Inhibitor Therapeutics (INTI) 10-Q 13 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 12, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	HPPI
Entity Registrant Name	HedgePath Pharmaceuticals, Inc.
Entity Central Index Key	1,042,418
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		268,393,270

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
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
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

Condensed Balance Sheets (Unau3

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	340,000,000	340,000,000
Common stock, shares issued	245,353,270	245,353,270
Common stock, shares outstanding	245,353,270	245,353,270

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues:
Total Revenues:	$ 0	$ 0
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	$ 0
Weighted average common stock shares outstanding	245,353,270	211,419,937

Condensed Statements of Stockho

Condensed Statements of Stockholders' (Deficit) Equity (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($)	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2015	$ 423,979	$ 24,535	$ 36,571,982	$ (36,172,538)
Beginning balance, shares at Dec. 31, 2015		245,353,270
Stock based compensation	447,696		447,696
Net loss	(1,194,465)			(1,194,465)
Ending balance at Mar. 31, 2016	$ (322,790)	$ 24,535	$ 37,019,678	$ (37,367,003)
Ending balance, shares at Mar. 31, 2016		245,353,270

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 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

Corporate Overview

Corporate Overview	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Corporate Overview	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 ™ 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.

Liquidity and Management's Plan

Liquidity and Management's Plans	3 Months Ended
	Mar. 31, 2016
Text Block [Abstract]
Liquidity and Management's Plans	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).

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	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. 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.

Other Liabilities

Other Liabilities	3 Months Ended
	Mar. 31, 2016
Other Liabilities Disclosure [Abstract]
Other Liabilities	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.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Stockholders' Equity	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.

Legal Proceedings

Legal Proceedings	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	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.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2016
Subsequent Events [Abstract]
Subsequent Events	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.

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Estimates	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	Revenue Recognition The Company currently has no ongoing source of revenues. Miscellaneous income is recognized when earned by the Company.
Cash and Cash Equivalents	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 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	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.
Income Taxes	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	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.

Corporate Overview - Additional

Corporate Overview - Additional Information (Detail) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001

Liquidity and Management's Pl16

Liquidity and Management's Plans - Additional Information (Detail) - USD ($)	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Reorganizations [Abstract]
Cash and cash equivalents	$ 118,623	$ 601,445	$ 83,951	$ 365,161

Summary of Significant Accoun17

Summary of Significant Accounting Policies - Additional Information (Detail)	Mar. 31, 2016USD ($)
Accounting Policies [Abstract]
Cash, FDIC insured amount	$ 250,000
Cash balance in excess of amount covered by Federal Deposit Insurance Corporation	$ 0

Other Liabilities - Additional

Other Liabilities - Additional Information (Detail) - Other Liabilities [Member] - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Other Liabilities [Line Items]
Accrued legal expenses	$ 30,000	$ 20,000
Value of shares payable to a third party service provider	52,500	52,500
Accrued payroll expenses	14,000	$ 6,000
Minimum [Member]
Other Liabilities [Line Items]
Stock offering value	$ 5,000,000

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Stock based compensation expense	$ 447,696	$ 419,703
Unamortized stock-based compensation cost related to RSU recognition period	29 months
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Stock based compensation expense	$ 450,000
Unamortized stock-based compensation cost related to RSU	$ 1,100,000
Board Members and Company Secretary [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units granted during the period	25,891,738

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions	May. 09, 2016	Apr. 30, 2016
Subsequent Event [Line Items]
Number of securities into which the class of warrant or right converted		1
Private Placement [Member]
Subsequent Event [Line Items]
Stock issued during period, shares, new issues	23,000,000
Proceeds from issuance of private placement	$ 2.3
Class of warrant or right, outstanding	23,000,000
Accredited Investor Member
Subsequent Event [Line Items]
Warrant expiration period		5 years
Shares issued, price per share		$ 0.10
Exercise price of warrants		$ 0.12
Number of securities into which each warrant or right converted		1
Accredited Investor Member | Private Placement [Member]
Subsequent Event [Line Items]
Stock issued during period, value, new issues		$ 5.5
Stock issued during period, shares, new issues		55,000,000