Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Organization and Basis of Presentation

1. Organization and Basis of Presentation

Evoke Pharma, Inc. (the “Company”) was incorporated in the state of Delaware on January 29, 2007. The Company is a publicly-held specialty pharmaceutical company focused primarily on the development of drugs to treat gastroenterological disorders and disease.

Since its inception, the Company has devoted substantially all of its efforts to product development, raising capital and building infrastructure, and has not realized revenues from its planned principal operations. The Company does not anticipate realizing revenues for the foreseeable future. The Company’s activities are subject to significant risks and uncertainties, including funding its operations beyond the completion of its ongoing Phase 3 clinical trial for EVK-001.

In its report on the Company’s financial statements for the year ended December 31, 2014, our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding our ability to continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has experienced significant losses since its inception, including net losses of $13.2 million and $2.8 million for the years ended December 31, 2014 and 2013, respectively.  As of December 31, 2014, the Company had an accumulated deficit of $35.9 million, approximately $14.2 million in cash and cash equivalents, and $4.5 million in borrowings under its bank credit facility.  Substantially all the Company’s net losses have resulted from costs incurred in connection with its research and development programs and its general and administrative costs to support operations. The Company’s net losses may fluctuate significantly from quarter to quarter and year to year.

The Company expects to continue to incur net losses for at least the next several years.  Over that period, the Company will need to raise additional debt or equity financing to fund its development. If the Company is not able to secure adequate additional funding, the Company may be forced to make reductions in spending, extend payment terms with suppliers, and/or suspend or curtail planned programs. Any of these actions could materially harm the Company’s business, results of operations, financial condition and future prospects.

In the quarter ended June 30, 2014, the Company early adopted ASU No. 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. Please refer to Note 2 for further details.

On June 13, 2013, the Company’s board of directors approved an amendment to the restated certificate of incorporation to effect a one-for-five reverse stock split of the Company’s common stock (the “Reverse Stock Split”). The amendment effecting the Reverse Stock Split was approved by the stockholders on August 29, 2013. The par value and the authorized shares of the common and convertible preferred stock were not adjusted as a result of the Reverse Stock Split. All issued and outstanding common stock and the conversion ratio of the convertible preferred stock have been retroactively adjusted to reflect this Reverse Stock Split for all periods presented. The Reverse Stock Split was effected on August 30, 2013.