v3.25.4
Mergers
 12 Months Ended
Dec. 31, 2025
Mergers [Abstract]  
Mergers
2.
Mergers
  
Acquisition of Opus Genetics

Summary of Transaction

As described in Note 1 – Company Description and Summary of Significant Accounting Policies, on October 22, 2024, the Company completed the stock purchase of Private Opus. Under the terms of the Merger Agreement, at the closing of the Opus Acquisition, the Company issued to the security holders of Private Opus 5,237,063 shares of the Company’s common stock, par value $0.0001 per share, and 14,145.374 shares of the Company’s preferred stock, par value $0.0001 per share, designated as Series A Non-Voting Convertible Preferred Stock (“Series A Preferred Stock”), each share of which was converted into 1,000 shares of common stock on May 5, 2025 upon stockholder approval that occurred on April 30, 2025.


The total consideration in connection with the Opus Acquisition was $25.8 million. The transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations, as one asset, the underlying intellectual property associated with the IRD therapies, comprised more than 90% of Private Opus’s assets.



Under this method of accounting, the Company was the accounting acquirer for financial reporting purposes. This determination was primarily based on the facts that, immediately following the Opus Acquisition: (i) legacy Ocuphire’s stockholders held the majority of the voting rights in the combined company based on their ownership, (ii) Private Opus held only three out of the nine board of director seats of the combined company, and (iii) Private Opus senior management held only one of the five key positions in the senior management of the combined company.



Private Opus was determined to be a variable interest entity (“VIE”) as it was insufficiently capitalized to fund future operations. As such, the acquisition costs of $2.8 million were expensed and not capitalized as part of the purchase price in accordance with ASC 805.  In addition, the fair value of the net assets and IPR&D acquired in excess of the purchase price was recorded as an asset acquisition gain and was included in the other income, net line item in the consolidated statements of comprehensive loss. The reported operating results prior to the Opus Acquisition are those of legacy Ocuphire.



The following summarizes the purchase price paid in the Opus Acquisition (in thousands, except share and per share amounts):


Number of common shares of the combined organization owned by the Company’s Pre-acquisition Private Opus stockholders
    
5,237,063
  
Multiplied by the fair value per share of the Company’s common stock (1)
  
$
1.33
  
Fair value of common stock issued to affect the Opus Acquisition
  
$
6,965
  
Number of Series A preferred shares of the combined organization owned by the Company’s Pre-acquisition Private Opus stockholders
    
14,145.374
  
Multiplied by the fair value per share of the Company’s Series A preferred stock (2)
  
$
1.3321
  
Fair value of preferred stock issued to affect the Opus Acquisition
  
$
18,843
  
Purchase price
  
$
25,808
  



(1)
Based on the last reported sale price of the Company’s common stock on the Nasdaq Capital Market on October 22, 2024, the closing date of the Opus Acquisition.


(2)
Based on the fair market valuation of the Series A preferred stock that considered the reported sale price of the Company’s common stock on the Nasdaq Capital Market on October 22, 2024 on an as converted basis (1,000 shares of common stock for 1 share of preferred stock), the closing date of the Opus Acquisition, as well as the underlying dividend provisions on a discounted cash flow basis.

The fair value of the net assets and IPR&D acquired was as follows (in thousands):

Cash acquired
  
$
1,210
  
Net liabilities assumed
    
(955
)
IPR&D (3)
    
28,000
  
Net assets and IPR&D acquired
  
$
28,255
  


(3)
Represents the Private Opus Acquisition research and development projects which were in-process, but not yet completed, and which the Company may advance post the Opus Acquisition. This includes the development of gene therapies for IRDs. Current accounting standards require that the fair value of IPR&D projects acquired in an asset acquisition with no alternative future use be charged to expense on the acquisition date. The acquired IPR&D did not have outputs or employees. The fair value of the IPR&D was recorded at fair value using Level 3 inputs. A Multi-Period Excess Earnings Method (“MPEEM”) model was applied which incorporates assumptions such as future earnings and margins in connection with the further development and commercialization of IRD therapies, and a discount rate of 20%.



The gain recorded upon the close of the Opus Acquisition is recapped below (in thousands):
Purchase Price
  
$
25,808
  
Net assets and IPR&D acquired
    
28,255
  
Gain recorded upon close of Opus Acquisition
  
$
2,447

Merger with Rexahn

On November 5, 2020, the Company completed a merger transaction with Rexahn Pharmaceuticals, Inc. (“Rexahn). In connection with the merger (“Rexahn Merger”), the Company, Shareholder Representatives Services LLC, as representative of the Rexahn stockholders prior to the Merger, and Olde Monmouth Stock Transfer Co., Inc., as the rights agent, entered into the Contingent Value Rights Agreement (the “CVR Agreement”).

Pursuant to the terms of the Rexahn Merger and the CVR Agreement, Rexahn stockholders of record as of immediately prior to the effective time of the Rexahn Merger received one contingent value right (“CVR”) for each share of Rexahn common stock held.

The CVRs are not transferable, except in certain limited circumstances, will not be certificated or evidenced by any instrument, will not accrue interest and will not be registered with the SEC or listed for trading on any exchange. The CVR Agreement will continue in effect until the later of the end of the CVR Term (as defined in the CVR Agreement) and the payment of all amounts payable thereunder. As of December 31, 2025, no payments subject to the CVR Agreement had been received beyond those previously reported in the second and third quarters of calendar year 2021. In addition, no milestones had been accrued as of December 31, 2025, as there were no potential milestones yet considered probable beyond those previously reported.