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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 001-13467

 

 

HedgePath Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   30-0793665

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

324 S. Hyde Park Avenue Ste. 350

Tampa, FL

  33606
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number (including area code): 813-864-2559

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

 

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  x    No  ¨

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  x    No  ¨

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

 

Large accelerated filer   ¨    Accelerated filer   ¨
Non-accelerated filer   ¨ (Do not check if a smaller reporting company)    Smaller reporting company   x

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

As of May 12, 2016, there were 268,393,270 shares of company common stock issued and outstanding.

 

 

 


Table of Contents

HedgePath Pharmaceuticals, Inc.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

 

         Page  
Part I. Financial Information   
Item 1.  

Condensed Financial Statements (unaudited)

  
 

Condensed Balance Sheets as of March 31, 2016 and December 31, 2015

     1   
 

Condensed Statements of Operations for the three months ended March 31, 2016 and 2015

     2   
 

Condensed Statement of Stockholders’ (Deficit) Equity for the three months ended March 31, 2016

     3   
 

Condensed Statements of Cash Flows for the three months ended March 31, 2016 and 2015

     4   
 

Notes to Condensed Financial Statements

     5   
Item 2.  

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

     9   
Item 3.  

Quantitative and Qualitative Disclosures about Market Risk

     10   
Item 4.  

Controls and Procedures

     10   

Cautionary Note on Forward Looking Statements

     10   
Part II. Other Information   
Item 1  

Legal Proceedings

     11   
Item 1A.  

Risk Factors

     11   
Item 2  

Unregistered Sales of Equity Securities and Use of Proceeds

     11   
Item 3  

Defaults upon Senior Securities

     11   
Item 4  

Mine Safety Disclosures

     11   
Item 5  

Other Information

     11   
Item 6.  

Exhibits

     11   

Signatures

     S-1   


Table of Contents

HEDGEPATH PHARMACEUTICALS, INC.

CONDENSED BALANCE SHEETS

AS OF MARCH 31, 2016 AND DECEMBER 31, 2015

(Unaudited)

 

     March 31, 2016     December 31, 2015  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 118,623      $ 601,445   

Other current assets

     52,017        34,414   
  

 

 

   

 

 

 

Total current assets

     170,640        635,859   

Other long term assets

     250,000        250,000   
  

 

 

   

 

 

 

Total assets

   $ 420,640      $ 885,859   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY     

Current liabilities:

    

Accounts payable

   $ 647,114      $ 383,356   

Other liabilities

     96,316        78,524   
  

 

 

   

 

 

 

Total current liabilities

     743,430        461,880   
  

 

 

   

 

 

 

Total liabilities

     743,430        461,880   
  

 

 

   

 

 

 

Commitments and contingencies (note 6)

     —         —    

Stockholders’ (deficit) equity:

    

Common stock, $0.0001 par value; 340,000,000 shares authorized; 245,353,270 shares issued and outstanding

     24,535        24,535   

Additional paid-in capital

     37,019,678        36,571,982   

Accumulated deficit

     (37,367,003     (36,172,538
  

 

 

   

 

 

 

Total stockholders’ (deficit) equity

     (322,790     423,979   
  

 

 

   

 

 

 

Total liabilities and stockholders’ (deficit) equity

   $ 420,640      $ 885,859   
  

 

 

   

 

 

 

 

1


Table of Contents

HEDGEPATH PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF OPERATIONS

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Unaudited)

 

     Three Months Ended March 31,  
     2016     2015  

Revenues:

    

Total Revenues:

   $ —       $ —    
  

 

 

   

 

 

 

Expenses:

    

Research and development expenses

     582,513        313,017   

General and administrative

     611,952        609,657   
  

 

 

   

 

 

 

Total Expenses:

     1,194,465        922,674   
  

 

 

   

 

 

 

Net loss

   $ (1,194,465   $ (922,674
  

 

 

   

 

 

 

Basic and diluted net loss per share

   $ 0.00     $ 0.00  
  

 

 

   

 

 

 

Weighted average common stock shares outstanding

     245,353,270        211,419,937   
  

 

 

   

 

 

 

See notes to condensed financial statements

 

2


Table of Contents

HEDGEPATH PHARMACEUTICALS, INC.

CONDENSED STATEMENT OF STOCKHOLDERS’ (DEFICIT) EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2016

(Unaudited)

 

     Common Stock      Additional
Paid-In
Capital
     Accumulated
Deficit
    Total
Stockholders’
(Deficit) Equity
 
     Shares      Amount          

Balances, January 1, 2016

     245,353,270       $ 24,535       $ 36,571,982       $ (36,172,538   $ 423,979   

Stock based compensation

     —          —          447,696         —         447,696   

Net loss

     —          —          —          (1,194,465     (1,194,465
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Balances, March 31, 2016

     245,353,270       $ 24,535       $ 37,019,678       $ (37,367,003   $ (322,790
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

See notes to condensed financial statements

 

3


Table of Contents

HEDGEPATH PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015

(Unaudited)

 

     Three months Ended
March 31,
 
     2016     2015  

Operating activities:

    

Net loss

   $ (1,194,465   $ (922,674

Adjustments to reconcile net loss to net cash flows from operating activities:

    

Stock based compensation

     447,696        419,703  

Changes in assets and liabilities:

    

Prepaid expense and other current assets

     (17,603     54,094  

Accounts payable and other current liabilities

     281,550        167,667   
  

 

 

   

 

 

 

Net cash used in operating activities

     (482,822     (281,210
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (482,822     (281,210

Cash and cash equivalents at beginning of period

     601,445        365,161   
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 118,623      $ 83,951   
  

 

 

   

 

 

 

See notes to condensed financial statements

 

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Table of Contents

HEDGEPATH PHARMACEUTICALS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Unaudited)

 

1. Corporate overview:

Overview

The accompanying unaudited condensed financial statements of HedgePath Pharmaceuticals, Inc., a Delaware corporation (the “Company”, “HPPI”, “we”, “us” or similar terminology), have been prepared by the Company without audit. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows as of March 31, 2016, and for all periods presented, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to the Securities and Exchange Commission (“SEC”) rules and regulations. These unaudited condensed financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2015, which are included in the Company’s 2015 Annual Report on Form 10-K, filed with the SEC on February 1, 2016 (the “2015 Annual Report”). The accompanying condensed balance sheet as of December 31, 2015 has been derived from the audited financial statements at that date, but does not include all information and footnotes required by GAAP for complete financial statements.

As used herein, the term “Common Stock” means the Company’s common stock, $0.0001 par value per share.

The results of operations for the three month period ended March 31, 2016 are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Readers of this Quarterly Report are strongly encouraged to review the risk factors relating to the Company which are set forth in the 2015 Annual Report and our other filings with the SEC.

The accompanying financial statements have been prepared on a going concern basis which contemplates the realization of assets and satisfaction of liabilities of the Company in the normal course of business. If the Company is unable to raise required funding to continue to pursue its business plan, it may have to cease operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Nature of the Business and Background

The Company is a clinical stage biopharmaceutical company that is seeking to discover, develop and commercialize innovative therapeutics for patients with certain cancers. The Company’s proposed therapy is based upon the use of SUBA Itraconazole, which is a patented, oral formulation of the currently marketed anti-fungal drug itraconazole. The Company believes that the dosing of oral capsules of this formulation can affect the Hedgehog signaling pathway, a major regulator of many fundamental cellular processes, which, in turn, can impact the development and growth of cancers such as basal cell carcinoma. Itraconazole has been approved by the U.S. Food and Drug Administration (the “FDA”) for, and has been extensively used to treat, fungal infections and has an extensive history of safe and effective use in humans. The Company has developed, optioned and licensed intellectual property and know-how related to the treatment of cancer patients using itraconazole.

The Company’s preliminary focus is on the development of therapies for skin, lung and prostate cancers in the United States of America (“U.S.”) market, with the first indication targeting basal cell carcinoma in patients with Basal Cell Carcinoma Nevus Syndrome (also known as Gorlin Syndrome) for which the Company is presently conducting a Phase II(b) clinical trial.

Relationship with Mayne Pharma Ventures Pty Ltd.

The Company has exclusive rights in the U.S. to develop and to commercialize SUBA-Itraconazole capsules for the treatment of human cancer via oral administration. SUBA-Itraconazole was developed and is licensed to us by the Company’s manufacturing partner and significant shareholder Mayne Pharma Ventures Pty Ltd. and its affiliates (“Mayne Pharma”) under a supply and license agreement, originally dated September 3, 2013 and most recently amended and restated on May 15, 2015 (the “SLA”). Mayne Pharma is an Australian specialty pharmaceutical company that develops and manufactures branded and generic products, which it distributes directly or through distribution partners and also provides contract development and manufacturing services. In addition to being the Company’s licensor and supply partner, under the SLA and related agreements, Mayne Pharma holds a significant minority equity stake in the Company and holds important rights with respect to the Company, such as the right to appoint a member to the Company’s Board of Directors.

 

5


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HEDGEPATH PHARMACEUTICALS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Unaudited)

 

2. Liquidity and management’s plans:

The Company presently has very limited cash resources and requires significant additional financing for its research and development, commercialization and distribution efforts and its working capital and intends to finance these activities primarily through:

 

    proceeds from public and private financings and, potentially, from strategic transactions;

 

    proceeds from the exercise of warrants issued in public and private financings;

 

    potential partnerships with other pharmaceutical companies to assist in the supply, manufacturing and distribution of its products for which the Company would expect to receive upfront milestone and royalty payments;

 

    potential licensing and joint venture arrangements with third parties, including other pharmaceutical companies where the Company would receive funding based on out-licensing its product; and

 

    seeking government or private foundation grants which would be awarded to the Company to further develop its current and future anti-cancer therapies.

However, there is a material risk that none of these plans will be implemented in a manner necessary to sustain the Company for an extended period of time and that the Company will be unable to obtain additional financing when needed on commercially reasonable terms, if at all. If adequate funds are not available when needed, the Company may be required to significantly reduce or refocus operations or to obtain funds through arrangements that may require the Company to relinquish rights to technologies or potential markets, any of which could have a material adverse effect on the Company, its viability, its financial condition and its results of operations beyond 2016. To the extent that additional capital is raised through the sale of equity or convertible debt securities or exercise of warrants and options, the issuance of such securities would result in ownership dilution to existing stockholders. The Company had cash and cash equivalents of approximately $118,623 as of March 31, 2016 (see note 7 for information regarding an equity offering by the Company subsequent to March 31, 2016).

 

3. Summary of Significant Accounting Policies:

Estimates

The preparation of condensed financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

Revenue Recognition

The Company currently has no ongoing source of revenues. Miscellaneous income is recognized when earned by the Company.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. At times, the Company may maintain cash balances in excess of Federal Deposit Insurance Corporation insured amounts which is $250,000 for substantially all depository accounts. As of March 31, 2016, the Company had did not have any depository accounts containing a cash balance in excess of these insured limits.

Research and Development Expenses

Research and development costs are expensed in the period in which they are incurred and include the expenses paid to third parties who conduct research and development activities on behalf of the Company and purchased in-process research and development.

Stock-Based Compensation

The Company accounts for stock-based awards to employees and non-employees using Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 – Accounting for Share-Based Payments, which provides for the use of the fair value based method to determine compensation for all arrangements where shares of stock or equity instruments are issued for compensation. Fair values of equity securities issued are determined by the Company based predominantly on the trading price of the common stock. The value of these awards is based upon their grant-date fair value. That cost is recognized over the period during which the employee is required to provide service in exchange for the award.

 

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Table of Contents

HEDGEPATH PHARMACEUTICALS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Unaudited)

 

3. Summary of Significant Accounting Policies (continued):

 

Income Taxes

Deferred tax assets and liabilities are recognized for future tax consequences attributed to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and are measured using enacted tax rates that are expected to apply to the differences in the periods that they are expected to reverse.

Recent accounting pronouncements:

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles-based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new standard, as updated in 2015, will be effective for the Company in the first quarter of the year ending December 31, 2018 and can be applied either retrospectively to all periods presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company will evaluate the impact of adoption of the new standard on its financial statements upon commencement of revenue generating activities.

In August 2014, the Financial Accounting Standards Board issued ASU No. 2014-15, “Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosure. This ASU provides guidance to an organization’s management, with principles and definitions that are intended to reduce diversity in the timing and content of disclosures that are commonly provided by organizations today in the financial statement footnotes. The amendments are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The Company is evaluating the impact the guidance will have on its financial statements.

 

4. Other liabilities

At March 31, 2016 and December 31, 2015, other liabilities include $52,500 payable to a third party service provider which is required to be settled in stock upon the completion of at least a $5 million stock offering. Additional other liabilities include approximately $30,000 in accrued legal expenses and $14,000 in accrued payroll at March 31, 2016, and approximately $20,000 in accrued legal expenses and $6,000 in accrued payroll expenses at December 31, 2015.

 

5. Stockholders’ Equity:

Employee Stock Plans

Total stock-based compensation for the three months ended March 31, 2016 was approximately $0.45 million and is related to certain restricted stock units (“RSUs”) issued in 2014 and 2015 in connection with the Company’s Equity Incentive Plan. The expense is classified as research and development expense and general and administrative expense in the accompanying condensed statements of operations. There was approximately $1.1 million in unamortized stock-based compensation relating the RSUs at March 31, 2016, which is expected to be recognized over the next 29 months. The grant date fair value of RSUs was determined using the quoted market price of the Common Stock on the date of issuance and the number of shares expected to vest. As of March 31, 2016, there were 25,891,738 RSUs granted to various members of the Board of Directors, management and other employees.

 

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HEDGEPATH PHARMACEUTICALS, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2016 AND 2015

(Unaudited)

 

6. Legal Proceedings:

The Company is currently not subject to any material legal proceedings. However, the Company may from time to time become a party to various legal proceedings arising in the ordinary course of business.

 

7. Subsequent Events:

In April 2016, the Company initiated a private placement offering (the “Offering”) of up to $5.5 million solely to “accredited investors” pursuant to Rule 506(c) of regulation D promulgated by the SEC. The Offering is being undertaken on a “no minimum” basis, meaning that the Company is free to raise less than the maximum $5.5 million amount of the Offering. In the Offering, the Company is offering up to 55,000,000 units, with each unit comprised of one (1) share of Common Stock and one (1) 5-year warrant to purchase one (1) share of Common Stock. Each unit is being offered at a price of $0.10, and the exercise price of each warrant is $0.12 per share. No actual units will be issued, and each investor will only receive shares of Common Stock and warrants to purchase Common Stock. Both the shares and the shares underlying the warrants will be subject to customary registration rights. As of May 9, 2016, approximately $2.3 million has been raised under the Offering resulting in the issuance of approximately 23.0 million shares of Common Stock and warrants to purchase 23.0 million shares of Common Stock. Under agreements previously entered into with the Company, Mayne has the right to purchase the Company’s securities in new equity offerings of the Company in an amount necessary to maintain its percentage ownership in the fully-diluted capitalization of the Company. Mayne has provided the Company with written notice of its exercise of such right in connection with the Offering, and it is expected that Mayne will purchase all of its pro rata share, on a fully-diluted basis, of the securities issued by the Company in connection with the Offering.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the Condensed Financial Statements and Notes thereto included elsewhere in this Quarterly Report. This discussion contains certain forward-looking statements that involve risks and uncertainties. The Company’s actual results and the timing of certain events could differ materially from those discussed in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth herein and elsewhere in this Quarterly Report and in the Company’s other filings with the SEC. See “Cautionary Note Regarding Forward Looking Statements” below.

As used in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, unless otherwise indicated, the terms “the Company”, “we”, “us”, “our” and similar terminology refer to both, as the context requires, the present activity of HPPI and the historic activity of CBI, as the context requires.

Critical Accounting Policies

See Note 3 of the Notes to Condensed Financial Statements included in Item 1 of this Quarterly Report for a summary of significant accounting policies and information on recently issued accounting pronouncements.

Results of Operations

For the three months ended March 31, 2016 compared to the three months ended March 31, 2015

Research and Development Expenses. We recognized approximately $0.6 million in research and development expenses during the three months ended March 31, 2016 compared to approximately $0.3 million for the three months ended March 31, 2015. Research and development expenses for the current period primarily include expenses related to our clinical trial for Basal Cell Carcinoma Nevus Syndrome, regulatory activities, legal expenses relating to patents, and stock-based compensation. Research and development expenses for the prior period consists primarily of salaries and stock-based compensation related to clinical trial design and regulatory activities.

General and Administrative Expenses. We recognized approximately $0.6 million in general and administrative expenses during both the three months ended March 31, 2016 and 2015. General and administrative expenses consist primarily of compensation and related costs for corporate administrative staff, facility expenditures, professional fees, consulting and taxes.

Liquidity and Capital Resources

We had approximately $118,623 cash on hand at March 31, 2016 and approximately $1.8 million as of May 12, 2016. Subsequent to March 31, 2016, we began closing on a private placement offering with gross proceeds received through May 12, 2016 of approximately $2.3 million (see Note 7 to the accompanying financial statements).

We intend to seek additional financing for our research and development, commercialization and distribution efforts and our working capital needs primarily through:

 

    proceeds from public and private financings and, potentially, other strategic transactions;

 

    proceeds from the exercise of warrants issued in public and private financings

 

    partnering with other pharmaceutical companies to assist in the supply, manufacturing and distribution of our products for which we would expect to receive upfront milestone and royalty payments;

 

    potential licensing and joint venture arrangements with third parties, including other pharmaceutical companies where we would receive funding based on out-licensing our product; and

 

    seeking government or private foundation grants which would be awarded to us to further develop our current and future anti-cancer therapies.

However, there is a material risk that none of these plans will be implemented and that we will be unable to obtain additional financing on commercially reasonable terms, if at all. If adequate funds are not available, we may be required to significantly reduce or refocus operations or to obtain funds through arrangements that may require us to relinquish rights to technologies or potential markets, any of which could have a material adverse effect on our company, our viability, our financial condition and our results of operations in 2016 and beyond. To the extent that additional capital is raised through the sale of equity or convertible debt securities or exercise of warrants and options, the issuance of such securities would result in ownership dilution to existing stockholders.

 

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As a result of the foregoing circumstances, there is substantial doubt about our ability to continue as a going concern. Our independent registered public accounting firm has included a paragraph emphasizing “going concern” uncertainty in their audit report on the 2015 financial statements dated February 1, 2016. The financial statements included herein do not include any adjustments relating to the recoverability or classification of asset carrying amounts or the amounts and classification of liabilities that may result should we be unable to continue as a going concern.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

None.

 

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, the Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer (the “Certifying Officers”), conducted evaluations of our disclosure controls and procedures. As defined under Sections 13a–15(e) and 15d–15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including the Certifying Officers, to allow timely decisions regarding required disclosures.

Based on this evaluation, the Certifying Officers have concluded that 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 during our first fiscal quarter of 2016 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

Readers are cautioned that our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our control have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any control design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

Certain information set forth in this Quarterly Report on Form 10-Q, including in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (and the “Liquidity and Capital Resources” section thereof) and elsewhere may address or relate to future events and expectations and as such constitutes “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such forward-looking statements involve significant risks and uncertainties. Such statements may include, without limitation, statements with respect to our plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects”, “may”, “could”, “would”, “should”, “believes”, “expects”, “anticipates”, “estimates”, “intends”, “plans” or similar expressions. These statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties, including those detailed in our filings with the SEC. Actual results, including, without limitation: (i) the results of our collaboration with Mayne Pharma, (ii) the application and availability of corporate funds and our need for future funds, or (iii) the timing for completion, and results of, scheduled or additional clinical trials and the FDA’s review and/or approval and potential commercial launch of our products and product candidates and regulatory filings related to the same, may differ significantly from those set forth in the forward-looking statements. Such forward-looking statements also involve other factors which may cause our actual results, performance or achievements to materially differ from any future results, performance, or achievements expressed or implied by such forward-looking statements and to vary significantly from reporting period to reporting period. Such factors include, among others, those listed under Item 1A of our 2015 Annual Report and other factors detailed from time to time in our other filings with the SEC. Although management believes that the assumptions made and

 

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expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual future results will not be different from the expectations expressed in this Report. We undertake no obligation to publically update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

None.

 

Item 1A. Risk Factors.

Not required for smaller reporting companies.

 

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

None, but see note 7 to the accompanying financial statements for information regarding a private placement we commenced in April 2016.

 

Item 3. Defaults upon Senior Securities.

None.

 

Item 4. Mine Safety Disclosures.

Not applicable.

 

Item 5. Other Information.

Not applicable.

 

Item 6. Exhibits.

 

Number

  

Description

  31.1

   Certification of Chief Executive Officer Pursuant To Sarbanes-Oxley Section 302

  31.2

   Certification of Chief Financial Officer Pursuant To Sarbanes-Oxley Section 302

  32.1

   Certification Pursuant To 18 U.S.C. Section 1350 (*)

  32.2

   Certification Pursuant To 18 U.S.C. Section 1350 (*)

101.ins

   XBRL Instance Document

101.sch

   XBRL Taxonomy Extension Schema Document

101.cal

   XBRL Taxonomy Calculation Linkbase Document

101.def

   XBRL Taxonomy Definition Linkbase Document

101.lab

   XBRL Taxonomy Label Linkbase Document

101.pre

   XBRL Taxonomy Presentation Linkbase Document

 

* A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

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SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    HEDGEPATH PHARMACEUTICALS, INC.
Date: May 13, 2016     By:   /s/ Nicholas J. Virca
   

Nicholas J. Virca

President and Chief Executive Officer

(Principal Executive Officer)

Date: May 13, 2016     By:  

/s/ Garrison J. Hasara

   

Garrison J. Hasara, CPA

Chief Financial Officer and Treasurer

(Principal Financial Officer)

 

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