Inhibitor Therapeutics (INTI) 10-Q 31 Oct 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 30, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
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		369,599,266

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 887,361	$ 6,885,422
Prepaid expenses	51,954	61,097
Deposit	250,000	250,000
Total current assets	1,189,315	7,196,519
Other long term assets	119,607	141,576
Total assets	1,308,922	7,338,095
Current liabilities:
Accounts payable	218,663	297,826
Other liabilities	33,539	10,307
Total current liabilities	252,202	308,133
Total liabilities	252,202	308,133
Commitments and contingencies (Note 5)
Stockholders' equity:
Preferred stock value
Common stock, $0.0001 par value; 500,000,000 shares authorized; 369,599,266 and 353,447,172 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively	36,960	35,345
Additional paid-in capital	48,389,463	50,167,372
Accumulated deficit	(47,369,703)	(43,172,755)
Total stockholders' equity	1,056,720	7,029,962
Total liabilities and stockholders' equity	1,308,922	7,338,095
Series A Preferred Stock [Member]
Stockholders' equity:
Preferred stock value

Condensed Balance Sheets (Unau3

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	9,500,000	9,500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	369,599,266	353,447,172
Common stock, shares outstanding	369,599,266	353,447,172
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenues:
Total Revenues	$ 0	$ 0	$ 0	$ 0
Expenses:
Research and development expenses	433,545	720,339	1,692,645	1,908,372
General and administrative	247,621	1,013,846	2,521,029	2,350,337
Total Expenses:	681,166	1,734,185	4,213,674	4,258,709
Loss from operations	(681,166)	(1,734,185)	(4,213,674)	(4,258,709)
Interest income	2,086	9,177	16,726	10,230
Net loss	$ (679,080)	$ (1,725,008)	$ (4,196,948)	$ (4,248,479)
Basic and diluted net loss per share	$ 0	$ (0.01)	$ (0.01)	$ (0.02)
Weighted average common stock shares outstanding	369,599,266	300,353,270	365,618,815	273,979,411

Condensed Statement of Stockhol

Condensed Statement of Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($)	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]
Beginning balance at Dec. 31, 2016	$ 7,029,962	$ 35,345	$ 50,167,372	$ (43,172,755)
Beginning balance, shares at Dec. 31, 2016		353,447,172
Issuance of common stock in payment of vested restricted stock units, net	(3,677,727)	$ 1,574	(3,679,301)
Issuance of common stock in payment of vested restricted stock units, net, shares		15,739,594
Issuance of common stock upon warrant exercise	49,500	$ 41	49,459
Issuance of common stock upon warrant exercise, shares		412,500
Stock based compensation	1,851,933		1,851,933
Net loss	(4,196,948)			(4,196,948)
Ending balance at Sep. 30, 2017	$ 1,056,720	$ 36,960	$ 48,389,463	$ (47,369,703)
Ending balance, shares at Sep. 30, 2017		369,599,266

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities:
Net loss	$ (4,196,948)	$ (4,248,479)
Adjustments to reconcile net loss to net cash flows from operating activities:
Stock based compensation	1,851,933	1,716,309
Changes in assets and liabilities:
Prepaid expense and other assets	31,112	(24,490)
Accounts payable and other current liabilities	(55,931)	7,723
Net cash used in operating activities	(2,369,834)	(2,548,937)
Financing activities:
Proceeds from sale of common stock and common stock warrants, net		2,664,900
Proceeds from sale of common stock and common stock warrants, related party, net		2,836,424
Proceeds from the exercise of common stock warrants	49,500
Net settlement in connection with the issuance of shares associated with underlying Restricted Stock Units	(3,677,727)
Net cash from financing activities	(3,628,227)	5,501,324
Net change in cash and cash equivalents	(5,998,061)	2,952,387
Cash and cash equivalents at beginning of period	6,885,422	601,445
Cash and cash equivalents at end of period	887,361	$ 3,553,832
Supplemental disclosure of non-cash activities:
Fair value of shares withheld with net settlement transaction	$ 3,677,727

Corporate overview

Corporate overview	9 Months Ended
	Sep. 30, 2017
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 September 30, 2017, 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, 2016, which are included in the Company’s 2016 Annual Report on Form 10-K, 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 and nine month periods ended September 30, 2017 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 2016 Annual Report and our other filings with the SEC. The accompanying unaudited condensed 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 unaudited condensed 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 may also explore acquiring or licensing other innovative therapeutics addressing unmet needs and orphan indications beyond cancer. The Company’s current focus is on the development of therapies for skin, lung and prostate cancers in the 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 commenced a Phase 2(b) clinical trial in the third quarter of 2015. The Company’s proposed therapy is based upon the use of SUBA TM know-how The Company has been able to follow and report the progress of the Phase 2(b) clinical trial, and the impact of therapy has been impressive, with only one target tumor requiring surgical excision and 99% of target tumors being controlled. As of the date of this filing, the Company has measured the response of 467 individual target tumors, with 54% exhibiting a 30% or greater reduction in size since dosing began and 28% completely disappearing. Approximately 60% of responding lesions have continued to respond during ongoing treatment with a duration of response yet to be determined, but currently exceeding one year at this point in time. The patient dropout rate has been only 11%, with SUBA-Itraconazole being well-tolerated with no reports of hair loss, loss of taste, or disabling muscle cramps typical of other hedgehog inhibitors. In addition, no serious adverse events attributable to SUBA-Itraconazole have been reported. Based on the results above and the company’s on-going communications with the FDA, the Company believes the data from this trial will support the filing of a New Drug Application (“NDA”) for the management of basal cell carcinomas in BCCNS. In order to reach this objective, the Company has begun the process of locking the study database, which the Company intends to achieve by year-end, with the goal to complete a Clinical Study Report during the first quarter of 2018 while at the same time preparing for submission of a pre-NDA meeting request to FDA. While the clinical data observed to date appear to be predictive of the desired final study results while the Company seeks further guidance from FDA, readers are cautioned that no assurances can be given that (i) the final study results will match these latest results or (ii) the study, when and if completed, will achieve its primary and secondary endpoints or (iii) that the study will be found by FDA to be sufficient for the filing of an NDA or (iv) if an NDA is filed, that it will be approved by FDA. Further, the Company is not committing to providing further interim updates prior to the reporting of the final study results. 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 majority shareholder, Mayne Pharma Ventures Pty Ltd. and its affiliates (“Mayne Pharma”), under a supply and license agreement, originally dated September 3, 2013, as amended and restated on May 15, 2015, and further amended on November 22, 2016 (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 majority equity stake in the Company and holds important contractual rights with respect to the Company, such as the right to maintain its percentage ownership of the Company in connection with equity financings.

Liquidity and management's plan

Liquidity and management's plans	9 Months Ended
	Sep. 30, 2017
Text Block [Abstract]
Liquidity and management's plans	2. Liquidity and management’s plans: The Company had cash and cash equivalents of approximately $0.9 million as of September 30, 2017. Based on the Company’s current operational plan and budget, the Company expects that it has sufficient cash to manage its business into approximately the first quarter of 2018, although this estimation assumes that the Company does not accelerate the development of the existing product candidate (including expanding the therapeutic indications for such product candidate), acquire other drug development opportunities, or otherwise face unexpected events, costs or contingencies, any of which could affect the Company’s cash requirements. The Company intends to finance its research and development, commercialization and distribution efforts and its working capital needs primarily through: • proceeds from public and private financings and, potentially, from strategic transactions (including, potentially, financings from our majority shareholder, Mayne Pharma); • proceeds from the exercise of outstanding warrants previously issued in private financings (including warrants held by our majority shareholder, Mayne Pharma); • 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 • 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 the first quarter of 2018. 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.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2017
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 September 30, 2017, the Company had approximately $0.4 million in excess of the amount covered by the Federal Deposit Insurance Corporation with one financial institution. 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 Stock-Based Compensation The Company accounts for stock-based awards to employees and non-employees 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. These differences occur primarily in share-based compensation, in-process Recent accounting pronouncements: Management has considered all recent accounting pronouncements issued and does not believe that they will have a significant impact on the Company’s financial statements.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2017
Equity [Abstract]
Stockholders' Equity	4. Stockholders’ Equity: Employee Stock Plans Total stock-based compensation for the nine months ended September 30, 2017 was approximately $1.9 million and is related to certain restricted stock units (“RSUs”) and common stock options issued pursuant to the Company’s 2014 Equity Incentive Plan (the “Plan”). The expense is classified as research and development expense and general and administrative expense in the accompanying 2017 condensed statement of operations. 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 September 30, 2017, there were 650,000 outstanding common stock options vested and outstanding with an intrinsic value of approximately $0.1 million. On March 8, 2017, approximately 26.5 million previously vested but unpaid RSUs were settled by issuing shares of Common Stock. Upon settlement of the RSUs, the Company issued 15,739,594 shares of Common Stock to employees (including the Company’s executive officers), current and former Board members, and contractors (“RSU recipients”). Additionally, 10,802,144 shares of Common Stock, valued at approximately $3.7 million, were withheld from issuance representing estimated income taxes due from the RSU recipients as the fair value of the shares is considered taxable income upon issuance. The Company subsequently remitted to the appropriate taxing authorities in cash both the Company and the RSU recipient portions of the tax withholdings in the amount of approximately $3.7 million. As of September 30, 2017, there were 125,000 outstanding RSUs, all of which vest on January 1, 2018. These RSUs were issued in May 2017 to recently added Board members pursuant to the Plan. There was $14,060 in unamortized stock-based compensation relating to these outstanding RSUs at September 30, 2017.

Legal Proceedings

Legal Proceedings	9 Months Ended
	Sep. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Legal Proceedings	5. Legal Proceedings: The Company is currently not subject to any legal proceedings. However, the Company may from time to time become a party to various legal proceedings arising in the ordinary course of business.

Summary of Significant Accoun12

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2017
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 September 30, 2017, the Company had approximately $0.4 million in excess of the amount covered by the Federal Deposit Insurance Corporation with one financial institution.
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
Stock-Based Compensation	Stock-Based Compensation The Company accounts for stock-based awards to employees and non-employees
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. These differences occur primarily in share-based compensation, in-process
Recent accounting pronouncements	Recent accounting pronouncements: Management has considered all recent accounting pronouncements issued and does not believe that they will have a significant impact on the Company’s financial statements.

Corporate Overview - Additional

Corporate Overview - Additional Information (Detail) - $ / shares	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Percentage of target tumors controlled	99.00%
Number of individuals measured for target tumors response	467
Percentage of reduction in size of 30% or greater since dosing began	54.00%
percentage of target tumor completely disappeared	28.00%
Percentage of target tumor continued to respond during ongoing treatment	60.00%
Percentage of patient dropout rate	11.00%

Liquidity and Management's Pl14

Liquidity and Management's Plans - Additional Information (Detail) - USD ($)	Sep. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Reorganizations [Abstract]
Cash and cash equivalents	$ 887,361	$ 6,885,422	$ 3,553,832	$ 601,445

Summary of Significant Accoun15

Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Cash, FDIC insured amount	$ 250,000
Cash balance in excess of amount covered by Federal Deposit Insurance Corporation	$ 400,000
Percentage of valuation allowance against deferred tax assets	100.00%	100.00%
Valuation Allowance, Methodologies and Assumptions	In accordance with GAAP, it is required that a deferred tax asset be reduced by a valuation allowance if, based on the weight of available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized. At September 30, 2017 and December 31, 2016, the Company recorded a 100% valuation allowance against its deferred tax assets as it has determined such amounts will not be currently realizable.

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail) - USD ($)	Mar. 08, 2017	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Stock based compensation expense		$ 1,851,933	$ 1,716,309
Outstanding common stock options vested and outstanding		650,000
Common stock options vested and outstanding, intrinsic value		$ 100,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares issued to employees including company's executive officers, current and former Board members, and contractors in associated with vested RSUs	15,739,594
Common shares withheld from issuance representing estimated income taxes	10,802,144
Shares withheld from issuance representing estimated income taxes, value	$ 3,700,000
RSU recipient portions of tax withholdings in amount	$ 3,700,000
RSUs vested	26,500,000
RSUs outstanding		125,000
Unamortized stock-based compensation cost related to RSU		$ 14,060
Two Thousand Fourteen Equity Incentive Plan [Member] | Restricted Stock Units RSU and Common Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Stock based compensation expense		$ 1,900,000