REXAHN PHARMACEUTICALS, INC. Item 1.01 Entry into Material Definitive Agreement.
Reverse Merger with Ocuphire
On
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the "Effective Time"): (a) each share of Ocuphire Common Stock (as defined below) outstanding immediately prior to the Effective Time (excluding shares held as treasury stock, shares held by Ocuphire and dissenting shares) will be converted into the right to receive shares of Rexahn common stock (the "Rexahn Common Stock") equal to the Exchange Ratio described below; and (b) each outstanding Ocuphire stock option that has not previously been exercised prior to the Effective Time will be assumed by Rexahn.
Under the exchange ratio formula in the Merger Agreement (the "Exchange Ratio"),
immediately following the consummation of the Merger (the "Closing"), Rexahn's
then-current stockholders would own approximately 14.3% of the combined
company's common stock, and the former Ocuphire securityholders would own
approximately 85.7% of the combined company's common stock, in each case
calculated on a fully-diluted basis, assuming Rexahn's net cash balance at
Closing is between
In connection with the Merger, Rexahn will prepare and file with the
• the issuance of Rexahn Common Stock to the Ocuphire stockholders pursuant to
the Merger Agreement and the change of control of Rexahn resulting from the Merger pursuant to pertinentNasdaq Stock Market ("Nasdaq") listing rules;
• the amendment of Rexahn's certificate of incorporation to effect a reverse
split of all outstanding shares of the Rexahn Common Stock at a reverse stock split ratio as mutually agreed to by Rexahn and Ocuphire; and
• the amendment of Rexahn's certificate of incorporation to change the name of
Rexahn to "Ocuphire Pharma, Inc. "; 2
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• the adoption of the
• the issuance of (a) shares of Rexahn Common Stock upon the exercise of certain
warrants to be issued in the Pre-Merger Financing, and (b) additional shares of Rexahn Common Stock that may be issued following the closing of the Pre-Merger Financing.
Consummation of the Merger is subject to certain Closing conditions, including,
among other things: (i) approval by the stockholders of Rexahn and Ocuphire;
(ii) the continued listing of the Rexahn Common Stock on Nasdaq and the listing
of the additional Rexahn Common Stock issued in connection with the Merger on
Nasdaq; (iii) the accuracy of the representations and warranties, subject to
certain materiality qualifications; (iv) satisfaction by Rexahn of a minimum net
cash at Closing requirement of
Under the Merger Agreement, Rexahn's net cash at Closing is calculated as follows: (i) the sum of Rexahn's cash and cash equivalents, short-term investments, accrued investment interest receivable, and any prepaid refundable deposits of Rexahn, less (ii) the sum of Rexahn's accounts payable and accrued expenses, less (iii) all liabilities of Rexahn to any current or former officer, director, employee, consultant or independent contractor, including change of control payments, retention payments, severance and other related termination costs, or other payments pursuant to any of Rexahn's benefit plans, less (iv) any bona fide current liabilities of Rexahn payable in cash, less (v) Rexahn's transaction expenses incurred in connection with the Merger as calculated in accordance with the terms of the Merger Agreement, and less (vi) certain estimated liabilities associated with Rexahn's outstanding warrants to be calculated approximately 10 days prior to the Closing in accordance with the terms of the Merger Agreement. The estimated liabilities associated with Rexahn's outstanding warrants will be impacted by, among other things, the volatility and trading price of shares of Rexahn Common Stock on Nasdaq.
The Merger Agreement contains certain termination rights for both Rexahn and
Ocuphire, and further provides that, upon termination of the Merger Agreement
under specified circumstances, either party may be required to pay the other
party a termination fee of
Immediately after the Effective Time, the Board of Directors of Rexahn is
expected to be comprised of seven members, one of whom is expected to be
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
The Merger Agreement contemplates that Rexahn will terminate the employment of
In accordance with the Merger Agreement, on
Item 8.01 Other Events.
Attached as Exhibit 99.1 is a copy of the joint press release issued by Rexahn
and Ocuphire on
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Forward-Looking Statements
This communication contains forward-looking statements (including within the
meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act
of 1933, as amended) concerning Rexahn, Ocuphire, the proposed Merger, the CVR
Agreement, the Pre-Merger Financing and other matters, including without
limitation, statements relating to the satisfaction of the conditions to and
consummation of the Merger, the expected timing of the Closing, the expected
ownership percentages of the combined company and Rexahn's estimates of its
expected net cash at Closing. These statements may discuss goals, intentions and
expectations as to future plans, trends, events, results of operations or
financial condition, or otherwise, based on current beliefs of the management of
Rexahn, as well as assumptions made by, and information currently available to,
management. Forward-looking statements generally include statements that are
predictive in nature and depend upon or refer to future events or conditions,
and include words such as "may," "will," "should," "would," "expect,"
"anticipate," "plan," "likely," "believe," "estimate," "project," "intend," and
other similar expressions. Statements that are not historical facts are
forward-looking statements. Forward-looking statements are based on current
beliefs and assumptions that are subject to risks and uncertainties and are not
guarantees of future performance. Actual results could differ materially from
those contained in any forward-looking statement as a result of various factors,
including, without limitation: the risk that the conditions to the Closing are
not satisfied, including the failure to obtain stockholder approval for the
proposed Merger in a timely manner or at all; uncertainties as to the timing of
the consummation of the proposed Merger and the ability of each of Rexahn and
Ocuphire to consummate the Merger; risks related to Rexahn's ability to
correctly estimate its expected net cash at Closing and estimate and manage its
operating expenses and its expenses associated with the proposed Merger pending
Closing; risks related to the calculation of the estimated warrant liability of
Rexahn's net cash amount being impacted by the volatility and trading price of a
share of Rexahn Common Stock on Nasdaq on the calculation date and its impact on
Rexahn's expected net cash at Closing; Rexahn's ability to meet the minimum net
cash requirement at Closing; risks related to Rexahn's continued listing on the
Nasdaq Capital Market until Closing of the proposed Merger; risks related to the
failure or delay in obtaining required approvals from any governmental or
quasi-governmental entity necessary to consummate the proposed Merger; the risk
that as a result of adjustments to the Exchange Ratio, Rexahn stockholders or
Ocuphire stockholders could own more or less of the combined company than is
currently anticipated; risks related to the market price of Rexahn Common Stock
relative to the Exchange Ratio; the risk that the conditions to payment under
the CVRs will be not be met and that the CVRs may otherwise never deliver any
value to Rexahn stockholders; risks associated with the possible failure to
realize certain anticipated benefits of the proposed Merger, including with
respect to future financial and operating results; the ability of Rexahn or
Ocuphire to protect their respective intellectual property rights; competitive
responses to the Merger and changes in expected or existing competition;
unexpected costs, charges or expenses resulting from the proposed Merger;
potential adverse reactions or changes to business relationships resulting from
the announcement or completion of the proposed Merger; the success and timing of
regulatory submissions and pre-clinical and clinical trials; regulatory
requirements or developments; changes to clinical trial designs and regulatory
pathways; changes in capital resource requirements; risks related to the
inability of the combined company to obtain sufficient additional capital to
continue to advance its product candidates and its preclinical programs;
legislative, regulatory, political and economic developments; and the effects of
COVID-19 on clinical programs and business operations. The foregoing review of
important factors that could cause actual events to differ from expectations
should not be construed as exhaustive and should be read in conjunction with
statements that are included herein and elsewhere, including the risk factors
included in Rexahn's most recent Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K filed with the
Important Additional Information Will be Filed with the
In connection with the proposed Merger, Rexahn intends to file relevant
materials with the
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No Offer or Solicitation
This communication shall not constitute an offer to sell, the solicitation of an offer to sell or any offer to buy or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Participants in the Solicitation
Rexahn and its directors and executive officers and Ocuphire and its directors
and executive officers may be deemed to be participants in the solicitation of
proxies from the stockholders of Rexahn in connection with the Merger.
Information regarding the special interests of these directors and executive
officers in the Merger will be included in the proxy
statement/prospectus/information statement referred to above. Additional
information about Rexahn's directors and executive officers is included in
Rexahn's Annual Report on Form 10-K for the fiscal year ended
Item 9.01 Financing Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
2.1* Agreement and Plan of Merger, dated as of June 17, 2020 , by and among
Rexahn, Merger Sub and Ocuphire.
4.1 Form of Series A/B Warrants.
4.2* Registration Rights Agreement, dated June 17, 2020 , by and among
Rexahn and certain investors named therein.
10.1* Form of CVR Agreement, by and among Rexahn, the CVR Representative,
and the Rights Agent.
10.2 Form of Ocuphire Voting Agreement, by and among Ocuphire, Rexahn and
certain stockholders of Ocuphire.
10.3 Form of Lock-Up Agreement, by and among Rexahn, Ocuphire and certain
stockholders of Rexahn and Ocuphire.
10.4* Securities Purchase Agreement, dated as of June 17, 2020 , by and among
Rexahn, Ocuphire and the investors party thereto.
10.5 Form of Financing Lock-Up Agreement, by and among Rexahn, Ocuphire,
and the investors party thereto.
10.6 Form of Leak-Out Agreement, by and between Rexahn and the investors
party thereto.
99.1 Joint Press Release, dated June 17, 2020 , issued by Rexahn and
Ocuphire.
* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. A copy of any omitted schedule and/or exhibit will be
furnished to the SEC upon request.
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