UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington, D.C.
20549





FORM
10-Q


(Mark One)


þ
                  
                  QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the Quarterly Period Ended March 31, 2009


or


o
                
                TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the Transition Period from 
      to







Commission
File Number: 001-33004












Opexa
Therapeutics, Inc.


(Exact
name of registrant as specified in its charter)







Texas
                  2635
      North Crescent Ridge Drive
                    The Woodlands, Texas 77381
                  76-0333165(State
      or other jurisdiction of
                    Incorporation
      or organization)
                  Address
      of principal executive
                    (offices
      and zip code)
                  (I.R.S.
      Employer
                    Identification
      No.)
  (281)
272-9331


Registrant’s
telephone number, including area code







Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days. Yes þ No o




Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).  Yes o No
o




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.





Large
      accelerated filer o
                      Accelerated
      filer   oNon-accelerated
      filer   o(Do not check if
      a smaller reporting company)
                      Smaller
      reporting company  þ


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes o   No
þ





As of May
11, 2009, there were 12,245,858 shares of the issuer’s Common Stock
outstanding.












OPEXA
THERAPEUTICS, INC.


(A
development stage company)





For
the Quarter Ended March 31, 2009





INDEX





PART I –
      FINANCIAL INFORMATION
                                                PageItem 1.
                                                Financial StatementsUnaudited Balance Sheets as of March 31, 2009 and
      December 31, 2008
                                                1Unaudited Statements of Expenses:
                                                  For the three months ended March 31, 2009 and 2008
      and from Inception (January 22, 2003) through March 31,
      2009
                                                2Unaudited Statements of Cash Flows:
                                                  For
      the three months ended March 31, 2009 and 2008and from Inception(January
      22, 2003) through March 31, 2009
                                                3Notes to Unaudited Financial Statements
                                                4Item 2.
                                                Management’s Discussion and Analysis of Condition and
      Results of Operations
                                                8Item 3.
                                                Quantitative and Qualitative Disclosures About Market
      Risk
                                                12Item 4.
                                                Controls and Procedures
                                                12PART II – OTHER INFORMATIONItem 1.
                                                Legal Proceedings
                                                12Item 1A.
                                                Risk Factors
                                                12Item 2.
                                                Unregistered Sales of Equity Securities and Use of
      Proceeds
                                                13Item 3.
                                                Defaults Upon Senior Securities
                                                13Item 4.
                                                Submission of Matters to a Vote of Security
      Holders
                                                13Item 5.
                                                Other Information
                                                13Item 6.
                                                Exhibits
                                                14Signatures










PART I - FINANCIAL INFORMATION





Item 1. Financial Statements





OPEXA THERAPEUTICS, INC.


(a
development stage company)


BALANCE
SHEETS


(unaudited)




March
      31,
                                  
                                  
                                  December
      31,2009
                                  
                                  
                                  2008AssetsCurrent
      assets:Cash
      and cash equivalents
                                  
                                  $
                                  403,943
                                  
                                  
                                  $
                                  1,243,187Other
      current assets
                                  
                                  
                                  141,692
                                  
                                  
                                  
                                  86,705Total
      current assets
                                  
                                  
                                  545,635
                                  
                                  
                                  
                                  1,329,892Property
      & equipment, net of accumulated depreciationof
      $904,621 and $847,244, respectively
                                  
                                  
                                  1,109,152
                                  
                                  
                                  
                                  1,166,530Total
      assets
                                  
                                  $
                                  1,654,787
                                  
                                  
                                  $
                                  2,496,422Liabilities
      and Stockholders' Equity (Deficit)Current
      liabilities:Accounts
      payable
                                  
                                  $
                                  576,112
                                  
                                  
                                  $
                                  482,838Accounts
      payable - related parties
                                  
                                  
                                  57,976
                                  
                                  
                                  
                                  161,714Accrued
      expenses
                                  
                                  
                                  220,496
                                  
                                  
                                  
                                  199,272Current
      maturity of loan payable
                                  
                                  
                                  63,618
                                  
                                  
                                  
                                  62,423Derivative
      liability
                                  
                                  
                                  661,815
                                  
                                  
                                  
                                  -Total
      current liabilities
                                  
                                  
                                  1,580,017
                                  
                                  
                                  
                                  906,247Long
      term liabilities:Loan
      payable
                                  
                                  
                                  86,425
                                  
                                  
                                  
                                  102,778Total
      liabilities
                                  
                                  
                                  1,666,442
                                  
                                  
                                  
                                  1,009,025Commitments
      and contingencies
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Stockholders'
      equity (deficit):Preferred
      stock, no par value, 10,000,000 shares authorized,none
      issued and outstanding
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common
      stock, $0.50 par value, 100,000,000 shares authorized,12,245,858
      and 12,245,858 shares issued and outstanding
                                  
                                  
                                  6,122,888
                                  
                                  
                                  
                                  6,122,888Additional
      paid in capital
                                  
                                  
                                  83,311,776
                                  
                                  
                                  
                                  84,929,481Deficit
      accumulated during the development stage
                                  
                                  
                                  (89,446,319
                                  )
                                  
                                  
                                  (89,564,972
                                  )Total
      stockholders' equity (deficit)
                                  
                                  
                                  (11,655
                                  )
                                  
                                  
                                  1,487,397Total
      liabilities and stockholders' equity (deficit)
                                  
                                  $
                                  1,654,787
                                  
                                  
                                  $
                                  2,496,422










See
accompanying notes to consolidated financial statements


- 1
-








OPEXA THERAPEUTICS, INC.


(a
development stage company)


STATEMENTS
OF EXPENSES


Three
months ended March 31, 2009 and 2008 and the


Period
from January 22, 2003 (Inception) to March 31, 2009


(unaudited)







Three
      Months Ended
                                
                                
                                InceptionMarch
      31,
                                
                                
                                through2009
                                
                                
                                2008
                                
                                
                                2009Research
      and development
                                
                                $
                                737,778
                                
                                
                                
                                2,373,936
                                
                                
                                $
                                62,884,049General
      and administrative
                                
                                
                                396,315
                                
                                
                                
                                709,517
                                
                                
                                
                                19,386,045Depreciation
      and amortization
                                
                                
                                57,378
                                
                                
                                
                                58,277
                                
                                
                                
                                809,913Loss
      on disposal of assets
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                498,332Operating
      loss
                                
                                
                                (1,191,471
                                )
                                
                                
                                (3,141,730
                                )
                                
                                
                                (83,578,339
                                )Interest
      income
                                
                                
                                1,109
                                
                                
                                
                                37,709
                                
                                
                                
                                1,355,170Other
      income and expense, net
                                
                                
                                -
                                
                                
                                
                                8,317
                                
                                
                                
                                106,904Gain
      on extinguishment of debt
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                1,612,440Loss
      on derivative instruments
                                
                                
                                (440,980
                                )
                                
                                
                                
                                
                                
                                
                                (661,818
                                )Interest
      expense
                                
                                
                                (5,627
                                )
                                
                                
                                (6,326
                                )
                                
                                
                                (8,280,676
                                )Net
      loss
                                
                                $
                                (1,636,969
                                )
                                
                                $
                                (3,102,030
                                )
                                
                                $
                                (89,446,319
                                )Basic
      and diluted loss per share
                                
                                $
                                (0.13
                                )
                                
                                $
                                (0.37
                                )
                                
                                
                                N/AWeighted
      average shares outstanding
                                
                                
                                12,245,858
                                
                                
                                
                                8,312,169
                                
                                
                                
                                N/A










See
accompanying notes to consolidated financial statements


- 2
-







OPEXA THERAPEUTICS, INC.


(a
development stage company)


STATEMENTS
OF CASH FLOWS


Three
months ended March 31, 2009 and 2008 and the


Period
from January 22, 2003 (Inception) to March 31, 2009


(unaudited)




Three
      Months Ended
                                  
                                  
                                  InceptionMarch
      31,
                                  
                                  
                                  through2009
                                  
                                  
                                  2008
                                  
                                  
                                  March
      31, 2009Cash
      flows from operating activitiesNet
      loss
                                  
                                  $
                                  (1,636,969
                                  )
                                  
                                  $
                                  (3,102,030
                                  )
                                  
                                  $
                                  (89,446,319
                                  )Adjustments
      to reconcile net loss to net cashused
      in operating activitiesStock
      payable for acquired research and development
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  112,440Stock
      issued for acquired research and development
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  26,286,589Stock
      issued for services
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,910,365Stock
      issued for debt in excess of principal
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  109,070Amortization
      of discount on notes payable dueto
      warrants and beneficial conversion feature
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  6,313,205Realized
      gain on marketable securities
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Gain
      on extinguishment of debt
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (1,612,440
                                  )Depreciation
                                  
                                  
                                  57,378
                                  
                                  
                                  
                                  58,277
                                  
                                  
                                  
                                  809,913Debt
      financing costs
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  365,910Option
      expense
                                  
                                  
                                  358,752
                                  
                                  
                                  
                                  409,682
                                  
                                  
                                  
                                  12,308,789Loss
      on derivative instruments
                                  
                                  
                                  440,980
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  661,818Loss
      on disposition of fixed assets
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  498,332Changes
      in:Marketable
      securities
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Prepaid
      and other expenses
                                  
                                  
                                  (54,987
                                  )
                                  
                                  
                                  178,885
                                  
                                  
                                  
                                  (558,365
                                  )Accounts
      payable
                                  
                                  
                                  (10,464
                                  )
                                  
                                  
                                  (119,770
                                  )
                                  
                                  
                                  184,448Accrued
      expenses
                                  
                                  
                                  21,224
                                  
                                  
                                  
                                  (93,982
                                  )
                                  
                                  
                                  93,840Net
      cash used in operating activities
                                  
                                  
                                  (824,086
                                  )
                                  
                                  
                                  (2,668,938
                                  )
                                  
                                  
                                  (41,962,405
                                  )Cash
      flows from investing activitiesPurchase
      of property & equipment
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (8,940
                                  )
                                  
                                  
                                  (1,339,510
                                  )Net
      cash used in investing activities
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (8,940
                                  )
                                  
                                  
                                  (1,339,510
                                  )Cash
      flows from financing activitiesCommon
      stock and warrants sold for cash, net of offering costs
                                  
                                  
                                  -
                                  
                                  
                                  
                                  6,372,397
                                  
                                  
                                  
                                  35,765,166Common
      stock repurchased and canceled
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (325
                                  )Proceeds
      from debt
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  8,102,199Repayments
      on notes payable
                                  
                                  
                                  (15,158
                                  )
                                  
                                  
                                  (14,011
                                  )
                                  
                                  
                                  (161,179
                                  )Net
      cash provided by (used in) financing activities
                                  
                                  
                                  (15,158
                                  )
                                  
                                  
                                  6,358,386
                                  
                                  
                                  
                                  43,705,861Net
      change in cash and cash equivalents
                                  
                                  
                                  (839,244
                                  )
                                  
                                  
                                  3,680,508
                                  
                                  
                                  
                                  403,946Cash
      and cash equivalents at beginning of period
                                  
                                  
                                  1,243,187
                                  
                                  
                                  
                                  2,645,482
                                  
                                  
                                  
                                  -Cash
      and cash equivalents at end of period
                                  
                                  $
                                  403,943
                                  
                                  
                                  $
                                  6,325,990
                                  
                                  
                                  $
                                  403,946Cash
      paid for:Income
      tax
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -Interest
                                  
                                  
                                  5,627
                                  
                                  
                                  
                                  6,326
                                  
                                  
                                  
                                  52,752NON-CASH
      TRANSACTIONSIssuance
      of common stock to Sportan shareholders
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  147,733Issuance
      of common stock for accrued interest
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  525,513Conversion
      of notes payable to common stock
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  6,407,980Conversion
      of accrued liabilities to common stock
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  197,176Conversion
      of accounts payable to note payable
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  93,364Discount
      on convertible notes relating to:-
      warrants
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  3,309,790-
      beneficial conversion feature
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,715,973-
      stock attached to notes
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,287,440Fair
      value of derivative instrument
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  4,680,220










See
accompanying notes to consolidated financial statements




- 3
-






OPEXA THERAPEUTICS, INC.


(a
development stage company)


NOTES
TO FINANCIAL STATEMENTS


(unaudited)








Note
1.  Basis of Presentation





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







Accounting
for Derivative Instruments.




Statement
of Financial Accounting Standard (“SFAS”) No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” as amended, requires all
derivatives to be recorded on the balance sheet at fair value. Opexa’s
derivatives are separately valued and accounted for on our balance sheet. Fair
values for securities traded in the open market and derivatives are based on
quoted market prices. Where market prices are not readily available, fair values
are determined using market based pricing models incorporating readily
observable market data and requiring judgment and estimates.




The
pricing model Opexa used for determining fair values of its derivatives is the
Black-Scholes option-pricing model. Valuations derived from this model are
subject to ongoing internal and external verification and review. The model uses
market-sourced inputs such as interest rates, exchange rates and option
volatilities. Selection of these inputs involves management’s judgment and may
impact net income.






Fair
Value Measurements





In
September 2006, the FASB issued SFAS 157 which defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements. The provisions of SFAS 157 were effective January 1, 2008.
The FASB has also issued Staff Position (FSP) SFAS 157-2 (FSP No. 157-2),
which delays the effective date of SFAS 157 for nonfinancial assets and
liabilities, except for items that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually), until fiscal
years beginning after November 15, 2008.





As defined
in SFAS 157, fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date (exit price). The Company utilizes market
data or assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk and the risks inherent in the inputs
to the valuation technique. These inputs can be readily observable, market
corroborated, or generally unobservable. The Company classifies fair value
balances based on the observability of those inputs. SFAS 157 establishes a fair
value hierarchy that prioritizes the inputs used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the lowest
priority to unobservable inputs (level 3 measurement).





The three
levels of the fair value hierarchy defined by SFAS 157 are as
follows:





Level 1 –
Quoted prices are available in active markets for identical assets or
liabilities as of the reporting date. Active markets are those in which
transactions for the asset or liability occur in sufficient frequency and volume
to provide pricing information on an ongoing basis. Level 1 primarily consists
of financial instruments such as exchange-traded derivatives, marketable
securities and listed equities.




- 4
-





Level 2 –
Pricing inputs are other than quoted prices in active markets included in level
1, which are either directly or indirectly observable as of the reported date.
Level 2 includes those financial instruments that are valued using models or
other valuation methodologies. These models are primarily industry-standard
models that consider various assumptions, including quoted forward prices for
commodities, time value, volatility factors, and current market and contractual
prices for the underlying instruments, as well as other relevant economic
measures. Substantially all of these assumptions are observable in the
marketplace throughout the full term of the instrument, can be derived from
observable data or are supported by observable levels at which transactions are
executed in the marketplace. Instruments in this category generally include
non-exchange-traded derivatives such as commodity swaps, interest rate swaps,
options and collars.





Level 3 –
Pricing inputs include significant inputs that are generally less observable
from objective sources. These inputs may be used with internally developed
methodologies that result in management’s best estimate of fair
value.





The
following table sets forth by level within the fair value hierarchy the
Company’s financial assets and liabilities that were accounted for at fair value
as of March 31, 2009. As required by SFAS 157, financial assets and
liabilities are classified in their entirety based on the lowest level of input
that is significant to the fair value measurement. The Company’s assessment of
the significance of a particular input to the fair value measurement requires
judgment, and may affect the valuation of fair value assets and liabilities and
their placement within the fair value hierarchy levels.




March 31,
      2009Level
      1
                      
                      Level
      2
                      
                      Level 3
                      
                      TotalFreestanding
      derivatives
                      
                      
                      -
                      
                      $
                      661,815
                      
                      
                      -
                      
                      $
                      661,815


The
derivatives listed above are carried at fair value. The fair value amounts in
current period earnings associated with the Company’s derivatives resulted from
Level 2 fair value methodologies; that is, the Company is able to value the
assets and liabilities based on observable market data for similar instruments.
This observable data includes the quoted market prices and estimated volatility
factors.





Note
2.  Going Concern





Opexa
incurred a net loss of approximately $1.6 million for the three months ended
March 31, 2009 and has an accumulated deficit of approximately $89.4
million.  The cash balance of approximately $0.4 million as of March
31, 2009 is not sufficient to fund the Company’s operations for the next
twelve months. Subsequent to March 31, 2009, the Company closed on a private
offering of secured convertible notes for approximately $1.3
million.  These conditions raise substantial doubt as to Opexa’s
ability to continue as a going concern. Management continues to seek means to
raise additional capital through sales of equity and partnering arrangements.
The financial statements do not include any adjustments that might be necessary
if Opexa is unable to continue as a going concern.





Note
3.  Marketable Securities





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





At March
31, 2009, Opexa invested approximately $400,000 in a money market account with
an average market yield of 0.41%. Interest income of $1,100 was recognized for
the three months ended March 31, 2009 in the statements of
expenses.  As March 31, 2009, the Company held no auction rate
securities.





Note
4.  Commitments and Contingencies







Office
Lease




In October
2005, Opexa entered into a ten-year lease for its office and research
facilities. The facility including the property is leased for a term of ten
years with two options for an additional five years each at the then prevailing
market rate. Future minimum lease payments under the non-cancellable operating
lease are $139,782 for 2009, $147,540 for 2010, $147,540 for 2011 and $584,343
for years 2012 to 2015.




- 5
-




License
Agreement




In July
2007, Opexa entered into a second amended and restated license agreement with
the University of Chicago that requires Opexa to make milestone payments of up
to $1,350,000 if certain late stage clinical trial and FDA approval milestones
are achieved. Opexa has determined that these payments are not probable at this
time and thus no liability has been recorded as of March 31,
2009.





Note
5.  Loan Payable





Loan
payable consists of an equipment line of $250,000 with Wells Fargo Bank of which
$150,042 was outstanding as of March 31, 2009. This loan has an interest rate of
7.61% per annum, matures in May 2011 and is secured by Opexa’s furniture and
equipment purchased with the loan proceeds.  Payments are due and
payable monthly on the same day of each month until maturity.





Note
6.  Options





Share-based
Compensation:




The
June 2004 Compensatory Stock Option Plan authorizes the issuance of various
forms of stock-based awards, including incentive and non-statutory stock
options, stock purchase rights, stock appreciation rights, and restricted and
unrestricted stock awards.  A total of 2,300,000 shares are authorized
to be issued under the Plan through June, 2014.  At March 31,
2009, 1,873,517 shares were issued.





The
Company accounts for share-based compensation, including options and nonvested
shares, according to the provisions of SFAS No. 123R, "Share Based
Payment". During the three month period ended March 31, 2009, the Company
recognized share-based compensation expense of approximately $359,000. Activity
in options during the three month period ended March 31, 2009 and related
balances outstanding as of that date are reflected below.  The
weighted average fair value per share of options granted for the three month
period ended March 31, 2009 was approximately $0.31.




A
summary of share-based compensation activity for the three month period ended
March 31, 2009 is presented below:




Number
      of
                                      Shares
                                    
                                    
                                    Wtd.
      Avg.
                                      Exercise
      Price
                                    
                                    
                                    Wtd.
      Avg.
                                      Remaining
                                      Contract
      Term
                                      (#
      years)Outstanding
      at January 1, 2009
                                    
                                    
                                    1,553,347
                                    
                                    
                                    $
                                    6.47Granted
                                    
                                    
                                    472,339
                                    
                                    
                                    
                                    0.31Exercised
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Forfeited
      or canceled
                                    
                                    
                                    (152,169
                                    )
                                    
                                    
                                    4.50Oustanding
      at March 31, 2009
                                    
                                    
                                    1,873,517
                                    
                                    
                                    $
                                    4.85
                                    
                                    
                                    
                                    7.3Exercisable
      at March 31, 2009
                                    
                                    
                                    1,354,629
                                    
                                    
                                    $
                                    6.08
                                    
                                    
                                    
                                    6.6




The
intrinsic value of the exercisable options at March 31, 2009 was
$2.15.





Stock
Option Activity:





Stock
option awards issued by the Company have a ten year life and have various
vesting dates that range from partial vesting upon date of grant to full vesting
on a specified date,. The Company estimates the fair value of stock options
using the Black-Scholes option-pricing model and records the compensation
expense ratably over the service period.





The fair
values of stock options granted during the three months ended March 31, 2009 and
2008 were estimated using the following assumptions:




- 6
-





Three
      Months Ended
                              March
      31, 2009
                            
                            Three
      Months Ended
                              March
      31, 2008Expected
      volatility
                            192%
      - 194%
                            
                            -Expected
      term
                            5-
      5.5 years
                            
                            -Risk
      free rate
                            1.47%
      - 1.97%
                            
                            -Expected
      dividends
                            -
                            
                            -




Note
7. Derivative Instruments




In June
2008, the FASB ratified EITF Issue 07-5, “Determining Whether an Instrument (or
Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF 07-5”). Paragraph
11(a) of Statement of Financial Accounting Standard No 133, “Accounting for
Derivatives and Hedging Activities” (“SFAS 133”) specifies that a contract that
would otherwise meet the definition of a derivative, but is both
(a) indexed to its own stock and (b) classified in stockholders’
equity in the statement of financial position would not be considered a
derivative financial instrument. EITF 07-5 provides a new two-step model to be
applied in determining whether a financial instrument or an embedded feature is
indexed to an issuer’s own stock, including evaluating the instrument’s
contingent exercise and settlement provisions, and thus able to qualify for the
SFAS 133 paragraph 11(a) scope exception. It also clarifies the impact of
foreign-currency-denominated strike prices and market-based employee stock
option valuation instruments on the evaluation. EITF 07-5 will be effective for
the first annual reporting period beginning after December 15, 2008, and
early adoption is prohibited. Opexa evaluated all of its financial instruments
and determined that the warrants associated with the August 2008 financing
qualified for treatment under EITF 07-5. As of January 1, 2009, Opexa
adjusted its financial statements to reflect the adoption of the EITF 07-5.
Opexa reclassified the fair value of these warrants as of January 1, 2009
in the amount of $220,835 from additional paid in capital to derivative
liability.  The cumulative effect of the change in accounting
principle in the amount of $1,755,622 is recognized as an adjustment to the
opening balance of retained earnings. The impact of implementing EITF 07-5 for
the quarter ended March 31, 2009 resulted in an increase in the derivative
liability of $440,980 with a corresponding loss on derivative
instruments.





The fair
values of the warrants during March 31, 2009 and January 1, 2009 were estimated
using the following assumptions:




March
      31, 2009
                  
                  January
      1, 2009Expected
      volatility
                  236%
                  
                  219.95%Expected
      term
                  1.9
      years
                  
                  2.1
      yearsRisk
      free rate
                  0.81%
                  
                  0.88%Expected
      dividends
                  -
                  
                  -




Note
8.  Subsequent Events




The
Company closed a second and final tranche of a private offering consisting of
secured convertible notes and warrants on May 14, which together with the first
tranche that closed on April 14, 2009, generated approximately $1.3 million in
gross proceeds.The notes mature in four years from the date of
issue and accrue interest at a 10% rate, compounded annually. The interest
is payable at maturity in either cash or common stock at the Company’s
option.  The notes are secured by substantially
all of the Company’s assets and areconvertible into common stock, at the option of the holders, at a price
of $0.50 per share. Additionally, subject to the satisfaction of certain
conditions, the notes are mandatorily convertible into common stock,
at the Company’s option, during their term also at $0.50 per
share.  The required conditions are: (1) the Company enters into an
agreement that will fund a Phase IIb or Phase III clinical trial for the further
development of the Company’s product known as Tovaxin®, (2) the
Company'scommon
stock trades at a price greater than or equal to $1.00 per share for twenty
consecutive trading days, and (3) the Company has an effective registration
statement on file with the Securities and Exchange Commission for the
re-sale of the shares of common stock issuable upon conversion of the
notes . The warrants have a four year term and are exercisable
for 50% of the number of shares that the note is convertible into at an
exercise price of $ 0.75 per share. In connection with the
offering, the Company has agreed to pay commissions equal to 10% of the
Units sold and will issue broker warrants to acquire the number of shares of
common stock equal to 7% of the aggregate number of broker warrant shares and
shares of common stock issuable upon conversion of the broker notes. The
Company will reimburse the broker for its costs associated with the placement of
the Units.




- 7
-




Item 2.  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 accompanying financial statements and the
related footnotes thereto.




Forward-Looking
Statements





Some of
the statements contained in this report discuss future expectations, contain
projections of results of operations or financial condition, or state other
"forward-looking" information. The words "believe," "intend," "plan," "expect,"
"anticipate," "estimate," "project," "goal" and similar expressions identify
such statement was made. These statements are subject to known and unknown
risks, uncertainties, and other factors that could cause the actual results to
differ materially from those contemplated by the statements. The forward-looking
information is based on various factors and is derived using numerous
assumptions. Factors that might cause or contribute to such a discrepancy
include, but are not limited to the risks discussed in this and our other SEC
filings. We do not promise to update forward-looking information to reflect
actual results or changes in assumptions or other factors that could affect
those statements. Future events and actual results could differ materially from
those expressed in, contemplated by, or underlying such forward-looking
statements.





The
following discussion and analysis of our financial condition is as of March 31,
2009.  Our results of operations and cash flows should be read in
conjunction with our unaudited financial statements and notes thereto included
elsewhere in this report and the audited financial statements and the notes
thereto included in our Form 10-K for the year ended December 31,
2008.




Business
Overview




Unless
otherwise indicated, we use “Opexa,” “the Company,” “we,” “our” and “us” in this
annual report to refer to the businesses of Opexa Therapeutics,
Inc.




We are a
biopharmaceutical company developing autologous cellular therapies with the
potential to treat major illnesses, including multiple sclerosis (MS) and
diabetes. These therapies are based on our proprietary T-cell and adult stem
cell technologies. The information discussed related to our product candidates
is preliminary and investigative. Our product candidates are not approved by the
Food and Drug Administration (FDA).




Our lead
product, Tovaxin®, is an
individualized T-cell therapeutic vaccine licensed from Baylor College of
Medicine, which is in clinical development for the treatment for
MS.




T-Cell
Therapy




We have an
exclusive worldwide license from Baylor College of Medicine (or Baylor) to an
individualized T-cell therapeutic vaccine, Tovaxin®, which
is in clinical development for the treatment of Multiple Sclerosis
(MS).




Multiple
sclerosis is the result of a person’s own T-cells attacking the myelin sheath
that coats the nerve cells of the central nervous system (CNS). Tovaxin consists
of attenuated patient-specific myelin reactive T-cells (MRTCs) against peptides
from one or more of the primary proteins on the surface of the myelin sheath
(myelin basic protein (MBP), proteolipid protein (PLP) and myelin
oligodendrocyte glycoprotein (MOG)). Patient-specific MRTCs are expanded in
culture with specific peptides identified by our proprietary test of the
patient’s peripheral blood. The cells are then attenuated by gamma irradiation,
and returned to the patient as a subcutaneous injection. Although further
testing is necessary, results from our initial human trials appear to indicate
that these attenuated T-cells cause an immune response directed at the
autoreactive T-cells in the patient’s body, resulting in a reduction in the
level of harmful T-cells. In 2008, we completed an FDA cleared Phase IIb
clinical trial of Tovaxin which enrolled 150-patients. The trial was entitled, A
Multicenter, Randomized, Double-Blind, Placebo-Controlled Study of Subcutaneous
Tovaxin in Subjects with Clinically Isolated Syndrome or Relapsing Remitting
Multiple Sclerosis. (Tovaxin for Early Relapsing-remitting MS,
“TERMS”).




The TERMS
study was a Phase IIb multi-center, randomized, double blind, placebo-controlled
trial in 150 patients with Relapsing-Remitting Multiple Sclerosis or high risk
Clinically Isolated Syndrome (CIS). The study involved 2:1 randomization with
100 patients receiving Tovaxin and 50 receiving placebo. According to the study
protocol, patients received a total of five subcutaneous injections at weeks 0,
4, 8, 12 and 24. Top-line data from the TERMS trial is as follows:




- 8
-




•
            Annualized
      relapse rate (ARR) for Tovaxin-treated patients was 0.214 as compared to
      0.339 for placebo-treated patients, which represented a 37 percent
      decrease in ARR for Tovaxin as compared to placebo in the general
      population;




•
            For
      patients who had more active disease as indicated by an ARR > 1 in the
      year prior to the study, Tovaxin demonstrated a 55 percent reduction in
      ARR as compared to placebo; and an 87% reduction in relapse rate was
      observed in Tovaxin patients in this population compared to placebo during
      the 24 week period following the administration of the full course of
      treatment (p=0.039).




•
            Patients
      who had an ARR>1 at entry demonstrated a statistically significant
      improvement in disability score as measured by the Expanded Disability
      Status Scale (EDSS) (p =0.045) for patients treated with Tovaxin as
      compared to those receiving placebo. The EDSS score is a measure of
      disability ranging from 0-10. In addition 28.1% of the Tovaxin patients
      showed an improvement in EDSS of at least one point as compared to 5.6% in
      the placebo group.





•
            Patients
      who had an ARR>1 at entry and were treated with Tovaxin experienced an
      88% reduction in brain atrophy and a 59% reduction in absolute T-2 lesion
      volume as compared to placebo.




•
            Tovaxin
      was safe and well tolerated with no serious adverse events related to
      Tovaxin treatment. The most common adverse event was injection site
      irritation;




Stem
Cell Therapy




We have
developed a proprietary adult stem cell technology to produce monocyte-derived
stem cells (MDSC) from blood. These MDSC can be derived from a patient’s
monocytes, expanded in our laboratories, and then administered to the same
patient. We believe that because this is an autologous therapy, there should be
no immunological problems. Normally, allogenic cells trigger host immune
responses and require the use of anti-rejection drugs.




Our
multi-potent stem cell is derived from peripheral blood monocytes which when
cultured under defined conditions are able to further differentiate into several
cellular lineages. Molecular biology and cellular analysis studies have shown
that these MDSCs have specific markers that distinguish them from other stem
cells. In addition these studies have also shown a time-dependence for the
expression of these markers during the growth and differentiation of MDSCs.
In vitro experiments
with MDSCs have shown their capacity to differentiate as hematopoietic,
epithelial, endothelial, endocrine and neuronal cells. Our main focus is the
further development of this monocyte-derived stem cell (MDSC) technology as a
platform for the in
vitro generation of highly specialized cells for potential application in
autologous cell therapy for patients with diseases such diabetes mellitus and
cardiovascular disease.




Other
Opportunities




We may
conduct basic research to determine the potential use of stem cells and
differentiated cells in other indications, such as macular degeneration, stroke,
myocardial infarction, wound healing and Parkinson’s disease. We will attempt to
partner or sublicense some of these indications if they are not pursued for
internal development. For those indications where we believe we can participate
commercially, we also desire to partner in key commercial markets outside of the
U.S.




Our
proprietary T-cell technology has enabled us to develop intellectual property
and a knowledge/sample database that may enable discovery of the most relevant
peptides to be used to treat MS patients. We may conduct research to identify
the most promising peptide targets that could lead to customized off the shelf
approaches based on a patient’s shifting epitope profile.




Critical
Accounting Policies




General




Our
discussion and analysis of our financial condition and results of operations is
based on our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the U.S. The
preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities
and expenses. We base our estimates on historical experience and on various
other assumptions that we believe to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions. The Company’s significant accounting policies are disclosed in the
Company’s Annual Report on Form 10-K for the year ended December 31,
2008.  The Company has not materially changed its significant
accounting policies.




- 9
-




Accounting
for Derivative Instruments




In June
2008, the FASB ratified EITF Issue 07-5, “Determining Whether an Instrument (or
Embedded Feature) Is Indexed to an Entity’s Own Stock” (“EITF 07-5”). Paragraph
11(a) of Statement of Financial Accounting Standard No 133, “Accounting for
Derivatives and Hedging Activities” (“SFAS 133”) specifies that a contract that
would otherwise meet the definition of a derivative, but is both
(a) indexed to its own stock and (b) classified in stockholders’
equity in the statement of financial position would not be considered a
derivative financial instrument. EITF 07-5 provides a new two-step model to be
applied in determining whether a financial instrument or an embedded feature is
indexed to an issuer’s own stock, including evaluating the instrument’s
contingent exercise and settlement provisions, and thus able to qualify for the
SFAS 133 paragraph 11(a) scope exception. It also clarifies the impact of
foreign-currency-denominated strike prices and market-based employee stock
option valuation instruments on the evaluation. EITF 07-5 will be effective for
the first annual reporting period beginning after December 15, 2008, and
early adoption is prohibited. Opexa evaluated all of its financial instruments
and determined that the warrants associated with the August 2008 financing
qualified for treatment under EITF 07-5. As of January 1, 2009, Opexa
adjusted its financial statements to reflect the adoption of the EITF 07-5.
Opexa reclassified the fair value of these warrants as of January 1, 2009
in the amount of $220,835 from additional paid in capital to derivative
liabilities.  The cumulative effect of the change in accounting
principle in the amount of $1,755,622 is recognized as an adjustment to the
opening balance of retained earnings. The impact of implementing EITF 07-5 for
the quarter ended March 31, 2009 resulted in an increase in the derivative
liability of $440,980 with a corresponding loss on derivative
instruments.




Measuring
Fair Value




In
September 2006, the FASB issued SFAS 157 which defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements. The provisions of SFAS 157 were effective January 1, 2008.
The FASB has also issued Staff Position (FSP) SFAS 157-2 (FSP No. 157-2),
which delays the effective date of SFAS 157 for nonfinancial assets and
liabilities, except for items that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually), until fiscal
years beginning after November 15, 2008.





As defined
in SFAS 157, fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market
participants at the measurement date (exit price). The Company utilizes market
data or assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk and the risks inherent in the inputs
to the valuation technique. These inputs can be readily observable, market
corroborated, or generally unobservable. The Company classifies fair value
balances based on the observability of those inputs. SFAS 157 establishes a fair
value hierarchy that prioritizes the inputs used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the lowest
priority to unobservable inputs (level 3 measurement).





The three
levels of the fair value hierarchy defined by SFAS 157 are as
follows:





Level 1 –
Quoted prices are available in active markets for identical assets or
liabilities as of the reporting date. Active markets are those in which
transactions for the asset or liability occur in sufficient frequency and volume
to provide pricing information on an ongoing basis. Level 1 primarily consists
of financial instruments such as exchange-traded derivatives, marketable
securities and listed equities.





Level 2 –
Pricing inputs are other than quoted prices in active markets included in level
1, which are either directly or indirectly observable as of the reported date.
Level 2 includes those financial instruments that are valued using models or
other valuation methodologies. These models are primarily industry-standard
models that consider various assumptions, including quoted forward prices for
commodities, time value, volatility factors, and current market and contractual
prices for the underlying instruments, as well as other relevant economic
measures. Substantially all of these assumptions are observable in the
marketplace throughout the full term of the instrument, can be derived from
observable data or are supported by observable levels at which transactions are
executed in the marketplace. Instruments in this category generally include
non-exchange-traded derivatives such as commodity swaps, interest rate swaps,
options and collars.





Level 3 –
Pricing inputs include significant inputs that are generally less observable
from objective sources. These inputs may be used with internally developed
methodologies that result in management’s best estimate of fair
value.




- 10
-





As
required by SFAS 157, financial assets and liabilities are classified in their
entirety based on the lowest level of input that is significant to the fair
value measurement. The Company’s assessment of the significance of a particular
input to the fair value measurement requires judgment, and may affect the
valuation of fair value assets and liabilities and their placement within the
fair value hierarchy levels.




Results
of Operations and Financial Condition




Three
Months Ended March 31, 2009 Compared with the Three Months Ended March 31,
2008





Net Sales.We
recorded no sales for the three months ended March 31, 2009 and
2008.




Research and Development Expenses.Research and development expense was approximately $0.7 million for the
three months ended March 31, 2009, compared to approximately $2.4 million for
the three months ended March 31, 2008.




The
decrease in expenses was primarily due to the completion of the Phase IIb
clinical trial in August 2008, closing the extension trial and a reduction in
staff offset in part by an increase in stock compensation expense. We have made
and expect to continue to make substantial investments in research and
development in order to develop and market our technology. We expense research
and development costs as incurred. Acquired research and development that has no
alternative future use is expensed when acquired. Property, plant and equipment
for research and development that has an alternative future use is capitalized
and the related depreciation is expensed.




General and Administrative Expenses.General and administrative expense was approximately $0.4 million for the
three months ended March 31, 2009, as compared to approximately $0. 7 million,
for the three months ended March 31, 2008.  The decrease in expenses
is due to a decrease in stock compensation expense, overhead expenses,
professional service fees, board compensation fees and a reduction in
staff.




Interest
Expense.  Interest expense was $5,627 for the three months
ended March 31, 2009, compared to $6,326 for the three months ended March 31,
2008. Interest expense for 2008 and 2007 was related to a loan payable
consisting of an equipment line of up to $250,000 with Wells Fargo of which
$150,042 was outstanding as of March 31, 2009.




Gain (loss) on derivative instruments
liabilities, net.We recognized a loss on
derivative instruments of $440,980 for the three months ended March 31, 2009.
This loss is a result of the net unrealized (non-cash) change in the fair value
of our derivative instrument liabilities related to warrants associated with the
August 2008 financing which qualified for treatment under EITF
07-5.




Interest
Income.  Interest income was $1,109 for the three months ended
March 31, 2009 compared to $37,709 for the three months ended March 31,
2008.  The decrease was due to the reduction in cash balances that
were available for investment in cash equivalent instruments and a reduction in
interest rates.




Net loss. We had a net loss
for the three months ended March 31, 2009, of approximately $1.6 million, or
$0.13 per share (basic and diluted), compared with a net loss of approximately
$3.1 million or $0.37 per share (basic and diluted), for the three months ended
March 31, 2008. The decrease in net loss is primarily due to the reduction of
costs associated with the Phase IIb clinical trial of Tovaxin that was completed
in 2008.




Liquidity
and Capital Resources




Historically,
we have financed our operations primarily from the sale of debt and equity
securities. As of March 31, 2009 we had cash and cash equivalents of
approximately $400,000.




The
Company’s  current burn rate is approximately $300,000 per month.
Subsequent to March 31, 2009, the Company closed on a private offering
of secured convertible notes and warrants for gross proceeds of
approximately $1.3 million, which will support our operations at current
levels  into September 2009. We will need to raise additional capital
in fiscal year 2009 to fund our business plan and support our operations. As our
prospects for funding, if any, develop during the fiscal year, we will assess
our business plan and make adjustments accordingly. We are actively seeking
strategic partnership or collaboration arrangements with companies for our
technologies. Although we have successfully funded our operations to date by
attracting additional investors in our equity, there is no assurance that our
capital raising efforts will be able to attract additional necessary capital for
our operations. If we are unable to obtain additional funding for operations at
any time now or in the future, we may not be able to continue operations as
proposed, requiring us to modify our business plan, curtail various aspects of
our operations or cease operations.




- 11
-




Off-Balance
Sheet Arrangements




None.




Recent
Accounting Pronouncements





For the
period ended March 31, 2009, there were no other changes to our critical
accounting policies as identified in our annual report on Form 10-K for the year
ended December 31, 2008.





Item 3. Quantitative and Qualitative Disclosures About Market
Risk.





Not
Applicable.





Item 4. Controls and Procedures.




Disclosure
Controls and Procedures.




We
maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed by us in the reports that we file or submit
to the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended, is recorded, processed, summarized, and reported within the
time periods specified by the Securities and Exchange Commission’s rules and
forms, and that information is accumulated and communicated to our management,
including our principal executive and principal financial officer (whom we refer
to in this periodic report as our Certifying Officer), as appropriate to allow
timely decisions regarding required disclosure. Our management evaluated, with
the participation of our Certifying Officer, the effectiveness of our disclosure
controls and procedures as of March 31, 2009, pursuant to Rule 13a-15(b)
under the Securities Exchange Act. Based upon that evaluation, our Certifying
Officer concluded that, as of March 31, 2009, our disclosure controls and
procedures were effective.




Changes
in Internal Control Over Financial Reporting.




There were
no changes in our internal control over financial reporting that occurred during
our most recently completed fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.  We will continue to evaluate the effectiveness of internal
controls and procedures on an on-going basis.







PART II




OTHER
INFORMATION





Item 1.  Legal Proceedings.





None.





Item 1A.  Risk Factors.





This Item
1A should be read in conjunction with “Item 1A. Risk Factors” in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2008.




We
will need additional capital to conduct our operations beyond August 2009 and
our ability to obtain the necessary funding is uncertain.




We need to
obtain significant amounts of additional capital to continue our business beyond
August 2009. The capital may come from many sources, including equity and/or
debt financings, license arrangements, grants and/or collaborative research
arrangements. As of March 31, 2009, we had cash and cash equivalents of
approximately $400,000. Our current burn rate is approximately $300,000 per
month. Subsequent to March 31, 2009, the Company closed on a private
offering of secured convertible notes and warrants for approximately
$1.3 million. We must rely upon third-party debt or equity funding and we can
provide no assurance that we will be successful in any funding effort. The
failure to raise such funds will necessitate the curtailment or ceasing of
operations.




- 12
-




The timing
and degree of any future capital requirements will depend on many factors,
including:




•
            our
      ability to establish, enforce and maintain strategic arrangements for
      research, development, clinical testing, manufacturing and
      marketing;




•
            the
      accuracy of the assumptions underlying our estimates for capital needs in
      2009 and beyond;




•
            scientific
      progress in our research and development
  programs;




•
            the
      magnitude and scope of our research and development
    programs;




•
            our
      progress with preclinical development and clinical
  trials;




•
            the
      time and costs involved in obtaining regulatory
  approvals;




•
            the
      costs involved in preparing, filing, prosecuting, maintaining, defending
      and enforcing patent claims; and




•
            the
      number and type of product candidates that we
  pursue.




We do not
have any committed sources of capital, although we have issued and outstanding
warrants that, if exercised, would result in an equity capital raising
transaction. Additional financing through strategic collaborations, public or
private equity financings, capital lease transactions or other financing sources
may not be available on acceptable terms, or at all. Additional equity
financings could result in significant dilution to our stockholders. Further, if
additional funds are obtained through arrangements with collaborative partners,
these arrangements may require us to relinquish rights to some of our
technologies, product candidates or products that we would otherwise seek to
develop and commercialize ourselves. If sufficient capital is not available we
may not be able to continue operations as proposed requiring us to modify our
business plan, curtail various aspects of our operations or cease
operations.




Our
independent auditor’s opinion expresses substantial doubt about our ability to
continue as a going concern which may make raising capital more difficult
and could require us to cease operations.




The report
of our independent auditors in respect to the 2008 fiscal year, expresses
substantial doubt about our ability to continue as a going
concern. Specifically, it indicates an absence of obvious or reasonably
assured sources of future funding that will be required by us to maintain
ongoing operations. Although Opexa has been successfully funded to date by
attracting investors in our equity, there is no assurance that our capital
raising efforts will be able to attract the capital needed to sustain our
operations. The opinion from our auditors expressing substantial doubt about our
ability to continue as a going concern may make it more difficult for us to
raise funds. If we are unable to obtain additional funding for operations,
we may not be able to continue operations as proposed, requiring us to modify
our business plan, curtail various aspects of our operations or cease
operations. In such event, investors may lose a portion or all of their
investment.




Item 2.  Unregistered Sales of Equity Securities and Use of
Proceeds.





None.





Item 3.  Defaults Upon Senior
Securities.





None.





Item 4.  Submission of Matters to a Vote of Security
Holders.





None.





Item 5.  Other Information.





None.





- 13
-





Item 6.  Exhibits.








Exhibit
      31.1*
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      302 of the Sarbanes-Oxley Act of 2002.Exhibit
      32.1*
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002.


__________________




*
            Filed
      herewith








SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.







OPEXA
      THERAPEUTICS, INC.Date:
      May 14, 2009
                        
                        By:
                        /s/  Neil
      K.
WarmaNeil
      K. Warma
                          President
      and Chief Executive Officer
                          (Principal
      Executive Officer)
                          Acting
      Chief Financial Officer
                          (Principal
      Financial and Accounting
Officer)








- 14
-