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Document And Entity Information

v2.4.0.6
Document And Entity Information
3 Months Ended
Mar. 31, 2012
May 10, 2012
Document And Entity Information [Abstract]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Mar. 31, 2012  
Document Fiscal Year Focus 2012  
Document Fiscal Period Focus Q1  
Entity Registrant Name CORTEX PHARMACEUTICALS INC/DE/  
Entity Central Index Key 0000849636  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   85,623,663

Condensed Balance Sheets

v2.4.0.6
Condensed Balance Sheets (USD $)
Mar. 31, 2012
Dec. 31, 2011
Assets    
Cash and cash equivalents $ 778,440 $ 1,610,945
Restricted cash 48,309 48,309
Other current assets 59,926 85,630
Total current assets 886,675 1,744,884
Furniture, equipment and leasehold improvements, net 56,029 66,882
Other 8,889 8,889
Total assets 951,593 1,820,655
Liabilities and Stockholders' (Deficit) Equity    
Accounts payable 521,126 472,756
Accrued wages, salaries and related expenses 242,223 235,399
Unearned revenue 48,309 48,309
Advance for MCI project 324,784 323,779
Deferred rent 56,292 64,502
Total current liabilities 1,192,734 1,144,745
Stockholders' (deficit) equity:    
Series B convertible preferred stock, $0.001 par value; $25,001 liquidation preference; shares authorized: 37,500; shares issued and outstanding: 37,500; shares issuable upon conversion: 3,679 21,703 21,703
Common stock, $0.001 par value; shares authorized: 205,000,000; shares issued and outstanding: 85,623,663 (March 31, 2012 and December 31, 2011) 85,624 85,624
Additional paid-in capital 121,354,389 121,337,670
Accumulated deficit (121,702,857) (120,769,087)
Total stockholders' (deficit) equity (241,141) 675,910
Total liabilities and stockholders' (deficit) equity $ 951,593 $ 1,820,655

Condensed Balance Sheets (Parenthetical)

v2.4.0.6
Condensed Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2012
Dec. 31, 2011
Condensed Balance Sheets [Abstract]    
Series B convertible preferred stock, par value $ 0.001 $ 0.001
Series B convertible preferred stock, liquidation preference amount $ 25,001 $ 25,001
Series B convertible preferred stock, shares authorized 37,500 37,500
Series B convertible preferred stock, shares issued 37,500 37,500
Series B convertible preferred stock, shares outstanding 37,500 37,500
Series B convertible preferred stock, shares issuable upon conversion 3,679 3,679
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 205,000,000 205,000,000
Common stock, shares issued 85,623,663 85,623,663
Common stock, shares outstanding 85,623,663 85,623,663

Condensed Statements Of Operations

v2.4.0.6
Condensed Statements Of Operations (USD $)
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Revenues:    
Grant revenues   $ 25,300
Total revenues   25,300
Operating expenses:    
Research and development expenses 202,981 643,879
General and administrative expenses 731,373 940,418
Total operating expenses 934,354 1,584,297
Loss from operations (934,354) (1,558,997)
Interest income, net 584 3,151
Net loss $ (933,770) $ (1,555,846)
Basic and diluted net loss per share: $ (0.01) $ (0.02)
Shares used in calculating per share amounts :    
Basic and diluted 85,623,663 78,858,197

Condensed Statements Of Comprehensive Loss

v2.4.0.6
Condensed Statements Of Comprehensive Loss (USD $)
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Condensed Statements Of Comprehensive Loss [Abstract]    
Net loss $ (933,770) $ (1,555,846)
Other comprehensive loss:    
Unrealized loss on marketable securities   (473)
Other comprehensive loss   (473)
Comprehensive loss $ (933,770) $ (1,556,319)

Condensed Statements Of Cash Flows

v2.4.0.6
Condensed Statements Of Cash Flows (USD $)
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Cash flows from operating activities:    
Net loss $ (933,770) $ (1,555,846)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense 7,250 25,455
Stock option compensation expense 16,719 14,139
Gain on sale of fixed assets (1,532) (2,550)
Changes in operating assets/liabilities:    
Restricted cash   18,123
Accrued interest on marketable securities   2,519
Unearned revenue   (18,123)
Other current assets 25,704 (18,368)
Accounts payable and accrued expenses 55,194 92,895
Other (7,205) 964
Net cash used in operating activities (837,640) (1,440,792)
Cash flows from investing activities:    
Proceeds from sales and maturities of marketable securities   1,990,000
Proceeds from sales of fixed assets 5,135 2,550
Net cash provided by investing activities 5,135 1,992,550
(Decrease) increase in cash and cash equivalents (832,505) 551,758
Cash and cash equivalents, beginning of period 1,610,945 1,037,549
Cash and cash equivalents, end of period $ 778,440 $ 1,589,307

Basis Of Presentation And Significant Accounting Principles

v2.4.0.6
Basis Of Presentation And Significant Accounting Principles
3 Months Ended
Mar. 31, 2012
Basis Of Presentation And Significant Accounting Principle [Abstract]  
Basis Of Presentation And Significant Accounting Principles

Note 1 — Basis of Presentation and Significant Accounting Principles

The accompanying unaudited interim condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2012 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information, refer to the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

The Company has incurred net losses and cash outflows from operations of approximately $934,000 and $838,000, respectively, for the three months ended March 31, 2012 and expects to incur additional losses and negative cash flow from operations in fiscal 2012 and for several more years. Management believes the Company has adequate financial resources to conduct operations into the second quarter of 2012. This raises substantial doubt about the Company's ability to continue as a going concern, which will be dependent on its ability to obtain additional financing and to generate sufficient cash flows to meet its obligations on a timely basis.

The Company is exploring its strategic and financial alternatives, including, but not limited to, new collaborations for its AMPAKINE program which would provide capital to the Company in exchange for exclusive or non-exclusive license or other rights to certain of the technologies and products that the Company is developing. Although the Company is presently engaged in discussions with a number of candidate companies, there can be no assurance that an agreement will arise from these discussions in a timely manner, or at all.

The Company will likely need to raise additional capital through the sale of debt or equity. If the Company is unable to obtain additional financing to fund operations beyond mid-second quarter of 2012, it will need to eliminate some or all of its activities, merge with another company, license or sell some or all of its assets to another company, or cease operations entirely. There can be no assurance that the Company will be able to obtain additional financing on favorable terms or at all, or that the Company will be able to merge with another Company or license or sell any or all of its assets.

Employee Stock Options and Stock-based Compensation

The Company's 2006 Stock Incentive Plan (the "2006 Plan") provides for a variety of equity vehicles to allow flexibility in implementing equity awards, including incentive stock options, nonqualified stock options, restricted stock grants, stock appreciation rights, stock payment awards, restricted stock units and dividend equivalents to qualified employees, officers, directors, consultants and other service providers. The exercise price of stock options offered under the 2006 Plan must be at least 100% of the fair market value of the common stock on the date of grant. If the person to whom an incentive stock option is granted is a 10% stockholder of the Company on the date of grant, the exercise price per share shall not be less than 110% of the fair market value on the date of grant. Options granted generally vest over a three-year period, although options granted to officers may include more accelerated vesting. Options generally expire ten years from the date of grant, but options granted to consultants may expire five years from the date of grant.

 

The Company recognizes expense in its financial statements for all share-based payments to employees, including grants of employee stock options, based on their fair values over the service period.

There were no options granted during the three months ended March 31, 2012. For options granted during the three months ended March 31, 2011, the fair value of each option award was estimated using the Black-Scholes option pricing model and the following assumptions: weighted average risk-free interest rate of 2.8%; dividend yield of 0%; volatility factor of the expected market price of the Company's common stock of 107%; and a weighted average life of the options of 7.0 years.

Expected volatility is based on the historical volatility of the Company's stock. The Company also uses historical data to estimate the expected term of options granted and employee termination rates. The risk-free rate for periods within the estimated life of the options is based on the U.S. Treasury yield curve in effect at the time of grant.

The weighted-average grant-date fair value per share of options granted during the three months ended March 31, 2011 was $0.11.

A summary of option activity for the three months ended March 31, 2012 is as follows:

 

     Shares      Weighted
Average
Exercise Price
     Weighted Average
Remaining
Contractual Term
     Aggregate
Intrinsic Value
 

Balance, December 31, 2011

     10,800,856       $ 1.38         

Granted

     —           —           

Exercised

     —           —           

Forfeited

     —           —           

Expired

     —           —           
  

 

 

          

Balance, March 31, 2012

     10,800,856       $ 1.38         4.5 years         —     

Vested and expected to vest, March 31, 2012

     10,566,523       $ 1.40         4.4 years         —     

Exercisable, March 31, 2012

     9,689,860       $ 1.51         4.1 years         —     

As of March 31, 2012, there was approximately $26,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements. That non-cash cost is expected to be recognized over a weighted-average period of less than one year.

Stock options and warrants issued as compensation for services to be provided to the Company by non-employees are accounted for based upon the fair value of the services provided or the estimated fair value of the option or warrant, whichever can be more clearly determined. The Company recognizes this expense over the period in which the services are provided. This expense is a non-cash charge and has no impact on the Company's available cash or working capital.

There were no stock option exercises during the three months ended March 31, 2012 or 2011. The Company issues new shares to satisfy stock option exercises.

 

A summary of warrant activity for the three months ended March 31, 2012 is as follows:

 

     Shares     Weighted
Average Per Share
Exercise Price
 

Balance, December 31, 2011

     25,818,319      $ 0.70   

Granted

     —          —     

Exercised

     —          —     

Expired

     (2,996,927   $ 1.66   
  

 

 

   

Balance, March 31, 2012

     22,821,392      $ 0.57   
  

 

 

   

Net (Loss) Income per Share

For the three months ended March 31, 2012 and 2011, the effect of potentially issuable shares of common stock was not included in the calculation of diluted loss per share given that the effect would be anti-dilutive.

Comprehensive Income (Loss)

In June 2011, the Financial Accounting Standards Board issued Accounting Standards Update No. 2011-05, "Presentation of Comprehensive Income" (ASU 2011-05). ASU 2011-05 requires comprehensive income to be reported in either a single statement or in two consecutive statements reporting net income and other comprehensive income. ASU 2011-05 eliminated the option to report other comprehensive income and its components in the statement of changes in stockholder's equity.

As required, the Company retroactively adopted ASU 2011-05 effective January 1, 2012 and has elected to report comprehensive income for the three months ended March 31, 2012 and 2011 in two consecutive statements reporting net income and other comprehensive income. The adoption of ASU 2011-05 did not have a material impact on the Company's financial position or its results of operations.

Transactions With Biovail

v2.4.0.6
Transactions With Biovail
3 Months Ended
Mar. 31, 2012
Transactions With Biovail [Abstract]  
Transactions With Biovail

Note 2 — Transactions with Biovail

In March 2010, the Company entered into an asset purchase agreement with Biovail Laboratories International SRL ("Biovail"). Pursuant to the asset purchase agreement, Biovail acquired the Company's interests in CX717, CX1763, CX1942 and the injectable dosage form of CX1739, as well as certain of its other AMPAKINE compounds and related intellectual property for use in the field of respiratory depression or vaso-occlusive crises associated with sickle cell disease. In connection with the transaction, Biovail paid the Company $10,000,000. In addition, the agreement provided the Company with the right to receive up to three milestone payments in an aggregate amount of up to $15,000,000 plus the reimbursement of certain related expenses, each conditioned upon the occurrence of particular events relating to the clinical development of certain assets that Biovail acquired. None of these events have occurred and accordingly, the Company did not record any milestone revenue related to the Biovail transaction.

As part of the transaction, Biovail licensed back to the Company certain exclusive and irrevocable rights to some acquired AMPAKINE compounds, other than CX717, an injectable dosage form of CX1739, CX1763 and CX1942, for use outside of the field of respiratory depression or vaso-occlusive crises associated with sickle cell disease. Accordingly, following the transaction with Biovail, the Company retained its rights to develop and commercialize the non-acquired AMPAKINE compounds as a potential treatment for neurological diseases and psychiatric disorders. Additionally, the Company retained its rights to develop and commercialize the AMPAKINE compounds as a potential treatment for sleep apnea disorders, including an oral dosage form of AMPAKINE CX1739.

In September 2010, Biovail's parent corporation, Biovail Corporation, combined with Valeant Pharmaceuticals International in a merger transaction and the combined company was renamed "Valeant Pharmaceuticals International, Inc." ("Valeant"). Following the merger, in November 2010, Biovail announced its intent to exit from the respiratory depression project acquired from the Company in March 2010.

Following that announcement, the Company entered into discussions with Biovail regarding the future of the respiratory depression project. In March 2011, the Company entered into a new agreement with Biovail to reacquire the AMPAKINE compounds, patents and rights that Biovail acquired from the Company in March 2010. The new agreement includes an upfront payment by Cortex of $200,000 and potential future payments of up to $15,150,000 based upon the achievement of certain development and New Drug Application submission and approval milestones. Biovail is also eligible to receive additional payments of up to $15,000,000 based upon the Company's net sales of an intravenous dosage form of the compounds for respiratory depression.

The Company has recorded the $200,000 upfront payment to reacquire the respiratory depression project from Biovail as research and development expense during the three months ended March 31, 2011.

At any time following the completion of Phase I clinical studies and prior to the end of Phase IIa clinical studies, Biovail retains an option to co-develop and co-market intravenous dosage forms of an AMPAKINE compound as a treatment for respiratory depression and vaso-occlusive crises associated with sickle cell disease. In such an event, the Company would be reimbursed for certain development expenses to date and Biovail would share in all such future development costs with the Company. If Biovail makes the co-marketing election, the Company would owe no further milestone payments to Biovail and the Company would be eligible to receive a royalty on net sales of the compound by Biovail or its affiliates and licensees.