Organization and Basis of Presentation

12 Months Ended

Dec. 31, 2015

Organization Consolidation And Presentation Of Financial Statements [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.

The Company’s recurring losses from operations raise substantial doubt about its 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 $12.1 million and $13.2 million for the years ended December 31, 2015 and 2014, respectively.  As of December 31, 2015, the Company had an accumulated deficit of $48.1 million, approximately $8.7 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. In its report on the Company’s financial statements for the year ended December 31, 2015, our independent registered public accounting firm included an explanatory paragraph expressing substantial doubt regarding our ability to continue as a going concern.

The Company expects to continue to incur net losses for at least the next several years.  The Company will need to raise additional debt or equity financing to fund any additional development requirements requested by the U.S. Food and Drug Administration (“FDA”), as well as for new drug application (“NDA”) preparation and pre-commercial activities, including marketing and manufacturing of EVK-001. 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.