OPEXA THERAPEUTICS, INC., 10-Q filed on 11/7/2013
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2013
Nov. 5, 2013
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Sep. 30, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q3 
 
Trading Symbol
OPXA 
 
Entity Registrant Name
OPEXA THERAPEUTICS, INC. 
 
Entity Central Index Key
0001069308 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Smaller Reporting Company 
 
Entity Common Stock, Shares Outstanding
 
22,729,487 
Consolidated Balance Sheets (USD $)
Sep. 30, 2013
Dec. 31, 2012
Current assets:
 
 
Cash and cash equivalents
$ 20,172,485 
$ 592,004 
Other current assets
1,304,146 
1,077,546 
Total current assets
21,476,631 
1,669,550 
Property & equipment, net of accumulated depreciation of $1,752,655 and $1,494,510, respectively
1,226,511 
1,265,041 
Restricted cash
 
1,000,000 
Deferred financing costs, net of amortization of $0 and $58,639, respectively
 
211,479 
Other long-term assets
85,047 
 
Total assets
22,788,189 
4,146,070 
Current liabilities:
 
 
Accounts payable
914,317 
412,096 
Accrued expenses
1,056,300 
473,879 
Deferred revenue
1,395,348 
 
Total current liabilities
3,365,965 
885,975 
Long term liabilities:
 
 
Deferred revenue
2,686,878 
 
Total liabilities
6,052,843 
1,262,738 
Commitments and contingencies
   
   
Stockholders' equity:
 
 
Preferred stock, no par value, 10,000,000 shares authorized, none issued and outstanding
   
   
Common stock, $0.01 par value, 100,000,000 shares authorized, 22,729,487 and 6,249,369 shares issued and outstanding
227,295 
62,494 
Additional paid in capital
139,017,515 
112,432,458 
Deficit accumulated during the development stage
(122,509,464)
(109,611,620)
Total stockholders' equity
16,735,346 
2,883,332 
Total liabilities and stockholders' equity
22,788,189 
4,146,070 
Unrelated Party Transactions
 
 
Long term liabilities:
 
 
Convertible debt, net of unamortized discount
 
318,658 
Related Party Transactions
 
 
Long term liabilities:
 
 
Convertible debt, net of unamortized discount
 
$ 58,105 
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Property & equipment, accumulated depreciation
$ 1,752,655 
$ 1,494,510 
Deferred financing costs, amortization
0 
58,639 
Preferred stock, no par value
   
   
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
100,000,000 
100,000,000 
Common stock, shares issued
22,729,487 
6,249,369 
Common stock, shares outstanding
22,729,487 
6,249,369 
Unrelated Party Transactions
 
 
Convertible debt, unamortized discount
0 
3,136,342 
Related Party Transactions
 
 
Convertible debt, unamortized discount
$ 0 
$ 571,895 
Consolidated Statements of Operations (USD $)
3 Months Ended 9 Months Ended 128 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Revenue:
 
 
 
 
 
Option Revenue
$ 348,837 
 
$ 917,774 
 
$ 917,774 
Research and development
2,494,463 
1,455,938 
6,338,859 
4,504,243 
82,836,210 
General and administrative
626,668 
532,474 
2,479,708 
1,878,236 
32,597,324 
Depreciation and amortization
90,935 
81,514 
258,144 
225,365 
1,908,302 
Loss on disposal of assets
 
 
 
 
513,345 
Operating loss
(2,863,229)
(2,069,926)
(8,158,937)
(6,607,844)
(116,937,407)
Interest income
4,448 
61 
9,388 
256 
1,368,085 
Other income, net
 
 
37,910 
 
699,056 
Loss on extinguishment of debt
(2,518,912)
 
(2,518,912)
 
(906,472)
Gain/Loss on derivative instruments
 
(136,889)
 
(136,889)
1,941,826 
Gain on sale of technology
 
 
 
 
3,000,000 
Interest expense
(346,239)
(151,029)
(2,267,293)
(152,002)
(11,674,552)
Net loss
$ (5,723,932)
$ (2,357,783)
$ (12,897,844)
$ (6,896,479)
$ (122,509,464)
Basic and diluted loss per share
$ (0.39)
$ (0.40)
$ (1.29)
$ (1.20)
 
Weighted average shares outstanding
14,721,474 
5,762,028 
10,011,453 
5,762,028 
 
Consolidated Statements of Changes In Stockholders' Equity (USD $)
Total
Beneficial Conversion Feature
Warrants Attached to Debt
Purchase Agreements
Accrued Interest
Common Stock
Common Stock
Purchase Agreements
Common Stock
Accrued Interest
Additional Paid in Capital
Additional Paid in Capital
Beneficial Conversion Feature
Additional Paid in Capital
Warrants Attached to Debt
Additional Paid in Capital
Purchase Agreements
Additional Paid in Capital
Accrued Interest
Accumulated Deficit
Beginning balance at Dec. 31, 2012
$ 2,883,332 
 
 
 
 
$ 62,494 
 
 
$ 112,432,458 
 
 
 
 
$ (109,611,620)
Beginning balance (in shares) at Dec. 31, 2012
 
 
 
 
 
6,249,369 
 
 
 
 
 
 
 
 
Conversion of convertible notes (in shares)
 
 
 
 
 
2,079,960 
 
 
 
 
 
 
 
 
Conversion of convertible notes
4,275,053 
 
 
 
 
20,799 
 
 
4,254,254 
 
 
 
 
 
Discount
 
141,829 
195,969 
 
 
 
 
 
 
141,829 
195,969 
 
 
 
Shares issued for cash, net of offering costs (in shares)
 
 
 
 
 
14,275,952 
 
 
 
 
 
 
 
 
Shares issued for cash, net of offering costs
21,022,269 
 
 
 
 
142,760 
 
 
20,879,509 
 
 
 
 
 
Shares issued (in shares)
900,000 
 
 
 
 
 
975 
123,231 
 
 
 
 
 
 
Shares issued
 
 
 
1,234 
188,543 
 
10 
1,232 
 
 
 
1,224 
187,311 
 
Warrant expense
219,553 
 
 
 
 
 
 
 
219,553 
 
 
 
 
 
Option expense
705,408 
 
 
 
 
 
 
 
705,408 
 
 
 
 
 
Net loss
(12,897,844)
 
 
 
 
 
 
 
 
 
 
 
 
(12,897,844)
Ending balance at Sep. 30, 2013
$ 16,735,346 
 
 
 
 
$ 227,295 
 
 
$ 139,017,515 
 
 
 
 
$ (122,509,464)
Ending balance (in shares) at Sep. 30, 2013
 
 
 
 
 
22,729,487 
 
 
 
 
 
 
 
 
Consolidated Statements of Changes In Stockholders' Equity (Parenthetical) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Share purchase agreement, value
$ 1.5 
Consolidated Statements of Cash Flows (USD $)
9 Months Ended 128 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Cash flows from operating activities
 
 
 
Net loss
$ (12,897,844)
$ (6,896,479)
$ (122,509,464)
Adjustments to reconcile net loss to net cash used in operating activities
 
 
 
Stock payable for acquired research and development
 
 
112,440 
Stock issued for acquired research and development
 
 
26,286,589 
Stock issued for services
 
 
2,061,743 
Stock issued for debt in excess of principal
 
 
109,070 
Amortization of discount on notes payable due to warrants and beneficial conversion feature
1,613,354 
34,600 
8,470,084 
Loss on extinguishment of debt
2,518,912 
 
906,472 
Depreciation
258,144 
225,365 
1,908,302 
Amortization of debt financing costs
125,248 
24,710 
708,265 
Option and warrant expense
924,961 
542,766 
17,190,894 
(Gain) loss on derivative instruments
 
136,889 
(1,941,826)
Loss on disposition of fixed assets
 
 
513,345 
Changes in:
 
 
 
Other current assets
20,481 
(1,025,807)
(1,132,572)
Accounts payable - third parties and related parties
216,938 
(130,278)
56,287 
Accrued expenses
745,999 
(219,372)
1,351,237 
Deferred revenue
4,082,226 
 
4,082,226 
Other assets
(85,047)
 
(85,047)
Net cash used in operating activities
(2,476,628)
(7,307,606)
(61,911,955)
Cash flows from investing activities
 
 
 
Purchase of property & equipment
(214,197)
(512,048)
(2,436,396)
Restricted cash
1,000,000 
(1,000,000)
 
Net cash provided by (used in) investing activities
785,803 
(1,512,048)
(2,436,396)
Cash flows from financing activities
 
 
 
Common stock and warrants sold for cash, net of offering costs
21,319,153 
 
70,772,950 
Common stock repurchased and canceled
 
 
(325)
Proceeds from exercise of warrants and options
 
 
1,248,588 
Deferred financing and offering costs
(147,847)
(136,943)
(657,339)
Repayments on notes payable
(450,000)
 
(761,222)
Net cash provided by financing activities
21,271,306 
3,948,057 
84,520,836 
Net change in cash and cash equivalents
19,580,481 
(4,871,597)
20,172,485 
Cash and cash equivalents at beginning of period
592,004 
7,109,215 
 
Cash and cash equivalents at end of period
20,172,485 
2,237,618 
20,172,485 
Cash paid for:
 
 
 
Income tax
   
   
   
Interest
19,638 
1,460 
174,747 
NON-CASH TRANSACTIONS
 
 
 
Issuance of common stock to Sportan shareholders
 
 
147,733 
Issuance of common stock for accrued interest
188,543 
 
977,830 
Issuance of warrants to placement agent
 
 
37,453 
Conversion of notes payable and accrued interest to common stock
4,275,053 
 
11,985,033 
Conversion of accrued liabilities to common stock
 
 
197,176 
Conversion of accounts payable to note payable
 
 
93,364 
Discount on convertible notes relating to:
 
 
 
Warrants
195,969 
2,314,635 
6,170,341 
Beneficial conversion feature
141,829 
1,497,634 
3,444,982 
Stock attached to notes
 
 
1,287,440 
Fair value of derivative instrument
 
 
4,680,220 
Derivative reclassified to equity
 
 
2,349,266 
Unpaid additions to property and equipment
5,417 
11,730 
5,417 
Amortization of deferred offering costs to paid-in capital
 
 
47,339 
Shares issued as deferred offering costs
1,234 
 
150,365 
Unpaid offering costs
296,884 
170,831 
296,884 
Third Parties
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from convertible debt
550,000 
3,455,000 
13,288,184 
Related Parties
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from convertible debt
100,000 
630,000 
730,000 
Repayments on notes payable
$ (100,000)
 
$ (100,000)
Basis of Presentation
Basis of Presentation
Note 1.  Basis of Presentation

The accompanying interim unaudited consolidated financial statements of Opexa Therapeutics, Inc. (“Opexa” or the “Company”), a development stage company, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in Opexa’s latest Annual Report filed with the SEC on Form 10-K.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.  Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year as reported in Form 10-K have been omitted.

The accompanying consolidated financial statements include the accounts of Opexa and its wholly owned subsidiary, Opexa Hong Kong Limited (“Opexa Hong Kong”). All intercompany balances and transactions have been eliminated in the consolidation.
Significant Accounting Polices
Significant Accounting Polices
Note 2.  Significant Accounting Polices

Revenue Recognition.  Opexa recognizes revenue in accordance with 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 Agreement”) with Ares Trading SA (“Merck”), a wholly owned subsidiary of Merck Serono S.A.  Pursuant to the terms, Merck has an option to acquire an exclusive, worldwide (excluding Japan) license of the Company’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 prior to or upon the Company’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 would pay the Company an upfront license fee of $25 million unless Merck 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), in which event the upfront license fee would be $15 million. After exercising the option, Merck 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 evaluated the Merck Agreement and determined that the $5 million upfront payment from Merck has stand-alone value. Opexa’s continuing performance obligations, in connection with the $5 million payment, include the execution and completion of the Phase IIb clinical trial in SPMS using commercially reasonable efforts at the Company’s own costs.  As a stand-alone value term in the Merck Agreement, the $5 million upfront payment is determined to be a single unit of accounting, and is recognized as revenue on a straight-line basis over the exclusive option period based on the expected completion term of the Phase IIb clinical trial in SPMS. Opexa includes the unrecognized portion of the $5 million as deferred revenue on the consolidated balance sheets.

Cash and Cash Equivalents.  Opexa considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Investments with maturities in excess of three months but less than one year are classified as short-term investments and are stated at fair market value.

Opexa primarily maintains cash balances on deposit in accounts at a U.S.-based financial institution.  The aggregate cash balance on deposit in these accounts is insured by the Federal Deposit Insurance Corporation up to $250,000.  Opexa’s cash balances on deposit in these accounts may, at times, exceed the federally insured limits.  Opexa has not experienced any losses in such accounts.

At September 30, 2013, Opexa invested approximately $19.1 million in a savings account.  For the nine months ended September 30, 2013, the savings account recognized an average market yield of 0.19%.  Interest income of $9,388 was recognized for the nine months ended September 30, 2013 in the consolidated statements of operations.
Other Current Assets
Other Current Assets
Note 3.  Other Current Assets

Other current assets consisted of the following at September 30, 2013 and December 31, 2012:

Description
  
September 30,
2013
  
December 31,
2012
Supplies inventory
   $ 803,371     $ 604,179  
Deferred offering costs
     326,630       341,166  
Prepaid expenses
     174,145       132,201  
    $ 1,304,146     $ 1,077,546  

Supplies inventory at September 30, 2013 and December 31, 2012 includes reagents and supplies that will be used to manufacture Tcelna and placebo product in Opexa’s Phase IIb clinical study. Opexa expects to amortize these prepaid reagents and supplies to research and development costs in the consolidated statements of operations over the course of the clinical study.

Deferred offering costs at September 30, 2013 and December 31, 2012 include costs incurred from third parties in connection with the implementation of an at-the-market program (“ATM Agreement”) in September 2012 pursuant to which Opexa may sell shares of its common stock from time to time depending upon market demand through a sales agent in transactions deemed to be an “at-the-market” offering as defined in Rule 415 of the Securities Act of 1933.  As of September 30, 2013, the remaining costs of $88,446 in connection with the implementation of the ATM Agreement remained capitalized and are included in other current assets in the consolidated balance sheets. Upon the sales of shares of common stock under the ATM Agreement, the remaining capitalized costs are offset against the proceeds of such sales of shares of common stock.

Deferred offering costs at September 30, 2013 also include costs incurred from third parties in connection with the implementation of a $1.5 million purchase agreement and a $15 million purchase agreement (collectively, the “purchase agreements”) in November 2012 pursuant to which Opexa has the right to sell to Lincoln Park Capital Fund, LLC (“Lincoln Park”) an aggregate of up to $16.5 million in shares of its common stock, subject to certain conditions and limitations.  As of September 30, 2013, the remaining costs of $238,184 in connection with the implementation of the purchase agreements remained capitalized and are included in other current assets in the consolidated balance sheets.  Upon the sales of shares of common stock under the purchase agreements, the remaining capitalized costs are offset against the proceeds of such sales of shares of common stock.

Prepaid expenses at September 30, 2013 include the current portion of legal costs of $44,070 incurred from third parties in conjunction with the Merck Agreement (see Note 6).
Restricted Cash
Restricted Cash
Note 4.  Restricted Cash

Pursuant to the July 2012 Note financing, $1.0 million of the gross proceeds were initially required to be maintained in a segregated account and subject to a deposit control agreement while the July 2012 Notes were outstanding.  Pursuant to a waiver executed by the holders of in excess of two-thirds (66-2/3%) of the principal amount of the outstanding July 2012 Notes and accepted by Opexa, the amount of the cash subject to the deposit control agreement was reduced to $500,000 on January 29, 2013.  In exchange for such waiver, the Company issued warrants to the holders of the July 2012 Notes to purchase an aggregate of 187,500 shares of the Company’s common stock (see Note 10).

Opexa entered into an Omnibus Amendment to All Outstanding 12% Convertible Secured Promissory Notes of Opexa Therapeutics, Inc. and Associated Registration Rights Agreement (the “July 2012 Note Amendment”) on September 23, 2013 with certain holders of its July 2012 Notes with respect to certain terms relating to conversion of the July 2012 Notes (see Note 7).  Pursuant to the July 2012 Note Amendment and the Company’s subsequent conversion of all outstanding July 2012 Notes into shares of common stock on September 24, 2013 (see Note 7), the deposit control agreement was effectively terminated and the remaining $500,000 balance in the controlled account is reported as cash and cash equivalents on the consolidated balance sheets.
Deferred Financing Costs
Deferred Financing Costs
Note 5.  Deferred Financing Costs

Deferred financing costs consisted of costs incurred from third parties in conjunction with the July 2012 Notes.  The costs in connection with the debt financing were capitalized and are amortized to interest expense over the term of the related debt. In connection with the September 24, 2013 conversion of the July 2012 Notes, the balance of the unamortized deferred financing costs of $86,231 was charged to loss on debt extinguishment. During the nine months ended September 30, 2013, Opexa amortized $125,248 of deferred financing costs as interest expense.
Other Assets
Other Assets
Note 6.  Other Assets

Other long-term assets at September 30, 2013 consist of legal costs incurred from third parties in conjunction with the Merck Agreement.  These costs were capitalized and are amortized to general and administrative expenses on the consolidated statements of operations in conjunction with the recognition of revenue on a straight-line basis over the exclusive option period based on the term of the Phase IIb clinical trial in SPMS. During the nine months ended September 30, 2013, Opexa amortized $28,799 of legal costs to general and administrative expenses on the consolidated statements of operations.  Opexa included the current portion of the legal costs of $44,070 in other current assets on the consolidated balance sheets and the long term portion of the legal costs of $85,047 in other long-term assets on the consolidated balance sheets as of September 30, 2013.
Convertible Promissory Notes
Convertible Promissory Notes
Note 7.  Convertible Promissory Notes

On January 23, 2013, Opexa closed a private offering consisting of convertible notes (the “January 2013 Notes”) and warrants to purchase shares of common stock for gross proceeds of $650,000 of which $100,000 was from a related party (see Note 8).  The January 2013 Notes were scheduled to mature on January 23, 2014 and accrued interest at the rate of 12% per annum, compounded annually.  The January 2013 Notes were convertible into common stock at the option of the investors at a price of $1.30 per share, subject to certain limitations.  The principal balance plus accrued interest was payable within five business days of the receipt by Opexa of an aggregate of at least $7.5 million in proceeds from the sale of its equity securities and/or as payments from one or more partners or potential partners in return for granting a license, other rights, or an option to license or otherwise acquire rights with respect to Tcelna.

The January 2013 Notes were analyzed at issuance for a beneficial conversion feature and Opexa concluded that a beneficial conversion feature existed. The beneficial conversion feature was measured using the commitment-date stock price and was determined to be $141,829 of which $21,820 was attributable to the related party.  Opexa also analyzed the Notes for derivative accounting consideration and determined that derivative accounting does not apply.

In connection with the issuance of the January 2013 Notes, Opexa also issued Series J warrants to purchase an aggregate of 243,750 shares of Opexa’s common stock (see Note 10), subject to certain limitations and adjustments.  The relative fair value of the warrant liability of $195,969, together with the beneficial conversion feature of $141,829, were recognized as a debt discount and were amortized to interest expense in the consolidated statements of expenses over the term of the January 2013 Notes using the effective interest method. 

On February 26, 2013, following the receipt of $3.25 million in gross proceeds during February 2013 from the sale of common stock and warrants to purchase shares of common stock, and following the receipt of the upfront payment of $5 million from Merck on February 20, 2013, Opexa paid principal and interest totaling $567,368 to holders of the January 2013 Notes, of which $100,000 was to a related party, and issued 77,034 shares of common stock to one holder of the January 2013 Notes who elected to convert the principal of $100,000. 

During the nine months ended September 30, 2013, the debt discount of $337,798 in connection with the January 2013 Notes was fully amortized to interest expense.

In February 2013, three of the third party holders of the July 2012 Notes elected to convert their principal amounts of $900,000 into shares of the Company’s Series A convertible preferred stock with further immediate conversion into 288,229 shares of the Company’s common stock.

On September 23, 2013, the Company entered into the July 2012 Note Amendment with certain holders of its July 2012 Notes with respect to certain terms relating to conversion of the July 2012 Notes.  Pursuant to the July 2012 Note Amendment, all outstanding Notes were amended such that, in addition to the existing conversion arrangements, the Notes became convertible at the Company’s election directly into shares of common stock (rather than any intermediate conversion to shares of Series A convertible preferred stock), at a conversion price of not less than $1.50 nor more than $2.25, based on the most recent closing market price of the Company’s common stock on the NASDAQ Stock Market at the time of the Company’s election to convert the Notes plus any accrued but unpaid interest through the conversion date  into shares of common stock.  Notes in the aggregate principal amount of $3,185,000 were outstanding at the time of the July 2012 Note Amendment.

On September 24, 2013, the Company converted the principal amount of the July 2012 Notes and unpaid interest totaling $3,275,053 into an aggregate of 1,714,697 shares of common stock at a conversion price of $1.91, which was the most recent closing market price of the Company’s common stock on the NASDAQ Stock Market when the Company effected such conversion. The Company determined that the conversion of the July 2012 Notes qualifies as a debt extinguishment since the Notes were converted based on the amended conversion price.  Consequently, the Company recorded a loss on extinguishment of debt of $2,518,912, which represents the difference in the fair value of the shares issued of $3,275,053 and the carrying amount of the Notes (including accrued interest of $98,053) of $756,141 at the date of conversion. The carrying amount of the Notes is net of the unamortized discount and deferred financing costs at the date of conversion amounting to $2,432,681 and $86,231, respectively.

The following table provides a summary of the changes in convertible debt – third parties, net of unamortized discount, during the nine months ended September 30, 2013:

Balance at December 31, 2012
   $ 318,658  
January 2013 Notes, face value
     550,000  
Discount on beneficial conversion feature of January 2013 Notes at issuance
     (120,009 )
Discount on fair value of Series J warrant liability at issuance
     (165,820 )
Repayment of January 23, 2013 Notes
     (450,000 )
Conversion of January 23, 2013 Notes into common stock
     (100,000 )
Conversion of July 25, 2012 Notes into common stock
     (900,000 )
Conversion of July 25, 2012 Notes into common stock
     (2,555,000 )
Unamortized discount closed to loss on debt extinguishment
     1,949,003  
Amortization of debt discount to interest expense through September 30, 2013
     1,473,168  
         
Balance at September 30, 2013
   $ -  
Related Party Transactions
Related Party Transactions
Note 8.  Related Party Transactions

Investors in the January 2013 Note offering included one member of Opexa’s Board of Directors who was issued a Note with a principal amount of $100,000 (see Note 7).

Investors in the July 2012 Notes included two members of Opexa’s Board of Directors and an entity for which a third director reports beneficial ownership of Opexa securities, and Notes in the aggregate principal amount of $630,000 held by these directors and entity were outstanding at the time of the July 2012 Note Amendment (see Note 7).  On September 24, 2013, such post-modification Notes in an aggregate of $647,605 in principal amount and unpaid interest were converted into an aggregate of 339,170 shares of common stock at a conversion price of $1.91, which was the most recent closing market price of the Company’s common stock on the NASDAQ Stock Market when the Company effected such conversion.

The following table provides a summary of the changes in convertible debt – related parties, net of unamortized discount, during the nine months ended September 30, 2013:

Balance at December 31, 2012
   $ 58,105  
January 2013 Notes, face value
     100,000  
Discount on beneficial conversion feature of January 2013 Notes at issuance
     (21,820 )
Discount on fair value of Series J warrant liability at issuance
     (30,149 )
Repayment of January 23, 2013 Notes
     (100,000 )
Conversion of July 25, 2012 Notes into common stock
     (630,000 )
Unamortized debt discount closed to loss on debt extinguishment
     483,678  
Amortization of debt discount to interest expense through September 30, 2013
     140,186  
         
Balance at September 30, 2013
   $ -  
Equity
Equity
Note 9.  Equity

For the nine months ended September 30, 2013, equity related transactions were as follows:

●  
In January 2013, 125,000 shares of common stock were sold and 975 additional commitment shares were issued to Lincoln Park under the $1.5 million purchase agreement for net proceeds of $142,400.

●  
In February 2013, 365,263 shares of common stock were issued in connection with the conversion of the January 2013 Notes and certain July 2012 Notes (see Note 7).

●  
In February 2013, Opexa sold an aggregate of 167,618 shares of common stock under the ATM Agreement for gross proceeds of $536,417.

●  
On February 11, 2013, Opexa sold an aggregate of 1,083,334 units in a registered offering, with each unit consisting of one share of common stock and a warrant to purchase half (0.5) a share of common stock, at a price of $3.00 per unit, for gross proceeds of $3,250,002. The shares of common stock and warrants were immediately separable and were issued separately such that no units were issued. The warrants are exercisable immediately upon issuance, have a four-year term and an exercise price of $3.00 per share. A fee of 6.0% of the gross proceeds was paid to the placement agent.

●  
On July 1, 2013, Opexa issued 123,231 shares of common stock to the Noteholders of the July 2012 Notes as payment of accrued interest through June 30, 2013.

●  
On August 13, 2013, Opexa sold 12,000,000 shares of common stock in an underwritten public offering at a price of $1.50 per share for gross proceeds of $18,000,000.

●  
In September 2013, exercise of the over-allotment option granted to the underwriters of the August 2013 underwritten public offering resulted in the issuance of an additional 900,000 shares of common stock at a price of $1.50 per share for gross proceeds of $1,350,000.

●  
On September 24, 2013, 1,714,697 shares of common stock were issued in connection with the conversion of the remaining outstanding July 2012 Notes (see Note 7).

For the nine months ended September 30, 2013, $2,256,549 was netted against additional paid in capital as stock offering costs.
Stock-Based Compensation
Stock-Based Compensation
Note 10.  Stock-Based Compensation

Stock Options
 
The 2010 Stock Incentive Plan (the “2010 Plan”) provides for the grant of equity incentive awards to employees, directors and consultants of Opexa in the form 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 2010 Plan is the successor to and continuation of Opexa’s June 2004 Compensatory Stock Option Plan (the “2004 Plan”). A total of 625,000 shares of common stock are authorized to be issued for awards made under the 2010 Plan through September 2020, plus (i) 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 (ii) any reserved shares under the 2004 Plan that were not issued or subject to outstanding grants.  In addition, shares subject to awards granted under the 2010 Plan that terminate or expire before being exercised or settled will become available for grant under the 2010 Plan. As of September 30, 2013, options to purchase an aggregate of 1,094,854 shares were issued and outstanding.

Opexa accounts for share-based compensation, including options and nonvested shares, according to the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718, "Share Based Payment.” During the nine months ended September 30, 2013, Opexa recognized option expense of $705,408. Unamortized stock compensation expense as of September 30, 2013 amounted to $970,912.

Stock Option Activity
     
         A summary of stock option activity for the nine months ended September 30, 2013 is presented below:
 
   
Number of
Shares
  
Wtd. Avg.
Exercise Price
  
Wtd. Avg.
Remaining
Contract Term
(# years)
  
Intrinsic
Value
Outstanding at January 1, 2013
     824,620     $ 5.54              
Granted
     342,572       1.96              
Exercised
     -       -              
Forfeited and canceled
     (72,338 )     5.19              
                             
Outstanding at September 30, 2013
     1,094,854     $ 4.45       7.7     $ 184,740  
                                 
Exercisable at September 30, 2013
     599,188     $ 5.78       6.6     $ 109,111  

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 the nine months ended September 30, 2013, an option to purchase an aggregate of 125,000 shares was granted to an employee at an exercise price of $2.34. This option has a term of ten years and has a vesting schedule of three years. Fair value of $285,226 was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model for the option issued to an employee during the nine months ended September 30, 2013 include (1) discount rate of 1.87%, (2) expected term of 5.25 years, (3) expected volatility of 194% and (4) zero expected dividends.

During the nine months ended September 30, 2013, options to purchase an aggregate of 129,000 shares were granted to employees at exercise prices ranging from $1.45 to $1.75. These options have terms of ten years and have vesting schedules of three years. Fair value of $218,348 was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model for the options issued to employees during the nine months ended September 30, 2013 include (1) discount rate range of 1.73% to 2.78%, (2) expected term of 5.25 years, (3) expected volatility of 201% to 204% and (4) zero expected dividends.

During the nine months ended September 30, 2013, options to purchase an aggregate of 88,572 shares were granted to non-employee directors at an exercise price of $1.75. These options have terms of ten years with 50% of the options issued vesting immediately and the remaining 50% of the options issued having vesting schedules of eight months to one year. Fair value of $151,867 was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model for the options issued to non-employee directors during the nine months ended September 30, 2013 include (1) discount rate of 1.73%, (2) expected term of 5.25 years, (3) expected volatility of 201% and (4) zero expected dividends.

During the nine months ended September 30, 2013, options to purchase 72,338 shares were forfeited and cancelled.

Warrant Activity

A summary of warrant activity for the nine months ended September 30, 2013 is presented below:
 
   
Number of
Shares
  
Wtd. Avg.
Exercise Price
  
Wtd. Avg.
Remaining
Contract Term
(# years)
  
Intrinsic Value
Outstanding at January 1, 2013
     3,579,087     $ 5.64              
Granted
     972,918       2.21              
Exercised
     -       -              
Forfeited and canceled
     (1,482,892 )     6.54              
                             
Outstanding at September 30, 2013
     3,069,113     $ 4.12       3.4     $ 415,313  
                                 
Exercisable at September 30, 2013
     3,069,113     $ 4.12       3.4     $ 415,313  
 
In connection with the January 2013 Notes, investors were issued five-year warrants to purchase up to an aggregate of 243,750 shares of common stock, at an exercise price of $1.24 per share. The estimated relative fair value of the investor warrants was $195,969 and was calculated using the Black-Scholes valuation model. The following assumptions were used: (1) no expected dividends, (2) risk free interest rate of 0.76%, (3) expected volatility of 191% and (4) expected life of five years. Opexa can redeem the warrants at $0.01 per share if the Company’s common stock closes at or above $10.00 per share for 20 consecutive trading days.

Pursuant to a waiver executed by the holders of in excess of two-thirds (66-2/3%) of the principal amount of the outstanding July 2012 Notes and accepted by Opexa, the original amount of the cash subject to the deposit control agreement was reduced to $500,000 on January 29, 2013.  In exchange for such waiver, the Company issued warrants to the holders of the July 2012 Notes to purchase an aggregate of 187,500 shares of the Company’s common stock.  The warrants have an exercise price of $1.21 per share and a five-year term.  The estimated fair value of the warrants was $219,553 and was calculated using the Black-Scholes valuation model.  The following assumptions were used: (1) no expected dividends, (2) risk free interest rate of 0.90%, (3) expected volatility of 191% and (4) expected life of five years.  Opexa can redeem the warrants at $0.01 per underlying share of common stock if the common stock closes at or above $10.00 per share for 20 consecutive trading days.  The fair value of the warrants was recognized as additional interest expense during the nine months ended September 30, 2013.

In connection with the February 2013 registered offering (See Note 9), Opexa issued warrants to the investors on February 11, 2013 to purchase an aggregate of 541,668 shares of common stock at an exercise price of $3.00 per share. These warrants have a term of four years and were immediately exercisable.

During the nine months ended September 30, 2013, warrants to purchase 1,482,892 shares were forfeited and cancelled.
Significant Accounting Polices (Policies)
Revenue Recognition 
Revenue Recognition.  Opexa recognizes revenue in accordance with 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 Agreement”) with Ares Trading SA (“Merck”), a wholly owned subsidiary of Merck Serono S.A.  Pursuant to the terms, Merck has an option to acquire an exclusive, worldwide (excluding Japan) license of the Company’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 prior to or upon the Company’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 would pay the Company an upfront license fee of $25 million unless Merck 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), in which event the upfront license fee would be $15 million. After exercising the option, Merck 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 evaluated the Merck Agreement and determined that the $5 million upfront payment from Merck has stand-alone value. Opexa’s continuing performance obligations, in connection with the $5 million payment, include the execution and completion of the Phase IIb clinical trial in SPMS using commercially reasonable efforts at the Company’s own costs.  As a stand-alone value term in the Merck Agreement, the $5 million upfront payment is determined to be a single unit of accounting, and is recognized as revenue on a straight-line basis over the exclusive option period based on the expected completion term of the Phase IIb clinical trial in SPMS. Opexa includes the unrecognized portion of the $5 million as deferred revenue on the consolidated balance sheets.
Cash and Cash Equivalents 
Cash and Cash Equivalents.  Opexa considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents. Investments with maturities in excess of three months but less than one year are classified as short-term investments and are stated at fair market value.

Opexa primarily maintains cash balances on deposit in accounts at a U.S.-based financial institution.  The aggregate cash balance on deposit in these accounts is insured by the Federal Deposit Insurance Corporation up to $250,000.  Opexa’s cash balances on deposit in these accounts may, at times, exceed the federally insured limits.  Opexa has not experienced any losses in such accounts.

At September 30, 2013, Opexa invested approximately $19.1 million in a savings account.  For the nine months ended September 30, 2013, the savings account recognized an average market yield of 0.19%.  Interest income of $9,388 was recognized for the nine months ended September 30, 2013 in the consolidated statements of operations.
Other Current Assets (Tables)
Other Current Assets
Other current assets consisted of the following at September 30, 2013 and December 31, 2012:

Description
  
September 30,
2013
  
December 31,
2012
Supplies inventory
   $ 803,371     $ 604,179  
Deferred offering costs
     326,630       341,166  
Prepaid expenses
     174,145       132,201  
    $ 1,304,146     $ 1,077,546  
Related Party Transactions (Tables)
Summary of Changes in Convertible Debt - Net of Unamortized Discount 
The following table provides a summary of the changes in convertible debt – third parties, net of unamortized discount, during the nine months ended September 30, 2013:

Balance at December 31, 2012
   $ 318,658  
January 2013 Notes, face value
     550,000  
Discount on beneficial conversion feature of January 2013 Notes at issuance
     (120,009 )
Discount on fair value of Series J warrant liability at issuance
     (165,820 )
Repayment of January 23, 2013 Notes
     (450,000 )
Conversion of January 23, 2013 Notes into common stock
     (100,000 )
Conversion of July 25, 2012 Notes into common stock
     (900,000 )
Conversion of July 25, 2012 Notes into common stock
     (2,555,000 )
Unamortized discount closed to loss on debt extinguishment
     1,949,003  
Amortization of debt discount to interest expense through September 30, 2013
     1,473,168  
         
Balance at September 30, 2013
   $ -  
Summary of Changes in Convertible Debt - Net of Unamortized Discount 
The following table provides a summary of the changes in convertible debt – related parties, net of unamortized discount, during the nine months ended September 30, 2013:

Balance at December 31, 2012
   $ 58,105  
January 2013 Notes, face value
     100,000  
Discount on beneficial conversion feature of January 2013 Notes at issuance
     (21,820 )
Discount on fair value of Series J warrant liability at issuance
     (30,149 )
Repayment of January 23, 2013 Notes
     (100,000 )
Conversion of July 25, 2012 Notes into common stock
     (630,000 )
Unamortized debt discount closed to loss on debt extinguishment
     483,678  
Amortization of debt discount to interest expense through September 30, 2013
     140,186  
         
Balance at September 30, 2013
   $ -  
Stock-Based Compensation (Tables)
Stock Option Activity 
A summary of stock option activity for the nine months ended September 30, 2013 is presented below:
 
   
Number of
Shares
  
Wtd. Avg.
Exercise Price
  
Wtd. Avg.
Remaining
Contract Term
(# years)
  
Intrinsic
Value
Outstanding at January 1, 2013
     824,620     $ 5.54              
Granted
     342,572       1.96              
Exercised
     -       -              
Forfeited and canceled
     (72,338 )     5.19              
                             
Outstanding at September 30, 2013
     1,094,854     $ 4.45       7.7     $ 184,740  
                                 
Exercisable at September 30, 2013
     599,188     $ 5.78       6.6     $ 109,111  
Warrant Activity 
A summary of warrant activity for the nine months ended September 30, 2013 is presented below:
 
   
Number of
Shares
  
Wtd. Avg.
Exercise Price
  
Wtd. Avg.
Remaining
Contract Term
(# years)
  
Intrinsic Value
Outstanding at January 1, 2013
     3,579,087     $ 5.64              
Granted
     972,918       2.21              
Exercised
     -       -              
Forfeited and canceled
     (1,482,892 )     6.54              
                             
Outstanding at September 30, 2013
     3,069,113     $ 4.12       3.4     $ 415,313  
                                 
Exercisable at September 30, 2013
     3,069,113     $ 4.12       3.4     $ 415,313  
Significant Accounting Policies - Additional Information (Detail) (USD $)
3 Months Ended 9 Months Ended 128 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Sep. 30, 2013
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Option and License Agreement, upfront payment recognized
$ 348,837 
$ 917,774 
$ 917,774 
Investment in savings account
19,100,000 
19,100,000 
19,100,000 
Percentage of interest recognized from savings account investment
0.19% 
0.19% 
0.19% 
Interest income from savings account investment
 
9,388 
 
Maximum
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Deposit insured by the Federal Deposit Insurance Corporation
250,000 
250,000 
250,000 
Option and License Agreement
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Option and License Agreement, upfront payment received
5,000,000 
5,000,000 
5,000,000 
Licensing milestone
25,000,000 
25,000,000 
25,000,000 
Option and License Agreement, upfront payment recognized
 
5,000,000 
 
Option and License Agreement, deferred revenue
5,000,000 
5,000,000 
5,000,000 
Option and License Agreement |
Licensing fee if Merck is unable to advance directly to Phase III trials of Tcelna
 
 
 
Summary Of Significant Accounting Policies [Line Items]
 
 
 
Licensing milestone
$ 15,000,000 
$ 15,000,000 
$ 15,000,000 
Other Current Assets (Detail) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Other Assets, Current [Line Items]
 
 
Supplies inventory
$ 803,371 
$ 604,179 
Deferred offering costs
326,630 
341,166 
Prepaid expenses
174,145 
132,201 
Other current assets
$ 1,304,146 
$ 1,077,546 
Other Current Assets - Additional Information (Detail) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2013
Other Current Assets
Sep. 30, 2013
$1.5 Million Purchase Agreement with Lincoln Park
Jan. 31, 2013
$1.5 Million Purchase Agreement with Lincoln Park
Sep. 30, 2013
$15 Million Purchase Agreement with Lincoln Park
Sep. 30, 2013
ATM Agreement
Third Party
Sep. 30, 2013
Purchase Agreements
Other Current Assets
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
 
 
 
 
 
 
 
 
Deferred financing cost
$ 326,630 
$ 341,166 
 
 
 
 
$ 88,446 
$ 238,184 
Purchase agreement, aggregate shares opexa has right to sell
16,500,000 
 
 
1,500,000 
1,500,000 
15,000,000 
 
 
Legal costs, current
 
 
$ 44,070 
 
 
 
 
 
Restricted Cash - Additional Information (Detail) (USD $)
9 Months Ended
Sep. 30, 2013
Sep. 24, 2013
Jan. 31, 2013
Jan. 29, 2013
Jan. 23, 2013
Dec. 31, 2012
Sep. 30, 2012
Dec. 31, 2011
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
 
 
 
 
 
 
Restricted cash
 
 
 
$ 500,000 
 
$ 1,000,000 
 
 
Percentage needed to effect the waiver on the restricted cash
66.67% 
 
 
 
 
 
 
 
Warrants issued to purchase common stock
 
 
243,750 
187,500 
243,750 
 
 
 
Cash and cash equivalents
$ 20,172,485 
$ 500,000 
 
 
 
$ 592,004 
$ 2,237,618 
$ 7,109,215 
Convertible debt
 
 
 
 
 
 
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
 
 
 
 
 
 
Convertible debt instrument, effective interest rate
 
12.00% 
 
 
12.00% 
 
 
 
Deferred Financing Costs - Additional Information (Detail) (USD $)
3 Months Ended 9 Months Ended 128 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
 
 
 
 
Loss on debt extinguishment
$ (2,518,912)
$ (2,518,912)
 
$ (906,472)
Deferred financing costs, amortized
 
125,248 
24,710 
708,265 
Deferred Financing Costs
 
 
 
 
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Line Items]
 
 
 
 
Loss on debt extinguishment
(86,231)
(86,231)
 
 
Deferred financing costs, amortized
 
$ 125,248 
 
 
Other Assets - Additional Information (Detail) (USD $)
9 Months Ended
Sep. 30, 2013
General and Administrative Expense
 
Schedule of Other Assets [Line Items]
 
Legal costs, amortized
$ 28,799 
Other Current Assets
 
Schedule of Other Assets [Line Items]
 
Legal costs, current
44,070 
Other Long-term Assets
 
Schedule of Other Assets [Line Items]
 
Legal costs, long-term
$ 85,047 
Convertible Promissory Notes - Additional Information (Detail) (USD $)
1 Months Ended 3 Months Ended 9 Months Ended 128 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 1 Months Ended
Sep. 24, 2013
Jun. 30, 2013
Jan. 31, 2013
Sep. 30, 2013
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Jan. 29, 2013
Jan. 23, 2013
Dec. 31, 2012
Sep. 24, 2013
July 2012 Notes
Sep. 30, 2013
July 2012 Notes
Feb. 28, 2013
Common Stock
Sep. 30, 2013
Common Stock
Feb. 28, 2013
January 2013 Notes
Sep. 30, 2013
January 2013 Notes
Feb. 28, 2013
January 2013 Notes
Common Stock
Sep. 24, 2013
Amendment
July 2012 Notes
Sep. 23, 2013
Amendment
July 2012 Notes
Sep. 24, 2013
Amendment
Common Stock
July 2012 Notes
Sep. 23, 2013
Amendment
Minimum
July 2012 Notes
Sep. 23, 2013
Amendment
Maximum
July 2012 Notes
Sep. 30, 2013
Option and License Agreement
Sep. 30, 2013
Related Party
Sep. 30, 2013
Related Party Transactions
Jul. 31, 2012
Related Party Transactions
Feb. 28, 2013
Convertible debt
Jan. 23, 2013
Convertible debt
Sep. 24, 2013
Convertible debt
Feb. 28, 2013
Convertible debt
Common Stock
Jan. 23, 2013
Convertible debt
Related Party
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross proceed from the issuance of convertible note
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 650,000 
 
 
$ 100,000 
Debt Instrument, Maturity Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jan. 23, 2014 
 
 
 
Convertible debt instrument, effective interest rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12.00% 
12.00% 
 
 
Convertible debt, conversion price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1.91 
 
 
$ 1.50 
$ 2.25 
 
 
 
$ 1.91 
 
$ 1.30 
 
 
 
Minimum receipt of proceeds from sale of equity securities and/or as payments from partners to pay any remaining balance of note payable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,500,000 
 
 
 
Number of business days to pay remaining convertible debts
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5 days 
 
 
 
Debt instrument, beneficial conversion feature
 
 
141,829 
 
141,829 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21,820 
 
 
 
 
 
 
Discount on warrant
 
 
195,969 
 
195,969 
2,314,635 
6,170,341 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants issued
 
 
243,750 
 
 
 
 
187,500 
243,750 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross proceeds from sales of common stock and warrants to purchase shares of common stock
 
 
 
 
3,250,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Option and License Agreement, upfront payment received
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5,000,000 
 
 
 
 
 
 
 
 
Principal and interest paid
 
 
 
 
567,368 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100,000 
 
 
 
 
 
 
 
Common shares issued, note conversion
1,714,697 
 
 
 
 
 
 
 
 
 
 
 
365,263 
2,079,960 
 
 
77,034 
 
 
1,714,697 
 
 
 
 
 
 
 
 
 
 
 
Convertible notes, principal amount converted
 
 
 
 
 
 
 
 
 
 
 
900,000 
 
 
100,000 
 
 
 
 
 
 
 
 
 
 
 
900,000 
 
 
 
 
Amortization of debt discount to interest expense
 
 
 
 
1,613,354 
34,600 
8,470,084 
 
 
 
 
 
 
 
 
337,798 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares issued
 
123,231 
 
 
900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
288,229 
 
Aggregate principal amount outstanding
 
 
 
 
 
 
 
 
 
 
756,141 
 
 
 
 
 
 
 
3,185,000 
 
 
 
 
 
 
 
 
 
 
 
 
Conversion of convertible notes
 
 
 
 
4,275,053 
 
 
 
 
 
 
 
 
20,799 
 
 
 
3,275,053 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
 
 
(2,518,912)
(2,518,912)
 
(906,472)
 
 
 
(2,518,912)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Accrued interest
 
 
 
 
 
 
 
 
 
 
98,053 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized debt discount
 
 
 
 
 
 
 
 
 
 
2,432,681 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized deferred financing cost
 
 
 
 
 
 
 
 
 
$ 211,479 
$ 86,231 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary of Changes in Convertible Debt Third Parties Net of Unamortized Discount (Detail) (USD $)
9 Months Ended 128 Months Ended 9 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2013
Warrants Attached to Debt
Sep. 30, 2013
Convertible debt
Sep. 30, 2013
January 2013 Notes
Sep. 30, 2013
January 2013 Notes
Beneficial Conversion Feature
Sep. 30, 2013
July 2012 Notes
Sep. 24, 2013
July 2012 Notes
Sep. 30, 2013
July 2012 Notes
Scenario Two
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2012
$ 318,658 
 
 
 
 
 
 
 
 
 
Notes, face value
 
 
 
 
 
550,000 
 
 
 
 
Discount on convertible debt
 
 
 
(165,820)
 
 
(120,009)
 
(2,432,681)
 
Repayment of January 23, 2013 Notes
(450,000)
 
(761,222)
 
 
(450,000)
 
 
 
 
Principal amount of Notes converted to common stock
 
 
 
 
 
(100,000)
 
(900,000)
 
(2,555,000)
Unamortized discount closed to loss on debt extinguishment
1,949,003 
 
 
 
 
 
 
 
 
 
Amortization of debt discount to interest expense through September 30, 2013
$ (1,613,354)
$ (34,600)
$ (8,470,084)
 
$ 1,473,168 
 
 
 
 
 
Related Party Transactions - Additional Information (Detail) (Related Party Transactions, USD $)
1 Months Ended
Sep. 24, 2013
Jan. 31, 2013
Jul. 31, 2012
Related Party Transactions
 
 
 
Related Party Transaction [Line Items]
 
 
 
Convertible secured promissory notes, principal amount
$ 647,605 
$ 100,000 
$ 630,000 
Number of common stock issued upon conversion of notes
339,170 
 
 
Conversion price
 
 
$ 1.91 
Equity - Additional Information (Detail) (USD $)
1 Months Ended 9 Months Ended 128 Months Ended 1 Months Ended 9 Months Ended 1 Months Ended 1 Months Ended
Sep. 24, 2013
Jun. 30, 2013
Feb. 11, 2013
Jan. 23, 2013
Jan. 29, 2013
Sep. 30, 2013
Sep. 30, 2013
Feb. 28, 2013
Common Stock
Sep. 30, 2013
Common Stock
Aug. 13, 2013
Public Offering
Feb. 28, 2013
ATM Agreement
Sep. 30, 2013
$1.5 Million Purchase Agreement with Lincoln Park
Jan. 31, 2013
$1.5 Million Purchase Agreement with Lincoln Park
Jan. 31, 2013
$1.5 Million Purchase Agreement with Lincoln Park
Common Stock
Equity Note [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common shares issued
 
123,231 
 
 
 
900,000 
 
 
 
12,000,000 
167,618 
 
 
125,000 
Purchase agreement, aggregate shares opexa has right to sell
 
 
 
 
 
$ 16,500,000 
$ 16,500,000 
 
 
 
 
$ 1,500,000 
$ 1,500,000 
 
Net proceeds from shares sold
 
 
 
 
 
 
 
 
 
 
536,417 
 
 
142,400 
Common stock issued as fee
 
 
 
 
 
 
 
 
 
 
 
 
 
975 
Common shares issued, note conversion
1,714,697 
 
 
 
 
 
 
365,263 
2,079,960 
 
 
 
 
 
Common shares issued
 
 
1,083,334 
 
 
 
 
 
 
 
 
 
 
 
Warrants settlement ratio
 
 
Each unit consisting of one share of common stock and a warrant to purchase half (0.5) a share of common stock 
 
 
 
 
 
 
 
 
 
 
 
Share issue to private offering, price per share
 
 
$ 3.00 
 
 
$ 1.50 
 
 
 
$ 1.50 
 
 
 
 
Proceeds from issuance of common stocks and warrants, net
 
 
3,250,002 
 
 
21,319,153 
70,772,950 
 
 
 
 
 
 
 
Warrant term
 
 
4 years 
5 years 
5 years 
 
 
 
 
 
 
 
 
 
Warrant exercise price
 
 
$ 3.00 
$ 1.24 
$ 1.21 
 
 
 
 
 
 
 
 
 
Commission rate on gross proceed for common stock sold
 
 
6.00% 
 
 
 
 
 
 
 
 
 
 
 
Gross proceeds from shares of common stock sold
 
 
 
 
 
1,350,000 
 
 
 
18,000,000 
 
 
 
 
Amount netted against additional paid in capital as stock offering costs
 
 
 
 
 
$ 2,256,549 
 
 
 
 
 
 
 
 
Stock-Based Compensation - Additional Information (Detail) (USD $)
1 Months Ended 9 Months Ended
Feb. 11, 2013
Jan. 23, 2013
Jan. 29, 2013
Sep. 30, 2013
Jan. 31, 2013
Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Share based compensation, common stock shares issued and outstanding
 
 
 
1,094,854 
 
824,620 
Option expense recognized
 
 
 
$ 705,408 
 
 
Unamortized stock compensation expense
 
 
 
970,912 
 
 
Number of Shares, Granted
 
 
 
342,572 
 
 
Expected dividends
 
 
 
0 
 
 
Number of Shares, Forfeited and canceled
 
 
 
72,338 
 
 
Warrant term
4 years 
5 years 
5 years 
 
 
 
Warrants issued to purchase common stock
 
243,750 
187,500 
 
243,750 
 
Warrant exercise price
$ 3.00 
$ 1.24 
$ 1.21 
 
 
 
Warrant redemption price per share
 
$ 0.01 
$ 0.01 
 
 
 
Terms for warrant redeem
 
Opexa can redeem the warrants at $0.01 per share if the Company's common stock closes at or above $10.00 per share for 20 consecutive trading days. 
The warrants at $0.01 per underlying share of common stock if the common stock closes at or above $10.00 per share for 20 consecutive trading days. 
 
 
 
Number of common stock to be issued upon exercise of warrant
541,668 
 
187,500 
 
 
 
Warrants Attached to Debt
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Discount rate
 
0.76% 
 
 
 
 
Expected life
 
5 years 
 
 
 
 
Expected volatility rate
 
191.00% 
 
 
 
 
Expected dividends
 
0 
 
 
 
 
Estimated fair value of warrants
 
195,969 
 
 
 
 
Warrants, Forfeited and canceled
 
 
 
1,482,892 
 
 
Common Stock Warrants issued to Release a Claim on Cash
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Discount rate
 
 
0.90% 
 
 
 
Expected life
 
 
5 years 
 
 
 
Expected volatility rate
 
 
191.00% 
 
 
 
Estimated fair value of warrants
 
 
219,553 
 
 
 
Employee Stock Option
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Stock option, term
 
 
 
10 years 
 
 
Employee Stock Option |
Employee
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Stock option, term
 
 
 
10 years 
 
 
Number of Shares, Granted
 
 
 
125,000 
 
 
Weighted average exercise price, Granted
 
 
 
$ 2.34 
 
 
Vesting period
 
 
 
3 years 
 
 
Fair value of stock granted during period
 
 
 
285,226 
 
 
Discount rate
 
 
 
1.87% 
 
 
Expected life
 
 
 
5 years 3 months 
 
 
Expected volatility rate
 
 
 
194.00% 
 
 
Expected dividends
 
 
 
0 
 
 
Employee Stock Option |
Employees
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Stock option, term
 
 
 
10 years 
 
 
Number of Shares, Granted
 
 
 
129,000 
 
 
Vesting period
 
 
 
3 years 
 
 
Fair value of stock granted during period
 
 
 
218,348 
 
 
Expected life
 
 
 
5 years 3 months 
 
 
Expected dividends
 
 
 
$ 0 
 
 
Employee Stock Option |
Employees |
Minimum
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Weighted average exercise price, Granted
 
 
 
$ 1.45 
 
 
Discount rate
 
 
 
1.73% 
 
 
Expected volatility rate
 
 
 
201.00% 
 
 
Employee Stock Option |
Employees |
Maximum
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Weighted average exercise price, Granted
 
 
 
$ 1.75 
 
 
Discount rate
 
 
 
2.78% 
 
 
Expected volatility rate
 
 
 
204.00% 
 
 
Non Employee Director Stock Option
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Stock option, term
 
 
 
10 years 
 
 
Number of Shares, Granted
 
 
 
88,572 
 
 
Weighted average exercise price, Granted
 
 
 
$ 1.75 
 
 
Discount rate
 
 
 
1.73% 
 
 
Expected life
 
 
 
5 years 3 months 
 
 
Expected volatility rate
 
 
 
201.00% 
 
 
Fair value stock granted during period
 
 
 
$ 151,867 
 
 
Stock options vesting percentage, immediately from date of grant
 
 
 
50.00% 
 
 
Stock options vesting percentage, remaining of period
 
 
 
50.00% 
 
 
Non Employee Director Stock Option |
Minimum
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Vesting period
 
 
 
8 months 
 
 
Non Employee Director Stock Option |
Maximum
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Vesting period
 
 
 
1 year 
 
 
2010 Plan
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
Stock based compensation, common stock shares authorized
 
 
 
625,000 
 
 
Share based compensation, common stock shares issued and outstanding
 
 
 
1,094,854 
 
 
Stock Option Activity (Detail) (USD $)
9 Months Ended
Sep. 30, 2013
Number of Shares
 
Number of Shares, Outstanding at beginning of period
824,620 
Number of Shares, Granted
342,572 
Number of Shares, Exercised
   
Number of Shares, Forfeited and canceled
(72,338)
Number of Shares, Outstanding at end of period
1,094,854 
Number of Shares, Exercisable at end of period
599,188 
Weighted average exercise price
 
Weighted average exercise price, Outstanding at beginning of period
$ 5.54 
Weighted average exercise price, Granted
$ 1.96 
Weighted average exercise price, Exercised
   
Weighted average exercise price, Forfeited and canceled
$ 5.19 
Weighted average exercise price, Outstanding at end of period
$ 4.45 
Weighted average exercise price, Exercisable at end of period
$ 5.78 
Weighted average remaining contract term
 
Weighted average remaining contract term, Outstanding at end of period
7 years 8 months 12 days 
Weighted average remaining contract term, Exercisable at end of period
6 years 7 months 6 days 
Intrinsic Value
 
Intrinsic Value, Outstanding at end of period
$ 184,740 
Intrinsic Value, Exercisable at end of period
$ 109,111 
Warrant Activity (Detail) (Warrants Attached to Debt, USD $)
9 Months Ended
Sep. 30, 2013
Warrants Attached to Debt
 
Number of Shares
 
Number of Shares, Outstanding at beginning of period
3,579,087 
Number of Shares, Granted
972,918 
Number of Shares, Exercised
   
Number of Shares, Forfeited and canceled
(1,482,892)
Number of Shares, Outstanding at end of period
3,069,113 
Number of Shares, Exercisable at end of period
3,069,113 
Weighted average exercise price
 
Weighted average exercise price, Outstanding at beginning of period
$ 5.64 
Weighted average exercise price, Granted
$ 2.21 
Weighted average exercise price, Exercised
   
Weighted average exercise price, Forfeited and canceled
$ 6.54 
Weighted average exercise price, Outstanding at end of period
$ 4.12 
Weighted average exercise price, Exercisable at end of period
$ 4.12 
Weighted average remaining contract term
 
Weighted average remaining contract term, Outstanding at end of period
3 years 4 months 24 days 
Weighted average remaining contract term, Exercisable at end of period
3 years 4 months 24 days 
Intrinsic Value
 
Intrinsic Value, Outstanding at end of period
$ 415,313 
Intrinsic Value, Exercisable at end of the period
$ 415,313