Utah
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87-0652870
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(State or other jurisdiction of
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(I.R.S. employer
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incorporation or organization
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identification No.)
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Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer ¨ (Do not check if a smaller reporting company)
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Smaller reporting company x
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Page
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PART I - FINANCIAL INFORMATION
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Item 1.
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Financial Statements
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4
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Consolidated Balance Sheets
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4
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Consolidated Statements of Operations
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5
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Consolidated Statements of Cash Flows
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6
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Notes to Unaudited Consolidated Financial Statements Ending September 30, 2011
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7
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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12
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Item 3.
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Quantitative and Qualitative Disclosures about Market Risk
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21
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Item 4.
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Controls and Procedures
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21
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PART II - OTHER INFORMATION
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Item 1.
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Legal Proceedings
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22
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Item 1A.
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Risk Factors
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22
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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22
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Item 3.
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Defaults Upon Senior Securities
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22
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Item 4.
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(Removed and Reserved)
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22
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Item 5.
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Other Information
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22
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Item 6.
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Exhibits
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22
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September 30,
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December 31,
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|||||||
2011
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2010
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|||||||
(Unaudited)
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||||||||
ASSETS
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||||||||
Current assets
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||||||||
Cash
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$ | 983,286 | $ | 238,565 | ||||
Grants receivable
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- | 244,479 | ||||||
Prepaid drug product for testing
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- | 88,400 | ||||||
Other current assets
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52,026 | 72,993 | ||||||
Total current assets
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1,035,312 | 644,437 | ||||||
Other assets
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||||||||
Technology licenses - related party
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3,106,368 | 3,043,821 | ||||||
Less Accumulated Amortization
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(737,243 | ) | (579,754 | ) | ||||
2,369,125 | 2,464,067 | |||||||
TOTAL ASSETS
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$ | 3,404,437 | $ | 3,108,504 | ||||
LIABILITIES & SHAREHOLDERS' EQUITY
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||||||||
Current liabilities
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||||||||
Accounts payable
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43,135 | 88,400 | ||||||
Accrued expense
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111,862 | 84,141 | ||||||
Accrued license payments - related party
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50,000 | 74,217 | ||||||
Total current liabilities
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204,997 | 246,758 | ||||||
Long term debt
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- | - | ||||||
TOTAL LIABILITIES
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204,997 | 246,758 | ||||||
Shareholders' Equity
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||||||||
Preferred Stock, $.001 par value 10,000,000 shares authorized, no shares issued and outstanding
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- | - | ||||||
Common Stock, $.001 par value, 200,000,000 shares authorized 56,146,296 and 49,400,605 shares issued and outstanding as of 9/30/11 and 12/31/10, respectively
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56,146 | 49,401 | ||||||
Additional paid in capital
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11,745,990 | 9,719,147 | ||||||
Additional paid in capital for shares to be issued a/ b/
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142,000 | a/ | 278,600 | b/ | ||||
Accumulated deficit during development stage
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(8,744,696 | ) | (7,185,402 | ) | ||||
Total shareholders' equity
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3,199,440 | 2,861,746 | ||||||
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
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$ | 3,404,437 | $ | 3,108,504 | ||||
a/ Represents 473,334 shares of common stock
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||||||||
b/ Represents 928,667 shares of common stock
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Third Quarter
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Year to Date
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From inception
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||||||||||||||||||
July 1 to September 30
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January 1 to September 30
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05/10/07 to
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||||||||||||||||||
2011
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2010
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2011
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2010
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9/30/11
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Revenue
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$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Operating expense
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||||||||||||||||||||
Research and development a/
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127,109 | 235,346 | 458,803 | 587,104 | 3,048,687 | |||||||||||||||
Research and development - related party
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50,000 | - | 100,000 | - | 161,950 | |||||||||||||||
General & administrative b/
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327,380 | 265,942 | 1,002,191 | 832,518 | 5,850,742 | |||||||||||||||
Total operating expense
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504,489 | 501,288 | 1,560,994 | 1,419,622 | 9,061,379 | |||||||||||||||
Net operating loss
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$ | (504,489 | ) | $ | (501,288 | ) | $ | (1,560,994 | ) | $ | (1,419,622 | ) | $ | (9,061,379 | ) | |||||
Other income
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||||||||||||||||||||
Interest income
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870 | 236 | 2,171 | 1,283 | 75,575 | |||||||||||||||
Other income
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- | - | - | - | 244,479 | |||||||||||||||
Other expense
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(200 | ) | (285 | ) | (471 | ) | (753 | ) | (3,371 | ) | ||||||||||
Total Other Income
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670 | (49 | ) | 1,700 | 530 | 316,683 | ||||||||||||||
Net Loss
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$ | (503,819 | ) | $ | (501,337 | ) | $ | (1,559,294 | ) | $ | (1,419,092 | ) | $ | (8,744,696 | ) | |||||
Loss per share
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||||||||||||||||||||
Net loss per share, basic and diluted
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$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.21 | ) | |||||
Basic and diluted weighted average number of common shares outstanding
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56,146,296 | 49,083,806 | 52,398,690 | 47,752,807 | 42,353,075 |
a/
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Research and development expense includes stock option expenses of $17,406 and $36,176 for the quarters ending 9/30/2011 and 9/30/2010, respectively; $48,693 and $108,528 for the nine month periods ending 9/30/2011 and 9/30/2010, respectively; and $351,950 for the period from inception through 9/30/2011.
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b/
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General & administrative expense includes stock for services, stock option and warrant expenses of $105,491 and $106,534 for the quarters ending 9/30/2011 and 9/30/2010, respectively; $314,869 and $320,220 for the nine month periods ending 9/30/2011 and 9/30/2010, respectively; and for the period from inception through 9/30/2011 $2,579,063 for stock option and warrant expense and $300,000 in stock for services.
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From inception
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||||||||||||
January 1 to September 30
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05/10/2007 to
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2011
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2010
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9/30/2011
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CASH FLOW FROM OPERATING ACTIVITIES
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Net loss
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$ | (1,559,294 | ) | $ | (1,419,092 | ) | $ | (8,744,696 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities
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Amortization
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157,490 | 145,962 | 737,243 | |||||||||
Common stock issued for services
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- | - | 300,000 | |||||||||
Stock options and warrants
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363,562 | 428,748 | 2,931,013 | |||||||||
(Increase) decrease in assets
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Grants receivable
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244,479 | - | - | |||||||||
Drug product for testing
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88,400 | 77,262 | - | |||||||||
Other current assets
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20,967 | (35,614 | ) | (52,026 | ) | |||||||
Increase (decrease) in liabilities
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||||||||||||
Accounts payable and accrued expenses
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(41,761 | ) | (192,850 | ) | 204,997 | |||||||
Net cash used in operating activities
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(726,157 | ) | (995,584 | ) | (4,623,469 | ) | ||||||
CASH FLOW FROM INVESTING ACTIVITIES
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Purchase of exclusive license - related party
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(62,547 | ) | (175,437 | ) | (752,201 | ) | ||||||
Net cash used in investing activities
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(62,547 | ) | (175,437 | ) | (752,201 | ) | ||||||
CASH FLOW FROM FINANCING ACTIVITIES
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||||||||||||
Proceeds from convertible notes
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- | - | 435,000 | |||||||||
Cash repayment of convertible notes
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- | - | (15,000 | ) | ||||||||
Net proceeds from sale of common stock
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1,533,425 | 709,349 | 5,938,956 | |||||||||
Net cash from financing activities
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1,533,425 | 709,349 | 6,358,956 | |||||||||
NET INCREASE/(DECREASE) IN CASH
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744,721 | (461,672 | ) | 983,286 | ||||||||
Cash, beginning of period
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238,565 | 567,249 | - | |||||||||
Cash, end of period
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$ | 983,286 | $ | 105,577 | $ | 983,286 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
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Cash paid for
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||||||||||||
Interest
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$ | - | $ | - | $ | - | ||||||
Income taxes
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$ | - | $ | - | $ | - | ||||||
Non-cash financing activities
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||||||||||||
Common stock issued upon conversion of convertible notes
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$ | - | $ | - | $ | 420,000 | ||||||
Common stock issued to Placement Agent
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$ | 179,421 | $ | 117,300 | $ | 564,266 | ||||||
Common stock issued to M.D. Anderson for technology license
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$ | - | $ | - | $ | 2,354,167 | ||||||
Due diligence and commitment shares issued to Lincoln
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$ | - | $ | 202,580 | $ | 202,580 |
1)
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That the actual costs of a particular trial will come within our budgeted amount.
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2)
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That any trials will be successful or will result in drug commercialization opportunities.
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3)
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That we will be able to raise the sufficient funds to allow us to complete our planned clinical trials.
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·
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give Bio-Path ongoing access to MD Anderson’s Pharmaceutical Development Center for drug development;
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·
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provide rapid communication to Bio-Path of new drug candidate disclosures in the Technology Transfer Office;
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·
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standardize clinical trial programs sponsored by Bio-Path; and
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·
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standardize sponsored research under a master agreement addressing intellectual property sharing.
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1)
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Complete the Phase I clinical trial of our lead drug BP-100-1.01, which if successful, will validate our liposomal delivery technology for nucleic acid drug products including siRNA. In this Phase I trial, we will leverage MD Anderson’s pre-clinical and clinical development capabilities, including using the PDC for pre-clinical studies as well as clinical pharmacokinetics and pharmacodynamics and the institution’s world-renowned clinics, particularly for early clinical trials. This should allow us to develop our drug candidates with experienced professional staff at a reduced cost compared to using external contract laboratories. This should also allow us to operate in an essentially virtual fashion, thereby avoiding the expense of setting up and operating laboratory facilities, without losing control over timing or quality or IP contamination. Effective July 29, 2010, we began dosing of patients of this lead drug – BP-100-1.01 at MD Anderson;
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2)
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Perform necessary pre-clinical studies in our second liposomal antisense drug candidate, BP-100-1.02 to enable the filing of an Investigational New Drug (“IND”) for a Phase I clinical trial; and
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3)
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Out-license (non-exclusively) our delivery technology for either antisense or siRNA to a pharmaceutical partner to speed development of applications of our technology.
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1)
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Manage trials as if they were being done by Big Pharma: seamless transition; quality systems; documentation; and disciplined program management recognized by Big Pharma diligence teams; trials conducted, monitored and data collected consistent with applicable FDA regulations to maximize Bio-Path’s credibility and value to minimize time to gain registration by partner;
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2)
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Use our Scientific Advisory Board to supplement our management team to critically monitor existing programs and evaluate new technologies and/or compounds discovered or developed at MD Anderson, or elsewhere, for in-licensing;
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3)
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Hire a small team of employees or consultants: business development, regulatory management, and project management; and
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4)
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Outsource manufacturing and regulatory capabilities. Bio-Path will not need to invest its resources in building functions where it does not add substantial value or differentiation. Instead, it will leverage an executive team with expertise in the selection and management of high quality contract manufacturing and regulatory firms.
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·
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pre-clinical laboratory tests, pre-clinical studies in animals, formulation studies and the submission to the FDA of an investigational new drug application;
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·
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adequate and well-controlled clinical trials to establish the safety and efficacy of the drug;
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·
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the submission of a new drug application or biologic license application to the FDA; and
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·
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FDA review and approval of the new drug application or biologics license application.
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Exhibit No.
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Description of Exhibit
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3.1
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Restated Articles of Incorporation (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-A filed on September 10, 2008).
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3.2
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Bylaws (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-A filed on September 10, 2008).
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3.3
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Articles of Merger relating to the merger of Biopath Acquisition Corp. with and into Bio-Path, Inc. (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-K filed on February 19, 2008).
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3.4
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Amendment No. 1 to Bylaws (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-K filed on June 21, 2010)
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4.1
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Specimen Stock certificate (incorporated by reference to exhibit 3.2 to the registrant’s current report on Form 8-A filed on September 10, 2008)
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31*
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Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
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32*
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Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes Oxley Act of 2002.
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*
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Filed herewith.
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Dated: November 14, 2011
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BIO-PATH HOLDINGS, INC.
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By
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/s/ Peter H. Nielsen,
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Chief Executive Officer, President/Principal Executive
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Officer, Chief Financial Officer, Principal Financial Officer
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Date: November 14, 2011
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By:
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/s/ Peter H. Nielsen
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Peter H. Nielsen
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Chief Executive Officer
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(Principal Executive Officer)
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Chief Financial Officer
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(Principal Financial Officer)
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Date: November 14, 2011
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By:
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/s/ Peter H. Nielsen
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Peter H. Nielsen
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Chief Executive Officer
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Chief Financial Officer
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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 56,146,296 | 49,400,605 |
Common Stock, shares outstanding | 56,146,296 | 49,400,605 |
Additional paid in capital for shares to be issued, shares of common stock | 473,334 | 928,667 |
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | 53 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | ||||||||||
Revenue | ||||||||||||||
Operating expense | ||||||||||||||
General & administrative | 327,380 | [1] | 265,942 | [1] | 1,002,191 | [1] | 832,518 | [1] | 5,850,742 | [1] | ||||
Total operating expense | 504,489 | 501,288 | 1,560,994 | 1,419,622 | 9,061,379 | |||||||||
Net operating loss | (504,489) | (501,288) | (1,560,994) | (1,419,622) | (9,061,379) | |||||||||
Other income | ||||||||||||||
Interest income | 870 | 236 | 2,171 | 1,283 | 75,575 | |||||||||
Other income | 244,479 | |||||||||||||
Other expense | (200) | (285) | (471) | (753) | (3,371) | |||||||||
Total Other Income | 670 | (49) | 1,700 | 530 | 316,683 | |||||||||
Net Loss | (503,819) | (501,337) | (1,559,294) | (1,419,092) | (8,744,696) | |||||||||
Loss per share | ||||||||||||||
Net loss per share, basic and diluted | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.03) | $ (0.21) | |||||||||
Basic and diluted weighted average number of common shares outstanding | 56,146,296 | 49,083,806 | 52,398,690 | 47,752,807 | 42,353,075 | |||||||||
All Other | ||||||||||||||
Operating expense | ||||||||||||||
Research and development | 127,109 | [2] | 235,346 | [2] | 458,803 | [2] | 587,104 | [2] | 3,048,687 | [2] | ||||
Related Party Transactions | ||||||||||||||
Operating expense | ||||||||||||||
Research and development | $ 50,000 | $ 100,000 | $ 161,950 | |||||||||||
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Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 10, 2011 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | BPTH | |
Entity Registrant Name | BIO-PATH HOLDINGS INC | |
Entity Central Index Key | 0001133818 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 58,066,296 |
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Accrued Expense | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Accrued Expense |
5. Accrued Expense
As
of September 30, 2011, Current Liabilities included accrued expense
of $111,862. R&D expenses related to MD Anderson treating
patients in the Phase I clinical trial comprised $100,000 of this
amount. Accrued expenses for corporate communication and
travel to suppliers, meetings and conferences represented the
balance of accrued expenses.
|
Commitments and Contingencies | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Commitments and Contingencies |
10. Commitments
and Contingencies
Technology License – Related Party - The Company has
negotiated exclusive licenses from the MD Anderson Cancer Center to
develop drug delivery technology for antisense and siRNA drug
products and to develop liposome tumor targeting
technology. These licenses require, among other things,
the Company to reimburse MD Anderson for ongoing patent
expense. Accrued license payments totaling $50,000 are
included in Current Liabilities as of September 30,
2011. As of September 30, 2011, the Company estimates
reimbursable past patent expenses will total approximately $100,000
for the antisense license. The Company will be required
to pay when invoiced the patent expenses at the rate of $25,000 per
quarter.
Drug Supplier Project Plan - In June of 2008, Bio-Path
entered into a project plan agreement with a contract drug
manufacturing supplier for delivery of drug product to support
commencement of the Company’s Phase I clinical trial of its
first cancer drug product. The Company commenced this
trial and was enrolling patients by the end of the second quarter
2010. Previously in 2008 and 2009, the Company paid
$608,440 to this manufacturer and its drug substance raw material
supplier. During the first quarter 2011, $88,400
previously carried on the balance sheet as of December 31, 2010 as
prepaid drug product for testing was charged to R&D expense
after the manufacturer delivered the final lot of drug product
under this contract to the Company. As of June 30, 2011,
there were no further obligations under this drug supplier project
plan with the contract manufacturer. Subsequently, in
October of 2011, the Company entered into a new project plan
agreement with its contract manufacturing supplier for a batch of
drug product with expected delivery by year end. The
project plan requires the company to pay the supplier $177,440 for
this drug product.
|
Organization and Business | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Organization and Business |
1. Organization
and Business
Bio-Path
Holdings, Inc. (“Bio-Path” or the
“Company”) is a development stage company with its lead
cancer drug candidate, Liposomal Grb-2 (L-Grb-2 or BP-100-1.01),
currently in clinical trials. The Company was founded
with technology from The University of Texas, MD Anderson Cancer
Center (“MD Anderson”) dedicated to developing novel
cancer drugs under an exclusive license arrangement. The
Company has drug delivery platform technology with composition of
matter intellectual property that enables systemic delivery of
antisense and formulation intellectual property for small
interfering RNA (“siRNA”). Bio-Path has also
licensed liposome tumor targeting technology, which has the
potential to be developed to augment the Company’s current
delivery technology to improve further the effectiveness of its
antisense and siRNA drugs under development as well as future
liposome-based delivery technology drugs. In addition to
its existing technology under license, the Company expects to
maintain a close working relationship with key members of the MD
Anderson staff, which has the potential to provide Bio-Path with a
strong pipeline of promising drug candidates in the
future. Bio-Path also expects to broaden its technology
to include cancer drugs other than antisense and siRNA, including
drug candidates licensed from institutions other than MD
Anderson.
Bio-Path
believes that its core technology, if successful, will enable it to
be at the center of emerging genetic and molecular target-based
therapeutics that require systemic delivery of DNA and RNA-like
material. The Company’s two lead liposomal
antisense drug candidates treat acute myeloid leukemia, chronic
myelogenous leukemia, acute lymphoblastic leukemia and follicular
lymphoma, and if successful, could potentially be used in treating
many other indications of cancer.
Bio-Path
is currently treating patients with its lead cancer drug candidate
Liposomal Grb-2 (L-Grb-2 or BP-100-1.01) in a Phase I clinical
trial. In March of 2010, Bio-Path received written
notification from the U. S. Food and Drug Administration (the
“FDA”) that its application for Investigational New
Drug (“IND”) status for L-Grb-2 had been
granted. This enabled the Company to commence its Phase
I clinical trial to study L-Grb-2 in human patients, which began in
the third Quarter 2010.
The
Phase I clinical trial is a dose-escalating study to determine the
safety and tolerance of escalating doses of L-Grb-2. The
study will also determine the optimal biologically active dose for
further development. The pharmacokinetics of L-Grb-2 in
patients will be studied, making it possible to investigate whether
the delivery technology performs as expected based on pre-clinical
studies in animals. The trial will evaluate five doses
of L-Grb-2 given to between 18 to 30 evaluable
patients. An evaluable patient is a patient who is able
to complete the four-week treatment cycle. The clinical
trial is being conducted at The University of Texas MD Anderson
Cancer Center.
Patients
eligible for enrollment into the Phase I clinical trial have
refractory or relapsed Acute Myeloid Leukemia (AML), Philadelphia
Chromosome Positive Chronic Myelogenous Leukemia (CML) and Acute
Lymphoblastic Leukemia (ALL), or Myelodysplastic Syndrome (MDS) and
who have failed other approved treatments. These are
patients with very advanced stages of the disease, and
consequently, not all patients enrolled are able to complete the
four-week treatment cycle because of progressive disease, which is
unrelated to the treatment with
Liposomal-Grb-2. Enrollment continued in the Phase I
clinical trial through the end of the third
quarter 2011.
At
the end of July 2011, the sixth evaluable patient completed the
full treatment cycle. This completed requirements for
the first cohort. The Company, its medical advisors and
the Principal Investigator agreed that the data demonstrated that
Liposomal Grb-2 was safe enough to proceed to the next cohort of
the trial, which will treat patients in the trial with a dose that
is double the dose used in the first cohort. As a result
of this review, the first cohort was closed and the second cohort
was opened for recruiting patients into the clinical
trial. As of the end of September 2011, enrollment
continued in the second cohort of the clinical trial.
The
Principal Investigator for the Phase I clinical trial, Dr. Jorge
Cortes, is a leading expert in the treatment of CML, AML and
ALL. Because the results of the first cohort produced
unexpected and clinically interesting results in some patients, the
Principal Investigator prepared an abstract of the results of the
first cohort that was submitted in for review and potential
inclusion at the American Hematology Society annual meeting in
December. Subsequently, Dr. Cortes was notified that the
abstract was accepted for presentation as a poster at the
meeting.
The
Company expects that the Phase I clinical trial will be completed
during 2012. Since, at the Principal
Investigator’s recommendation, some patients who are
benefiting from the treatment are being placed on continuing
therapy beyond the requirements of the clinical trial, additional
expenses may be incurred as the Company is required to supply drug
at no charge for the continuing treatment. Additional
costs to completion of the Phase I clinical trial are estimated to
range from $500,000 to $1.0 million. Bio-Path believes
it has sufficient resources and access to additional resources if
needed to meet its obligations in this regard.
An
important outcome for the Phase I clinical trial is the ability to
assess for the first time the performance of the Company’s
delivery technology platform in human patients. The
Company has developed two new assays to be able to provide
scientific proof of concept of the delivery
technology. The first involves a novel detection method
for the drug substance in blood samples that will be used to assess
the pharmacokinetics of the drug. The second involves a
method to measure the amount of down regulation of the target
protein in a patient blood sample that was achieved. The
latter measurement will provide critical proof that the neutral
liposome delivery technology delivered the drug substance to the
cell and was able to transport it across the cell membrane into the
interior to block cellular production of the Grb-2
protein.
Being
platform technology, a successful demonstration of the delivery
technology in this study will allow the Company to immediately
begin expanding Bio-Path’s drug candidates by applying the
delivery technology template to multiple new drug product
targets. In this manner, Bio-Path believes that it can
quickly build an attractive drug product pipeline with multiple
drug product candidates for treating cancer as well as treating
other important diseases, such as diabetes, cardiovascular
conditions and neuromuscular disorders.
The
Company was founded in May of 2007 as a Utah
corporation. In February of 2008, Bio-Path completed a
reverse merger with Ogden Golf Co. Corporation, a public company
traded over the counter that had no current
operations. The name of Ogden Golf was changed to
Bio-Path Holdings, Inc. and the directors and officers of Bio-Path,
Inc. became the directors and officers of Bio-Path Holdings,
Inc. Bio-Path has become a publicly traded company
(symbol OTCBB: BPTH) as a result of this
merger. The Company’s operations to date
have been limited to organizing and staffing the Company,
acquiring, developing and securing its technology and undertaking
product development for a limited number of product candidates
including readying and now conducting a Phase I clinical trial in
its lead drug product candidate BP-100-1.01.
At
the end of the third quarter 2011, the Company had $983,286 in cash
on hand as of September 30, 2011, including $142,000 raised through
investors’ exercise of warrants. The Company plans
to begin raising significant amounts of additional development
capital at anticipated higher share prices once there is
demonstration of proof-of-concept of Bio-Path’s technology in
human patients.
As
the Company has not begun its planned principal operations of
commercializing a product candidate, the accompanying financial
statements have been prepared in accordance with principles
established for development stage enterprises.
|
Additional Paid In Capital For Shares To Be Issued | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Additional Paid In Capital For Shares To Be Issued |
7. Additional Paid In Capital For Shares To Be
Issued
In
November and December of 2010, the Company sold shares of common
stock for $278,600 in cash to investors pursuant to a private
placement memorandum. These shares were not issued by
the December 31, 2010 year end. At the end of the second
quarter 2011, the Company closed this offering and issued 928,667
shares of common stock to these investors. At the end of
September 2011, the Company raised $142,000 through
investors’ exercise of warrants to purchase shares of common
stock for cash. These shares were not issued by the
September 30, 2011 end of the quarter. Subsequently in
October of 2011, 473,334 shares of common stock were issued to
these investors.
|
New Accounting Pronouncements | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
New Accounting Pronouncements |
12. New Accounting Pronouncements
From
time to time, new accounting pronouncements are issued by FASB that
are adopted by the Company as of the specified effective
date. If not discussed, management believes that the
impact of recently issued standards, which are not yet effective,
will not have a material impact on the Company’s financial
statements upon adoption.
|
Stockholders' Equity | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Stockholders' Equity |
8. Stockholders’
Equity
Issuance of Common Stock – In May and June of 2007,
the Company issued 6,505,994 shares of common stock for $6,506 in
cash to founders of the Company. In August of 2007, the
Company issued 3,975,000 shares of common stock for $993,750 in
cash to investors in the Company pursuant to a private placement
memorandum. In August of 2007 the Company issued an
additional 1,333,334 shares of common stock for $1,000,000 in cash
to investors in the Company pursuant to a second round of
financing. The Company issued 530,833 in common stock to
the Placement Agent as commission for the shares of common stock
sold to investors. In November of 2007, the Company
issued 3,138,889 shares in common stock to MD Anderson as partial
consideration for its two technology licenses from MD
Anderson.
In
February of 2008, the Company completed a reverse merger with Ogden
Golf Co. Corporation and issued 38,023,578 shares of common stock
of the public company Bio-Path Holdings (formerly Ogden Golf Co.
Corporation) in exchange for pre-merger common stock of Bio-Path,
Inc. In addition, shareholders of Ogden Golf Co.
Corporation retained 3,600,000 shares of common stock of Bio-Path
Holdings. In February of 2008 Bio-Path issued 80,000
shares of common stock to strategic consultants pursuant to
executed agreements and the fair value was expensed upfront as
common stock for services. In April of 2008, the Company
issued 200,000 shares of common stock to a firm in connection with
introducing Bio-Path, Inc. to its merger partner Ogden Golf Co.
Corporation. The fair value of this stock issuance was
expensed upfront as common stock for services valued at
$180,000. In April of 2008, the Company recorded an
additional 24 shares for rounding in accordance with FINRA
rules. In December of 2008, the Company issued 100,000
shares of common stock to an investor relations firm for
services. The fair value of this stock issuance was
expensed upfront as common stock for services valued at
$40,000. There were no issuances of shares during the
first quarter of 2009. In June of 2009, the Company
issued 660,000 shares of common stock and warrants to purchase an
additional 660,000 shares of common stock for $165,000 in cash to
investors in the Company pursuant to a private placement
memorandum. The warrants must be exercised within two
years from the date of issuance. The exercise price of the warrants
is $1.50 a share. In connection with this private
placement, the Company issued 66,000 shares of common stock to the
Placement Agent as commission for the shares of common stock sold
to investors. There were no issuances of shares during
the fourth quarter of 2009.
In
November and December of 2009, the Company sold shares of common
stock and warrants to purchase shares of common stock for $675,000
in cash to investors pursuant to a private placement
memorandum. These shares were not issued by the December
31, 2009 year end. In January 2010, the Company issued
these investors 2,700,000 shares of common stock and warrants to
purchase an additional 2,700,000 shares of common
stock. The warrants must be exercised within two years
from the date of issuance. The exercise price of the warrants is
$1.50 a share. In January 2010, the Company also sold an
additional 900,000 shares of common stock and warrants to purchase
an additional 900,000 shares of common stock for $225,000 in cash
to investors in the Company pursuant to a private placement
memorandum. The warrants must be exercised within two
years from the date of issuance and the exercise price is $1.50 a
share. In connection with these private placement sales
of equity, the Company issued 360,000 shares of common stock to the
Placement Agent as commission for the shares of common stock sold
to investors.
In
May of 2010, the Company issued 780,000 shares of common stock and
warrants to purchase an additional 780,000 shares of common stock
for $273,000 in cash to investors in the Company pursuant to a
private placement memorandum. The warrants must be
exercised within two years from the date of issuance. The exercise
price of the warrants is $1.50 a share. In connection
with this private placement, the Company issued 78,000 shares of
common stock to the Placement Agent as commission for the shares of
common stock sold to investors.
In
June of 2010, the Company signed an equity purchase agreement for
up to $7 million with Lincoln Park Capital Fund, LLC
(“LPC”), a Chicago-based institutional
investor. Under the terms of the equity purchase
agreement, the Company has the right to sell shares of its common
stock to LPC from time to time over a 24-month period in amounts
between $50,000 and $1,000,000 up to an aggregate amount of $7
million depending upon certain conditions set forth in the purchase
agreement including that a registration statement related to the
transaction has been declared effective by the U.S. Securities and
Exchange Commission (“SEC”). As a result, a
registration statement was filed and later declared effective by
the SEC on July 12, 2010. Upon signing the agreement,
the Company received $200,000 from LPC as an initial purchase in
exchange for 571,429 shares (“Initial Purchase Shares”)
of the Company’s common stock and warrants to purchase
571,429 shares of the Company’s common stock at an exercise
price of $1.50 per share. Subsequent purchases of the
Company’s common stock by Lincoln Park under the agreement do
not include warrants. In connection with the signing of
the LPC financing agreement, the Company issued LPC 12,000 shares
of the Company’s common stock for its due diligence efforts
and 566,801 shares of the Company’s common stock as a
commitment fee for the balance of the $7 million equity purchase
commitment.
In
July of 2010, the Company received $150,000 from LPC in exchange
for 375,000 shares of the Company’s common
stock. LPC was also issued 6,251 shares of the
Company’s common stock as a commitment fee in connection with
the purchase of the 375,000 shares of common stock. No
warrants to purchase additional shares of common stock of the
Company were issued to Lincoln in connection with the sale of the
common stock.
In
September of 2010, the Company received $50,000 from LPC in
exchange for 125,000 shares of the Company’s common
stock. LPC was also issued 2,084 shares of the
Company’s common stock as a commitment fee in connection with
the purchase of the 125,000 shares of common stock. No
warrants to purchase additional shares of common stock of the
Company were issued to Lincoln in connection with the sale of the
common stock.
In
October of 2010, the Company received $50,000 from LPC in exchange
for 135,135 shares of the Company’s common
stock. LPC was also issued 2,084 shares of the
Company’s common stock as a commitment fee in connection with
the purchase of the 135,135 shares of common stock. No
warrants to purchase additional shares of common stock of the
Company were issued to Lincoln in connection with the sale of the
common stock.
In
November of 2010, the Company received $50,000 from LPC in exchange
for 135,135 shares of the Company’s common
stock. LPC was also issued 2,084 shares of the
Company’s common stock as a commitment fee in connection with
the purchase of the 135,135 shares of common stock. No
warrants to purchase additional shares of common stock of the
Company were issued to Lincoln in connection with the sale of the
common stock.
From
November 2010 through April of 2011 the Company sold shares of
common stock for $1,794,205 in cash to investors pursuant to a
private placement memorandum. In June of 2011, the
Company issued 5,980,685 shares of common stock to these
investors. In connection with this private placement, in
June of 2011 the Company issued 598,069 shares of common stock to
the Placement Agent as commission for the shares of common stock
sold to investors. No warrants to purchase additional
shares of common stock of the Company were issued to these
investors in connection with the sale of the common
stock.
In
June of 2011, the Company received $50,000 from LPC in exchange for
164,853 shares of the Company’s common stock. LPC
was also issued 2,084 shares of the Company’s common stock as
a commitment fee in connection with the purchase of the 164,853
shares of common stock. No warrants to purchase
additional shares of common stock of the Company were issued to
Lincoln in connection with the sale of the common
stock.
As
of September 30, 2011, there were 56,146,296 shares of common stock
issued and outstanding. There are no preferred shares
outstanding as of September 30, 2011.
|
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Accrued License Payments - Related Party | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Accrued License Payments - Related Party |
6. Accrued License Payments – Related
Party
Accrued
license payments – related party totaling $50,000 were
included in Current Liabilities as of September 30,
2011. This amount represents patent expenses and
maintenance fees for the licensed technology from the MD Anderson
Cancer Center. It is expected that the accrued license
payments will be made to MD Anderson in 2011.
|
Related Party | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Related Party |
2. Related Party
Based
on its stock ownership in the Company, MD Anderson Cancer Center
meets the criteria to be deemed a related party of Bio-Path
Holdings. In the third quarter ending September 30,
2011, MD Anderson received $25,000 in cash from the Company for
patent expenses previously accrued and related to the
Company’s Technology License, plus an additional $50,000 in
expense was accrued for R&D related clinical trial
expense. As of September 30, 2011, the Company had
accrued expenses due to the related party totaling $150,000,
comprised of $50,000 in accrued license payments related to the
Company’s Technology License and $100,000 in accrued R&D
related expense for the clinical trial. See Note
6.
|
Prepaid Drug Product for Testing | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Prepaid Drug Product for Testing |
3. Prepaid Drug Product for
Testing
Advance
payments, including nonrefundable amounts, for goods or services
that will be used or rendered for future R&D activities are
deferred and capitalized. Such amounts will be
recognized as an expense as the related goods are delivered or the
related services are performed. The Company incurred
installments to its contract drug manufacturing and raw material
suppliers totaling $88,400 during 2010 pursuant to a Project Plan
and Supply Agreement (see Note 11.) for the manufacture and
delivery of the Company’s lead drug product for testing in a
Phase I clinical trial. This amount was carried on the
Balance Sheet as of December 31, 2010 at cost as Prepaid Drug
Product for Testing and was expensed when the drug product was
received by the Company in 2011. As of September 30,
2011, the Company had supplies of drug product on hand for use in
the clinical trial estimated to be sufficient for requirements
through the end of 2011.
|
Subsequent Events | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Subsequent Events |
11. Subsequent Events
In
October of 2011, the Company raised $434,000 through
investors’ exercise of warrants to purchase common stock for
cash. Including the $142,000 exercise of warrants by
investors at the end of September of 2011, the Company raised
$576,000 through investors exercising warrants to purchase common
stock for cash during the end of September through October 2011
timeframe. A total of 1,920,000 shares were issued to
these investors. No cash or stock commissions were owed
from these equity sales.
In
October of 2011, the Company entered into a new project plan
agreement with its contract manufacturing supplier for a batch of
drug product with expected delivery by year end. The
project plan requires the Company to pay the supplier $177,440 for
this drug product. See Note 10.
|
Grants Receivable | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Grants Receivable |
4. Grants Receivable
As
of December 31, 2010, Current Assets included grants receivable of
$244,479. This represents a grant award that Bio-Path
received in October 2010 for its application to receive grant
funding from the U.S. Government’s Qualifying Therapeutic
Discovery Project Program. The Company received these
grant funds during the first week of February 2011.
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | 53 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | |
Research and Development Expense | |||||
Equity compensation | $ 17,406 | $ 36,176 | $ 48,693 | $ 108,528 | $ 351,950 |
Amortization expenses | 53,017 | 49,953 | 157,490 | 145,962 | 737,243 |
General and Administrative Expense | |||||
Equity compensation | 105,491 | 106,534 | 314,869 | 320,220 | |
Stock option and warrant expense | 2,579,063 | ||||
Stock for services | $ 300,000 |
Basis of Presentation | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Basis of Presentation | The
accompanying interim financial statements have been prepared with
the instructions to Form 10-Q pursuant to the rules and regulations
of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete
presentation of our financial position, results of operations, cash
flows, and stockholders’ equity in conformity with generally
accepted accounting principals. In the opinion of management, all
adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and
all such adjustments are of a normal recurring
nature. The unaudited quarterly financial statements
should be read in conjunction with the audited financial statements
and notes thereto included in the Annual Report on Form 10-K of
Bio-Path Holdings, Inc. (together with its subsidiary, the
“Company”) as of and for the fiscal year ended December
31, 2010. The results of operations for the period ended
September 30, 2011, are not necessarily indicative of the results
for a full-year period. |
Stock Options and Warrants | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Stock Options and Warrants |
9. Stock Options and
Warrants
Stock Options - There were no stock option awards in
2010. Total stock option expense for the year 2010
totaled $477,356.
In
February of 2011 the Company granted a stock option to purchase in
the aggregate 20,000 shares of the Company’s common
stock. Terms of the stock option grant require, among
other things, that the individual continues to provide services
over the vesting period of the option, which is four years from the
date that the option was granted. The exercise price of
the option is $0.53 a share, which was the closing price of the
common stock at the date of grant. The stock option
grant was not for current management and officers of the
Company. The Company determined the fair value of the
stock options granted using the Black Scholes model and expenses
this value monthly based upon the vesting schedule of the stock
option award. For purposes of determining fair value,
the Company used an average annual volatility of one hundred sixty
six percent (166%), which was calculated based on the closing price
of the Company’s stock over the preceding five
years. The risk free rate of interest used in the model
was taken from a table of the market rate of interest for U. S.
Government Securities for the date of the stock option award and
the effective term. The Company used
the simplified method to determine the expected term of the options
due to the lack of historical data. The
total value of the stock option granted was determined using this
methodology to be $10,260, which is being expensed over the four
years following the date of grant based on the stock option vesting
schedule.
Total
stock option expense for the first quarter of 2011 totaled
$119,981. Of this amount, $15,205 related to stock
options for personnel involved in R&D activities and $104,776
related to stock options for management involved in general and
administrative functions.
In
June of 2011 the Company made two stock option grants to purchase
in the aggregate 125,000 shares of the Company’s common stock
for service as a director of the Company and for consulting
services. Terms of the stock option grant
require, among other things, that the individual continues to
provide services over the vesting period of the option, which is
one year from the date of grant for the director service stock
option and four years from the date of grant for the consulting
service stock option. The exercise price of the options
is $0.33 a share, which was the closing price of the common stock
at the date of grant. The stock option grants were not
for current management and officers of the Company. The
Company determined the fair value of the stock options granted
using the Black Scholes model and expenses this value monthly based
upon the vesting schedule of the stock option award. For
purposes of determining fair value, the Company used an average
annual volatility of one hundred sixty two percent (162%), which
was calculated based on the closing price of the Company’s
stock over the preceding five years. The risk free rate
of interest used in the model was taken from a table of the market
rate of interest for U. S. Government Securities for the date of
the stock option award and the effective term. The
Company used the simplified method to determine the expected term
of the options due to the lack of historical
data. The total fair value of the stock
option granted was determined using this methodology to be $39,600,
which is being expensed following the date of grant based on the
stock option vesting schedule.
Total
stock option expense for the second quarter of 2011 totaled
$120,684. Of this amount, $16,082 related to stock
options for personnel involved in R&D activities and $104,602
related to stock options for management involved in general and
administrative functions and directors.
There
were no stock option grants in the third quarter of
2011. Total stock option expense for the third quarter
of 2011 totaled $122,897. Of this amount, $17,406
related to stock options for personnel involved in R&D
activities and $105,491 related to stock options for
management involved in general and administrative functions and
directors.
Warrants - There were no warrants for services granted in
2010 and there was no warrant expense for the year
2010. There were no warrants for services granted in the
year 2011 through the third quarter of 2011 and there was no
warrant expense in the year 2011 through the third quarter of
2011. Warrants previously issued in connection with the
sale of units of common stock were for cash value received and as
such were not grants of compensation-based warrants.
|