4. PROPERTY AND EQUIPMENT (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, gross
$ 3,281,467 
$ 3,197,493 
Less: accumulated depreciation
(2,443,600)
(2,099,389)
Property and equipment, net
837,867 
1,098,104 
Computer Equipment [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, useful life
3 years 
 
Property, plant and equipment, gross
193,596 
168,209 
Office Furniture And Equipment [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, gross
247,679 
247,679 
Office Furniture And Equipment [Member] |
Maximum [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, useful life
5 years 
 
Office Furniture And Equipment [Member] |
Minimum [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, useful life
7 years 
 
Computer Software Intangible Asset [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, useful life
3 years 
 
Property, plant and equipment, gross
125,412 
116,022 
Laboratory Equipment [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, useful life
7 years 
 
Property, plant and equipment, gross
1,120,693 
1,100,559 
Leasehold Improvements [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, useful life
5 years 
 
Property, plant and equipment, gross
683,295 
675,672 
Manufacturing Equipment [Member]
 
 
Property Plant And Equipment Disclosure [Line Items]
 
 
Property, plant and equipment, useful life
7 years 
 
Property, plant and equipment, gross
$ 910,792 
$ 889,352 
4. PROPERTY AND EQUIPMENT (Detail Narratives) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Property Plant And Equipment Disclosure [Line Items]
 
 
Depreciation expense
$ 351,403 
$ 387,779 
5. OTHER LONG TERM ASSETS (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Other Long Term Assets Details
 
 
Unamortized costs
$ 0 
$ 38,939 
6. INCOME TAXES (Details) (USD $)
Dec. 31, 2015
Dec. 31, 2014
Deferred tax asset resulting from:
 
 
Net Operating Loss
$ 24,806,175 
$ 24,531,026 
Research and development tax credits
2,593,792 
1,778,030 
Capitalized research and development costs
11,900,122 
8,803,914 
Subtotal
39,300,089 
35,112,970 
Less valuation allowance
(39,300,089)
(35,112,970)
Net deferred tax asset
$ 0 
$ 0 
6. INCOME TAXES (Detail Narratives) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Income Tax Disclosure [Abstract]
 
 
Unused net operating losses
$ 70,000,000 
$ 68,000,000 
Capitalized research and development costs
$ 11,900,122 
$ 8,803,914 
Net operating losses begin to expire
Dec. 31, 2025 
 
7. COMMITMENTS AND CONTINGENCIES (Details) (USD $)
Dec. 31, 2015
Commitments And Contingencies Details
 
2016
$ 200,000 
2017
200,000 
2018
201,250 
2019
206,250 
2020
157,500 
Total future minimum lease payments
$ 965,000 
7. COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Commitments And Contingencies Details Narrative
 
 
Rent expense
$ 153,000 
$ 136,000 
10. OPTIONS AND WARRANTS (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Options
 
 
Number of Shares, Outstanding at beginning of period
302,834 
145,233 
Options, Granted
135,430 
175,417 
Options, Exercised
Options, Forfeited and canceled
(20,860)
(17,816)
Number of Shares, Outstanding at end of period
417,404 
302,834 
Number of Shares, Exercisable at end of period
231,071 
120,485 
Weighted Average Exercise Price, Options
 
 
Weighted average exercise price, Outstanding at beginning of period
$ 23.34 
$ 34.39 
Weighted average exercise price options, Granted
$ 5.22 
$ 14.27 
Weighted average exercise price options, Exercised
$ 0.00 
$ 0.00 
Weighted average exercise price options, Forfeited and canceled
$ 13.35 
$ 23.86 
Weighted average exercise price, Outstanding at end of period
$ 18.04 
$ 23.34 
Weighted average exercise price, Exercisable at end of period
$ 23.58 
$ 36.52 
Weighted Average Remaining Contract Term, Options
 
 
Weighted Average Remaining Contract Term, Outstanding at end of period
7 years 8 months 12 days 
8 years 
Weighted Average Remaining Contract Term, Exercisable
7 years 
6 years 4 months 24 days 
Intrinsic Value, Options
 
 
Outstanding Aggregate Intrinsic Value, beginning of period
$ 0 
$ 0 
Outstanding Aggregate Intrinsic Value, end of period
Exercisable Aggregate Intrinsic Value
$ 0 
$ 0 
10. OPTIONS AND WARRANTS (Details 1) (Warrants, USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Warrants
 
 
Number of Shares, Outstanding at beginning of period
380,814 
383,603 
Warrants, Granted
3,311,128 
Warrants, Exercised
(1,103)
Warrants, Forfeited and canceled
(27,885)
(2,789)
Number of Shares, Outstanding at end of period
3,662,954 
380,814 
Number of Shares, Exercisable at end of period
3,662,954 
380,814 
Weighted average exercise price, Outstanding at beginning of period
$ 29.92 
$ 32.96 
Weighted average exercise price warrants, Granted
$ 4.16 
$ 0.00 
Weighted average exercise price warrants, Exercised
$ 4.00 
$ 0.00 
Weighted average exercise price warrants, Forfeited and canceled
$ 74.96 
$ 80.00 
Weighted average exercise price, Outstanding at end of period
$ 6.30 
$ 29.92 
Weighted average exercise price, Exercisable at end of period
$ 6.30 
$ 29.92 
Weighted Average Remaining Contract Term, Warrants
 
 
Weighted Average Remaining Contract Term, Outstanding at beginning of period
2 years 2 months 16 days 
2 years 5 months 16 days 
Weighted Average Remaining Contract Term, Outstanding at end of period
2 years 2 months 1 day 
2 years 2 months 16 days 
Weighted Average Remaining Contract Term, Exercisable
2 years 2 months 1 day 
2 years 2 months 16 days 
Intrinsic Value, Warrants
 
 
Outstanding Aggregate Intrinsic Value, Beginning of period
$ 0 
$ 0 
Aggregate Intrinsic Value Granted
Aggregate Intrinsic Value Exercised
Aggregate Intrinsic Value Forfeited
Outstanding Aggregate Intrinsic Value, End of period
Exercisable Aggregate Intrinsic Value
$ 0 
$ 0