Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 23, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
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 | 369,959,064 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 795,757 | $ 344,113 |
Prepaid expenses | 41,058 | 61,655 |
Deposit | 250,000 | 250,000 |
Total current assets | 1,086,815 | 655,768 |
Other long term assets | 97,638 | 112,284 |
Total assets | 1,184,453 | 768,052 |
Current liabilities: | ||
Accounts payable | 326,193 | 534,956 |
Dividends payable | 56,548 | |
Other liabilities | 79,145 | 66,533 |
Total current liabilities | 461,886 | 601,489 |
Total liabilities | 461,886 | 601,489 |
Commitments and contingencies | ||
Stockholders' (deficit) equity: | ||
Preferred stock | ||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 369,774,266 and 369,599,266 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 36,977 | 36,960 |
Additional paid-in capital | 48,707,702 | 48,403,523 |
Accumulated deficit | (50,382,978) | (48,273,920) |
Total stockholders' (deficit) equity | (1,638,299) | 166,563 |
Total liabilities, mezzanine equity and stockholders' (deficit) equity | 1,184,453 | 768,052 |
Series A Preferred Stock [Member] | ||
Stockholders' (deficit) equity: | ||
Preferred stock | ||
Series B Convertible, Redeemable, Preferred Stock [Member] | ||
Mezzanine equity: | ||
Series B Convertible, Redeemable, Preferred Stock, $0.0001 par value; 7,246,377 shares authorized; 3,478,261 and -0- shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | $ 2,360,866 |
Condensed Balance Sheets (Unau3
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,253,623 | 2,253,623 |
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 | 369,774,266 | 369,774,266 |
Common Stock, shares outstanding | 369,599,266 | 369,599,266 |
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 |
Series B Convertible, Redeemable, Preferred Stock [Member] | ||
Mezzanine equity, par value | $ 0.0001 | $ 0.0001 |
Mezzanine equity, shares authorized | 7,246,377 | 7,246,377 |
Mezzanine equity, shares issued | 3,478,261 | 3,478,261 |
Mezzanine equity, shares outstanding | 0 | 0 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Expenses: | ||||
Research and development expenses | $ 528,875 | $ 440,762 | $ 1,202,845 | $ 1,259,100 |
General and administrative | 355,531 | 278,674 | 856,377 | 2,273,408 |
Total Expenses: | 884,406 | 719,436 | 2,059,222 | 3,532,508 |
Loss from operations | (884,406) | (719,436) | (2,059,222) | (3,532,508) |
Interest income | 2,490 | 2,995 | 6,712 | 14,640 |
Net loss | (881,916) | (716,441) | (2,052,510) | (3,517,868) |
Preferred stock dividend | (29,918) | (56,548) | ||
Net loss applicable to common stockholders | $ (911,834) | $ (716,441) | $ (2,109,058) | $ (3,517,868) |
Basic and diluted net loss applicable to common stockholders per share | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Weighted average common stock shares outstanding - basic and diluted | 369,723,717 | 369,481,409 | 369,669,708 | 363,595,602 |
Condensed Statement of Stockhol
Condensed Statement of Stockholders' (Deficit) Equity and Redeemable Preferred Stock (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Series B Preferred Stock [Member] |
Sale of Preferred Stock and Common Stock warrants to related party, net, Mezzanine Equity | $ 2,360,866 | ||||
Sale of Preferred Stock and Common Stock warrants, related party, Shares, Mezzanine Equity | 3,478,261 | ||||
Ending balance, Mezzanine Equity at Jun. 30, 2018 | $ 2,360,866 | ||||
Ending balance, shares, Mezzanine Equity at Jun. 30, 2018 | 3,478,261 | ||||
Beginning balance at Dec. 31, 2017 | $ 166,563 | $ 36,960 | $ 48,403,523 | $ (48,273,920) | |
Beginning balance, shares at Dec. 31, 2017 | 369,599,266 | ||||
Sale of Preferred Stock and Common Stock warrants to related party, net | $ 0 | $ 0 | $ 0 | $ 0 | |
Sale of Preferred Stock and Common Stock warrants, related party, Shares | 0 | 0 | 0 | 0 | |
Issuance of common stock upon warrant exercise | $ 12,000 | $ 10 | $ 11,990 | ||
Issuance of common stock upon warrant exercise, Shares | 100,000 | ||||
Stock based compensation | 292,196 | $ 7 | $ 292,189 | ||
Stock based compensation, Shares | 75,000 | ||||
Preferred stock dividends | (56,548) | $ (56,548) | |||
Net loss | (2,052,510) | (2,052,510) | |||
Ending balance at Jun. 30, 2018 | $ (1,638,299) | $ 36,977 | $ (50,382,978) | ||
Ending balance, shares at Jun. 30, 2018 | 369,774,266 | 48,707,702 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities: | ||
Net loss | $ (2,052,510) | $ (3,517,868) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 292,196 | 1,837,869 |
Changes in assets and liabilities: | ||
Prepaid expense and other assets | 35,243 | 34,765 |
Accounts payable and other current liabilities | (196,151) | 31,446 |
Net cash used in operating activities | (1,921,222) | (1,613,788) |
Financing activities: | ||
Net settlement in connection with the issuance of shares associated with underlying Restricted Stock Units | (3,677,727) | |
Proceeds from the exercise of common stock warrants | 12,000 | 49,500 |
Proceeds from the sale of Preferred Stock and Common Stock warrants, related party, net | 2,360,866 | |
Net cash provided by (used in) financing activities | 2,372,866 | (3,628,227) |
Net change in cash and cash equivalents | 451,644 | (5,242,015) |
Cash and cash equivalents at beginning of period | 344,113 | 6,885,422 |
Cash and cash equivalents at end of period | 795,757 | 1,643,407 |
Non-cash financing activities: | ||
Fair value of shares withheld with net settlement transaction | $ 3,677,727 | |
Accrued, but unpaid dividends | $ 56,548 |
Corporate overview
Corporate overview | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018, 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, 2017, which are included in the Company’s 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 six month periods ended June 30, 2018 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 Company’s 2017 Annual Report on Form 10-K 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 initial product candidate is based upon the use of SUBA™-Itraconazole, which is a patented, oral formulation of the currently marketed anti-fungal drug itraconazole to which the Company holds an exclusive U.S. license. 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) (“BCCNS”), for which the Company commenced an open label, Phase 2(b) clinical trial in the third quarter of 2015. The Company continues to interact with the U.S. Food and Drug Administration (“FDA”) regarding the results of its Phase 2(b) trial in order to gain further guidance regarding the filing of the New Drug Application (“NDA”) for SUBA-Itraconazole for the treatment of BCCNS (“SUBA BCCNS”). In June 2018, the Company announced the FDA granted the Company a face-to-face The Company believes that the dosing of oral capsules of SUBA-Itraconazole 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 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 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, amended and restated on June 24, 2014 and May 15, 2015, and as further amended on November 22, 2016 and January 10, 2018 (collectively, 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 appoint members to the Company’s board of directors, and in particular with respect to SUBA BCCNS, as further explained below. Series B Preferred Stock Purchase Agreement On January 8, 2018, the Company entered into a definitive securities purchase agreement (the “Purchase Agreement”) with Mayne Pharma, pursuant to which Mayne Pharma agreed to purchase from the Company, and the Company agreed to issue to Mayne Pharma (over three closings as described further below, each a “Closing”): (i) up to 7,246,377 shares of the Company’s newly designated Series B Convertible Preferred Stock (the “Series B Preferred Stock”) at $0.69 per share of Series B Preferred Stock (with each share of Series B Preferred Stock being convertible into three (3) shares of the Common Stock for an effective price per share of Common Stock of $0.23), for potential gross proceeds of $5,000,000; (ii) Series A warrants (the “Series A Warrants”) to purchase up to an aggregate 5,434,783 shares of Common Stock, with a two-year (iii) Series B warrants (the “Series B Warrants”) to purchase up to an aggregate of 5,434,783 shares of Common Stock, with a five-year term from the date of issuance and an exercise price per share of $0.275 (the “Series B Warrants”, and together with the Series A Warrants, the “Warrants”). The transactions contemplated by the Purchase Agreement are referred to herein as the “Financing.” The Financing contemplates three closings (each, a “Closing”), as follows: (i) $2.4 million was funded at an initial closing of the Financing that occurred on January 10, 2018 (the “Initial Closing”) resulting in the issuance of 3,478,261 Preferred Shares and a total of 5,217,392 Warrants (ii) $1.6 million was scheduled to be funded subsequent to June 30, 2018 and was received on July 5, 2018 (the “Second Closing”) resulting in the issuance of 2,318,841 Preferred Shares and a total of 3,478,262 Warrants on July 5, 2018; and (iii) $1.0 million may be funded on or before December 31, 2018 (the “Third Closing”)(see below). The funding of the Third Closing shall be conditioned upon the acceptance of filing by the FDA of the Company’s NDA for SUBA BCCNS, provided that such date shall be automatically extended in the event that such NDA is filed with the FDA during December 2018 to a date which is 30 days from the date of such filing. In addition, as part of the Financing, the Company and Mayne Pharma agreed to amend the SLA, most notably to eliminate the provision that would have allowed Mayne Pharma to terminate the SLA in the event that the Company had not received an NDA approval for a product covered by the SLA by October 31, 2018. Under the Purchase Agreement, the Company has agreed to use the proceeds from the Financing solely for purposes of funding the continued development of SUBA BCCNS and for general corporate purposes; provided, however, that the Company may use the proceeds from the Third Closing (in a manner consistent with the SLA) for the development of other SUBA-Itraconazole treatments for cancer and for general operating purposes of the Company. In addition, the Purchase Agreement provides for additional limitations on the use of proceeds from the Financing including, without limitation, that the Company shall not use the proceeds from any Closing for: (i) the satisfaction of any portion of the Company’s indebtedness (other than payment of trade payables in the ordinary course of the Company’s business and prior practices) or (ii) the redemption of any Common Stock or other Company securities. In addition, under the Purchase Agreement, the Company agreed that for the period from the date of the Initial Closing through December 31, 2018 (the “Market Standoff Period”), the Company will not undertake external financing (which shall specifically exclude exercise of existing options and warrants) without the approval of Mayne Pharma, such approval not to be unreasonably withheld, conditioned or delayed, and giving due consideration to the fiduciary duties and business judgment of the Company’s Board of Directors; provided, however, that if, during the Market Standoff Period, any existing warrants or options of the Company are exercised, the proceeds of such exercises may, in the discretion of the Company’s Board of Directors, be used for preliminary work on SUBA-Itraconazole cancer indications other than SUBA BCCNS, in each case in accordance with the SLA. Under the Purchase Agreement, Mayne Pharma has been afforded certain demand and “piggyback” rights to cause the Company to register the shares of Common Stock underlying the Series B Preferred Stock and the Warrants for public resale; provided, however, that such rights shall only become effective and exercisable from and after the termination of the SLA. The negotiations with Mayne Pharma and preparation of related transaction documentation associated with Financing and amendment to the SLA was undertaken on behalf of the Company by a special committee of disinterested, independent members of the Company’s Board of Directors. Terms of the Series B Preferred Stock The Series B Preferred Stock carries the following provisions: Price Per Share Dividends 6-month Voluntary and Mandatory Conversion Liquidation Preference Seniority Voting Redemption Terms of the Warrants The Warrants are divided equally between the Series A Warrants and the Series B Warrants (i.e., with each being exercisable for an aggregate of 5,434,783 shares of Common Stock if all Closings occur), which represents fifty percent (50%) warrant coverage on the shares of Common Stock underlying the Series B Preferred Stock. The Warrants have been and will continue to be issued, pro rata in relation to the total investment in the Series B Preferred Stock, at each Closing. The Warrants are substantially identical in form, except that: (i) the exercise price per share of the Series A Warrants shall be $0.23 per share and the exercise price per share of the Series B Warrants shall be $0.275 per share (collectively, the “Warrant Exercise Price”) and (ii) The Series A Warrants shall have a term of two (2) years from the date of issuance and the Series B Warrants shall have term of five (5) years from the date of issuance. The Warrant Exercise Price shall be subject to customary stock-based, but not price-based, anti-dilution protection. The Warrants will not be eligible for “cashless” exercise. Amendment to Supply and License Agreement In connection with the Initial Closing, on January 10, 2018, the Company and Mayne Pharma entered into an amendment to the SLA to eliminate Mayne Pharma’s right to terminate the SLA if the Company fails to secure NDA approval for a SUBA-Itraconazole-based 60-day Mayne Pharma’s election to trigger the Mayne BCCNS Assumption Right shall not terminate the SLA or impact the Company’s ability to pursue other product development opportunities under and in accordance with the terms of the SLA. The Company BCCNS License includes: (i) a cash royalty to the Company from Mayne Pharma on all net sales of SUBA BCCNS in the United States, (ii) the forfeiture by Mayne Pharma under the Sublicense Agreement (as defined below) of (x) royalties from the Company with respect to SUBA BCCNS sales and (y) a portion of the milestone payments due by the Company to Mayne Pharma under the Sublicense Agreement and (iii) indemnification of the Company by Mayne Pharma for any claims incurred by the Company arising out of Mayne Pharma’s SUBA BCCNS activities following the exercise of the Mayne BCCNS Assumption Right. The term “Target Failure” means if: (i) the FDA has not accepted for filing the Company’s NDA for SUBA BCCNS by December 31, 2018, provided that such date shall be automatically extended in the event that such NDA is filed with FDA during December 2018 to a date which is 30 days from the date of such filing or (ii) the commercial launch of SUBA BCCNS is not achieved by June 30, 2020. The SLA Amendment also amends corresponding provisions of that certain Sublicense Agreement, dated August 31, 2015, between Mayne Pharma International Pty Ltd, an affiliate of Mayne Pharma (“Mayne Pharma International”), and the Company, in order to conform to the business terms agreed to in the SLA Amendment. |
Liquidity and management's plan
Liquidity and management's plans | 6 Months Ended |
Jun. 30, 2018 | |
Text Block [Abstract] | |
Liquidity and management's plans | 2. Liquidity and management’s plans: The Company had cash and cash equivalents of approximately $0.8 million as of June 30, 2018. Based on the Company’s current operational plan and budget (including the receipt of $1.6 million in July 2018 from Mayne Pharma following the Second Closing of the Financing as contemplated by the Purchase Agreement), the Company expects that it has sufficient cash to manage its business into approximately the second quarter of 2019, although this estimation assumes the Company does not build a commercial division, acquire other drug development opportunities, or otherwise face unexpected events, costs or contingencies, any of which could affect the Company’s cash requirements. Available resources may be consumed more rapidly than anticipated, potentially resulting in the need for additional funding. The Company intends to finance additional research and development, commercialization and distribution efforts and its working capital needs primarily through: • proceeds from public and private financings (including, most recently, financing from the Company’s majority shareholder, Mayne Pharma) and, potentially, from other strategic transactions; • proceeds from the exercise of outstanding warrants previously issued in private financings to investors (including, potentially, warrants held by the Company’s majority shareholder, Mayne Pharma); • potential partnerships with other pharmaceutical companies to assist in the supply, manufacturing and distribution of the Company’s 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 • government or private foundation grants or loans which would be awarded to the Company to further develop the Company’s current and future anti-cancer therapies. However, there is a 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 second quarter of 2019. In addition, a lack of adequate funds may force the Company to cease operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018, the Company had approximately $0.5 million in excess of the amount covered by Federal Deposit Insurance Corporation with one financial institution. Mezzanine Equity The Company issued Preferred Stock to Mayne Pharma pursuant to the Series B Preferred Stock Purchase Agreement. Based upon its initial analysis, the Company originally classified the proceeds from the sale of the Preferred Stock as permanent stockholders’ equity at March 31, 2018. Based on further analysis of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, which requires that conditionally redeemable securities be classified outside of permanent stockholders’ equity, the Company reclassified the original amount of the proceeds from the sale of these shares as mezzanine equity as reflected in the accompanying Condensed Balance Sheet at June 30, 2018 and Condensed Statement of Stockholders’ (Deficit) Equity and Redeemable Preferred Stock for the six months ended June 30, 2018 which resulted in no change to total assets, total liabilities, net loss, earnings per share, or cash flow. 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 In applying the Black-Scholes options pricing model for options issued in March 2018 (see note 4), the assumptions were as follows: 1) for the options vesting on the grant date – expected price volatility of 113.67%; risk-free interest rate of 2.64%; weighted average expected life of 5 years; and no dividend yield, and 2) for the options vesting on the first anniversary of the grant date – expected price volatility of 116.59%; risk-free interest rate of 2.64%; weighted average expected life of 5.5 years; and no dividend yield. In applying the Black-Scholes options pricing model for options issued in June 2018 (see note 4) which vest on the first anniversary of the grant date, the assumptions were as follows: expected price volatility of 112.6%; risk-free interest rate of 2.81%; weighted average expected life of 5.5 years; and no dividend yield 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: In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, In April 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-10, 2016-10 In June 2018, the FASB issued ASU 2018-07, 2018-07 Management has considered all recent accounting pronouncements issued, but not effective, and does not believe that they will have a significant impact on the Company’s financial statements. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Federal Home Loan Banks [Abstract] | |
Stockholders' Equity | 4. Stockholders’ Equity: Employee Stock Plans On March 13, 2018, as compensation for 2017 service, management was awarded 570,000 stock options pursuant to the Company’s 2014 Equity Incentive Plan (the “Plan”) with an exercise price of $0.2722 and Black-Scholes value of $0.22 per share that vested on the grant date. Independent Board members were awarded a total of 188,000 stock options pursuant to the Plan with an exercise price of $0.2722 and Black-Scholes value of $0.22 that also vested on the grant date. 75,000 common shares were issued to the former Secretary of the Company for the prior year’s service. In addition, Board members were awarded approximately 1.1 million stock options pursuant to the Plan with an exercise price of $0.2722 and Black-Scholes value of $0.23 that vest on the first anniversary of the grant date. The grant date fair value of common stock options was determined using the Black-Scholes model on the date of issuance and the number of shares expected to vest. The total Black-Scholes value of the March 13, 2018 stock options grants was approximately $0.4 million. On June 15, 2018, as compensation for 2018 service, Board members were awarded a total of 912,000 stock options pursuant to the Company’s 2014 Equity Incentive Plan (the “Plan”) with an exercise price of $0.33 and Black-Scholes value of $0.273 per share that vest on the first anniversary of the grant date. Total stock-based compensation for the six months ended June 30, 2018 was approximately $0.3 million and is primarily related to common stock options issued pursuant to the Plan in March and June 2018. The expense is classified as research and development expense and general and administrative expense in the accompanying condensed statements of operations. As of June 30, 2018, there were 3,424,000 outstanding common stock options under the Plan of which 1,408,000 were vested. There was approximately $0.4 million in unamortized stock-based compensation at June 30, 2018. |
Legal Proceedings
Legal Proceedings | 6 Months Ended |
Jun. 30, 2018 | |
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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 6. Subsequent Events: On July 5, 2018, the Company closed on a second tranche of funding from its majority shareholder, Mayne Pharma, as part of the Purchase Agreement executed in January 2018 as discussed further in note 1. On July 16, 2018, the Company signed an exclusive option agreement with the University of Connecticut to license rights to patents and patent applications covering certain chemical analogues of the FDA-approved anti-fungal drug itraconazole. The option agreement, which goes into effect on August 1, 2018, is for an exclusive option period of six months, which is extendible to twelve months. The optioned field of use includes all therapeutic, prophylactic, and diagnostic uses for cancerous and non-cancerous cell proliferation disorders in humans. The cost of the agreement, including the option period, are not material relative to the Company’s financial position or results of operations. |
Summary of Significant Accoun13
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 June 30, 2018, the Company had approximately $0.5 million in excess of the amount covered by Federal Deposit Insurance Corporation with one financial institution. |
Mezzanine Equity | Mezzanine Equity The Company issued Preferred Stock to Mayne Pharma pursuant to the Series B Preferred Stock Purchase Agreement. Based upon its initial analysis, the Company originally classified the proceeds from the sale of the Preferred Stock as permanent stockholders’ equity at March 31, 2018. Based on further analysis of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, which requires that conditionally redeemable securities be classified outside of permanent stockholders’ equity, the Company reclassified the original amount of the proceeds from the sale of these shares as mezzanine equity as reflected in the accompanying Condensed Balance Sheet at June 30, 2018 and Condensed Statement of Stockholders’ (Deficit) Equity and Redeemable Preferred Stock for the six months ended June 30, 2018 which resulted in no change to total assets, total liabilities, net loss, earnings per share, or cash flow. |
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 In applying the Black-Scholes options pricing model for options issued in March 2018 (see note 4), the assumptions were as follows: 1) for the options vesting on the grant date – expected price volatility of 113.67%; risk-free interest rate of 2.64%; weighted average expected life of 5 years; and no dividend yield, and 2) for the options vesting on the first anniversary of the grant date – expected price volatility of 116.59%; risk-free interest rate of 2.64%; weighted average expected life of 5.5 years; and no dividend yield. In applying the Black-Scholes options pricing model for options issued in June 2018 (see note 4) which vest on the first anniversary of the grant date, the assumptions were as follows: expected price volatility of 112.6%; risk-free interest rate of 2.81%; weighted average expected life of 5.5 years; and no dividend yield |
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: In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, In April 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-10, 2016-10 In June 2018, the FASB issued ASU 2018-07, 2018-07 Management has considered all recent accounting pronouncements issued, but not effective, 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) | Dec. 31, 2018USD ($) | Jul. 05, 2018USD ($)shares | Jan. 10, 2018USD ($)shares | Jan. 08, 2018USD ($)Closings$ / sharesshares | Jul. 31, 2018USD ($) | Jun. 30, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Common Stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, issued | shares | 0 | 0 | |||||
Mayne Pharma [Member] | Securities Purchase Agreement [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, potential gross proceeds | $ | $ 5,000,000 | ||||||
Number of closings | Closings | 3 | ||||||
Percentage of warrant coverage on shares of Common Stock | 50.00% | ||||||
Mayne Pharma [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, price per share of preferred stock to be issued | $ / shares | $ 0.23 | ||||||
Mayne Pharma [Member] | Securities Purchase Agreement [Member] | Series A Warrants [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Warrants issued to purchase common stock | shares | 5,434,783 | ||||||
Warrant expiration period | 2 years | ||||||
Exercise price of warrants | $ / shares | $ 0.23 | ||||||
Mayne Pharma [Member] | Securities Purchase Agreement [Member] | Series B Warrants [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Warrants issued to purchase common stock | shares | 5,434,783 | ||||||
Warrant expiration period | 5 years | ||||||
Exercise price of warrants | $ / shares | $ 0.275 | ||||||
Mayne Pharma [Member] | Securities Purchase Agreement [Member] | Series B Preferred Stock [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, preferred stock to be issued | shares | 7,246,377 | ||||||
Purchase Agreement, price per share of preferred stock to be issued | $ / shares | $ 0.69 | ||||||
Preferred stock dividend rate percentage | 5.00% | ||||||
Dividends payable nature | Dividends will be paid semi-annually as of June 30 (with a payment date of July 15) and December 31 (with a payment date of January 15) each year. The Company shall have the option in its discretion to pay dividends in cash or shares of Common Stock. If the Company elects to pay dividends in shares of Common Stock, the number of shares to be paid being calculated by dividing (i) the principal value of the dividend to be paid by (ii) the 6-month volume-weighted average price of the Common Stock prior to the measurement date (being December 31st, or June 30th) of the applicable year. | ||||||
Preferred stock convertible to common stock | shares | 21,739,131 | ||||||
Mayne Pharma [Member] | Securities Purchase Agreement [Member] | Series B Preferred Stock [Member] | Minimum [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, redemption period | 5 years | ||||||
Mayne Pharma [Member] | Initial Closing [Member] | Securities Purchase Agreement [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, gross proceeds | $ | $ 2,400,000 | ||||||
Preferred stock, issued | shares | 3,478,261 | ||||||
Warrants issued | $ | $ 5,217,392 | ||||||
Mayne Pharma [Member] | Second Closing [Member] | Securities Purchase Agreement [Member] | Subsequent Event [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, gross proceeds | $ | $ 1,600,000 | ||||||
Preferred stock, issued | shares | 2,318,841 | ||||||
Warrants issued | $ | $ 3,478,262 | ||||||
Mayne Pharma [Member] | Second Closing [Member] | Securities Purchase Agreement [Member] | Scenario, Forecast [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, potential gross proceeds | $ | $ 1,600,000 | ||||||
Mayne Pharma [Member] | Third Closing [Member] | Securities Purchase Agreement [Member] | Scenario, Forecast [Member] | |||||||
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items] | |||||||
Purchase Agreement, potential gross proceeds | $ | $ 1,000,000 |
Liquidity and Management's Pl15
Liquidity and Management's Plans - Additional Information (Detail) - USD ($) | Jan. 08, 2018 | Jul. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Bankruptcy [Line Items] | ||||||
Cash and cash equivalents | $ 795,757 | $ 344,113 | $ 1,643,407 | $ 6,885,422 | ||
Securities Purchase Agreement [Member] | Mayne Pharma [Member] | ||||||
Bankruptcy [Line Items] | ||||||
Purchase Agreement, potential gross proceeds | $ 5,000,000 | |||||
Scenario, Forecast [Member] | Second Closing [Member] | Securities Purchase Agreement [Member] | Mayne Pharma [Member] | ||||||
Bankruptcy [Line Items] | ||||||
Purchase Agreement, potential gross proceeds | $ 1,600,000 |
Summary of Significant Accoun16
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended |
Mar. 31, 2018 | Jun. 30, 2018 | |
Accounting Policies [Line Items] | ||
Cash, FDIC insured amount | $ 250,000 | |
Cash balance in excess of amount covered by Federal Deposit Insurance Corporation | $ 500,000 | |
Black-Scholes Option Pricing Model [Member] | Options vesting grant date [Member] | ||
Accounting Policies [Line Items] | ||
Volatility rate | 113.67% | |
Risk-free interest rate | 2.64% | |
Weighted average expected life (in years) | 5 years | |
Dividend yield | 0.00% | |
Black-Scholes Option Pricing Model [Member] | Options vesting on first anniversary of grant date [Member] | ||
Accounting Policies [Line Items] | ||
Volatility rate | 116.59% | 112.60% |
Risk-free interest rate | 2.64% | 2.81% |
Weighted average expected life (in years) | 5 years 6 months | 5 years 6 months |
Dividend yield | 0.00% | 0.00% |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | Jun. 15, 2018 | Mar. 13, 2018 | Jun. 30, 2018 | Jun. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total Stock based compensation expense | $ 292,196 | $ 1,837,869 | ||
Two Thousand Fourteen Equity Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options awarded, Shares | 570,000 | |||
Stock option exercise price | $ 0.2722 | |||
Stock-based compensation outstanding common stock options | 3,424,000 | |||
Total Stock based compensation expense | $ 300,000 | |||
Stock-based compensation vested common stock options | 1,408,000 | |||
Unamortized stock-based compensation | $ 400,000 | |||
Two Thousand Fourteen Equity Incentive Plan [Member] | Black-Scholes Option Pricing Model [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Black-Scholes value | $ 0.22 | |||
Stock options awarded, Value | $ 400,000 | |||
Two Thousand Fourteen Equity Incentive Plan [Member] | Independent Board members [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options awarded, Shares | 188,000 | |||
Stock option exercise price | $ 0.2722 | |||
Two Thousand Fourteen Equity Incentive Plan [Member] | Independent Board members [Member] | Black-Scholes Option Pricing Model [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Black-Scholes value | $ 0.22 | |||
Two Thousand Fourteen Equity Incentive Plan [Member] | Board Members [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options awarded, Shares | 1,100,000 | |||
Stock option exercise price | $ 0.2722 | |||
Stock option awards | 912,000 | |||
Exercise Share Price | $ 0.33 | |||
Two Thousand Fourteen Equity Incentive Plan [Member] | Board Members [Member] | Black-Scholes Option Pricing Model [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Black-Scholes value | $ 0.23 | |||
Shares to be issued, price per share | $ 0.273 | |||
Two Thousand Fourteen Equity Incentive Plan [Member] | Former Secretary [Member] | Common Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options issued | 75,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - University of Connecticut [Member] | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Event [Line Items] | |
Option agreement, Effective date | Aug. 1, 2018 |
Option agreement, Effective period | 6 months |
Option agreement, Effective extendibles period | 12 months |