UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: September 30, 2014
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number:
CONTRAVIR PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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46-2783806 |
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(State or Other Jurisdiction of Incorporation or Organization) |
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(I.R.S. Employer Identification No.) |
399 Thornall Street, First Floor, Edison, New Jersey
(Address of principal executive offices) (Zip Code)
(732) 902-4000
(Registrant’s telephone number)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o |
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Accelerated filer o |
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Non-accelerated filer o |
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Smaller reporting company x |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of the registrant’s shares of common stock outstanding was 22,237,397 as of November 10, 2014.
CONTRAVIR PHARMACEUTICALS, INC.
FORM 10-Q
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for ContraVir Pharmaceuticals Inc. may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are characterized by future or conditional verbs such as “may,” “will,” “expect,” “intend,” “anticipate,” believe,” “estimate” and “continue” or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. Such statements are only predictions and our actual results may differ materially from those anticipated in these forward-looking statements. We believe that it is important to communicate future expectations to investors. However, there may be events in the future that we are not able to accurately predict or control. Factors that may cause such differences include, but are not limited to, those discussed under Item 1A. Risk Factors and elsewhere the audited financial statements as of and for the period ended June 30, 2014 contained in the Company’s Annual Report on Form 10-K (“Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on September 29, 2014. These factors include the uncertainties associated with product development, the risk that products that appeared promising in early clinical trials do not demonstrate safety and efficacy in larger-scale clinical trials, the risk that we will not obtain approval to market our products, the risks associated with dependence upon key personnel and the need for additional financing. We do not assume any obligation to update forward-looking statements as circumstances change and thus you should not unduly rely on these statements.
CONTRAVIR PHARMACEUTICALS, INC.
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September 30, 2014 |
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June 30, 2014 |
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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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$ |
735,426 |
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$ |
1,817,757 |
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Prepaid expenses |
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158,019 |
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164,421 |
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Total Current Assets |
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893,445 |
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1,982,178 |
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Property and equipment, net |
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55,582 |
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14,526 |
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Other assets |
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55,544 |
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4,200 |
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Total Assets |
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$ |
1,004,571 |
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$ |
2,000,904 |
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LIABILITIES AND STOCKHOLDER’S EQUITY (DEFICIT) |
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Current Liabilities: |
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Accounts payable |
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$ |
213,331 |
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$ |
243,896 |
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Accrued expenses |
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244,438 |
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207,915 |
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Due to Synergy |
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6,928 |
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6,928 |
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Total Current Liabilities |
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464,697 |
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458,739 |
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Derivative financial instruments, at estimated fair value-warrants |
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— |
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4,475,345 |
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Total Liabilities |
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464,697 |
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4,934,084 |
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Stockholders’ Equity (Deficit): |
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Preferred stock, par value $0.0001 per share. Authorized 20,000,000 shares, none issued and outstanding. |
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— |
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— |
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Common stock, par value of $.0001 per share. Authorized 120,000,000 shares, issued and outstanding 22,237,397 and 18,479,279 shares at September 30, 2014 and June 30, 2014, respectively |
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2,228 |
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1,848 |
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Additional paid-in capital |
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7,429,388 |
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2,486,309 |
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Accumulated deficit |
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(6,891,742 |
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(5,421,337 |
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Total Stockholders’ Equity (Deficit) |
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539,874 |
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(2,933,180 |
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Total Liabilities and Stockholders’ Equity (Deficit) |
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$ |
1,004,571 |
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$ |
2,000,904 |
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The accompanying notes are an integral part of these condensed financial statements.
CONTRAVIR PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
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Three Months Ended |
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September 30, 2014 |
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September 30, 2013 |
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Revenues |
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$ |
— |
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$ |
— |
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Costs and Expenses: |
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Research and development |
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384,057 |
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13,638 |
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General and administrative |
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698,450 |
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166,713 |
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Loss from Operations |
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(1,082,507 |
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(180,351 |
) | ||
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Interest expense |
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— |
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(1,711 |
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Change in fair value of derivative instruments-warrants |
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(387,898 |
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— |
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Total Other Loss |
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(387,898 |
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(1,711 |
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Net loss |
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$ |
(1,470,405 |
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$ |
(182,062 |
) |
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Weighted Average Common Shares Outstanding |
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Basic and Diluted |
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20,211,376 |
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9,000,000 |
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Net Loss per Common Share |
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Basic and Diluted |
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$ |
(0.07 |
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$ |
(0.02 |
) |
The accompanying notes are an integral part of these condensed financial statements.
CONTRAVIR PHARMACEUTICALS, INC.
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
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Common |
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Common |
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Additional |
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Accumulated |
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Total |
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Balance June 30, 2014 |
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18,479,279 |
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$ |
1,848 |
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$ |
2,486,309 |
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$ |
(5,421,337 |
) |
$ |
(2,933,180 |
) |
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Stock based compensation expense |
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— |
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— |
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112,012 |
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— |
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112,012 |
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Stock options granted in excess of authorized limit |
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— |
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— |
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(31,796 |
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— |
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(31,796 |
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Restricted common shares issued in exchange of warrants |
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3,794,118 |
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380 |
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4,862,863 |
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— |
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4,863,243 |
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Net loss for the period |
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— |
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— |
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— |
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(1,470,405 |
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(1,470,405 |
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Balance September 30, 2014 |
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22,273,397 |
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$ |
2,228 |
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$ |
7,429,388 |
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$ |
(6,891,742 |
) |
$ |
539,874 |
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The accompanying notes are an integral part of these condensed financial statements.
CONTRAVIR PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
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Three Months Ended |
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Three Months Ended |
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September 30, 2014 |
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September 30, 2013 |
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Cash Flows From Operating Activities: |
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Net loss |
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$ |
(1,470,405 |
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$ |
(182,062 |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock based compensation expense |
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112,012 |
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— |
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Change in fair value of derivative instrument-warrants |
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387,898 |
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— |
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Interest expense on note payable to parent |
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— |
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1,711 |
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Depreciation expense |
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2,739 |
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— |
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Changes in operating assets and liabilities: |
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Accounts payable, accrued expenses and due to Synergy |
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(25,838 |
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69,639 |
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Prepaid expenses and other assets |
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(44,942 |
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— |
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Total Adjustments |
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431,869 |
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71,350 |
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Net Cash used in Operating Activities |
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(1,038,536 |
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(110,712 |
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Cash Flows From Investing Activities: |
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Additions to property and equipment |
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(43,795 |
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— |
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Net Cash Used in Investing Activities |
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(43,795 |
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— |
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Cash Flows From Financing Activities: |
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Borrowings under demand note payable to Synergy |
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— |
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100,000 |
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Net Cash provided by Financing Activities |
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— |
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100,000 |
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Net decrease in cash |
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(1,082,331 |
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(10,712 |
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Cash at beginning of period |
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1,817,757 |
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86,716 |
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Cash at end of period |
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$ |
735,426 |
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$ |
76,004 |
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Supplementary disclosure of non cash transactions: |
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Cash paid for taxes |
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$ |
— |
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$ |
— |
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Cash paid for interest |
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$ |
— |
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$ |
— |
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The accompanying notes are an integral part of these condensed financial statements.
CONTRAVIR PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Business Overview
ContraVir Pharmaceuticals Inc. (“ContraVir” or the “Company”) is a biopharmaceutical company focused primarily on the clinical development of FV-100 to treat herpes zoster (HZ), or shingles, which is an infection caused by the reactivation of varicella zoster virus (VZV) or “chickenpox”.
2. Basis of Presentation and Going Concern
These unaudited condensed financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and United States generally accepted accounting principles (“GAAP”) for interim reporting. In the opinion of management, the accompanying unaudited financial statements include all adjustments, which include only normal recurring adjustments, necessary to present fairly ContraVir’s interim financial information. The accompanying unaudited financial statements should be read in conjunction with the audited financial statements as of and for the period ended June 30, 2014 contained in the Company’s Annual Report on Form 10-K (“Form 10-K”) filed with the Securities and Exchange Commission (“SEC”) on September 29, 2014.
Separation from Synergy Pharmaceuticals Inc.
On August 8, 2013, Synergy Pharmaceuticals Inc. (“Synergy”) announced that it intended to separate its FV-100 assets from the remainder of its businesses through a pro rata distribution of the common stock of the entity holding the assets and liabilities associated with the FV-100 product candidate. ContraVir was incorporated in Delaware on May 15, 2013 for the purpose of holding such businesses as a wholly owned subsidiary of Synergy.
On January 28, 2014, the Synergy board of directors approved the distribution of the 9,000,000 issued and outstanding shares of ContraVir’s common stock currently held by Synergy on the basis of 0.0986 shares of our common stock for each share of Synergy common stock held on the record date. On January 28, 2014, Synergy declared a dividend of ContraVir common stock. On the distribution date of February 18, 2014, Synergy stockholders of record as of the close of business on February 6, 2014 received .0986 shares of ContraVir common stock for every 1 share of Synergy common stock they held. Fractional shares were not issued. Synergy stockholders received cash in lieu of fractional shares.
From February 6, 2014, ContraVir is no longer a wholly owned subsidiary of Synergy.
Going Concern
As of September 30, 2014, ContraVir had $735,426 in cash. Net cash used in operating activities was $1,038,536 for the three months ended September 30, 2014. Net loss for the three months ended September 30, 2014 was $1,470,405. As of September 30, 2014, ContraVir had working capital of $428,748.
These unaudited financial statements have been prepared under the assumption that the Company will continue as a going concern. ContraVir’s ability to continue as a going concern is dependent upon its ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to generate revenue. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
ContraVir will be required to raise additional capital within the next year to continue the development and commercialization of its current product candidate and to continue to fund operations at its current cash expenditure levels. ContraVir cannot be certain that additional funding will be available on acceptable terms, or at all. Any debt financing, if available, may involve restrictive covenants that impact ContraVir’s ability to conduct business. If ContraVir is unable to raise additional capital when required or on acceptable terms, ContraVir may have to (i) significantly delay, scale back or discontinue the development and/or commercialization of its product candidate; (ii) seek collaborators for product its candidate at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that ContraVir would otherwise seek to develop or commercialize ourselves on unfavorable terms.
On May 13, 2014, the Company filed a registration statement on Form S-1 with the SEC for a public offering of shares of its common stock and the Company has retained an underwriter for this proposed offering. On September 26, 2014, the Company formally requested the SEC to withdraw the registration statement on Form S-1.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP 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 expenses during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates.
Cash
As of September 30, 2014 and June 30, 2014, the amount of cash was approximately $0.7 million and $1.8 million, respectively, consisting of checking accounts held at U.S. commercial banks. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced losses related to these balances.
Fair Value of Financial Instruments
ASC Topic 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances.
ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three-tier fair value hierarchy that distinguishes among the following:
· Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.
· Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.
· Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Financial instruments consist of cash, accounts payable and derivative instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short term nature, except for derivative instruments, which were marked to market at the end of each reporting period. See Note 7, Derivative Financial Instruments, for additional information.
3. Recent Accounting Pronouncements
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about it’s ability to continue as a going concern. The pronouncement is effective for annual reporting periods ending after December 15, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.
4. Stockholder’s Equity (Deficit)
On February 4, 2014, ContraVir entered into a securities purchase agreement with accredited investors to sell securities and raise gross proceeds of $3,225,000 in a private placement and incurred expenses of approximately $15,000 related to this placement. The Company sold 9,485,294 units to the investors with each unit consisting of one share of our common stock and one warrant to purchase an additional one half share of our common stock. The purchase price paid by the investor was $0.34 for each unit. The warrants expire after six years and are exercisable at $0.37 per share. Based upon our analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity” the Company has determined that the warrants issued in connection with this financing transaction must be recorded as derivative liabilities upon issuance and marked to market on a quarterly basis. Upon the issuance of these warrants the fair value of $879,557 was recorded as derivative liability warrants. The warrants were converted to 3,794,118 shares of common stock in August 2014. See Note 7 for additional information regarding these warrants.
5. Accounting for Shared-Based Payments
ASC Topic 718 “Compensation—Stock Compensation” requires companies to measure the cost of employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award.
ContraVir accounts for stock options issued to non-employees based on the fair value of the stock option, if that value is more reliably measurable than the fair value of the consideration or services received. The Company accounts for stock options issued and vesting to non-employees in accordance with ASC Topic 505-50 “Equity -Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Accordingly the fair value of these options is being “marked to market” quarterly until the measurement date is determined.
ASC Topic 718 requires that cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for options exercised (excess tax benefits) be classified as cash inflows from financing activities and cash outflows from operating activities. Due to ContraVir’s accumulated deficit position, no excess tax benefits have been recognized. ContraVir accounts for stock options granted to employees and non-employees based on the fair market value of the instrument, using the Black-Scholes option pricing model based on assumptions for expected stock price volatility, term of the option, risk-free interest rate and expected dividend yield, at the grant date.
On June 3, 2013, ContraVir adopted the 2013 Equity Incentive Plan (the “Plan”). Stock options granted under the Plan typically will vest after three years of continuous service from the grant date and will have a contractual term of ten years. ContraVir has reserved 1,500,000 shares of common stock issuable pursuant to the Plan. As of September 30, 2014 the Company issued 841,270 options over the authorized number of options in the Plan. As per ASC Topic 815-40, the options have been accounted for as liabilities and recorded at fair value with the changes in fair value being recorded in the Company’s statement of operations. Once stockholder approval is obtained to increase the number of authorized shares, the liability will then be reversed into additional paid in capital. As of September 30, 2014, the total share-based payment liability is $69,274, which amount is included in accrued expenses.
For the quarter ended September 30, 2014, ContraVir recorded the following stock based compensation expense:
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Three months |
| |
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General and administrative |
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$ |
92,004 |
|
|
Research and development |
|
20,008 |
| |
|
Total stock based compensation expense |
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$ |
112,012 |
|
No stock based compensation expense was recorded during the period ended September 30, 2013, as there were no options granted as of that date.
A summary of stock option activity and of changes in stock options outstanding under the Plan is presented below:
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Number of |
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Exercise Price |
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Weighted Average |
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Intrinsic |
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Weighted Average |
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Balance outstanding, July 1, 2014 |
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2,341,270 |
|
$ |
0.11- $2.37 |
|
$ |
1.61 |
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$ |
633,200 |
|
2.95 years |
|
|
Granted |
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— |
|
— |
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— |
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— |
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— |
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Exercised |
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— |
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— |
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— |
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— |
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— |
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Forfeited |
|
40,000 |
|
0.11 — 2.35 |
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1.30 |
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— |
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— |
| |||
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Balance outstanding, September 30, 2014 |
|
2,301,270 |
|
$ |
0.11- $2.37 |
|
$ |
1.59 |
|
$ |
402,880 |
|
2.72 years |
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Exercisable at September 30, 2014 |
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230,000 |
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$ |
0.37 |
|
$ |
0.37 |
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$ |
151,800 |
|
|
|
There were no options granted during the quarter ended September 30, 2014.
As of September 30, 2014, the unrecognized compensation cost related to authorized non-vested stock options outstanding, net of expected forfeitures, was approximately $1.1 million to be recognized over a weighted-average remaining vesting period of approximately 2.4 years.
6. Income Taxes
ContraVir records a valuation allowance against deferred tax assets to the extent that it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Due to the substantial doubt related to ContraVir’s ability to continue as a going concern and utilize its deferred tax assets, a valuation allowance for the full amount of the deferred tax assets has been established at September 30, 2014. As a result of this valuation allowance there are no income tax benefits reflected in the accompanying statements of operations to offset pre-tax losses.
ContraVir has no uncertain tax positions subject to examination by the relevant tax authorities as of September 30, 2014 because no tax returns have yet been filed for the period May 15, 2013 (inception) to September 30, 2014. ContraVir will file U.S. and state income tax returns in jurisdictions with varying statutes of limitations.
7. Derivative Financial Instruments
Effective February 4, 2014, the Company adopted provisions of ASC Topic 815-40, “Derivatives and Hedging: Contracts in Entity’s Own Equity” (“ASC Topic 815-40”). ASC Topic 815-40 clarifies the determination of whether an instrument issued by an entity (or an embedded feature in the instrument) is indexed to an entity’s own stock, which would qualify as a scope exception under ASC Topic 815-10.
Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, ContraVir has determined that certain warrants issued in connection with sale of its common stock must be classified as derivative instruments. In accordance with ASC Topic 815-40, the fair value of these warrants is being re-measured at each balance sheet date and any resultant changes in fair value is being recorded in the Company’s statement of operations.
On August 20, 2014, Contravir, consummated its offer (the “Offer”) to exchange an aggregate 4,742,648 outstanding common stock purchase warrants (the “Warrants”) owned by certain investors in the Company for an aggregate 3,794,118 shares of restricted common stock. The Warrants were exercisable at $0.37 per share. The Company issued the Warrants in a private placement transaction in reliance on the exemption from registration provided by Rule 506 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). In connection with such transactions, the holders of the Warrants represented that they were “accredited investors.” Similarly, the issuance of the shares of the Company’s common stock in connection with the exchange of the Warrants was exempt from registration under the Securities Act pursuant to Rule 506 of Regulation D. In connection with the Offer, the holders of the Warrants represented that they were “accredited investors.” The Warrants were revalued on August 20, 2014, immediately prior to conversion increasing the liability by $387,898 to $4,863,243 which was recorded on the change in fair value of warrants on the statement of operations. The liability was extinguished when the restricted shares were issued that had a fair value of $4,552,924 (using $1.20 per share, which was the stock price on August 20, 2014) by recording the offset to additional paid in capital.
The following table sets forth the components of changes in the ContraVir’s’s derivative financial instruments liability balance for the periods indicated:
|
Date |
|
Description |
|
Warrants |
|
Derivative |
| |
|
7/1/2014 |
|
Balance of derivative financial instruments liability |
|
4,742,648 |
|
$ |
4,475,345 |
|
|
|
|
Fair value of new warrants issued during the quarter |
|
— |
|
$ |
— |
|
|
|
|
Change in fair value of warrants immediately prior to conversion, recognized as other expense in the statement of operations |
|
— |
|
387,898 |
| |
|
|
|
Amounts reclassified to additional paid-in capital |
|
4,742,648 |
|
$ |
(4,863,243 |
) |
|
9/30/2014 |
|
Balance of derivative financial instruments liability |
|
— |
|
$ |
— |
|
ContraVir’s warrants contained a price protection clause which variable term required the Company to use a binomial model to determine fair value. The range of assumptions used to determine the fair value of the warrants at period end on August 20, 2014 was as follows:
|
|
|
As of August 20, 2014 |
|
|
Estimated fair value of ContraVir common stock |
|
$1.20 |
|
|
Expected warrant term (years) |
|
5.46 years |
|
|
Risk-free interest rate |
|
1.75% |
|
|
Expected volatility |
|
88% |
|
|
Dividend yield |
|
— |
|
In the Binomial model, the assumption for estimated fair value of the stock is based on a Black-Scholes based apportionment of the unit price paid for the shares and warrants issued in ContraVir’s recent private placement, which resulting stock prices were deemed to be arms-length negotiated prices. Because the ContraVir has a limited trading history in its common stock, the Company based expected volatility on that of comparable public development stage biotechnology companies. The warrants have a transferability provision and based on guidance provided in SAB 107 for instruments issued with such a provision, ContraVir used the full contractual term as the expected term of the warrants. The risk free rate is based on the U.S. Treasury security rates for maturities consistent with the expected remaining term of the warrants.
8. Due to Synergy
On July 8, 2013, ContraVir entered into a Shared Services Agreement, as amended and restated August 5, 2013, with Synergy, effective May 16, 2013. Under the Shared Services Agreement, Synergy has provided and/or made available to us various administrative, financial, accounting, insurance, office, information technology and other services to be provided by, or on behalf of, Synergy, together with such other services as reasonably requested by us. In consideration for such services, we have paid fees to Synergy for the services provided, and those fees will generally be in amounts intended to allow the party providing services to recover all of its direct and indirect costs incurred in providing those services. The personnel performing services under the Shared Services Agreement are employees and/or independent contractors of Synergy and are not under our direction or control. These personnel costs are based upon the actual percentages of time spent by Synergy personnel performing services for us under the Shared Services Agreement. ContraVir reimburses Synergy for direct out-of-pocket costs incurred by Synergy for third party services provided to the Company. Effective April 1, 2014, ContraVir terminated the Shared Services Agreement with Synergy.
As of September 30, 2014 and June 30, 2014, the balances due to Synergy on shared services and allocated expenses are comprised of the following amounts:
|
|
|
September 30, 2014 |
|
June 30, 2014 |
| ||
|
|
|
|
|
|
| ||
|
Legal, patent and corporate |
|
$ |
— |
|
$ |
— |
|
|
Salaries and benefits |
|
— |
|
— |
| ||
|
Financial advisory fees |
|
— |
|
— |
| ||
|
Insurance |
|
— |
|
— |
| ||
|
Temporary labor |
|
1,454 |
|
1,454 |
| ||
|
Rent, utilities, and property taxes |
|
5,474 |
|
5,474 |
| ||
|
Other |
|
— |
|
— |
| ||
|
Total Shared Services |
|
$ |
6,928 |
|
$ |
6,928 |
|
9. Loss per Share
Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC Topic 260”) for all periods presented. In accordance with ASC Topic 260, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. The following table sets forth the computation of basic and diluted net loss per share for the periods indicated:
|
|
|
Three months ended |
| ||||
|
|
|
September |
|
September 30, |
| ||
|
Net loss |
|
$ |
(1,470,405 |
) |
$ |
(182,062 |
) |
|
Weighted average common shares outstanding |
|
20,211,376 |
|
9,000,000 |
| ||
|
Net loss per share of common stock—basic and diluted |
|
$ |
(0.07 |
) |
$ |
(0.02 |
) |
The following outstanding securities at September 30, 2014 and 2013 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti-dilutive:
|
|
|
Three months ended |
| ||
|
|
|
September 30, |
|
September 30, |
|
|
Options |
|
2,301,270 |
|
— |
|
|
Warrants |
|
— |
|
— |
|
|
Total |
|
2,301,270 |
|
— |
|
10. Subsequent event
On October 14, 2014, the Company closed a private offering of Series A Convertible Preferred Stock (the “Series A”) and issued 900,000 shares of Series A preferred shares at $10.00 per share, generating gross proceeds of approximately $9,000,000. The Company has also granted the purchaser of the option to purchase up to an additional 350,000 shares of Series A prior to February 28, 2015. The Series A are classified as permanent equity in accordance with ASC Topic 480, Distinguishing Liabilities from Equity. The following table sets forth the pro-forma effect on the financial position of the Company had the transaction taken place on September 30, 2014:
|
|
|
Effect of |
| |||||||
|
|
|
September 30, 2014 |
|
October 14, 2014 |
|
September 30, 2014 |
| |||
|
($000’s) except share amounts |
|
As Reported |
|
Series A Preferred |
|
Pro-Forma |
| |||
|
Cash |
|
$ |
735 |
|
$ |
9,000 |
|
$ |
9,735 |
|
|
Total Assets |
|
$ |
1,005 |
|
$ |
9,000 |
|
$ |
10,005 |
|
|
Total Liabilities |
|
$ |
465 |
|
$ |
0 |
|
$ |
465 |
|
|
Total stockholders’ equity |
|
540 |
|
9,000 |
|
9,540 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
1,005 |
|
$ |
9,000 |
|
$ |
10,005 |
|
|
Preferred Shares Outstanding |
|
— |
|
900,000 |
|
900,000 |
| |||
|
Common Shares Outstanding |
|
22,273,397 |
|
— |
|
22,273,397 |
| |||
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our condensed financial statements and other financial information appearing elsewhere in this quarterly report. In addition to historical information, the following discussion and other parts of this quarterly report contain forward-looking statements. You can identify these statements by forward-looking words such as “plan,” “may,” “will,” “expect,” “intend,” “anticipate,” believe,” “estimate” and “continue” or similar words. Forward-looking statements include information concerning possible or assumed future business success or financial results. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. We believe that it is important to communicate future expectations to investors. However, there may be events in the future that we are not able to accurately predict or control. Accordingly, we do not undertake any obligation to update any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
The forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties set forth under “Risk Factors” in our Annual Report on Form 10-K (“Form 10-K”) as of and for the year ended June 30, 2014 filed with the United States Securities and Exchange Commission (“SEC”). Accordingly, to the extent that this Report contains forward-looking statements regarding the financial condition, operating results, business prospects or any other aspect of us, please be advised that our actual financial condition, operating results and business performance may differ materially from that projected or estimated by us in forward-looking statements, and you should not unduly rely on such statements.
JOBS Act
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
· requirement to provide only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure;
· reduced disclosure about our executive compensation arrangements;
· no non-binding advisory votes on executive compensation or golden parachute arrangements; and
· exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
We have irrevocably elected not to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the JOBS Act, and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the distribution; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.
To the extent that we continue to qualify as a “smaller reporting company,” as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, after we cease to qualify as an emerging growth company, certain of the exemptions available to us as an emerging growth company may continue to be available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years.
Business Overview
We are a biopharmaceutical company focused primarily on the clinical development of FV-100 to treat herpes zoster (HZ), or shingles, which is an infection caused by reactivation of varicella zoster virus (VZV).
FV-100
FV-100 is an orally available, small molecule, nucleoside analogue pro-drug of CF-1743 that we are developing for the treatment of herpes zoster, which is an infection caused by the reactivation of varicella zoster virus or VZV. VZV is responsible for producing the infectious disease known as chicken pox in individuals upon initial exposure to the virus. After the initial infection, the virus can remain dormant in nerve endings for many years and if reactivated, causes a painful rash called shingles. FV-100 is being developed specifically for the treatment of shingles. Nucleoside analogs are capable of disrupting replication of the virus. FV-100 is a pro-drug of CF-1743, which enables us to take advantage of FV-100’s more readily absorbed properties compared to CF-1743 when given orally. FV-100 is then broken down to the active moiety, CF-1743, upon entry into the blood stream. Published preclinical studies demonstrate that FV-100 is significantly more potent against VZV than currently marketed compounds acyclovir, valacyclovir, and famciclovir, the FDA-approved drugs used for the treatment of shingles. Preclinical studies, including wash-out studies in VZV-infected human embryonic lung cells following exposure to FV-100 or acyclovir, conducted by Inhibitex and specific cellular antiviral activity experiments comparing FV-100 to acyclovir conducted by Balzarini et al (Biochimica et Biophysica Acta, 1587 pages 287-295) further demonstrate that FV-100 has a more rapid onset of antiviral activity, and may fully inhibit the replication of VZV more rapidly than these drugs at significantly lower concentration levels. In addition, pharmacokinetic data from completed Phase 1 and 2 clinical trials suggest that FV-100 has the potential to demonstrate antiviral activity when dosed orally once-a-day at significantly lower blood levels than valacyclovir, acyclovir, and famciclovir.
A Phase 2 clinical trial for FV-100 in shingles patients was conducted by Inhibitex and completed in December 2010. This trial represented the first evaluation of FV-100 in shingles patients, and was a well-controlled double blind study comparing two different doses of FV-100 to an active control dose of valacyclovir. A total of 350 patients, aged 50 years and older, were enrolled in one of three treatment arms: 200 mg FV-100 administered once daily; 400 mg FV-100 administered once daily; and 1,000 mg valacyclovir administered three times per day. In addition to further evaluating its safety and tolerability, the main objectives of the trial were to evaluate the potential therapeutic benefit of FV-100 in reducing the severity and duration of shingles-related pain, the incidence of post-herpetic neuralgia (PHN) (burning pain that follows healing of the shingles rash), and the time to lesion healing.
The primary endpoint for the FV-100 study was a 25% reduction in the severity and duration of shingles-related pain during the first 30 days as compared to valacyclovir. The trial missed its primary endpoint which was an endpoint developed by Inhibitex specifically for this trial called “burden of illness over the first 30 days” (BOI—30), as the results from the study did not meet statistical significance with respect to this endpoint. However, numerically favorable treatment differences with respect to the primary endpoint were observed, particularly in those patients that received 400 mg FV-100 relative to valacyclovir patients. Valacyclovir gave a BOI—30 of 118.0 days (6.25). In comparison, 400 mg FV-100 gave a BOI—30 of 110.3 days (6.08), which constitutes a 7% reduction over the value observed for valacyclovir over the first 30 days. As this was a Phase 2 study, we will be able to use this information to help design future clinical studies, as well as discussing future study designs with FDA and regulatory authorities worldwide. There were also favorable, non-statistically significant treatment differences observed for key secondary pain endpoints, including reduction in the severity and duration of shingles-associated pain over 90 days (a 14% relative reduction for 400 mg FV-100 as compared to valacyclovir), and the incidence of PHN (a 39% relative reduction for 400 mg FV-100 as compared to valacyclovir). The secondary endpoints were not powered to demonstrate statistically significant treatment differences between the arms. FV-100 was generally well tolerated at both dose levels, and demonstrated a similar adverse event profile as compared to valacyclovir.
We are currently reviewing the clinical data from the Phase 2 trial and performing post hoc analyses, conducting additional market research, including unmet medical need, reimbursement, pricing, and competitive analyses, etc. We are also evaluating a number of clinical, regulatory and commercial pathways for the potential future development of FV-100. Based upon the analyses of the completed Phase 2 study coupled with the additional market research, we are developing a comprehensive clinical strategy for future development of FV-100 which is being implemented in 2014. Inhibitex filed for an IND (IND 102,011) on March 19, 2008, which was approved by the FDA on April 20, 2008. This IND was transferred from Inhibitex to its new sponsor, Synergy, on August 27, 2012 and was subsequently transferred to us in April 2014. As a result of this transfer, we will be able to run all clinical trials required to support FV-100 for the use in the treatment of shingles.
Separation from Synergy Pharmaceuticals Inc.
On August 8, 2013, Synergy announced that it intended to separate its FV-100 assets from the remainder of its businesses through a pro rata distribution of the common stock of an entity holding the assets and liabilities associated with the FV-100 product candidate. We were incorporated in Delaware on May 15, 2013 for the purpose of holding such businesses and were previously a subsidiary of Synergy.
On January 28, 2014, the Synergy board of directors approved the distribution of the 9,000,000 issued and outstanding shares of our common stock currently held by Synergy on the basis of 0.0986 shares of our common stock for each share of Synergy common stock held on
the record date. On January 28, 2014, Synergy declared a dividend of our common stock. On the distribution date of February 18, 2014, Synergy stockholders of record as of the close of business on February 6, 2014 received .0986 shares of our common stock for every 1 share of Synergy common stock they held. None of our fractional shares were issued. Synergy stockholders received cash in lieu of fractional shares.
We are no longer a wholly-owned subsidiary of Synergy and Synergy retains no ownership interest in us.
We will incur increased costs as a result of becoming an independent, publicly-traded company, primarily from higher charges than in the past from Synergy for shared services and from establishing or expanding the corporate support for our businesses, including information technology, human resources, treasury, tax, risk management, accounting and financial reporting, investor relations, legal, procurement and other services. In the first year following the separation, these annual operating costs are estimated to be significantly higher than the general corporate expenses historically allocated from Synergy to us.
We do not anticipate that increased costs solely from becoming an independent, publicly traded company will have an adverse effect on our growth rate in the future.
FINANCIAL OPERATIONS OVERVIEW
From May 15, 2013 (inception) through September 30, 2014, we have sustained cumulative net losses of approximately $6.9 million. From inception through September 30, 2014, we have not generated any revenue from operations and expect to incur additional losses to perform further research and development activities and do not currently have any commercial biopharmaceutical products. We do not expect to have such for several years, if at all.
On February 4, 2014, we entered into a securities purchase agreement with accredited investors to sell securities and raise gross proceeds of $3,225,000 in a private placement and incurred expenses of approximately $15,000 related to this placement. We sold 9,485,294 units to the investors with each unit consisting of one share of our common stock and one warrant to purchase an additional one half share of our common stock. The purchase price paid by the investor was $0.34 for each unit. The warrants expire after six years and are exercisable at $0.37 per share. On August 20, 2014, the warrants were exchanged for common stock.
Our product development efforts are thus in their early stages and we cannot make estimates of the costs or the time they will take to complete. The risk of completion of any program is high because of the many uncertainties involved in bringing new drugs to market including the long duration of clinical testing, the specific performance of proposed products under stringent clinical trial protocols, the extended regulatory approval and review cycles, our ability to raise additional capital, the nature and timing of research and development expenses and competing technologies being developed by organizations with significantly greater resources.
CRITICAL ACCOUNTING POLICIES
Financial Reporting Release No. 60 requires all companies to include a discussion of critical accounting policies or methods used in the preparation of financial statements. Our accounting policies are described in ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA of our Annual Report on Form 10-K (“Form 10-K”) as of and for year ended June 30, 2014, filed with the SEC on September 29, 2014. There have been no changes to our critical accounting policies since June 30, 2014.
OFF-BALANCE SHEET ARRANGEMENTS
We had no off-balance sheet arrangements as of September 30, 2014.
RECENT ACCOUNTING PRONOUNCEMENTS
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about it’s ability to continue as a going concern. The pronouncement is effective for annual reporting periods ending after December 15, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.
RESULTS OF OPERATIONS
Comparison of Three Months Ended September 30, 2014 and 2013
|
|
|
Three months ended |
|
|
| |||||
|
|
|
September 30, |
|
September 30, |
|
Change |
| |||
|
Revenues |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
Costs and Expenses: |
|
|
|
|
|
|
| |||
|
Research and development |
|
384,057 |
|
13,638 |
|
370,419 |
| |||
|
General and administrative |
|
698,450 |
|
166,713 |
|
531,737 |
| |||
|
Loss from operations |
|
(1,082,507 |
) |
(180,351 |
) |
(902,156 |
) | |||
|
Other income (expense): |
|
|
|
|
|
|
| |||
|
Change in fair value of warrant liability |
|
(387,898 |
) |
— |
|
(387,898 |
) | |||
|
Interest expense |
|
— |
|
(1,711 |
) |
1,711 |
| |||
|
Total other income (expense) |
|
(387,898 |
) |
(1,711 |
) |
(386,187 |
) | |||
|
Net loss |
|
$ |
(1,470,405 |
) |
$ |
(182,062 |
) |
$ |
(1,288,343 |
) |
We had no revenues during the three months ended September 30, 2014 or 2013 because we do not have any commercial biopharmaceutical products and we do not expect to have such products for several years, if at all.
General and administrative expenses for the three months ended September 30, 2014 and 2013 amounted to $698,450 and $166,713, respectively, which were primarily corporate legal and accounting services related to our formation, patent maintenance and independent audit of our financial statements.
Research and development expenses for the three months ended September 30, 2014 and 2013 amounted to $384,057 and $13,638, respectively, which were primarily scientific advisory fees and clinical data storage.
Net loss for the three months ended September 30, 2014 and 2013 was approximately $1.5 million and $0.2 million, respectively, which was a result of the operating expenses discussed above, and a loss resulting from the change in fair value of derivative instruments-warrants of approximately $0.4 million the three months ended September 30, 2014.
LIQUIDITY AND CAPITAL RESOURCES
The following table summarizes our cash flows for the three months ended September 30, 2014 and 2013:
|
|
|
Three months ended |
| ||||
|
|
|
September 30, |
|
September 30, |
| ||
|
Net cash (used in) provided by: |
|
|
|
|
| ||
|
Operating activities |
|
$ |
(1,038,536 |
) |
$ |
(110,712 |
) |
|
Investing activities |
|
(43,795 |
) |
— |
| ||
|
Financing activities |
|
— |
|
100,000 |
| ||
|
Net decrease in cash |
|
$ |
(1,082,331 |
) |
$ |
(10,712 |
) |
As of September 30, 2014, we had $0.7 million in cash. Net cash used in operating activities was approximately $1.0 million for the year ended September 30, 2014. As of September 30, 2014, we had working capital of $0.4 million, as compared to a working capital deficit of $0.1 million as of September 30, 2013.
On June 5, 2013, we entered into a Loan and Security Agreement with Synergy pursuant to which Synergy agreed to lend us up to five hundred thousand dollars ($500,000) for working capital purposes (the “Loan Agreement”). On November 18, 2013, we entered into an amendment to the Loan Agreement with Synergy pursuant to which Synergy agreed to increase the aggregate amount available to us under the Loan Agreement from five hundred thousand dollars ($500,000) to one million dollars ($1,000,000). As of September 30, 2014, borrowings under the Note were zero. On March 27, 2014, we paid Synergy an aggregate of $461,236, which represented all principal and accrued and unpaid interest that was due and payable on the Note.
On February 4, 2014, we entered into a securities purchase agreement with accredited investors to sell securities and raise gross proceeds of $3,225,000 in a private placement. We sold 9,485,294 units to the investors with each unit consisting of one share of our common stock and one warrant to purchase an additional one half share of our common stock. The purchase price paid by the investor was $0.34 for each unit. The warrants expire after six years and are exercisable at $0.37 per share. Based upon our analysis of the criteria contained in ASC Topic 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity” we have determined that the units issued in connection with this financing transaction must be recorded as derivative liabilities upon issuance and marked to market on a quarterly basis. The warrants were converted into shares of common stock in August 2014.
In October 2014, we authorized the sale and issuance of up to 1,250,000 shares of Series A Convertible Preferred Stock (the “Series A”). On October 14, 2014, we closed on the sale of the Series A and issued 900,000 shares at $10.00 per share, generating gross proceeds of approximately $9,000,000.
Operating and Capital Expenditure Requirements
As of September 30, 2014, we had an accumulated deficit of $6.9 million, and expect to incur significant and increasing operating losses for the next several years as we expand our research, development and clinical trials of FV-100. We are unable to predict the extent of any future losses or when we will become profitable, if at all.
We will be required to raise additional capital to continue the development and commercialization of current product candidates and to continue to fund operations at the current cash expenditure levels. We cannot be certain that additional funding will be available on acceptable terms, or at all. Recently worldwide economic conditions and the international equity and credit markets have significantly deteriorated and may remain difficult for the foreseeable future. These developments will make it more difficult to obtain additional equity or credit financing, when needed. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize its self on unfavorable terms.
Our unaudited financial statements as of September 30, 2014 have been prepared under the assumption that we will continue as a going concern. Our independent registered public accounting firm has issued a report on our audited June 30, 2014 financial statements that included an explanatory paragraph referring to our recurring losses from operations and stockholder’s deficit; and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming available. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, attain further operating efficiencies and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Contractual Obligations
In August 2014, we entered into a new lease for new corporate office space in Edison, New Jersey. The following table summarizes annual rentals for each of the following fiscal years:
|
|
|
Total |
|
2015 |
|
2016 |
|
2017 |
|
2018 |
|
2019 and |
| ||||||
|
Lease obligation |
|
$ |
641,551 |
|
$ |
124,033 |
|
$ |
126,172 |
|
$ |
128,310 |
|
$ |
130,449 |
|
$ |
132,587 |
|
We do not have any other material contractual obligations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2014. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, as of September 30, 2014, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are not effective, due to weaknesses in our financial closing process. We intend to implement remedial measures designed to address the ineffectiveness of our disclosure controls and procedures.
Changes in Internal Control over Financial Reporting
As required by Rule 13a-15(d) of the Exchange Act, our management, including our principal executive officer and our principal financial officer, conducted an evaluation of the internal control over financial reporting to determine whether any changes occurred during the quarter ended September 30, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, our principal executive officer and principal financial officer concluded there were no such changes during the quarter ended September 30, 2014.
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3.1 |
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Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock of Contravir Pharmaceuticals, Inc. filed with the Secretary of State of the State of Delaware on October 14, 2014 (incorporated by reference to Exhibit 3.1 to Form 8-K filed on October 15, 2014). |
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10.1 |
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Form of Stock Purchase Agreement (incorporated by reference to Exhibit 10.1 to Form 8-K filed on October 15, 2014). |
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31.1 |
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Certification of Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act. |
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31.2 |
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Certification of Principal Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act. |
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32.1 |
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Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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32.2 |
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Certification of Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101 |
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Financial statements from the quarterly report on Form 10-Q of the Company for the quarter ended September 30, 2014, filed on, formatted in Extensible Business Reporting Language (XBRL): (i) the Statements of Operations, (ii) the Balance Sheets, (iii) the Statement of Stockholders Equity (iv) the Statements of Cash Flows and (v) the Notes to Financial Statements tagged as blocks of text. |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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CONTRAVIR PHARMACEUTICALS, INC. | |
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(Registrant) | |
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Date: November 13, 2014 |
By: |
/s/ JAMES SAPIRSTEIN |
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James Sapirstein |
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President and Chief Executive Officer |
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Date: November 13, 2014 |
By: |
/s/ WILLIAM HORNUNG |
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William Hornung |
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Chief Financial Officer |
EXHIBIT 31.1
CERTIFICATIONS
I, James Sapirstein, certify that:
1) I have reviewed this report on Form 10-Q of ContraVir Pharmaceuticals, Inc.
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions);
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 13, 2014 |
/s/ James Sapirstein |
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James Sapirstein |
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Chief Executive Officer and Director (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATIONS
I, William Hornung, certify that:
1) I have reviewed this report on Form 10-Q of ContraVir Pharmaceuticals, Inc.
2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions);
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 13, 2014 |
/s/ WILLIAM HORNUNG |
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William Hornung |
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Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
CONTRAVIR PHARMACEUTICALS, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2014
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I am the Chief Executive Officer of ContraVir Pharmaceuticals, Inc., a Delaware corporation (the “Company”). I am delivering this certificate in connection with the Form 10-Q of the Company for the quarter ended September 30, 2014 and filed with the Securities and Exchange Commission (“Form 10-Q”).
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I hereby certify that, to the best of my knowledge, the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 13, 2014 |
/s/ James Sapirstein |
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James Sapirstein |
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Chief Executive Officer and Director (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION OF SENIOR VICE PRESIDENT, FINANCE
CONTRAVIR PHARMACEUTICALS, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2014
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I am the Chief Financial Officer of ContraVir Pharmaceuticals, Inc., a Delaware corporation (the “Company”). I am delivering this certificate in connection with the Form 10-Q of the Company for the quarter ended September 30, 2014 and filed with the Securities and Exchange Commission (“Form 10-Q”).
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I hereby certify that, to the best of my knowledge, the Form 10-Q fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: November 13, 2014 |
/s/ WILLIAM HORNUNG |
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William Hornung |
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Chief Financial Officer |