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Item 2. Management’s Discussion and Analysis

2024-05-10 compared with 2023-11-13 · 354 added, 488 removed, 149 unchanged (85% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and

notes included in Part I “Financial Information”, Item I “Financial Statements” of this Quarterly Report on Form 10-Q (the “Report”) and the audited financial statements and related footnotes included in our Annual Report on Form 10-K for the year

ended December 31, 2022.

The following discussion of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and notes

included in Part I “Financial Information”, Item I “Financial Statements” of this Quarterly Report on Form 10-Q (the “Report”) and the audited financial statements and related footnotes included in our Annual Report on Form 10-K for the year ended

December 31, 2023.

Forward-Looking Statements

Certain statements contained in this Report are not statements of historical fact and are forward-looking statements within the meaning of Section 27A of

the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements give current expectations or forecasts of future events or our future financial or operating

We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “we expect,” “we anticipate,” “would” or the negative of

those terms, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements.

These forward-looking statements reflect our management’s beliefs and views with respect to future events, are based on estimates and assumptions as of the date of this Report

and are subject to risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in these forward-looking statements.

We discuss many of these risks in greater detail under Part

I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent reports filed with or furnished to the Securities and Exchange Commission (the “SEC”).

Moreover, we operate in a very competitive and

rapidly changing environment.

Certain statements contained in this Report are not statements of historical fact and are forward-looking statements within the meaning of Section

27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Forward-looking statements give current expectations or forecasts of future events or our future financial or

operating performance.

Such statements include, but are not limited to, statements concerning the applications of Phentolamine Ophthalmic Solution 0.75%, formerly known as Nyxol (“PS”) in ophthalmology, the registration program for PS,

the LYNX-2 Phase 3 registration study, the benefits, uses and side effects of PS treatment, ongoing discussions with the U.S.

Federal Drug Administration (the “FDA”) regarding various of our drug products, and continued drug development under our

agreement with Viatris.

In some cases, you can identify forward-looking statements by the following words:

“anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,”

“potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements.

These forward-looking statements reflect our management’s beliefs and views with respect to future events, are based on estimates and assumptions as of the date of this Report and

are subject to risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in these forward-looking statements, including, without limitation:

The success and timing of regulatory submissions and pre-clinical and clinical trials, including enrollment and data readouts;

Regulatory requirements or developments;

Changes to or unanticipated events in connection with clinical trial designs and regulatory pathways;

Delays or difficulties in the enrollment of patients in clinical trials;

Substantial competition and rapid technological change;

Our development of sales and marketing infrastructure;

Future revenue losses and profitability;

Our relatively short operating history;

Changes in capital resource requirements;

Risks related to the inability of Ocuphire to obtain sufficient additional capital to continue to advance its product candidates and its preclinical programs;

Domestic and worldwide legislative, regulatory, political and economic developments;

Employee misconduct;

Changes in market opportunities and acceptance;

Reliance on third-parties;

Future, potential product liability and securities litigation;

System failures, unplanned events, or cyber incidents;

The substantial number of shares subject to potential issuance associated with our Equity Line of Credit arrangement with Lincoln Park Capital Fund, LLC;

Risks that our partnership with Viatris, or our other licensing arrangements, may not facilitate the commercialization or market acceptance of Ocuphire’s product candidates;

Future fluctuations in the market price of our common stock;

The success and timing of commercialization of any of Ocuphire’s product candidates;

Obtaining and maintaining Ocuphire’s intellectual property rights.

We discuss many of these risks in greater detail under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent reports

filed with or furnished to the Securities and Exchange Commission (the “SEC”).

Moreover, we operate in a very competitive and rapidly changing environment.

New risks emerge from time to time.

It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors,

may cause actual results to differ materially from those contained in any forward-looking statements we may make.

Given these uncertainties, you should not place undue reliance on these forward-looking statements.

It is not possible for our management to predict all

risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make.

these uncertainties, you should not place undue reliance on these forward-looking statements.

Any forward-looking statement made by us in this Report speaks only as of the date hereof or as of the date specified herein.

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forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable laws or regulations.

We are a clinical-stage ophthalmic biopharmaceutical company focused on developing novel therapies for the treatment of unmet needs of patients with retinal and refractive eye

Our lead retinal product candidate, APX3330, is a first-in-class small-molecule inhibitor of Ref-1 (reduction oxidation effector factor-1 protein).

Ref-1 is a regulator of

transcription factors such as HIF-1α and NF-kB.

Inhibiting REF-1 reduces levels of vascular endothelial growth factor (“VEGF”) and inflammatory cytokines which are known to play key roles in ocular angiogenesis and inflammation.

Through inhibition

of Ref-1, APX3330 normalizes the levels of VEGF to physiologic levels, unlike biologics that deplete VEGF below the levels required for normal function.

APX3330 is an oral tablet administered twice per day for the treatment of diabetic retinopathy

DR affects approximately 10 million people with diabetes and is projected to impact over 14 million Americans by 2050.

DR is classified as Non-Proliferative Diabetic

Retinopathy (“NPDR”), the early stage of the disease in which symptoms may be mild or nonexistent or Proliferative Diabetic Retinopathy (“PDR”) which is the more advanced stage of diabetic eye disease that can be highly symptomatic with loss of

Approximately 80% of the DR patients have NPDR that will progress to PDR if left untreated.

Despite the risk for visual loss associated with this disease, over 90% of NPDR patients currently receive no course of treatment apart from

observation by their eye care specialist until they develop sight-threatening complications.

This is due to the treatment burden of the frequent eye injections required with currently approved therapies for this disease.

APX3330 as an oral tablet

has the potential to be an early, non-invasive treatment for the 8 million NPDR patients in the US.

We are a clinical-stage biopharmaceutical company focused on developing novel therapies for the treatment of unmet needs of patients with retinal and refractive eye disorders with

one FDA-approved product currently marketed by Viatris, Inc.

Ocuphire Pharma, Inc.

In January 2023, we reported top-line efficacy and safety results from the ZETA-1 Phase 2 trial conducted in 103 subjects (51

treated with 600 mg daily dose of APX3330) in DR, including moderately severe and severe NPDR and mild PDR, as well as patients with diabetic macular edema without loss of central vision.

Although administration of APX3330 daily did not meet the

study’s primary endpoint of percentage of patients with a ≥ 2-step improvement in Early Treatment of Diabetic Retinopathy Study (“ETDRS”) diabetic retinopathy severity scale (“DRSS”) in the study eye at week 24 compared to placebo, efficacy was

seen on the FDA agreed upon registration endpoint of ≥3-step worsening on a binocular DRSS Person Scale.

Our lead retinal product candidate, APX3330, is a small-molecule inhibitor of Ref-1 (reduction oxidation effector factor-1 protein).

Ref-1 is a regulator of transcription factors

such as HIF-1α and NF-kB.

Inhibiting Ref-1 has been shown to reduce levels of vascular endothelial growth factor (“VEGF”) and inflammatory cytokines which are known to play key roles in ocular angiogenesis and inflammation.

APX3330 is an oral

tablet administered twice per day in development for the treatment of diabetic retinopathy (“DR”).

DR affects approximately 10 million diabetics and is projected to impact over 14 million Americans by 2050.

DR is classified as either Non-Proliferative Diabetic Retinopathy

(“NPDR”), the early stage of the disease in which symptoms may be mild or non-existent, or Proliferative Diabetic Retinopathy (“PDR”), which is the more advanced stage of diabetic eye disease that can be highly symptomatic with loss of vision.

Approximately 8 million DR patients have NPDR that may progress to PDR if left untreated.

APX3330, as an oral tablet, has the potential to be an early, non-invasive treatment for the 8 million NPDR patients in the US.

In January 2023, we reported top-line efficacy and safety results from the ZETA-1 Phase 2 trial conducted in 103 subjects (51 treated with 600 mg daily dose of APX3330) in DR,

including moderately severe and severe NPDR and mild PDR, as well as patients with diabetic macular edema without loss of central vision.

Although administration of APX3330 daily did not meet the study’s primary endpoint of percentage of patients

with a ≥ 2-step improvement in Early Treatment of Diabetic Retinopathy Study (“ETDRS”) diabetic retinopathy severity scale (“DRSS”) in the study eye at week 24 compared to placebo, efficacy was seen on the ≥3-step worsening on a binocular DRSS

Person Scale.

Prevention or slowing of progression of DR to vision-threatening complication such as PDR is a clinically meaningful endpoint.

demonstrated favorable safety and tolerability in diabetic patients.

A successful End-of-Phase 2 (“EOP2”) meeting with the U.S.

Food and Drug Administration (the “FDA”) was held in October 2023 at which we obtained agreement on the Phase 3

registration endpoint supporting the advancement of APX3330 into Phase 3.

Ocuphire plans to submit a Special Protocol Assessment (“SPA”) to agree on the clinical trial protocol and statistical analysis plan for the Phase 3 trials.

Prior to Ocuphire in-licensing the APX3330 product candidate, it had been studied by other sponsors in a total of 11 clinical trials (6 Phase 1 and 5 Phase 2) in a total of

over 420 healthy volunteers or patients (with over 340 APX3330-treated) for inflammatory (hepatic) and oncology indications, and had demonstrated evidence of target engagement, consistent pharmacokinetics, durability, and favorable safety and

tolerability.

Treatment-related adverse events were uncommon, and most were mild in severity.

No clinically significant changes were observed in liver, kidney, or heart function.

There were no treatment-related effects on hematologic or blood

chemistry evaluations.

APX3330 demonstrated favorable safety and tolerability in the ZETA-1 trial, consistent with the safety data from the prior 11 clinical trials.

APX3330 also demonstrated favorable safety and tolerability in diabetic patients.

An End-of-Phase 2

(“EOP2”) meeting with the U.S.

Food and Drug Administration (the “FDA”) was held in October 2023 at which we obtained agreement on the registration endpoint of ≥3-step worsening on a binocular DRSS Person Scale.

APX3330 demonstrated favorable

safety and tolerability in the ZETA-1 trial.

Ocuphire submitted a Special Protocol Assessment (“SPA”) to the FDA in February 2024 to seek agreement on the clinical trial protocol and statistical analysis plan and will share specifics on the study

design parameters and anticipated timing if and when a SPA agreement is reached with the FDA.

We also in-licensed APX2009 and APX2014, which are second-generation analogs of APX3330.

The unique mechanism of action of these Ref-1 inhibitors of reducing angiogenesis and

inflammation could potentially be beneficial in treating other retinal diseases such as age-related macular degeneration (“AMD”), and geographic atrophy (“GA”).

We are currently evaluating local delivery routes of APX3330 and its second-generation analogs in addition to the systemic (oral) route as part of its pipeline expansion in

retinal therapies.

Phentolamine Ophthalmic Solution 0.75% (POS)

In November 2022, we entered into a license and collaboration agreement (the “Nyxol License Agreement”) with FamyGen Life Sciences, Inc.

(acquired by Viatris, Inc.

(“Viatris”) in January 2023) pursuant to which we granted Viatris an exclusive license to develop, manufacture, import,

export and commercialize our refractive product candidate Phentolamine Ophthalmic Solution 0.75%, formerly known as Nyxol (“POS”) for treating (a) reversal of pharmacologically-induced mydriasis, (b) night vision disturbances or dim light vision

(“DLD”), and (c) presbyopia, and (ii) POS and low dose pilocarpine for treating presbyopia (together, the “Nyxol Products”) worldwide except for certain countries and jurisdictions in Asia (the “Viatris Territory”).

Under the terms of the Nyxol License Agreement, Ocuphire in partnership with Viatris, will develop the Nyxol Products in the United States.

Viatris will reimburse us for

budgeted costs related to the development of the Nyxol Products through FDA approval.

Viatris will be responsible for developing the Nyxol Products in countries and jurisdictions in the Viatris Territory outside of the United States.

POS is a once-daily eye drop formulation of phentolamine mesylate designed to reduce pupil diameter and improve visual acuity.

can potentially be used across multiple indications such as treatment of pharmacologically-induced mydriasis (“RM”) (dilation of the pupil), presbyopia (age-related blurry near vision) and DLD (halos, glares and starbursts).

Our management

believes these multiple indications potentially represent a significant market opportunity.

POS has been studied in a total of 12 clinical trials (3 Phase 1, 5 Phase 2 and 4 Phase 3) in a total of over 1100 patients (with over 650 POS-treated)

and has demonstrated promising clinical data across the three targeted refractive indications.

We submitted a new drug application (“NDA”) to the U.S.

Food and Drug Administration (“FDA”) in November 2022 under the 505(b)(2)

pathway for POS for RM;

the FDA approved the NDA in September 2023 under the brand name RYZUMVI™, which triggered a $10 million milestone payment under the Nyxol License Agreement.

The unique mechanism of action of this family of Ref-1 inhibitors of reducing angiogenesis

and inflammation could potentially be beneficial in treating other retinal diseases such as age-related macular degeneration, geographic atrophy, and non-ophthalmic diseases.

We are currently evaluating local delivery routes of APX3330 and its second-generation analogs (APX2009 and APX2014) in addition to the systemic (oral) route as part of its pipeline

expansion in retinal therapies.

RYZUMVI and Phentolamine Ophthalmic Solution 0.75% (PS)

In November 2022, we entered into a license and collaboration agreement (the “Viatris License Agreement”) with Viatris, Inc.

(“Viatris”), as successor to FamyGen Life Sciences,

Inc., pursuant to which we granted Viatris an exclusive license to develop, manufacture, import, export and commercialize (i) our refractive product candidate Phentolamine Ophthalmic Solution 0.75%, formerly known as Nyxol (“PS”), for treating (a)

reversal of pharmacologically-induced mydriasis, (b) decreased vision under mesopic (low) light conditions after keratorefractive surgery, and (c) presbyopia;

and (ii) PS and low dose pilocarpine for treating presbyopia (together, the “PS

Products”) worldwide except for certain countries and jurisdictions in Asia (the “Viatris Territory”).

PS was approved by the FDA for the treatment for pharmacologically-induced mydriasis under the brand name RYZUMVI in September 2023, which

triggered a $10 million milestone payment under the Viatris License Agreement.

RYZUMVI was commercialized by Viatris in April 2024.

Under the terms of the Viatris License Agreement, Ocuphire, in partnership with Viatris, will develop the PS Products in the United States.

Viatris will reimburse us for budgeted

costs related to the development of the PS Products through FDA approval.

Viatris will be responsible for developing the PS Products in countries and jurisdictions in the Viatris Territory outside of the United States.

PS is a once-daily eye drop formulation of phentolamine mesylate designed to reduce pupil diameter and improve visual acuity.

PS can potentially be used across multiple indications

such as treatment of pharmacologically-induced mydriasis (“RM”) (dilation of the pupil), presbyopia (age-related blurry near vision) and decreased vision under mesopic (low) light conditions after keratorefractive surgery.

PS has been studied in a

total of 12 clinical trials (three of which were Phase 1 trials, five of which were Phase 2 trials, and four of which were Phase 3 trials) in a total of over 1100 study participants (with over 650 participants being treated with PS) and has

demonstrated promising clinical data across the three targeted refractive indications.

We reported positive top-line data from multiple late-stage clinical trials for PS in reversal of pharmacologically induced mydriasis, presbyopia and dim light disturbances.

VEGA-2 Phase 3 study in presbyopia achieved its primary endpoint and Viatris, our development and commercial partner, is expected to continue Phase 3 development in the first half of 2024.

For decreased vision under mesopic (low) light conditions

following keratorefractive surgery, we received FDA agreement under Special Protocol Assessment for LYNX-2, a Phase 3 Trial of PS.

The first patient was enrolled in LYNX-2 in April 2024.

Ocuphire Pharma, Inc.

We reported positive top-line data from multiple late-stage clinical trials for POS in RM, presbyopia and DLD.

positive top-line data from Phase 3 trials in RM:

MIRA-2 in March 2021, MIRA-3 in March 2022 and MIRA-4 in April 2022.

We also reported positive top-line data from a Phase 2 trial of POS for treatment of presbyopia, both as monotherapy and with

low-dose pilocarpine (pilocarpine hydrochloride ophthalmic solution 0.4%, “LDP”) as adjunctive therapy (VEGA-1).

We reported top-line data from a Phase 3 trial in DLD in May 2022 (LYNX-1).

The VEGA-2 Phase 3 study in presbyopia achieved its

primary endpoint and Viatris, our development and commercial partner, is expected to continue Phase 3 development in the first half of 2024.

For DLD, a SPA has been submitted and Viatris is also expected to continue Phase 3 development in the

first half of 2024 following FDA agreement.

Strategic Outlook

We will continue to explore opportunities to acquire additional ophthalmic assets, expand current pipeline to other retinal

indications with APX3330, APX2009 and APX2014, and to seek strategic partners for late-stage development, regulatory preparation and commercialization of APX3330 in key global markets.

To date, our primary activities have been conducting research

and development activities, planning clinical trials, performing business and financial planning, recruiting personnel and raising capital.

We have only one product, RYZUMVI™, approved for sale that may generate royalties based on sales by

Viatris, and we do not expect to consistently generate significant revenues, other than license and collaborations revenue, until, and unless, the FDA or other regulatory authorities approve, and we successfully commercialize, APX3330.

time, if ever, as we can consistently generate substantial product revenue, we expect to finance our cash needs through a combination of equity and debt financings as well as through collaborations, strategic alliances and licensing arrangements.

Through September 30, 2023, we have funded our operations primarily through equity financings that totaled $59.6 million in gross proceeds, of which $21.15 million was received

in connection with the merger (“Merger”) with Rexahn Pharmaceuticals, Inc.

We intend to continue to explore opportunities to acquire additional assets, expand current pipeline to other retinal indications with APX3330, APX2009 and APX2014, and to seek

strategic partners for late-stage development, regulatory preparation and commercialization of APX3330 in key global markets.

To date, our primary activities have been conducting research and development activities, performing business and

financial planning, recruiting personnel and raising capital.

We have only one product, RYZUMVI, approved for sale with commercialization launched in April 2024, that has started to generate royalties based on sales by Viatris.

However, we do not

expect to consistently generate significant revenues, other than license and collaborations revenue, unless and until the FDA or other regulatory authorities approve, and we successfully commercialize, APX3330 or PS for other indications.

such time, if ever, as we can consistently generate substantial product revenue, we expect to finance our cash needs through a combination of equity and debt financings as well as through collaborations, strategic alliances and licensing

arrangements.

Through March 31, 2024, we have funded our operations primarily through equity financings that totaled $65.8 million in gross proceeds, of which $21.15 million was received in

connection with the merger (“Merger”) with Rexahn Pharmaceuticals, Inc.

(“Rexahn”) and through the issuance of convertible notes in private placements that totaled $8.5 million in gross proceeds net cash.

In addition, we have received license

fee and milestone payments of $45.0 million in the aggregate and reimbursement for costs related to development, all in connection with the Nyxol License Agreement.

Our net loss was $5.2 million for the nine months ended September 30, 2023 as compared to a net loss of $16.1 million for the nine months ended September 30, 2022.

September 30, 2023, we had an accumulated deficit of $76.7 million.

In addition, we have received license fee

and milestone payments of $45.0 million in the aggregate and reimbursement for costs related to development, all in connection with the Viatris License Agreement.

Our net loss was $7.1 million for the three months ended March 31, 2024 as compared to a net loss of $5.8 million for the three months ended March 31, 2023.

As of March 31, 2024, we

had an accumulated deficit of $88.6 million.

Furthermore, we anticipate that our expenses will increase as we:

continue clinical trials for APX3330, POS and for any other product candidate in our future pipeline;

continue nonclinical studies for APX3330, APX2009 and APX2014, POS and for any other product candidate in our future pipeline;

continue clinical trials for APX3330, PS and for any other product candidate in our future pipeline;

continue nonclinical studies for APX3330, APX2009 and APX2014, PS and for any other product candidate in our future pipeline;

develop additional product candidates that we identify, in-license or acquire;

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hire additional staff, including clinical, scientific, operational and financial personnel, to execute our business plan;

add operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts;

add operational, financial and management information systems and personnel to support our product development and potential future commercialization efforts;

continue to operate as a public company;

establish on our own or with partners, a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain regulatory approval.

Our net income (loss) will likely continue to fluctuate significantly from quarter to quarter and year to year, depending on the timing of our nonclinical studies, clinical

trials, expenditures on other research and development activities (and reimbursement thereof), and from potential milestone payments received from and revenue earned under the Nyxol License Agreement or any other license and collaboration

agreements that we enter into, and potential payments that may become payable from time to time under the Apexian Sublicense Agreement.

Ocuphire Pharma, Inc.

Recent Developments

Clinical Milestones

In January 2023, we announced top-line efficacy and safety results from ZETA-1, a Phase 2b trial of APX3330 in diabetic

retinopathy patients.

In ZETA-1, APX3330 demonstrated favorable safety and tolerability and exhibited efficacy in slowing or prevention of DR worsening on a binocular DRSS Person Scale.

The FDA agreed this was an approvable registration endpoint

at our EOP2 meeting.

Phentolamine Ophthalmic Solution 0.75% (POS)

In January 2023, we announced the initiation of the VEGA-2 Phase 3 pivotal trial, the first of two Phase 3 registration trials

intended to support a presbyopia indication for POS alone and POS with LDP.

The VEGA-2 Phase 3 study achieved its primary endpoint and Viatris, our development and commercial partner, is expected to continue Phase 3 development in the first half

Regulatory Update

In September 2023, we announced FDA approval of POS under the brand name RYZUMVI™ for the treatment of RM;

for this approval we

received a $10 million milestone payment under the Nyxol License Agreement.

In October 2023, a SPA was submitted to the FDA for DLD and Viatris, our development and commercial partner, is expected to

continue Phase 3 development in the first half of 2024 following FDA agreement.

In November 2023, we announced the successful outcome of the EOP2 meeting with the FDA, at which we obtained agreement on the

registration endpoint supporting the advancement of APX3330 into Phase 3.

Ocuphire plans to submit a SPA to agree on the clinical trial protocol and statistical analysis plan for the Phase 3 trials and will share specifics on the study design

parameters and anticipated timing once agreed with the FDA.

CEO Transition

On April 19, 2023, the Company terminated the employment of Mina Sooch, the former President and Chief Executive Officer of the Company, and appointed Richard Rodgers as the

Company’s interim President and Chief Executive Officer.

On June 8, 2023, the Company entered into a Separation and Release Agreement with Ms.

On November 1, 2023, the Company announced the appointment of George Magrath, M.D., M.B.A., M.S., as Chief Executive Officer and

member of the Board of Directors.

As a result of such appointment, Richard Rodgers, who was serving as Interim President and Chief Executive Officer, resigned from such positions and remains on the Board.

Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”)

On August 10, 2023, we entered into a common stock purchase agreement (the “Purchase Agreement”) with Lincoln Park, which provides that, upon the terms and subject to the

conditions and limitations set forth therein, Ocuphire has the sole right, but not the obligation, to direct Lincoln Park to purchase up to $50 million of shares of our common stock, par value $0.0001 (the “Common Stock”), from time to time over

the 30-month term of the Purchase Agreement.

Concurrently with entering into the Purchase Agreement, Ocuphire also entered into a registration rights agreement with Lincoln Park (the “Registration Rights Agreement”), pursuant to which we agreed to

register the resale of the shares of our Common Stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a registration statement.

Upon the execution of the Purchase Agreement, we issued 246,792 shares of

Common Stock to Lincoln Park as consideration for its commitment to purchase shares of our Common Stock under the Purchase Agreement.

Lincoln Park has agreed not to cause or engage in any manner whatsoever in any direct or indirect short selling or

hedging of our Common Stock.

Ocuphire Pharma, Inc.

Global Economic Conditions

Generally, worldwide economic conditions remain uncertain, particularly due to the effects of the conflict between Russia and Ukraine and potentially between Israel and Hamas,

disruptions in the banking system and financial markets, lingering COVID-19 pandemic, increased inflation and increased interest rates.

The general economic and capital market conditions, both in the U.S.

and worldwide, have been volatile in the

past and at times have adversely affected our access to capital and increased the cost of capital.

The capital and credit markets may not be available to support future capital raising activity on favorable terms.

If economic conditions decline,

our future cost of equity or debt capital and access to the capital markets could be adversely affected.

Additionally, our operating results could be materially impacted by changes in the overall macroeconomic environment and other

economic factors.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, the conflicts in Ukraine and the Middle East, disruptions in the banking system and financial markets, and steps taken by

governments and central banks, particularly in response to the COVID-19 pandemic as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary

policy, including increased interest rates.

Our net loss will likely continue to fluctuate significantly from quarter to quarter and year to year, depending on the timing of our nonclinical studies, clinical trials,

expenditures on other research and development activities (and reimbursement thereof), and from potential milestone payments received from and revenue earned under the Viatris License Agreement or any other license and collaboration agreements that

we enter into, and potential payments that may become payable from time to time under the Apexian Sublicense Agreement.

Financial Operations Overview

License and Collaborations Revenue

License and collaborations revenue to date was derived from a one-time non-refundable payment related to a license transfer, an additional milestone payment and reimbursement

of expenses earned under the Nyxol License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and Processa Pharmaceuticals, Inc.

License and collaborations revenue to date was derived from a one-time non-refundable payment related to a license transfer, an additional milestone payment and reimbursement of

expenses earned under the Viatris License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”) and Processa Pharmaceuticals, Inc.

(“Processa”) in connection with the Rexahn RX-3117 drug compound.

anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Nyxol License Agreement and we may earn additional revenues from potential milestone and royalty payments from the

anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Viatris License Agreement and we may earn additional revenues from potential milestone and royalty payments from the

agreements with Viatris , BioSense, Processa, or from other license agreements entered into the future;

however, the attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained

To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue

unless or until our partner, Viatris, commercializes RYZUMVI™, or regulatory approval is obtained and commercialization begins for APX3330 or POS for indications other than RM.

If we fail to complete the development of APX3330, POS, or any other

product candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory approval, our ability to generate significant revenue would be compromised.

To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until our partner, Viatris, commercializes

RYZUMVI, or regulatory approval is obtained, and commercialization begins for APX3330 or PS for indications other than RM.

If we fail to complete the development of APX3330, PS, or any other product candidate we may pursue in the future, in a

timely manner, or fail to obtain regulatory approval, our ability to generate significant revenue would be compromised.

Ocuphire Pharma, Inc.

Operating Expenses

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General and Administrative Expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation costs, for personnel in functions

not directly associated with research and administrative activities.

Other significant costs include insurance coverage for directors and officers and other property and liability exposures, legal fees relating to intellectual property and

corporate matters, professional fees for accounting and tax services, other services provided by business consultants and legal settlements.

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation costs, for personnel in functions not

directly associated with research and development activities.

Other significant costs include insurance coverage for directors and officers and other property and liability exposures, legal fees relating to intellectual property and corporate

matters, professional fees for accounting and tax services, other services provided by business consultants and legal settlements.

Research and Development Expenses

To date, our research and development expenses have related primarily to the clinical stage development of APX3330 and POS.

To date, our research and development expenses have related primarily to the clinical stage development of APX3330 and PS.

Research and development expenses consist of costs

incurred in performing research and development activities, including compensation and benefits for research and development employees and costs for consultants, costs associated with nonclinical studies and clinical trials, regulatory activities,

manufacturing activities to support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead expenses.

Ocuphire Pharma, Inc.

Pursuant to the Nyxol License Agreement, our budgeted research and development expenses related to the development of POS are fully reimbursed by Viatris.

However, all research

and development costs, including those related to POS, are expensed as incurred, and costs incurred by third parties are expensed as the contracted work is performed.

We accrue for costs incurred as the services are being provided by monitoring the

status of the study or project, and as the invoices are received from our external service providers.

incurred in performing research and development activities, including compensation, benefits and stock-based compensation costs for research and development employees and costs for consultants, costs associated with nonclinical studies and clinical

trials, regulatory activities, manufacturing activities to support clinical activities, license fees, nonlegal patent costs, fees paid to external service providers that conduct certain research and development, and an allocation of overhead

Pursuant to the Viatris License Agreement, our budgeted research and development expenses related to the development of PS to date have been fully reimbursed by Viatris.

all research and development costs, including those related to PS, are expensed as incurred, and costs incurred by third parties are expensed as the contracted work is performed.

We accrue for costs incurred as the services are being provided by

monitoring the status of the study or project, and as the invoices are received from our external service providers.

We adjust our accrual as actual costs become known.

Research and development activities are central to our business model.

We expect that APX3330 and POS will have higher development costs during the later stages of clinical development, as compared to costs incurred during their earlier stages of

We expect that APX3330 and PS will have higher development costs during the later stages of clinical development, as compared to costs incurred during their earlier stages of

development, primarily due to the increased size and duration of the later-stage clinical trials and associated nonclinical studies.

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However, it is difficult

for us to determine with certainty the duration, costs and timing to complete our current or future nonclinical programs and clinical trials of APX3330, POS, and other product candidates.

The duration, costs and timing of clinical trials and

development of APX3330, POS and other product candidates will depend on a variety of factors that include, but are not limited to, the following:

the conduct of nonclinical studies;

the design of clinical studies;

per-patient trial costs;

the number of patients that participate in the trials;

the number of sites included in the trials;

the countries in which the trials are conducted;

the length of time required to enroll eligible patients;

the number of doses that patients receive;

the drop-out or discontinuation rates of patients;

potential additional safety monitoring or other studies requested by regulatory agencies;

the duration of patient follow-up;

the phase of development of the product candidate;

arrangements with contract research organizations and other service providers;

the efficacy and safety profile of the product candidates.

Financing costs

Financing costs consist of issuance costs attributed to an equity line financing with Lincoln Park discussed further below.

Interest Expense

Interest expense consists of interest costs on principal related to a short-term loan (related to financing an insurance policy) during the period it was outstanding.

short-term loan had an annual interest rate of 5.5%.

The short-term loan was fully repaid in May 2022.

Fair value change in derivative liability

The fair value change in derivative liability consists of the fair value change of the derivative liability associated with our equity line financing during the periods the

derivative liability is outstanding.

Other Income (Expense), net

Other income (expense), net reflected in this line item includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity

investments and reimbursements in connection with grants and other sources when they occur.

In addition, other income (expense), net also includes payments when made by us in connection with the Contingent Value Rights Agreement (the “CVR

Agreement”) with former Rexahn shareholders.

Ocuphire Pharma, Inc.

Provision for Income Taxes

Provision for income taxes consists of federal and state income taxes in the United States, as well as deferred income taxes and changes in related valuation allowance

reflecting the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

A full valuation allowance has been provided on the net

deferred tax assets as of September 30, 2023 and December 31, 2022.

Results of Operations

Comparison of Three Months Ended September 30, 2023 and 2022

The following table summarizes Ocuphire’s operating results for the periods indicated (in thousands):

For the Three Months Ended

September 30,

License and collaborations revenue

Operating expenses:

General and administrative

Research and development

Total operating expenses

Income (loss) from operations

Financing costs

Fair value change in derivative liability

for us to determine with certainty the duration, costs and timing to complete our current or future nonclinical programs and clinical trials of APX3330, PS, and other product candidates.

Fair value change in derivative liabilities

The fair value change in derivative liabilities consists of the fair value change of the derivative liability associated with our equity line financing during the periods the equity

line financing is outstanding.

In addition, the fair value change of the warrant liabilities associated with the Rexahn warrants, while outstanding, was also included in this line item.

Other Income, net

Income (loss) before income taxes

Other income, net includes interest earned from cash and cash equivalent investments, realized and unrealized gains (losses) from equity investments and reimbursements in connection

with grants and other sources when they occur.

In addition, other income, net also includes payments when made by us in connection with the Contingent Value Rights Agreement (the “CVR Agreement”) with former Rexahn shareholders.

Provision for Income Taxes

Net income (loss)

License and Collaborations Revenue

License and collaborations revenue was 11.9 million for the three months ended September 30, 2023.

There was no license and

collaborations revenue during the three months ended September 30, 2022.

Revenue during the third quarter of 2023 was derived from the achievement of a $10.0 million milestone attributed to the FDA’s approval of POS, for reversal of mydriasis,

and from the reimbursement of research and development services under the Nyxol License Agreement in the amount of $1.9 million.

General and Administrative

General and administrative expenses for the three months ended September 30, 2023 were $2.1 million compared to $1.7 million for the three months ended September 30, 2022.

increase period over period of $0.4 million was primarily attributable to professional services of $0.2 million, personnel related and other costs of $0.2 million on a net basis.

General and administrative expenses included $0.3 million in

stock-based compensation expense during both three months ended September 30, 2023 and 2022.

Ocuphire Pharma, Inc.

Research and Development

The following table illustrates the components of our research and development expenses for the periods presented (in thousands):

For the Three Months Ended

September 30,

External costs:

Phentolamine Ophthalmic Solution 0.75% (“POS”)

Total external cost

Internal costs:

Employee related expenses

Facilities, supplies and other

Total internal costs

Total research and development expenses

Research and development expenses for the three months ended September 30, 2023 were $3.5 million compared to $2.8 million for the

three months ended September 30, 2022.

The $0.7 million increase in the current period was primarily attributable to increased drug manufacturing of $0.4 million and toxicology services of $0.3 million related to APX3330 and increased payroll and

consulting related costs of $0.2 million, offset partially by decreases in regulatory and clinical activities of approximately $0.3 million on a net basis.

Pursuant to the Nyxol License Agreement, our budgeted research and development expenses

related to the development of POS, are fully reimbursed by Viatris.

Research and development expenses also included $0.2 million in stock-based compensation expense during both three months ended September 30, 2023 and 2022.

Financing costs

Financing costs for the three months ended September 30, 2023 of $1.3 million was comprised of issuance costs attributed to the equity line financing with Lincoln Park

described further below.

We did not incur any financing costs during the three months ended September 30, 2022.

Fair value change in derivative liability

The fair value change in derivative liability attributed to the equity line financing with Lincoln Park, described further below, was a gain of $0.1 million for the three

months ended September 30, 2023 attributed to the fluctuations in our common stock fair value and the number of potential shares of common stock issuable at the various discount tiers under the equity line financing.

Other Income, net

During the three months ended September 30, 2023, Ocuphire had other income, net of $0.5 million related primarily to interest income in connection with our cash and cash equivalents on-hand.

During the three months ended September 30, 2022, Ocuphire had other income, net of $7,000 which consisted of interest income related to cash and cash equivalents of

$34,000, offset in part by unrealized losses from our short-term investments of $25,000 and from realized foreign currency exchange losses of $2,000.

Provision for income taxes consists of federal and state income taxes in the United States, as well as deferred income taxes and changes in related valuation allowance reflecting

the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Currently, a full valuation allowance has been provided on the net

deferred tax assets as of March 31, 2024 and December 31, 2023 and given the uncertainty of future taxable income and other related factors impacting the realizability or our remaining net deferred tax assets.

Ocuphire Pharma, Inc.

Comparison of Nine Months Ended September 30, 2023 and 2022

Results of Operations

Comparison of Three Months Ended March 31, 2024 and 2023

The following table summarizes Ocuphire’s operating results for the periods indicated (in thousands):

For the Nine Months Ended

September 30,

For the Three Months Ended

License and collaborations revenue

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Loss from operations

Financing costs

Interest expense

Fair value change in derivative liability

Other income (expense), net

Fair value change in derivative liabilities

Other income, net

Loss before income taxes

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License and Collaborations Revenue

License and collaborations revenue was $17.4 million for the nine months ended September 30, 2023.

There was no license and

collaboration revenue during the nine months ended September 30, 2022.

Revenue during the nine month period ended September 30, 2023 was derived from the achievement of a $10.0 million milestone attributed to the FDA’s approval of POS, for

reversal of mydriasis, and from the reimbursement of research and development services under the Nyxol License Agreement in the amount of $7.4 million.

License and collaborations revenue was $1.7 million for each of the three months ended March 31, 2024 and 2023.

Revenue during both quarterly periods was derived from the Viatris License

Agreement largely from the reimbursement of research and development services.

During the first quarter of 2024, we earned our first royalty payment in the amount of $3,000 stemming from the sale of RYZUMVI by

Viatris in late March 2024.

General and Administrative

General and administrative expenses for the nine months ended September 30, 2023 were $8.7 million compared to $5.2 million for the nine months ended September 30, 2022.

increase period over period of $3.5 million was primarily attributable to severance costs associated with the departure of our former Chief Executive Officer in the amount of $1.2 million, stock-based compensation of $1.1 million, professional

services of $0.4 million, legal support of $0.2 million, other personnel related costs of $0.3 million and business development activities and other costs of $0.3 million on a net basis.

General and administrative expenses totaled $2.0 million and

$0.9 million in stock-based compensation expense during the nine months ended September 30, 2023 and 2022, respectively.

General and administrative expenses for the three months ended March 31, 2024 were $4.7 million compared to $2.3 million for the three months ended March 31, 2023.

The increase period over period

of $2.4 million was primarily attributable to an increase in payroll related costs of $0.6 million, stock-based compensation of $0.3 million, professional services of $0.1 million, corporate legal support of $0.6 million, legal fees associated with

intellectual property of $0.5 million, business development activities of $0.2 million and general operating costs of $0.1 million on a net basis.

General and administrative expenses included $0.8 million and $0.5 million in stock-based

compensation expense during the three months ended March 31, 2024 and 2023, respectively.

Research and Development

The following table illustrates the components of our research and development expenses for the periods presented (in thousands):

For the Nine Months Ended

September 30,

For the Three Months Ended

External costs:

Phentolamine Ophthalmic Solution 0.75% (“POS”)

Phentolamine Ophthalmic Solution 0.75% (“PS”)

Total external cost

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Total research and development expenses

Research and development expenses for the three months ended March 31, 2024 were $4.7 million compared to $5.6 million for the three months ended March 31, 2023.

The $0.8 million decrease was

primarily attributable to lower clinical costs of $1.5 million, lower regulatory costs of $0.1 million and lower manufacturing expenses of $0.3 million

attributed to an activity reduction in the PS VEGA-2 trial.

The lower research and development costs in the current quarter when compared to the comparable prior year quarter were offset in part by an increase in toxicology costs of $0.9 million,

higher payroll costs of $0.1 million, when factoring in stock-based compensation, and by an increase in general consulting costs of $0.1 million.

Pursuant to the Viatris License Agreement, our budgeted research and development expenses related to

the development of the PS Products have been fully reimbursed by Viatris to date.

Research and development expenses included $0.2 million and $0.3 million in stock-based compensation expense during the three months ended March 31, 2024 and 2023,

respectively.

Ocuphire Pharma, Inc.

Research and development expenses for the nine months ended September 30, 2023 were $13.8 million compared to $10.8 million for the nine months ended September 30, 2022.

$3.0 million increase was primarily attributable to increased clinical costs of $2.6 million for the POS VEGA-2 trial, increased manufacturing and toxicology activities of approximately $1.3 million for APX3330, offset by decreased clinical costs

for the APX3330 ZETA-1 trial and other research and development activities period over period.

Additionally, higher payroll, including stock-based compensation, and consulting costs of $0.8 million and other operating expenses of $0.1 million, on

net basis, contributed to the expense increase during the current nine-month period.

Pursuant to the Nyxol License Agreement, our budgeted research and development expenses related to the development of POS are fully reimbursed by Viatris.

and development expenses also included $0.8 million and $0.5 million in stock-based compensation expense during the nine months ended September 30, 2023 and 2022, respectively.

Financing costs

Financing costs for the nine months ended September 30, 2023 of $1.3 million was comprised of issuance costs attributed to the equity line financing with Lincoln Park described

further below.

We did not have any financing costs during the nine months ended September 30, 2022.

Interest Expense

Interest expense for the nine months ended September 30, 2022 of $9,000 was comprised of interest on principal related to a short-term loan (related to financing an insurance

We did not have any interest expense during the nine months ended September 30, 2023.

Fair value change in derivative liability

The fair value change in derivative liability attributed to the equity line financing, described further below, was a gain of $0.1 million for the nine months ended September

30, 2023 attributed to the fluctuations in our common stock fair value and the number of potential shares of common stock issuable at the various discount tiers under the equity line financing.

Other Income (Expense), net

During the nine months ended September 30, 2023, Ocuphire had other income (expense), net of $1.2 million related primarily to interest income in connection with our cash and cash equivalents

During the nine months ended September 30, 2022, Ocuphire had other expense, net of $60,000 stemming from net unrealized losses from our short-term investments of $118,000 and

realized currency losses of approximately $1,000, offset in part by interest income of $59,000 related to cash and cash equivalents.

Fair value change in derivative liabilities

The fair value change in derivative liabilities attributed to the equity line financing, as described further below, was negligible for the three months ended March 31, 2024.

This is attributed to the fluctuations in our common stock fair value and the number of potential shares of common stock issuable at the various discount tiers under the equity line financing.

The equity line financing was not in effect during the

three months ended March 31, 2023.

Lastly, the fair value change of the warrant liabilities associated with the Rexahn warrants was also included in this line item for the three months ended March 31, 2023, but was de minimis .

The last of the Rexahn warrants classified as liabilities expired in April 2023 unexercised.

Other Income, net

During the three months ended March 31, 2024, Ocuphire had other income, net of $0.6 million related to interest income related to our cash and cash equivalents

on-hand of $0.6 million.

During the three months ended March 31, 2023, Ocuphire had other income, net of $0.3 million related to interest income related to our cash and cash equivalents on-hand of $367,000, offset in part by

net unrealized losses from our short-term investments of $27,000.

Liquidity and Capital Resources

Capital Resources

As of September 30, 2023, our principal sources of liquidity consisted of cash and cash equivalents of $42.4 million.

We believe that our cash on hand will be sufficient to fund our operations for

at least twelve months beyond the date of this filing.

As of September 30, 2023, our cash and cash equivalents on-hand were held at two large financial institutions.

As of March 31, 2024, our principal sources of liquidity consisted of cash and cash equivalents of $47.2 million.

We believe that our cash on hand as of March 31, 2024 will be

sufficient to fund our operations for at least twelve months beyond the date of this filing.

As of March 31, 2024, our cash and cash equivalents were invested primarily in cash deposits and cash equivalent investments at two large financial

institutions.

Historical Capital Resources

Our primary source of cash to fund our operations has been various equity offerings in the amount of $59.6 million and the issuance of convertible notes in the amount of $8.5

million, inclusive of the promissory notes exchanged for Ocuphire convertible notes (the “Ocuphire Convertible Notes”).

Our primary source of cash to fund our operations has been various equity offerings in the amount of approximately $65.8 million and the issuance of convertible notes in the amount

of $8.5 million, inclusive of the promissory notes exchanged for Ocuphire convertible notes (the “Ocuphire Convertible Notes”).

In addition, we received a one-time non-refundable cash payment of $35.0 million during the fourth quarter of 2022, a

million milestone payment during the third quarter of 2023, and have received reimbursement for costs related to development since the fourth quarter of 2022, all in connection with the Nyxol License Agreement.

Ocuphire Pharma, Inc.

$10.0 million milestone payment during the fourth quarter of 2023, and have received reimbursement for costs related to development since the fourth quarter of 2022, all in connection with the Viatris License Agreement.

Lincoln Park Purchase Agreement

On August 10, 2023, we entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Purchase

The Purchase Agreement provides that, subject to the terms and conditions set forth therein, we have the sole right, but not the obligation, to direct Lincoln Park to purchase up to $50 million of shares of the Company’s common stock

from time to time over the 30-month term of the Purchase Agreement.

Concurrently with entering into the Purchase Agreement, we also entered into a Registration Rights Agreement, pursuant to which we agreed to register the resale of the shares of

our common stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a registration statement.

Upon the execution of the Purchase Agreement, we issued 246,792 shares of the Company’s common stock to Lincoln

Park as consideration for its commitment to purchase shares of our common stock under the Purchase Agreement.

Lincoln Park has agreed not to cause or engage in any manner whatsoever in any direct or indirect short selling or hedging of our common

In addition to the commitment shares referenced above, a total of 800,000 shares of common stock were sold under the Purchase Agreement for net proceeds through September 30, 2023 in the amount of $3.1 million.

No shares of common stock

were sold under the Purchase Agreement prior to the third quarter of 2023.

On August 10, 2023, we entered into a common stock purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) for an equity line financing (the “Purchase Agreement”).

time over the 30-month term of the Purchase Agreement.

Concurrently with entering into the Purchase Agreement, we also entered into a Registration Rights Agreement, pursuant to which we agreed to register the resale of the shares of our common

stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a registration statement.

Upon the execution of the Purchase Agreement, we issued 246,792 shares of the Company’s common stock to Lincoln Park as

consideration for its commitment to purchase shares of our common stock under the Purchase Agreement.

Lincoln Park has agreed not to cause or engage in any manner whatsoever in any direct or indirect short selling or hedging of our common stock.

addition to the commitment shares referenced above, a total of 1,450,000 shares of common stock were sold under the Purchase Agreement for gross proceeds through March 31, 2024 in the amount of $4.8 million.

No shares of common stock were sold

under the Purchase Agreement prior to the third quarter of 2023.

At-The-Market Program

On February 4, 2021, we filed a Form S-3 shelf registration under the Securities Act which was declared effective by the SEC on February 12, 2021 (the “2021 Shelf”) under which

the Company may offer and sell, from time to time in our sole discretion, securities having an aggregate offering price of up to $125 million.

In connection with the 2021 Shelf, on March 11, 2021, we entered into a sales agreement with JonesTrading

Institutional Services LLC (“JonesTrading”) under which we may offer and sell, from time to time at our sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of our common stock having an aggregate offering price of

up to $40 million (the “ATM”).

A total of 5,205,425 shares of common stock were sold under the ATM since its inception for net proceeds through September 30, 2023 in the amount of $19.6 million.

On January 10, 2024, we filed a Form S-3 shelf registration under the Securities Act which was declared effective by the SEC on January 23, 2024 under which the Company may offer

and sell, from time to time in our sole discretion, securities having an aggregate offering price up to $175 million.

On March 11, 2021, we entered into a sales agreement with JonesTrading Institutional Services LLC (“JonesTrading”) under which we

may offer and sell, from time to time at our sole discretion, to or through JonesTrading, acting as agent and/or principal, shares of our common stock having an aggregate offering price of up to $40 million (the “ATM”).

A total of 6,895,866 shares

of common stock were sold under the ATM since its inception for gross proceeds through March 31, 2024 in the amount of $24.8 million.

Registered Direct Offering

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Pursuant to the terms of the placement agency agreement, AGP on June 8,

8, 2021, sold an aggregate of 3,076,923 shares of our common stock and warrants to purchase 1,538,461 shares of our common stock (the “RDO Warrants”) at an offering price of $4.875 per share and 0.50 RDO Warrants, for gross proceeds of $15.0

million, before deducting AGP’s fees and related offering expenses in the amount of $1.1 million.

The purchase agreement contains customary representations, warranties and agreements by Ocuphire, customary conditions to closing, indemnification

obligations of Ocuphire, other obligations of the parties and termination provisions.

The RDO Warrants have an exercise price of $6.09 per share, are exercisable upon the initial issuance date of June 8, 2021, and will expire five years following the initial

exercise date.

Subject to limited exceptions, a holder of a RDO Warrant will not have the right to exercise any portion of its RDO Warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election

of a holder prior to the date of issuance, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to such exercise;

provided, however, that upon prior notice to us, the holder may increase or decrease the

beneficial ownership limitation, provided further that in no event shall the beneficial ownership limitation exceed 9.99%.

As of September 30, 2023, 1,538,461 RDO Warrants were still outstanding.

The offering of the securities was made pursuant to

our effective shelf registration statement on Form S-3.

Pre-Merger Financing

2021, sold an aggregate of 3,076,923 shares of our common stock and warrants to purchase 1,538,461 shares of our common stock (the “RDO Warrants”) at an offering price of $4.875 per share and 0.50 RDO Warrants, for gross proceeds of $15.0 million,

before deducting AGP’s fees and related offering expenses in the amount of $1.1 million.

The purchase agreement contains customary representations, warranties and agreements by Ocuphire, customary conditions to closing, indemnification obligations

of Ocuphire, other obligations of the parties and termination provisions.

Ocuphire Pharma, Inc.

The RDO Warrants have an exercise price of $6.09 per share, are exercisable upon the initial issuance date of June 8, 2021, and will expire five years following the initial exercise

holder prior to the date of issuance, 9.99%) of the number of shares of common stock outstanding immediately after giving effect to such exercise;

provided, however, that upon prior notice to us, the holder may increase or decrease the beneficial

ownership limitation, provided further that in no event shall the beneficial ownership limitation exceed 9.99%.

As of March 31, 2024, 1,538,461 RDO Warrants were still outstanding.

The offering of the securities was made pursuant to our effective

shelf registration statement on Form S-3.

Pre-Merger Financing

Securities Purchase Agreement

On June 17, 2020, Ocuphire, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as

amended and restated, the “Securities Purchase Agreement”).

Pursuant to the Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $300,000 invested by directors of Ocuphire Pharma, Inc.

Merger, and one director of Rexahn, upon closing of the Merger (the “Pre-Merger Financing”).

Pursuant to the Pre-Merger Financing, (i) Ocuphire issued and sold to the investors shares of common stock of Ocuphire Pharma, Inc.

prior to the Merger

(the “Initial Shares”) which converted pursuant to the exchange ratio in the Merger into an aggregate of 1,249,996 shares (the “Converted Initial Shares”) of common stock, (ii) Ocuphire deposited into escrow, for the benefit of the investors,

additional shares of common stock of Ocuphire Pharma, Inc.

prior to the Merger (the “Additional Shares”) which converted pursuant to the exchange ratio in the Merger into an aggregate of 3,749,992 shares of common stock (the “Converted Additional

Shares”), which Converted Additional Shares were delivered (or became deliverable) to the investors on November 19, 2020, and (iii) we agreed to issue to each investor on the tenth trading day following the consummation of the Merger (x) Series A

Warrants representing the right to acquire shares of common stock equal to the sum of (A) the Converted Initial Shares purchased by the investor, (B) the Converted Additional Shares delivered or deliverable to the investor, without giving effect to

any limitation on delivery contained in the Securities Purchase Agreement and (C) the initial number of shares of common stock, if any, underlying the Series B Warrants issued to the investor and (y) additional warrants to purchase shares of common

Waiver Agreements

Effective February 3, 2021, each investor that invested in the Pre-Merger Financing (each, a “Holder”) entered into a Waiver Agreement with the Company (collectively, the

On June 17, 2020, Ocuphire, Rexahn and certain investors entered into a Securities Purchase Agreement, which was amended and restated in its entirety on June 29, 2020 (as amended

and restated, the “Securities Purchase Agreement”).

Pursuant to the Securities Purchase Agreement, the investors invested a total of $21.15 million in cash, including $300,000 invested by directors of Ocuphire, and one director of Rexahn, upon

closing of the Merger (the “Pre-Merger Financing”).

Pursuant to the Pre-Merger Financing, (i) Ocuphire issued and sold to the investors shares of common stock of Ocuphire (the “Initial Shares”), which converted pursuant to the exchange ratio in the

Merger into an aggregate of 1,249,996 shares (the “Converted Initial Shares”) of common stock, (ii) Ocuphire deposited into escrow, for the benefit of the investors, additional shares of common stock of Ocuphire (the “Additional Shares”), which

converted pursuant to the exchange ratio in the Merger into an aggregate of 3,749,992 shares of common stock (the “Converted Additional Shares”), which Converted Additional Shares were delivered (or became deliverable) to the investors on November

19, 2020, and (iii) we agreed to issue to each investor on the tenth trading day following the consummation of the Merger (x) Series A Warrants representing the right to acquire shares of common stock equal to the sum of (A) the Converted Initial

Shares purchased by the investor, (B) the Converted Additional Shares delivered or deliverable to the investor, without giving effect to any limitation on delivery contained in the Securities Purchase Agreement and (C) the initial number of shares

of common stock, if any, underlying the Series B Warrants issued to the investor and (y) additional warrants to purchase shares of common stock.

Waiver Agreements

Pursuant to the Waiver Agreements, the Holders and Ocuphire agreed to waive certain rights, finalize the exercise price and number of Series A Warrants and Series B Warrants, eliminate certain financing restrictions, extend

the term of certain leak-out agreements, and, in the case of certain Holders, grant certain registration rights for the shares underlying the warrants.

The Waiver Agreements provide for the permanent waiver of the full ratchet anti-dilution provisions, contained in the Series A Warrants (as certain of the anti-dilution

provisions had previously caused liability accounting treatment for the Series A Warrants).

Effective February 3, 2021, each investor that invested in the Pre-Merger Financing (each, a “Holder”) entered into a Waiver Agreement with the Company (collectively, the “Waiver

Agreements”).

of certain leak-out agreements, and, in the case of certain Holders, grant certain registration rights for the shares underlying the warrants.

The Waiver Agreements provide for the permanent waiver of the full ratchet anti-dilution provisions, contained in the Series A Warrants (as certain of the anti-dilution provisions

had previously caused liability accounting treatment for the Series A Warrants).

Upon the effective date of the Waiver Agreement, the Series A Warrants were reclassified to equity.

Pursuant to the Waiver Agreements, the number of shares underlying all of the Series B Warrants was fixed to 1,708,335 in the aggregate with respect to all Holders.

Pursuant to the Waiver Agreements, the number of shares underlying all of the Series B Warrants was fixed at 1,708,335 in the aggregate with respect to all Holders.

Series A Warrants

The Series A Warrants were issued on November 19, 2020 at an initial exercise price of $4.4795 per share, were immediately exercisable upon issuance and have a term of five

years from the date of issuance.

The Series A Warrants were issued on November 19, 2020 at an initial exercise price of $4.4795 per share, were immediately exercisable upon issuance and have a term of five years

from the date of issuance.

The Series A Warrants are exercisable for 5,665,838 shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein).

As of September 30, 2023, 5,665,838 Series A

Warrants were still outstanding.

As of March 31, 2024, 5,665,838 Series A Warrants were

still outstanding.

At issuance, the Series A Warrants contained certain provisions that could have resulted in a downward adjustment of the initial exercise price and an upward adjustment in the

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Series B Warrants

The Series B Warrants had an exercise price of $0.0001, were exercisable upon issuance and would have expired on the day following the later to occur of (i) the Reservation

Date (as defined therein) or (ii) the date on which the investor’s Series B Warrants would have been exercised in full (without giving effect to any limitation on exercise contained therein).

The Series B Warrants had an exercise price of $0.0001, were exercisable upon issuance and would have expired on the day following the later to occur of (i) the Reservation Date (as

defined therein) or (ii) the date on which the investor’s Series B Warrants would have been exercised in full (without giving effect to any limitation on exercise contained therein).

The Series B Warrants were initially exercisable for 665,836

shares of common stock in the aggregate (without giving effect to any limitation on exercise contained therein) and ultimately became exercisable for 1,708,335 shares of common stock upon execution of the Waiver Agreements.

As of September

As of March 31, 2024,

none of the Series B Warrants remained outstanding.

At issuance, the Series B Warrants contained certain provisions that could have resulted in the issuance of additional Series B Warrants depending on the dollar volume-weighted average prices of a

share of Common Stock during a 45-trading day reset period.

At issuance, the Series B Warrants contained certain provisions that could have resulted in the issuance of additional Series B Warrants depending on the dollar volume-weighted

average prices of a share of Common Stock during a 45-trading day reset period.

Pursuant to the terms of the Waiver Agreements, those provisions were no longer in effect.

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Ocuphire Convertible Notes

From May 2018 through March 2020, we issued the Ocuphire Convertible Notes for aggregate gross proceeds of $8.5 million, inclusive of the promissory notes exchanged for

Ocuphire Convertible Notes.

From May 2018 through March 2020, we issued the Ocuphire Convertible Notes for aggregate gross proceeds of $8.5 million, inclusive of the promissory notes exchanged for Ocuphire

Convertible Notes.

The final closing of the Ocuphire Convertible Notes occurred on March 10, 2020.

The Ocuphire Convertible Notes had an interest rate of 8% per annum.

On November 4, 2020, all of Ocuphire’s outstanding notes were converted

into 977,128 shares of Ocuphire common stock in connection with the completion of the Merger.

On November 4, 2020, all of Ocuphire’s outstanding notes were converted into

977,128 shares of Ocuphire common stock in connection with the completion of the Merger.

The following table summarizes Ocuphire’s cash flows for the periods indicated (in thousands):

For the Nine Months Ended

September 30,

For the Three Months Ended

Net cash used in operating activities

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Cash Flow from Operating Activities

For the nine months ended September 30, 2023, cash used in operating activities of $5.7 million was attributable to a net loss of

$5.2 million, partially offset by $4.1 million in non-cash operating expenses and a net change cash use of $4.6 million in Ocuphire’s net operating assets and liabilities.

The non-cash expenses consisted principally of stock-based compensation of

$2.8 million, non-cash financing costs of $1.2 million in connection with the equity line financing and $0.2 million of issuance costs reclassified to financing activities, offset by a fair value gain attributed to the derivative liability of

$0.1 million.

The change in operating assets and liabilities was primarily attributable to an overall net increase in Ocuphire’s accounts receivable attributed to the milestone receivable associated with the FDA’s approval of POS, for reversal of

Net cash used for the period was partially offset by decreases in our contract assets/unbilled receivables, prepaid expenses and increases in our accounts payable, all associated with Ocuphire’s operating expenses under the normal

course of business.

For the nine months ended September 30, 2022, cash used in operating activities of $14.5 million was attributable to a net loss of $16.1 million, partially offset by $1.5

million in non-cash operating expenses, and attributable to a net cash increase of approximately $0.1 million stemming from the change in Ocuphire’s net operating assets and liabilities.

The non-cash expenses consisted principally of stock-based

compensation of $1.4 million and unrealized loss on short-term investments of $0.1 million.

The change in operating assets and liabilities was primarily attributable to a net cash source of $0.7 million attributed to a decrease in prepaid expenses,

offset largely by a decrease in accounts payable and accrued expense associated with the fluctuations of Ocuphire’s operating expenses.

For the three months ended March 31, 2024, cash used in operating activities of $5.7 million was attributable to a net loss of $7.1 million, partially offset by $1.0 million in non-cash operating

expenses and a net change cash source of $0.4 million in Ocuphire’s net operating assets and liabilities.

The non-cash expenses consisted principally of stock-based compensation of $1.0 million and unrealized loss on short-term investments of

The change in operating assets and liabilities was primarily attributable to an increase in Ocuphire’s accrued expenses and prepaid expenses, offset in part by an increase in our accounts receivable, attributed to fluctuations in

Ocuphire’s operating expenses and collections under the normal course of business.

For the three months ended March 31, 2023, cash used in operating activities of $3.6 million was attributable to a net loss of $5.8 million, partially offset by $0.8 million in non-cash operating

expenses and a net change cash source of $1.3 million in Ocuphire’s net operating assets and liabilities.

The non-cash expenses consisted principally of stock-based compensation of $0.8 million and unrealized loss on short-term investments of

The change in operating assets and liabilities was primarily attributable to an increase in Ocuphire’s accounts payable and accrued expenses, and by decreases in our contract asset and prepaid expenses, associated with Ocuphire’s operating

expenses under the normal course of business.

These net change sources of cash were offset in part by an increase in our accounts receivable during the period.

Cash Flow from Investing Activities

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Cash Flow from Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2023 was $5.4 million that consisted of net proceeds received from both the 2021 ATM and

the equity line financing in the aggregate of $5.4 million.

Ocuphire Pharma, Inc.

Net cash provided by financing activities during the nine months ended September 30, 2022 was $3.8 million that consisted principally of proceeds received from the 2021 ATM net

of issuance costs in the amount of $4.3 million, offset in part by payments made on the short-term loan of $0.5 million.

Net cash provided by financing activities during the three months ended March 31, 2024 was $2.4 million that consisted principally of proceeds received from the ATM and Purchase

Agreement, net of issuance costs, in the amount of $0.2 million.

There were no financing activities during the three months ended March 31, 2023.

Liquidity and Capital Resource Requirements

As of September 30, 2023, we had cash and cash equivalents of $42.4 million.

This does not include the $10 million license

agreement milestone payment received in October 2023 under the Nyxol License Agreement for the NDA approval of RYZUMVI™ for the treatment of RM.

License and collaborations revenue inception to date was derived from a one-time non-refundable

payment of $35 million, a milestone payment of $10 million and reimbursement and expected reimbursement of expenses earned under the Nyxol License Agreement, and to a much lesser degree, from license agreements with BioSense Global LLC (“BioSense”)

and Processa Pharmaceuticals, Inc.

As of March 31, 2024, we had cash and cash equivalents of $47.2 million.

License and collaborations revenue inception to date was derived from a one-time non-refundable payment of

$35 million, a milestone payment of $10 million, reimbursement and expected reimbursement of expenses and royalties earned under the Viatris License Agreement and, to a much lesser degree, from license agreements with BioSense Global LLC

(“BioSense”) and Processa Pharmaceuticals, Inc.

(“Processa”) in connection with the Rexahn RX-3117 drug compound.

We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the Nyxol License

Agreement and we may earn additional revenues from future potential milestone and royalty payments from the agreements with Viatris, BioSense, Processa, or from other license agreements entered into the future;

however, the attainment of milestones

or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.

To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless

or until our partner, Viatris, commercializes RYZUMVI™, or regulatory approval is obtained and commercialization begins for APX3330 or POS for indications other than RM.

If we fail to complete the development of APX3330, POS, or any other product

candidate we may pursue in the future, in a timely manner, or fail to obtain regulatory approval, our ability to generate significant revenue would be compromised.

In addition, on August 10, 2023, we entered into the Purchase Agreement with Lincoln Park, which provides that we have the sole right, but not the obligation, to direct Lincoln

Park to purchase up to $50 million of shares of our common stock, from time to time over the 30-month term of the Purchase Agreement.

We anticipate that we will recognize revenue as we earn reimbursement for research and development services in connection with the

Viatris License Agreement and we may earn additional revenues from future potential milestone and royalty payments from the agreements with Viatris, BioSense, Processa, or from other license agreements entered into in the future;

attainment of milestones or level of sales required to earn royalty payments is highly uncertain for the reasons explained below.

To date, outside of the license and collaborations revenue referenced above, we do not expect to generate significant revenue unless or until RYZUMVI sales become material, or

regulatory approval is obtained and commercialization begins for APX3330 or PS for indications other than RM.

If we fail to complete the development of APX3330, PS or any other product candidate we may pursue in the future, in a timely manner, or

fail to obtain regulatory approval for any of such product candidates, our ability to generate significant revenue would be compromised.

Ocuphire Pharma, Inc.

In addition, on August 10, 2023, we entered into the Purchase Agreement with Lincoln Park, which provides that we have the sole right, but not the obligation, to direct Lincoln Park

to purchase up to $50 million of shares of our common stock, from time to time over the 30-month term of the Purchase Agreement.

The Purchase Agreement was executed to compliment the ATM.

Concurrently with entering into the Purchase Agreement,

we also entered into a Registration Rights Agreement with Lincoln Park, pursuant to which we agreed to register the resale of the shares of our common stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a

Concurrently with entering into the Purchase Agreement, we

also entered into a Registration Rights Agreement with Lincoln Park, pursuant to which we agreed to register the resale of the shares of our common stock that have been and may be issued to Lincoln Park under the Purchase Agreement pursuant to a

registration statement.

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Therefore, there is no assurance that we will have full access to the facility during the term of the Purchase Agreement.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the

terms of these securities may include liquidation, warrants or other preferences that adversely affect your rights as a common stockholder.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our

ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise additional funds through future collaborations, strategic alliances or licensing arrangements with pharmaceutical

partners, we may have to relinquish valuable rights to our technologies, future revenue streams or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings or through

collaborations, strategic alliances or licensing arrangements when needed, we may be required to delay, limit, reduce or terminate our product development, future commercialization efforts, or grant rights to develop and market our product

candidates that we would otherwise prefer to develop and market ourselves.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms

of these securities may include liquidation, warrants or other preferences that adversely affect your rights as a common stockholder.

Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to

take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

If we raise additional funds through future collaborations, strategic alliances or licensing arrangements with pharmaceutical partners, we

may have to relinquish valuable rights to our technologies, future revenue streams or grant licenses on terms that may not be favorable to us.

If we are unable to raise additional funds through equity or debt financings or through collaborations,

strategic alliances or licensing arrangements when needed, we may be required to delay, limit, reduce or terminate our product development, future commercialization efforts, or grant rights to develop and market our product candidates that we would

otherwise prefer to develop and market ourselves.

Future Capital Requirements

Pursuant to the Nyxol License Agreement, our budgeted research and development expenses related to the development of POS are fully reimbursed by Viatris.

Pursuant to the Viatris License Agreement, our budgeted research and development expenses related to the development of PS are fully reimbursed by Viatris.

The development of

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We cannot give any assurance that we will ever be profitable or generate positive cash flow from operating activities.

Ocuphire Pharma, Inc.

Contractual Obligations and Commitments

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constitute a Ref-1 Inhibitor program relating to therapeutic applications to treat disorders related to ophthalmic and diabetes mellitus conditions.

The lead compound in the Ref-1 Inhibitor program is APX3330, which we intend to develop as an oral

tablet therapeutic to treat NPDR.

The unique, dual mechanism of action of Ref-1 inhibitors (e.g., APX3330, APX2009 and APX2014) of reducing angiogenesis and inflammation could potentially be beneficial in treating other retinal diseases such as

Ocuphire is currently evaluating local delivery routes in addition to the systemic (oral) route as part of its pipeline expansion into retina.

The lead compound in the Ref-1 Inhibitor program is APX3330, which is currently in development as

an oral tablet therapeutic to treat DR in patients with NPDR.

The mechanism of action of Ref-1 inhibitors (e.g., APX3330, APX2009 and APX2014) of reducing angiogenesis and inflammation could potentially be beneficial in treating other retinal

diseases such as diabetic macular edema (“DME”), wet age-related macular degeneration (“wAMD”) and geographic atrophy (“GA”) as well as non-ophthalmic indications.

Ocuphire is currently evaluating local delivery routes in addition to the systemic

(oral) route as part of its pipeline expansion into retina and non-ophthalmic indications.

In connection with the Apexian Sublicense Agreement, we issued 843,751 shares of our common stock to Apexian and certain of Apexian’s affiliates.

We agreed to make one-time milestone payments under the Apexian Sublicense Agreement for each of the first ophthalmic indication and the first diabetes mellitus indication.

These milestone payments include (i) payments for specified developmental and regulatory milestones (including completion of the first Phase 2 trial (if such trial meets a primary endpoint) and the first Phase 3 pivotal trial in the United States,

and filing and achieving regulatory approval from the FDA for the first New Drug Application for a compound) totaling up to $11 million in the aggregate and (ii) payments for specified sales milestones of up to $20 million in the aggregate, each of

milestone payments include (i) payments for specified developmental and regulatory milestones (including completion of the first Phase 2 trial (if such trial meets a primary endpoint) and the first Phase 3 pivotal trial in the United States, and

filing and achieving regulatory approval from the FDA for the first New Drug Application for a compound) totaling up to $11 million in the aggregate and (ii) payments for specified sales milestones of up to $20 million in the aggregate, each of

which net sales milestone payments is payable once, upon the first achievement of such milestone.

Lastly, we also agreed to make royalty payments equal to a single-digit percentage of our net sales of products covered by the patents under the Apexian Sublicense Agreement.

Additionally, we also agreed to make royalty payments equal to a single-digit percentage of our net sales of products covered by the patents under the Apexian Sublicense Agreement.

None of the milestone or royalty payments were triggered as of the date of this Report.

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In the course of normal operations, we entered into cancellable purchase commitments with our suppliers for various key research, clinical and manufacturing services.

purchase commitments covered by these arrangements are subject to change based on our research and development efforts.

commitments covered by these arrangements are subject to change based on our research and development efforts.

Ocuphire Pharma, Inc.

Other Funding Requirements

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obligations under our intellectual property licenses.

See “Part I, Item 1— Business—APX3330 Clinical Experience Summary —Ocuphire Clinical Development Plan —Potential Clinical Plans for APX3330—Future In-Licensing and Acquisition

Opportunities—Manufacturing—Apexian Sublicense Agreement— Review and Approval of Drugs in the United States” in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of design, development, pre-clinical and clinical

activities that we may conduct in the future, including expected cash expenditures required for some of those activities, to the extent we are able to estimate such costs.

Ocuphire Pharma, Inc.

See “Part I, Item 1— Business— Potential Clinical Plans for APX3330—PS Potential Clinical Plans—Future In-Licensing and Acquisition Opportunities—Manufacturing—Apexian Sublicense Agreement—

Review and Approval of Drugs in the United States” in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of design, development, pre-clinical and clinical activities that we may conduct in the future, including

expected cash expenditures required for some of those activities, to the extent we are able to estimate such costs.

Our other cash requirements within the next twelve months include accounts payable, accrued expenses, purchase commitments and other current liabilities.

Our other cash

requirements greater than twelve months from various contractual obligations and commitments may include operating leases and contractual agreements with third-party service providers for clinical research, product development, manufacturing,

commercialization, supplies, payroll, equipment maintenance, and audits for periods into calendar year 2024.

Refer to Note 3 – Commitments and Contingencies included in “Part 1, Item 1 – Financial Statements” of this Report for further detail of

our lease obligation and license agreements with regard to the timing of expected future payments.

cash requirements greater than twelve months from various contractual obligations and commitments may include operating leases and contractual agreements with third-party service providers for clinical research, product development,

manufacturing, commercialization, supplies, payroll, equipment maintenance, and audits for periods into calendar year 2024.

Refer to Note 3 – Commitments and Contingencies included in Part 1, Item 1 – “Financial Statements ” of this Report for further detail of our lease obligation and license agreements with regard to the timing of expected future payments.

We expect to satisfy our short-term and long-term obligations through cash on hand, from future equity and debt financings, and from reimbursement payments, potential milestone and

royalty payments under the Nyxol License Agreement and any future collaborations and license agreements, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever.

royalty payments under the Viatris License Agreement and any future collaborations and license agreements, until we generate an adequate level of revenue from commercial sales to cover expenses, if ever.

Critical Accounting Policies and Estimates

Our financial statements are prepared in accordance with U.S.

These accounting principles require us to make estimates and judgments that can affect the reported amounts

of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expense during the periods presented.

We believe that the estimates and judgments upon which we rely are reasonably based upon

information available to us at the time that we make these estimates and judgments.

These accounting principles require us to make estimates and judgments that can affect the reported

amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expense during the periods presented.

We believe that the estimates and judgments upon which we rely are reasonably based

upon information available to us at the time that we make these estimates and judgments.

To the extent that there are material differences between these estimates and actual results, our financial results will be affected.

The accounting policies that

reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.

The accounting policies

that reflect our more significant estimates and judgments and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.

Our significant accounting policies are discussed in Note 1 — Company Description and Summary of Significant Accounting Policies, included in “Part I, Item 1 – Financial

Statements” of this Report.

We believe that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our reported financial results.

These estimates require our most difficult, subjective,

or complex judgments because they relate to matters that are inherently uncertain.

We have reviewed these critical accounting policies and estimates and related disclosures with the Audit Committee of our Board of Directors.

We have not made any

material changes to date, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas described below.

Statements and Supplementary Data” of this Report.

We believe that the following accounting policies and estimates are the most critical to aid in fully understanding and evaluating our reported

financial results.

These estimates require our most difficult, subjective, or complex judgments because they relate to matters that are inherently uncertain.

We have reviewed these critical accounting policies and estimates and related

disclosures with the Audit Committee of our Board of Directors.

We have not made any material changes to date, nor do we believe there is a reasonable likelihood of a material future change to the accounting methodologies for the areas described

License and Collaborations Revenue

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The guidance provides a unified model to determine how revenue is recognized.

We have entered into license and collaboration agreements which have revenue

recognition implications.

We have entered into license and collaboration agreements which have

revenue recognition implications.

We recognize license and collaborations revenue by first allocating the transaction price of a contract to each performance obligation under the contract based on its stand-alone price.

The stand-alone price of each

performance obligation is based on its fair value utilizing a discounted cash flow approach, taking into consideration assumptions, including projected worldwide net profit for each of the respective programs based on probability assessments,

projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors.

We do not expect to have in the future, significant variable consideration adjustments

related to our existing license and collaborations revenue recognized.

For discussion about the determination of license and collaborations revenue, see Note 9 — License and Collaboration Agreements included in “Part 1, Item 1 – Financial

Statements” of this Report.

The stand-alone price of

each performance obligation is based on its fair value utilizing a discounted cash flow approach, taking into consideration assumptions, including projected worldwide net profit for each of the respective programs based on probability

assessments, projections based on internal forecasts, industry data, and information from other guideline companies within the same industry and other relevant factors.

We do not expect to have in the future, significant variable consideration

adjustments related to our existing license and collaborations revenue recognized.

For discussion about the determination of license and collaborations revenue, see Note 9 — License and Collaboration Agreements included in Part 1, Item 1 –

“Financial Statements” of this Report.

Stock-based Compensation

Ocuphire accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation — Stock Compensation .

Ocuphire accounts for stock-based compensation in accordance with the provisions of ASC 718, Compensation —

Stock Compensation .

Accordingly, compensation costs related to equity instruments granted are recognized at the grant date fair value which is not subject to remeasurement.

We record equity instrument forfeitures when they occur.

For discussions about the application

of grant date fair value associated with our stock-based compensation, see Note 7 — Stock-based Compensation included in “Part 1, Item 1 – Financial Statements” of this Report.

We record equity instrument

forfeitures when they occur.

For discussions about the application of grant date fair value associated with our stock-based compensation, see Note 7 — Stock-based Compensation included in “ Part 1, Item 1 – Financial Statements ” of this Report.

Ocuphire Pharma, Inc.

Income Tax Assets and Liabilities

A full valuation allowance has been provided on our net deferred tax assets given the uncertainty of future taxable income and other related factors impacting the realizability

of our remaining net deferred tax assets.

For additional information, see Note 12 — Income Taxes included in “Part II, Item 8 – Consolidated Financial Statements and Supplementary Data” in our Annual Report filed on Form 10-K for the year ended

December 31, 2022, and see Note 11 — Income Taxes included in “Part 1, Item 1 – Financial Statements” of this Report.

A full valuation allowance has been provided on our net deferred tax assets given the uncertainty of future taxable income and other related factors impacting the

realizability of our remaining net deferred tax assets.

For additional information, see Note 11 — Income Taxes included in “Part II, Item 8 – Financial Statements and Supplementary Data” in our Annual Report filed on Form 10-K for the year

ended December 31, 2023, and see Note 11 — Income Taxes included in “ Part 1, Item 1 – Financial Statements ” of this Report.

Contingencies

We are subject to numerous contingencies arising in the ordinary course of business, including obligations related to certain license agreements.

For additional information,

see Note 3 — Commitments and Contingencies included in “Part 1, Item 1 – Financial Statements” of this Report.

For additional

information, see Note 3 — Commitments and Contingencies included in “ Part 1, Item 1 – Financial Statements ” of this Report.

Recent Accounting Pronouncements

Refer to Note 1— “Company Description and Summary of Significant Accounting Policies” to our condensed financial statements included in “Part 1, Item 1 – Financial Statements”

in this Report for a discussion of recently issued accounting pronouncements.

Refer to Note 1— Company Description and Summary of Significant Accounting Policies to our condensed financial statements included in “Part 1, Item 1 – Financial Statements” in this Report for a

discussion of recently issued accounting pronouncements.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis