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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2012	Mar. 15, 2013	Jun. 29, 2012
Document And Entity Information
Entity Registrant Name	Imprimis Pharmaceuticals, Inc.
Entity Central Index Key	0001360214
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 11,000,000
Entity Common Stock, Shares Outstanding		8,888,250
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Current assets
Cash and cash equivalents	$ 10,035,615	$ 146,160
Prepaid expenses and other current assets	61,552	14,797
Deferred offering costs	596,281	0
Total current assets	10,693,448	160,957
Furniture and equipment, net	12,548	0
TOTAL ASSETS	10,705,996	160,957
Current liabilities
Accounts payable and accrued expenses	635,384	218,612
Accounts payable - related party	0	56,087
Accrued Phase 3 expenses	55,784	55,784
Accrued payroll	18,391	0
Deferred revenue	0	100,000
Notes payable and accrued interest - related party	0	300,000
Convertible note payable and accrued interest	0	1,130,479
Total current liabilities	709,559	1,860,962
Commitments and contingencies
STOCKHOLDERS' EQUITY (DEFICIT)
Series A convertible preferred stock, $0.001 par value, 10 shares authorized, none and 10 shares issued and outstanding at December 31, 2012 and 2011, respectively	0	0
Common stock, $0.001 par value, 395,000,000 shares authorized, 6,772,066 and 397,515 shares issued and outstanding at December 31, 2012 and 2011, respectively	6,772	398
Additional paid-in capital	34,093,933	16,820,330
Deficit accumulated during the development stage	(24,104,268)	(18,520,733)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)	9,996,437	(1,700,005)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 10,705,996	$ 160,957

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2012	Dec. 31, 2011
Stockholders' Equity (Deficit)
Preferred stock, Authorized	10	10
Preferred stock, Issued	0	10
Preferred stock, outstanding	0	10
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	395,000,000	395,000,000
Common stock, issued shares	6,772,066	397,515
Common stock, outstanding shares	6,772,066	397,515

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended		173 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Revenues:
License revenues	$ 100,000	$ 0	$ 100,000
Operating expenses:
Selling, general and administrative	2,980,374	827,674	12,553,701
Research and development	1,298,503	111,554	9,118,761
Loss from operations	(4,178,877)	(939,228)	(21,572,462)
Other income (expense):
Interest expense	(24,658)	(75,000)	(1,730,892)
Interest income	15,410	0	142,991
Loss from extinguishment of debt	(1,195,410)	0	(1,195,410)
Gain on settlement	0	0	375,000
Gain on forgiveness of liabilities	0	60,292	176,505
Total other expense, net	(1,204,658)	(14,708)	(2,231,806)
Net loss	(5,383,535)	(953,936)	(23,804,268)
Deemed dividend to preferred stockholders	(200,000)	(100,000)	(300,000)
Net loss attributable to common stockholders	$ (5,583,535)	$ (1,053,936)	$ (24,104,268)
Net loss attributable to common stockholders per common share, basic and diluted	$ (1.24)	$ (2.65)
Weighted average number of shares of common outstanding, basic and diluted	4,493,535	397,803

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)	Preferred Stock	Common Stock	Additional Paid-In Capital	Deficit accumulated during the development stage	Total
Beginning Balance - Shares at Jun. 23, 1998	0
Beginning Balance - Amount at Jun. 23, 1998	$ 0	$ 0	$ 0	$ 0	$ 0
Estimated fair value of services contributed by stockholders			100,000		100,000
Net loss				(100,000)	(100,000)
Ending Balance, Shares at Dec. 31, 1998	0
Ending Balance, Amount at Dec. 31, 1998	$ 0	0	100,000	(100,000)	0
Estimated fair value of services contributed by stockholders			200,000		200,000
Net loss				(204,000)	(204,000)
Ending Balance, Shares at Dec. 31, 1999	0
Ending Balance, Amount at Dec. 31, 1999	$ 0	$ 0	300,000	(304,000)	(4,000)
Issuance of common stock, Shares		23,437
Issuance of common stock, Amount		$ 23	5,977		6,000
Estimated fair value of services contributed by stockholders			200,000		200,000
Net loss				(213,092)	(213,092)
Ending Balance, Shares at Dec. 31, 2000	0	23,437
Ending Balance, Amount at Dec. 31, 2000	$ 0	$ 23	505,977	(517,092)	(11,092)
Estimated fair value of services contributed by stockholders			200,000		200,000
Net loss				(208,420)	(208,420)
Ending Balance, Shares at Dec. 31, 2001	0	23,437
Ending Balance, Amount at Dec. 31, 2001	$ 0	$ 23	705,977	(725,512)	(19,512)
Estimated fair value of services contributed by stockholders			200,000		200,000
Net loss				(228,217)	(228,217)
Ending Balance, Shares at Dec. 31, 2002	0	23,437
Ending Balance, Amount at Dec. 31, 2002	$ 0	$ 23	905,977	(953,729)	(47,729)
Estimated fair value of services contributed by stockholders			200,000		200,000
Net loss				(207,196)	(207,196)
Ending Balance, Shares at Dec. 31, 2003	0	23,437
Ending Balance, Amount at Dec. 31, 2003	$ 0	$ 23	1,105,977	(1,160,925)	(54,925)
Estimated fair value of services contributed by stockholders			400,000		400,000
Net loss				(508,226)	(508,226)
Ending Balance, Shares at Dec. 31, 2004	0	23,437
Ending Balance, Amount at Dec. 31, 2004	$ 0	$ 23	1,505,977	(1,669,151)	(163,151)
Capital contributions			14,200		14,200
Issuance of common stock, Shares		61,328
Issuance of common stock, Amount		$ 61	15,639		15,700
Excercise of stock options and warrants, Shares		390
Excercise of stock options and warrants, Amount		$ 1	99		100
Estimated fair value of services contributed by stockholders			400,000		400,000
Net loss				(539,622)	(539,622)
Ending Balance, Shares at Dec. 31, 2005	0	85,155
Ending Balance, Amount at Dec. 31, 2005	$ 0	$ 85	1,935,915	(2,208,773)	(272,773)
Capital contributions			48,600		48,600
Issuance of common stock, Shares		9,375
Issuance of common stock, Amount		$ 9	2,391		2,400
Estimated fair value of services contributed by stockholders			400,000		400,000
Net loss				(584,232)	(584,232)
Ending Balance, Shares at Dec. 31, 2006	0	94,530
Ending Balance, Amount at Dec. 31, 2006	$ 0	$ 94	2,386,906	(2,793,005)	(406,005)
Capital contributions			105,907		105,907
Issuance of common stock, Shares		99,609
Issuance of common stock, Amount		$ 100	25,400		25,500
Excercise of stock options and warrants, Shares		976
Excercise of stock options and warrants, Amount		$ 1	249		250
Estimated fair value of services contributed by stockholders			175,000		175,000
Forgiveness of notes payable and interest			241,701		241,701
Issuance of restricted common stock, Shares		4,882
Issuance of restricted common stock, Amount		$ 5	(5)		0
Issuance of common stock in connection with merger, Shares		46,249
Issuance of common stock in connection with merger, Amount		$ 46	(46)		0
Net proceeds from private placement offering issued, Shares		51,795
Net proceeds from private placement offering issued, Amount		$ 52	3,837,739		3,837,791
Issuance of common stock related to conversion of senior convertible notes payable and accrued interest, Shares		38,254
Issuance of common stock related to conversion of senior convertible notes payable and accrued interest, Amount		$ 38	1,530,139		1,530,177
Beneficial conversion feature upon conversion of senior convertible notes payable			1,530,177		1,530,177
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Shares		6,875
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Amount		$ 7	549,993		550,000
Stock-based compensation			184,522		184,522
Net loss				(4,284,540)	(4,284,540)
Ending Balance, Shares at Dec. 31, 2007	0	343,170
Ending Balance, Amount at Dec. 31, 2007	$ 0	$ 343	10,567,682	(7,077,545)	3,490,480
Issuance of restricted common stock, Shares		625
Issuance of restricted common stock, Amount		$ 1	(1)		0
Net proceeds from private placement offering issued, Shares		45,454
Net proceeds from private placement offering issued, Amount		$ 45	3,941,256		3,941,301
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Shares		(347)
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Amount		$ 0	(117,993)		(117,993)
Stock-based compensation			562,442		562,442
Net loss				(3,304,388)	(3,304,388)
Ending Balance, Shares at Dec. 31, 2008	0	388,902
Ending Balance, Amount at Dec. 31, 2008	$ 0	$ 389	14,953,386	(10,381,933)	4,571,842
Excercise of stock options and warrants, Shares		1,250
Excercise of stock options and warrants, Amount		$ 1	49,499		49,500
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Shares		1,144
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Amount		$ 1	121,454		121,455
Stock-based compensation			388,050		388,050
Net loss				(4,553,636)	(4,553,636)
Ending Balance, Shares at Dec. 31, 2009	0	391,296
Ending Balance, Amount at Dec. 31, 2009	$ 0	$ 391	15,512,389	(14,935,569)	577,211
Issuance of restricted common stock, Shares		1,250
Issuance of restricted common stock, Amount		$ 1	12,082		12,083
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Shares		5,750
Warrants and stock issued for both consulting contracts (services) and stock and warrant purchases, Amount		$ 6	367,894		367,900
Stock-based compensation			535,812		535,812
Net loss				(2,531,228)	(2,531,228)
Ending Balance, Shares at Dec. 31, 2010	0	398,296
Ending Balance, Amount at Dec. 31, 2010	$ 0	$ 398	16,428,177	(17,466,797)	(1,038,222)
Forfeiture of unvested restricted stock, Shares		(781)
Forfeiture of unvested restricted stock, Amount		$ 0	3,332		3,332
Issuance of Series A Preferred Stock, Shares	10
Issuance of Series A Preferred Stock, Amount	$ 0		100,000		100,000
Preferred stock beneficial conversion feature			100,000		100,000
Accretion of preferred stock discount				(100,000)	(100,000)
Estimated fair value of stock options granted to former employees in forgiveness of liabilities			11,400		11,400
Capital contributions					0
Estimated fair value of services contributed by stockholders					0
Forgiveness of notes payable and interest					0
Issuance of common stock related to conversion of senior convertible notes payable and accrued interest, Amount					0
Stock-based compensation			177,421		177,421
Net loss				(953,936)	(953,936)
Ending Balance, Shares at Dec. 31, 2011	10	397,515
Ending Balance, Amount at Dec. 31, 2011	$ 0	$ 398	16,820,330	(18,520,733)	(1,700,005)
Estimated fair value of beneficial conversion feature and warrants in connection with modification and extinguishment of debt			1,245,410		1,245,410
Conversion of convertible note payable and related party accounts payable, Shares		1,835,830
Conversion of convertible note payable and related party accounts payable, Amount		$ 1,836	1,196,854		1,198,690
Round lot adjustment for reverse stock split, Shares		1,402
Round lot adjustment for reverse stock split, Amount		$ 1	(1)		0
Conversion of notes payable – related party common stock and warrant units, Shares		193,046
Conversion of notes payable – related party common stock and warrant units, Amount		$ 193	762,341		762,534
PCCA Purchase Agreement, sale of common stock net of offering costs, Shares		832,682
PCCA Purchase Agreement, sale of common stock net of offering costs, Amount		$ 833	3,981,253		3,982,086
Issuance of Series A Preferred Stock, Shares	(10)	1,499,700
Issuance of Series A Preferred Stock, Amount	$ 0	$ 1,500	(1,500)	(200,000)	(200,000)
Accretion of preferred stock discount					0
Capital contributions					$ 0
Excercise of stock options and warrants, Shares		200			(200)
Excercise of stock options and warrants, Amount		$ 0	800		$ 800
Estimated fair value of services contributed by stockholders					0
Forgiveness of notes payable and interest					0
Net proceeds from private placement offering issued, Shares		2,011,691
Net proceeds from private placement offering issued, Amount		$ 2,011	7,931,834		7,933,845
Stock-based compensation			2,156,612		2,156,612
Net loss				(5,383,535)	(5,383,535)
Ending Balance, Shares at Dec. 31, 2012	0	6,772,066
Ending Balance, Amount at Dec. 31, 2012	$ 0	$ 6,772	$ 34,093,933	$ (24,104,268)	$ 9,996,437

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended		173 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (5,383,535)	$ (953,936)	$ (23,804,268)
Adjustments to reconcile net loss to net cash used in operating activities:
Estimated fair value of contributed services	0	0	2,475,000
Gain on forgiveness of liabilities	0	(60,292)	(176,505)
Amortization of prepaid consulting fees	0	0	807,608
Depreciation	2,944	338	6,098
Loss from extinguishment of debt	1,195,410	0	1,195,410
Non-cash interest on notes payable	24,658	75,000	1,730,892
Stock-based compensation	2,156,612	192,153	4,285,428
Payments made on behalf of Company by related party	0	254,142	254,142
Changes in assets and liabilities:
Prepaid consulting costs	0	0	(140,000)
Prepaid expenses and other current assets	(46,755)	45,695	(61,552)
Accounts payable and accrued expenses	231,435	144,980	539,961
Accrued Phase 3 expenses	0	0	111,871
Accrued payroll	18,391	(9,240)	104,982
Deferred revenue	(100,000)	20,000	0
NET CASH USED IN OPERATING ACTIVITIES	(1,900,840)	(291,160)	(12,670,933)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets	(15,492)	0	(18,646)
NET CASH USED IN INVESTING ACTIVITIES	(15,492)	0	(18,646)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable to related party	450,000	300,000	976,300
Proceeds received in connection with debt modification	50,000	0	50,000
Proceeds from issuance of preferred stock	0	100,000	100,000
Proceeds from notes payable	0	0	2,500,000
Preferred stock deemed dividend paid at conversion	(200,000)	0	(200,000)
Cash advances from related party	0	27,537	27,537
Repayment of advances from related party	0	(281,679)	(281,679)
Capital contributions	0	0	168,707
Net proceeds from purchase of common stock and exercise of warrants and stock options	800	0	100,250
Proceeds from issuance of common stock and warrants for cash, net of offering costs	11,915,931	0	19,695,023
Deferred offering costs	(410,944)	0	(410,944)
NET CASH PROVIDED BY FINANCING ACTIVITIES	11,805,787	145,858	22,725,194
NET CHANGE IN CASH AND CASH EQUIVALENTS	9,889,455	(145,302)	10,035,615
CASH AND CASH EQUIVALENTS BALANCES, beginning of period	146,160	291,462
CASH AND CASH EQUIVALENTS BALANCES, end of period	10,035,615	146,160	10,035,615
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	1,600	2,400	12,000
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of and adjustment to common stock and warrants to consulting firms for prepaid consulting fees	0	0	432,007
Deferred offering costs in connection with equity offering recorded in accounts payable	185,337	0	185,337
Conversion of related party accounts payable into common stock	56,087	0	56,087
Conversion of notes payable and accrued interest into common stock	1,905,137	0	3,435,314
Forgiveness of notes payable and accrued interest to stockholders	0	0	241,701
Conversion of advances to notes payable to stockholders	0	0	196,300
Accretion of preferred stock discount	0	(100,000)	100,000
Related party acquisition of Phase three liabilities	0	56,087	56,087
Conversion of preferred stock into common stock	$ 1,500	$ 0	$ 1,500

1. ORGANIZATION

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION

NOTE 1. ORGANIZATION

Imprimis Pharmaceuticals, Inc. (“Imprimis”, the “Company”, “we”, “us”, or “our”) is a specialty pharmaceutical company focused on the commercial development of compounded drug formulations. Through an exclusive strategic relationship with the largest compounding pharmacy organization in North America, Imprimis expects to use its proprietary Accudel drug delivery technology, coupled with licensed technologies, and proprietary formulations and market data, to identify pharmaceutical development opportunities where there is a significant unmet need for a new drug product. Imprimis is also internally developing non-invasive, topically delivered products. Our innovative patented Accudel cream formulation technology is designed to enable highly targeted site-specific treatment. Impracor, our lead Phase 3 pain product candidate, utilizes the Accudel platform technology to deliver the active drug, ketoprofen, a non-steroidal anti-inflammatory drug, through the skin directly into the underlying tissues where the drug exerts its localized anti-inflammatory and analgesic effects. We intend to leverage the Accudel platform technology to expand and create a portfolio of topical products for a variety of indications.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Publisher AICPA
-Name Statement of Position (SOP)
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 4, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
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+ Details

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

On February 28, 2012, the Company changed its name from Transdel Pharmaceuticals, Inc. to Imprimis Pharmaceuticals, Inc. All prior references to Transdel Pharmaceuticals, Inc. have been changed to Imprimis Pharmaceuticals, Inc. to reflect the change. On February 28, 2012, the Company effected a one-for-eight reverse stock split and on February 7, 2013 the Company effected a one-for-five reverse stock split. All share and per share amounts and calculations in this report reflect the effects of these reverse stock splits.

Imprimis has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

On September 17, 2007, Imprimis entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) by and among Imprimis, Transdel Pharmaceuticals Holdings, Inc., a privately held Nevada corporation (“Transdel Holdings”), and Trans-Pharma Acquisition Corp., a newly formed, wholly-owned Delaware subsidiary of Imprimis (“Acquisition Sub”). Upon closing of the merger transaction contemplated under the Merger Agreement (the “Merger”), Acquisition Sub merged with and into Transdel Holdings, and Transdel Holdings, as the surviving corporation, became a wholly-owned subsidiary of Imprimis. As a result of the Merger, the former owners of Transdel Holdings became the controlling stockholders of Imprimis. Accordingly, the merger of Transdel Holdings and Imprimis is a reverse merger that has been accounted for as a recapitalization of Transdel Holdings.

Effective on September 17, 2007, and for all reporting periods thereafter, Imprimis’ operating activities, including any prior comparative period, include only those of Transdel Holdings. All references to share and per share amounts in the accompanying consolidated financial statements and footnotes have been restated to reflect the aforementioned share exchange. All significant intercompany accounts and transactions have been eliminated in consolidation.

On June 20, 2011, Transdel Holdings was merged with Imprimis Pharmaceuticals, Inc., at which time Transdel Holdings ceased as a corporation, and Imprimis Pharmaceuticals, Inc. remains as the sole surviving corporation.

Development Stage Enterprise

The Company is a development stage company as defined under Financial Accounting Standards Board (“FASB”) guidance. The Company is devoting substantially all of its present efforts to establish a new business, and its planned principal operations have not yet commenced. All losses accumulated since inception have been considered as part of the Company’s development stage activities.

These consolidated financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a development stage enterprise and has incurred recurring operating losses, has had negative operating cash flows and has not recognized any significant revenues since July 24, 1998 (Inception). In addition, the Company has a deficit accumulated during the development stage of approximately $24.1 million at December 31, 2012, and anticipates incurring further losses through the year 2013 and beyond. The Company has not yet generated significant sales revenue and has funded its operating losses to date through debt and equity offerings and borrowings under its line of credit. The Company believes that its existing cash and cash equivalents, including the proceeds from the public offering in February 2013 (see Note 12), will be sufficient to cover its cash flow requirements for at least the next twelve months.

Research and Development

The Company expenses all costs related to research and development as they are incurred. Research and development expenses consist of expenses incurred in performing research and development activities including salaries and benefits, and other overhead expenses, clinical trials, contract services and outsource contracts.

Revenue Recognition and Deferred Revenue

The Company will recognize revenues in accordance with FASB guidance, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) will be based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments will be provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or for which services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.

During the year ended December 31, 2012, the Company recorded $100,000 in revenues for non-refundable royalty advances, which were previously deferred. The Company does not anticipate that it will generate any significant revenues until one or more of its drug candidates are approved by the U.S. Food and Drug Administration (“FDA”) and the Company is able to commercialize one or more of its product candidates. Also, effective sales and marketing support must be in place for either the drug candidates or any other products the Company may develop in order to generate any revenues. The FDA approval process is highly uncertain and the Company cannot estimate when it will generate revenues at this time from sales of its products.

Income Taxes

We account for income taxes under the provision of Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of December 31, 2012 and 2011, there were no unrecognized tax benefits included in the consolidated balance sheets that would, if recognized, affect the effective tax rate. Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense. We had no accrual for interest or penalties in our consolidated balance sheets at December 31, 2012 and 2011, and have not recognized interest and/or penalties in the consolidated statements of operations for the years ended December 31, 2012 and 2011. We are subject to taxation in the United States and California. The Company’s tax years for 2000 and forward are subject to examination by the United States and state tax authorities due to the carry forward of unutilized net operating losses.

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition.

Concentrations of Credit Risk

The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (“FDIC”) provides basic deposit coverage with limits to $250,000 per owner. In addition to the basic insurance deposit coverage, the FDIC provided temporary unlimited coverage for noninterest-bearing transaction accounts from December 31, 2010 to December 31, 2012. At December 31, 2012, the Company had approximately $7.8 million in cash deposits in excess of FDIC limits.

Deferred Offering Costs

On July 25, 2012, the Company filed with the Securities and Exchange Commission a registration statement in connection with an underwritten public offering of its common stock. At December 31, 2012, the Company had deferred offering costs of $596,281 for legal, accounting and other expenses directly related to the offering. The offering closed on February 13, 2013 (see Note 12). Cash proceeds to the Company arising from the offering will be netted against these deferred offering costs and any other costs directly associated with the offering incurred subsequent to December 31, 2012.

Furniture and Equipment

Furniture and equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of three to five years.

Deferred Rent

The Company accounts for rent expense related to its operating leases by determining total minimum rent payments on the leases over their respective periods and recognizing the rent expense on a straight-line basis. The difference between the actual amount paid and the amount recorded as rent expense in each fiscal year is recorded as an adjustment to deferred rent.

Fair Value Measurements

Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. GAAP establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The established fair value hierarchy prioritizes the use of inputs used in valuation methodologies into the following three levels:

●	Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.
●	Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
●	Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.

At December 31, 2012 and 2011, the Company does not have any financial assets or liabilities which are measured on a recurring basis. At December 31, 2012 and 2011, the Company’s financial instruments include cash and cash equivalents, accounts payable and accrued expenses, accrued Phase 3 expenses, accrued payroll, notes payable-related party and convertible note payable and accrued interest. The carrying amount of these financial instruments approximates fair value due to the short-term maturities of these instruments.

Beneficial Conversion Features and Debt Discounts

The convertible features of debt provide for a rate of conversion that is below market value. Such feature is normally characterized as a “beneficial conversion feature” (“BCF”). The relative fair values of the BCF were recorded as discounts from the face amount of the respective debt instrument. The Company amortized the discount using the effective interest method through maturity of such instruments.

Stock-Based Compensation

All share-based payments to employees, including grants of stock options to employees, directors and consultants and restricted stock grants, are recognized in the consolidated financial statements based upon their fair values.

The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during their vesting terms. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor's balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the fair value of nonforfeitable equity instruments issued for future consulting services as prepaid consulting fees in its consolidated balance sheets.

The Company recorded stock-based compensation related to equity instruments granted to employees, directors and consultants as follows:

	For the Years Ended				For the Period From July 24, 1998(Inception) through
	December 31,				December 31,
	2012		2011		2012
Employees - selling, general and administrative	$	384,859	$	134,922	$	1,776,312
Employees - research and development		250,380		37,754		865,051
Directors - selling, general and administrative		1,225,350		19,477		1,348,042
Consultants - selling, general and administrative		137,745		-		945,353
Consultants - research and development		158,278		-		158,278
Total	$	2,156,612	$	192,153	$	5,093,036

Basic and Diluted Loss per Common Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted average number of common and common equivalent shares, such as stock options and warrants outstanding during the period.

Basic and diluted net loss applicable to common stock per share is computed using the weighted average number of shares of common stock outstanding during the period. Common stock equivalents (using the treasury stock or, “if converted” method) from convertible notes, preferred stock, stock options, unvested restricted stock units (“RSUs”) and warrants were 1,682,678 and 827,242 at December 31, 2012 and 2011, respectively, and are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive.

The following table shows the computation of basic and diluted loss per share of common stock for the years ended December 31, 2012 and 2011:

	For the year ended December 31,
	2012			2011

Net loss	$	(5,383,535	)	$	(953,936	)
Deemed dividend to preferred stockholders		(200,000	)		(100,000	)
Numerator – loss attributable to common stockholders		(5,583,535	)		(1,053,936	)
Denominator – weighted average number of shares
of common stock outstanding, basic and diluted		4,493,535			397,803
Net loss per share, basic and diluted	$	(1.24	)	$	(2.65	)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management are, among others, the valuation of contributed services, deferred taxes and stock-based compensation issued to employees and non-employees. Actual results could differ from those estimates.

Recently Adopted Accounting Pronouncements

In May 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards (“IFRS”).” The update contains the results of the work of the FASB and the International Accounting Standards Board to develop common requirements for measuring fair value and for disclosing fair value measurements in accordance with GAAP and IFRS. The amendments in this update are effective for periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on the consolidated financial statements.

Recent Accounting Pronouncements

In December 2011, the FASB issued ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities.” This pronouncement was issued to enhance disclosure requirements surrounding the nature of an entity’s right to offset and related arrangements associated with its financial instruments and derivative instruments. This new guidance requires companies to disclose both gross and net information about instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to master netting arrangements. This pronouncement is effective for reporting periods beginning on or after January 1, 2013. We do not anticipate the adoption of ASU 2011-11 to have a material impact on our consolidated financial statements.

In January 2013, the FASB issued ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities.” This pronouncement was issued to address implementation issues about the scope of ASU 2011-11 and to clarify the scope of the offsetting disclosures and address any unintended consequences. This pronouncement is effective for reporting periods beginning on or after January 1, 2013. We do not anticipate the adoption of ASU 2013-01 to have a material impact on our consolidated financial statements.

3. BANKRUPTCY PETITION AND ASSET PURCHASE AGREEMENT

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

BANKRUPTCY PETITION AND ASSET PURCHASE AGREEMENT

NOTE 3. BANKRUPTCY PETITION AND ASSET PURCHASE AGREEMENT

On June 26, 2011, the Company filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of California (the “Bankruptcy Court”), Case No. 11-10497-11 (the “Chapter 11 Case”). In connection with the Chapter 11 Case, the Company, as seller, and Cardium Healthcare, Inc., a wholly-owned subsidiary of Cardium Therapeutics, Inc., as purchaser (“Cardium”), entered into an Asset Purchase Agreement dated June 23, 2011 (the “Asset Purchase Agreement”) pursuant to which the Company agreed to sell substantially all of its assets pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, subject to court approval and the satisfaction of certain conditions set forth in the Asset Purchase Agreement.

Consummation of the sale to Cardium was subject to a number of conditions, including, among others, the approval by the Bankruptcy Court of the transactions contemplated by the Asset Purchase Agreement and compliance with certain specified deadlines for actions in connection with the Bankruptcy Case. The Asset Purchase Agreement was terminable by the parties under a number of circumstances, including failure to obtain certain Bankruptcy Court orders by agreed dates.

On July 26, 2011, the Bankruptcy Court denied the Company’s motion to sell its assets pursuant to the Asset Purchase Agreement. On October 7, 2011, the Company terminated the Asset Purchase Agreement pursuant to its terms. On November 21, 2011, in connection with certain transactions with DermaStar International, LLC (“DermaStar”) described in Notes 6 and 7 below, the Company requested that the Bankruptcy Court dismiss the Chapter 11 Case and retain jurisdiction to decide matters related to claims brought in the Bankruptcy Case by the Purchaser. On December 8, 2011, the Bankruptcy Court entered an order dismissing the Chapter 11 Case. In connection with the dismissal of the Chapter 11 Case, the Bankruptcy Court, among other things, declined to retain jurisdiction over claim objection proceedings and found moot the Company’s objection to certain claims to receive a break-up fee pursuant to the Asset Purchase Agreement of Cardium Therapeutics, Inc. and Cardium Healthcare, Inc., a wholly owned subsidiary of Cardium. The dismissal of the Chapter 11 Case was based upon the provisions of both 11 U.S.C. Sections 305 (a) and 1112(b).

4. FURNITURE AND EQUIPMENT

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

FURNITURE AND EQUIPMENT

NOTE 4. FURNITURE AND EQUIPMENT

Furniture and equipment, net, as of December 31, 2012 and December 31, 2011 consisted of the following:

	December 31,			December 31,
	2012			2011
Furniture and Equipment, net:
Computer Software and Hardware	$	6,525		$	-
Furniture and Equipment		8,967			-
		15,492			-
Accumulated Depreciation		(2,944	)		-
	$	12,548		$	-

During the years ended December 31, 2012 and 2011, the Company recorded depreciation expenses of $2,944 and $338, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2012

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following at:

	December 31,		December 31,
	2012		2011
Accounts payable	$	286,686	$	218,612
Accrued offering costs		185,337
Deferred rent		2,477		-
Other accrued expenses		21,440		-
Stock-based compensation accrual		139,444		-
Total accounts payable and accrued expenses	$	635,384	$	218,612

6. NOTES PAYABLE

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 6. NOTES PAYABLE

Convertible Notes – August 2005

In August 2005, the Company issued seven convertible promissory notes in the aggregate amount of $226,300 to various stockholders (collectively, the “Stockholders’ Notes”). The Stockholders’ Notes bore interest at 4% per annum and were to mature on August 25, 2010. In connection with the issuance of the Stockholders’ Notes, the Company granted warrants that were exercisable into an aggregate of 884 shares of the Company’s common stock. The warrants were determined to have an insignificant fair value at the time of the grant.

In May 2007, the holders of the Stockholders’ Notes and related warrants forgave the amounts due and forfeited the related warrants. In connection with the forgiveness, the Company recorded additional paid-in capital of $241,701 equal to the value of the Stockholders’ Notes and related accrued interest. Interest expense on the Stockholders’ Notes was $15,401 for the period from Inception through December 31, 2007.

Convertible Notes – May and June 2007

In May and June 2007, the Company issued convertible notes payable to various lenders for an aggregate amount of $1,500,000 (collectively, the “2007 Notes”). Each of the 2007 Notes included interest at 7% per annum and were to mature on December 16, 2007 (“Maturity Date”). However, as a result of the Merger and Private Placement (see Note 7), the entire outstanding principal amount and accrued interest was converted into the Company’s common stock at a conversion price equal to $40.00 per share, which resulted in the issuance of 38,254 shares. Also, the Company recorded a debt discount of $1,530,177, which was amortized immediately to interest expense upon the conversion of the 2007 Notes. Excluding the debt discount, interest expense on the 2007 Notes was $30,177 for the period from Inception through December 31, 2008.

Convertible Note – April 2010 – Related Party

On April 5, 2010, the Company issued a Senior Convertible Promissory Note (the “Note”) to Alexej Ladonnikov in a private placement. The Note included an annual interest rate of 7.5% and (unless converted or prepaid, as noted below) all principal and interest was due and payable on its maturity date of April 5, 2012 (“Maturity Date”). At any time prior to the Maturity Date, the investor had the right to convert all or a portion of the outstanding principal and accrued interest at a conversion ratio of one share of the Company’s common stock for each $40 (the fair market value of the Company’s common stock on April 5, 2010) owed. Also, at any time prior to the Maturity Date, the Company had the option to prepay the outstanding principal and accrued interest. The Company received gross proceeds from the issuance of the Note in the aggregate amount of $1,000,000. There were no discounts or commissions paid in connection with this private placement. Accrued interest on the Note was $0 and $130,479 at December 31, 2012 and 2011, respectively, and interest expense on the Note for the years ended December 31, 2012 and 2011 was $12,124 and $75,000, respectively. Following the Company’s bankruptcy petition filed June 26, 2011, as well as the change in ownership control following the issuance of Series A Convertible Preferred Stock to DermaStar, the entire unpaid principal sum of this Note, together with its accrued and unpaid interest became immediately due and payable.

In January 2012, DermaStar acquired 80% of the Note in a private transaction with Mr. Ladonnikov. On January 25, 2012, the Board of Directors of the Company approved, and the Company entered into, separate waiver and settlement agreements with DermaStar and Mr. Ladonnikov, the two parties holding the Note.

In connection with each of the waiver and settlement agreements, the holders of the Note each agreed to forever waive their rights to (i) accelerate the entire unpaid principal sum of the Note and all accrued interest pursuant to Section 1 of the Note related to the Company’s bankruptcy petition filed June 26, 2011, (ii) Section 7 of the Senior Convertible Note Purchase Agreement dated April 5, 2010, regarding the designation and creation of the Series A Convertible Preferred Stock (“Series A Preferred Stock”) and (iii) certain conversion rights pursuant to Section 3 of the Note related to the change of control that resulted from the sale of the Series A Preferred Stock.

Pursuant to the terms of the waiver and settlement agreement by and between the Company and DermaStar, DermaStar and the Company agreed to the mandatory conversion of the eighty percent (80%) of the principal and accrued and unpaid interest of the Note held by DermaStar, at such time as (and not until) the Company has a sufficient number of authorized common shares to effect such a conversion, into common stock of the Company at a conversion price of approximately $0.6668 (“DermaStar Conversion Price”). Additionally, DermaStar agreed to a mandatory conversion of an additional $56,087 of current accounts payable of the Company (“AP Conversion”) held by DermaStar, at such time as (and not until) the Company had a sufficient number of authorized common shares for such conversion. The AP Conversion was made at the DermaStar Conversion Price.

On February 28, 2012, the Company issued 1,454,962 shares of common stock to DermaStar as payment in full for its 80% ownership of the Note ($800,000), its related accrued interest ($114,082) and $56,087 in the Company’s accounts payable. The Company has determined this to be a substantial modification to the debt instruments and has applied debt extinguishment accounting to record a loss on extinguishment of debt of $856,087 for the year ended December 31, 2012.

Pursuant to the terms of the waiver and settlement agreement by and between the Company and Mr. Ladonnikov, Mr. Ladonnikov and the Company agreed to the mandatory conversion of the twenty percent (20%) of the principal and accrued and unpaid interest of the Note held by Mr. Ladonnikov, at such time as (and not until) the Company had a sufficient number of authorized common shares to effect such a conversion, into common stock of the Company at a conversion price of $0.60. Additionally, Mr. Ladonnikov agreed to make a one-time payment to the Company, at such time as the Note is converted into the Company’s common stock, of $50,000.

On February 28, 2012, the Company received payment from Mr. Ladonnikov of $50,000 and issued 380,868 shares of common stock to Mr. Ladonnikov as payment in full for his 20% ownership of the Note ($200,000) and its related accrued interest ($28,521). The Company has determined this to be a substantial modification to the debt instrument and has applied debt extinguishment accounting to record a loss on extinguishment of debt of $150,000 ($200,000 Note principal balance less $50,000 cash payment received) for the year ended December 31, 2012.

Secured Line of Credit – Related Party

On November 21, 2011, the Company entered into a Secured Line of Credit Letter Agreement (the “Line of Credit Agreement”) with DermaStar. The Line of Credit Agreement became effective on December 10, 2011, in connection with the dismissal of the Chapter 11 Case by the Bankruptcy Court. The line of credit was secured by a blanket security interest in all of the Company’s assets, including its intellectual property. The Line of Credit Agreement provided for advances to the Company of up to an aggregate of $750,000 (each an “Advance” and collectively the “Loan”), subject to the satisfaction by the Company of certain conditions in connection with the initial Advance and each subsequent Advance. Each Advance was made pursuant to a promissory note in favor of DermaStar. The Company had received advances totaling $750,000 and $300,000 up to April 25, 2012 (the date of the conversion thereof) and December 31, 2011, respectively. The promissory notes accrued interest at 10% annually and had a maturity of one year after the effective dates of the applicable Advance. There was no accrued interest on the promissory notes at December 31, 2012 and 2011 and interest expense for the years ended December 31, 2012 and 2011 was $12,534 and $0, respectively.

As of April 20, 2012, the aggregate principal balance owed under the Line of Credit was $750,000. Effective April 20, 2012, the Company and DermaStar entered into a Promissory Note Conversion Agreement (the “Conversion Agreement”) wherein the parties agreed that the entire outstanding principal balance of the promissory notes issued in favor of DermaStar pursuant to the Line of Credit Agreement and all related accrued interest, totaling $762,534, would be converted into Units (as defined in Note 7) at a rate of $3.95 per Unit. Pursuant to the Conversion Agreement, on April 25, 2012 and upon conversion of the outstanding principal balance and unpaid interest under the Line of Credit Agreement, DermaStar was issued a total of 193,046 shares of the Company’s common stock and a related warrant to purchase up to an additional 48,262 shares of the Company’s common stock. The warrant has an exercise price of $5.925 per share and a three year term. The Line of Credit Agreement has been terminated.

The addition of a conversion feature to the Line of Credit Agreement resulted in terms that were substantially different from the terms of the original agreement, and therefore, the conversion resulted in an extinguishment of debt. The relative fair value of the warrant issued to DermaStar was determined to be $137,383 using the Black-Scholes-Merton option pricing model. The variables used in this pricing model included: (1) discount rate of 0.4% (2) expected warrant life of 3 years, (3) expected volatility of 350% and (4) zero expected dividends. In addition, the value of the effective BCF resulting from the Conversion Agreement was determined to be $51,940. The value of the debt discount was recorded as additional paid-in capital and as the Line of Credit was immediately convertible, the debt discount of $189,323 was immediately expensed as a loss on extinguishment of debt.

DermaStar is a former control person of the Company and had the ability to direct or cause direction of management and policies of the Company through its ownership of the Company’s capital stock. Also, Dr. Robert Kammer, a director and the Chairman of the Board of the Company, and Mark L. Baum, Chief Executive Officer and a director of the Company, were managing members and partial owners of DermaStar. In July 2012, the Company was informed by DermaStar that it had dissolved and distributed all of its shares of the Company’s capital stock held by it to its members. As a result of that dissolution and distribution, DermaStar is no longer a control person of the Company.

Notes payable consist of the following:

	December 31,		December 31,
	2012		2011
10% convertible notes	$	-	$	300,000
7.5% convertible note		-		1,000,000
Total convertible notes payable		-		1,300,000
Less: Current portion		-		(1,300,000	)
Long-term portion	$	-	$	-

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

7. STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2012

Equity [Abstract]

STOCKHOLDERS EQUITY

NOTE 7. STOCKHOLDERS’ EQUITY

Common Stock Issuances

On February 28, 2012, the Company increased the number of authorized shares of capital stock to 400,000,000, and the number of authorized shares of common stock to 395,000,000 and effected a one-for-eight reverse stock split. On February 7, 2013, the Company effected a one-for-five reverse stock split. All share and per share amounts and calculations in this report reflect these stock splits.

The following is a summary of common stock and capital contribution transactions from inception through December 31, 2012:

In fiscal year 1998, the Company recorded capital contributions of $100,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 1999, the Company recorded capital contributions of $200,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 2000, the Company issued 23,437 shares of common stock at a price of $0.256 per share for proceeds of $6,000. Also, recorded capital contributions of $200,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 2001, the Company recorded capital contributions of $200,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 2002, the Company recorded capital contributions of $200,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 2003, the Company recorded capital contributions of $200,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 2004, the Company recorded capital contributions of $400,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 2005, the Company issued 61,718 shares of common stock at a price of $0.256 per share for gross proceeds of $15,800 for common stock purchases and stock option exercises. The Company received additional capital contributions in cash of $14,200 from the Company’s stockholders and recorded capital contributions of $400,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

In fiscal year 2006, the Company issued 9,375 shares of common stock at a price of $0.256 per share for gross proceeds of $2,400. The Company received additional capital contributions in cash of $48,600 from the Company’s stockholders and recorded capital contributions of $400,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

Prior to the Merger during fiscal year 2007, the Company issued 100,585 shares of its common stock at a price of $0.256 per share for proceeds of $25,750, which includes the issuance of 781 shares upon the exercise of a warrant and 195 shares upon exercise of stock options. Also, prior to the Merger, the Company received capital contributions of $105,907 from the Company’s stockholders and recorded capital contributions of $175,000 (the estimated fair value of the services contributed) in connection with services contributed by stockholders, which is recorded respectively in selling, general and administrative and research and development expenses in the accompanying consolidated statements of operations.

Prior to the Merger during fiscal year 2007, the Company recorded additional paid-in capital of $241,701 related to the forgiveness of Stockholders’ Notes (see Note 6).

In August 2007, the Company issued a restricted stock grant to an executive of the Company for 4,882 shares of the Company’s common stock.

In connection with the Merger in 2007, 46,249 shares of common stock remained outstanding (see Note 2).

Concurrent with the Merger in 2007, the Company sold 51,795 shares of common stock for net proceeds of $3,837,791 ($4,143,667 gross) through a private placement (the “Private Placement”). In addition, the investors received warrants to purchase 12,949 shares of common stock for a period of five years at a cash and cashless exercise price of $160.00 and $200.00 per share, respectively. In connection with the Private Placement, the Company incurred placement agent fees and other related expenses totaling $342,105 (of which $36,229 was paid in fiscal year 2008 and netted with the 2008 private placement discussed below) and issued warrants to purchase up to 844 shares of common stock for a period of three years at cash and cashless exercise price of $160.00 and $200.00 per share, respectively.

Concurrent with the Merger in 2007, the Company issued 38,254 shares of common stock related to the conversion of the 2007 Notes and accrued interest of $1,530,177. Also, the Company recorded a debt discount of $1,530,177 related to the 2007 Notes (see Note 6).

In September 2007, the Company entered into three, one-year consulting agreements with three separate firms to provide services related to investor communications. In the aggregate, 6,875 shares of common stock were issued in accordance with the terms of the agreements along with a warrant to purchase 469 shares of common stock for a period of five years at a cash and cashless exercise price of $160.00 and $200.00, respectively. The fair value of the stock and warrants were valued at $550,000. The estimated costs of the consulting agreements, including the stock, warrants and non-refundable fee were amortized over the one-year terms.

On May 12, 2008, the Company sold 45,454 shares of common stock for net proceeds of $3,941,301 ($4,000,000 gross) through a follow-on private placement (the “Follow-on Private Placement”) to accredited investors. In addition, the investors received warrants to purchase 5,682 shares of common stock for a period of five years at a cash and cashless exercise price of $176.00 and $220.00 per share, respectively. In connection with the Follow-On Private Placement, the Company incurred expenses of $22,470, which was recorded as a reduction of additional paid-in capital, and the gross proceeds were also netted with $36,229 related to the 2007 Private Placement that was paid in 2008.

In 2008, in connection with the termination of certain consulting agreements entered into in 2007 and 2008, 2,064 shares of common stock were forfeited at a value that was reversed of $135,136. The Company also decreased additional paid-in capital and consulting expense by $70,000 because of the remeasurement of certain consulting agreements. Additionally, during 2008, the Company entered into an agreement with an investor relations firm (“IR Firm”). Pursuant to the agreement with the IR Firm, the Company issued 1,717 shares of common stock during 2008 at a value of $85,833. In a separate agreement, the Company entered into a consulting agreement in which the Company issued a three-year warrant to purchase 125 shares of the Company’s common stock at a cash and cashless price of $80.00 per share. The net amount of shares forfeited during 2008 from consulting agreements and the IR Firm was (347) and the net expense reversed and charged to additional paid-in capital was ($117,993).

On November 21, 2008, the Company issued a restricted stock grant to a director of the Company for 625 shares of the Company’s common stock. The restricted stock grant vested over a one-year period.

During 2009, in connection with the agreement with the IR Firm, the Company issued 1,144 shares of common stock valued at $50,356. In a separate agreement, the Company entered into a consulting agreement in which the Company issued a stock option to purchase 1,250 shares of the Company’s common stock at an exercise price of $39.60 per share. The fair value of the option, determined based on the Black-Scholes-Merton pricing model, was recorded as $14,434. In another agreement, the Company entered into a consulting agreement in which the Company issued stock options to purchase 1,188 shares of the Company’s common stock at an exercise price of $64.00 per share. The fair value of the options, determined based on the Black-Scholes-Merton pricing model, was recorded at $56,665. The total value of common stock, warrants and options recorded during 2009 was $121,455.

In August 2009, the Company issued 1,250 shares of common stock at a price of $39.60 per share for gross proceeds of $49,500 for stock option exercises.

In June 2010, the Company entered into two separate agreements with an investor relations firm and a financial advisory services firm (collectively “the firms”) in order to provide certain investor relations and advisory services to the Company for a period of one year. In exchange for such services, the Company issued 5,000 shares, in the aggregate, of its unregistered common stock, of which all shares were nonforfeitable (valued at $208,000 and recorded as prepaid consulting fees upon issuance) to the firms as a prepayment of services to be received over a three-month period. The Company agreed to suspend the services related to these agreements, therefore, at this time no additional shares of common stock will be issued to the firms. For the year ended December 31, 2010, the Company recorded stock-based compensation related to the stock of $208,000. On August 13, 2010, the Company entered into a consulting agreement in which the Company issued stock options to purchase 5,030 shares of the Company’s common stock at an exercise price of $42.80 per share. The fair value of the options, determined based on the Black-Scholes-Merton pricing model, was recorded at $132,300. In September 2010, the Company entered an agreement with an investor relations firm in order to provide certain investor relations services to the Company for a period of six months. In exchange for such services, the Company issued 750 shares, in the aggregate, of its unregistered common stock, of which all shares were nonforfeitable (valued at $27,600 and recorded as prepaid consulting fees upon issuance) to the investor relations firm as a prepayment of services to be received for the initial three-month period of the agreement. The agreement was terminated by the Company during November 2010. For the year ended December 31, 2010, the Company recorded stock-based compensation related to the restricted stock of $27,600. The total number of shares of common stock issued to consultants during 2010 was 5,750 and the total value of common stock and options issued to consultants during 2010 was $367,900.

On October 20, 2010, the Company appointed John N. Bonfiglio, Ph.D. as Chief Executive Officer and President of the Company. Dr. Bonfiglio was also appointed as a director on the Company’s Board. The Board granted Dr. Bonfiglio a stock option for 10,000 shares of common stock and issued 1,250 shares of restricted common stock in accordance with the Company’s 2007 Incentive Stock and Awards Plan. The stock option and the restricted common stock vested as follows: 25% of the option shares and the restricted stock vested immediately upon grant, with the balance of the option shares and the restricted stock vesting in equal monthly installments over the next 36 months beginning 30 days after the grant date. The restricted stock was valued at $32.00 per share, the reported closing price of the Company’s common stock on October 20, 2010. For the year ended December 31, 2010, the Company recorded stock-based compensation expense related to the issuance and partial vesting of the restricted stock award of $12,083.

On May 13, 2011, the Board accepted the resignation of Dr. Bonfiglio, Ph.D. as Chief Executive Officer and President of the Company and as a director on the Board. As a result of Dr. Bonfiglio’s resignation, of the 1,250 shares of restricted stock awarded to him, 469 shares had vested and 781 shares were returned to treasury and cancelled effective his date of resignation. For the year ended December 31, 2011, the Company recorded stock-based compensation expense related to the issuance and partial vesting of the restricted stock award of $3,332.

On February 28, 2012, the Company issued 380,868 shares of common stock to Alexej Ladonnikov as payment in full for his 20% ownership of the Note ($200,000) and its related accrued interest ($28,521).

On April 20, 2012, the Company entered into a Securities Purchase Agreement with certain accredited investors relating to the sale and issuance of an aggregate of 2,011,691 shares of its common stock and warrants to purchase up to 502,928 shares of its common stock at an exercise price of $5.925 per share, for an aggregate purchase price of approximately $7,950,000 (the “April Private Placement”). The April Private Placement closed on April 25, 2012, and the Company received proceeds, net of offering costs, of approximately $7,930,000.

On April 25, 2012, the Company converted debt totaling $762,534 (including accrued interest of $12,534) owed to DermaStar, a related party, into 193,046 shares of the Company’s common stock and a related warrant to purchase 48,262 shares of the Company’s common stock at an exercise price of $5.925 per share (see Note 6).

On August 30, 2012, the Company entered into a License Agreement (the “PCCA License Agreement") and a Stock Purchase Agreement (the “PCCA Purchase Agreement”) in a strategic transaction with PCCA (the “PCCA Transaction”). Pursuant to the terms of the PCCA Purchase Agreement, on August 31, 2012, the Company issued and sold to PCCA 832,682 shares of its common stock at a per share purchase price of $4.8038, for aggregate proceeds, net of offering costs, of approximately $3,980,000.

On December 11, 2012, the Company issued 200 shares of common stock at a price of $4.00 per share for gross proceeds of $800 for stock option exercises.

Preferred Stock

At December 31, 2012, the Company had 5,000,000 shares of preferred stock, $0.001 par value, authorized and no shares issued and outstanding.

Series A Preferred Stock - Converted

The Series A Preferred Stock had the rights and preferences identified in the Certificate of Designation to our Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on December 9, 2011. Among other things, the Certificate of Designation (i) authorizes 10 shares of the Company’s preferred stock to be designated as “Series A Convertible Preferred Stock”; (ii) grants the holders of the Series A Preferred Stock the right to convert into our common stock at a conversion price of approximately $0.06668, as adjusted; (iii) grants a liquidation preference of $10,000 per share of Series A Preferred Stock; (iv) provides that the holders of Series A Preferred Stock shall vote with the holders of our common stock on an “as converted basis”; and (v) provides that the affirmative vote of a majority of the outstanding shares of the Series A Preferred Stock is required to approve certain corporate matters including, among other things, changes to the rights of the holders of the Series A Preferred Stock, amendments to our Amended and Restated Certificate of Incorporation or Bylaws, issuance of priority or parity securities, issuance of debt securities, entry into certain fundamental transactions and increase or decrease in the size of our Board of Directors.

In partial consideration for and in connection with the Line of Credit Agreement described in Note 6, on November 21, 2011, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with DermaStar, a former related party, pursuant to which the Company agreed to issue ten (10) shares of newly-designated Series A Preferred Stock to DermaStar for an aggregate purchase price of $100,000. The Purchase Agreement, as amended, became effective on December 9, 2011, in connection with the dismissal of the Chapter 11 Case by the Bankruptcy Court. On December 12, 2011, the Company and DermaStar consummated the transactions contemplated by the Purchase Agreement. On December 31, 2011 and made effective November 21, 2011, the Company entered into a First Amendment to Securities Purchase Agreement (the “Amendment”). Pursuant to the terms of the Amendment, DermaStar agreed not to convert more than five (5) shares of Series A Preferred Stock into common stock until such time as the Company has a sufficient number of authorized shares of common stock to enable the conversion of all ten shares of Series A Preferred Stock held by DermaStar. The five shares of preferred stock could be converted into 749,850 shares of common stock, which represented approximately 65% of the capital stock of the Company on an as-converted basis at the time of issuance.

The Company recorded a beneficial conversion feature of $100,000 to the preferred share purchase and recorded a preferred stock discount. As the preferred shares did not have a stated redemption date, the associated discount was amortized from the date of issuance to the earliest possible conversion date, which is the date of issuance and recognized as a deemed dividend to the preferred stockholders using the effective yield method. Accordingly, the Company recorded non-cash accretion of preferred stock deemed dividend totaling $100,000 in 2011, which represents an increase to reported net loss in arriving at net loss attributable to common stockholders and additional paid-in capital by a corresponding $100,000. The non-cash accretion of the preferred stock deemed dividend does have an effect on net loss or cash flows for the year ended December 31, 2011.

On June 29, 2012, DermaStar converted the 10 shares of Series A Preferred Stock held by it into 1,499,700 shares of the Company’s common stock. In connection with the conversion, the Company paid to DermaStar $200,000 as partial consideration for the conversion pursuant to a conversion agreement. Immediately following the conversion of the Series A Preferred Stock, all 10 shares were retired to our treasury and cancelled. The Company recognized the $200,000 payment as additional consideration transferred in the transaction in excess of the fair value of the consideration issuable in accordance with the original conversion terms. As a result, the cash payment to DermaStar was recorded as a deemed preferred stock dividend. Accordingly, the Company recorded a deemed preferred stock dividend at the date of conversion, June 29, 2012, totaling $200,000, which represents an increase to reported net loss in arriving at net loss attributable to common stockholders.

Restricted Stock Units (“RSUs”)

RSU awards are granted subject to certain restrictions, including performance based conditions. The grant-date fair value of the RSUs, which has been determined based upon the market value of the Company’s shares of common stock on the grant date, is expensed over the vesting period.

On July 18, 2012, the Company granted to Mr. Baum, in connection with his services as the Chief Executive Officer, 160,000 RSUs pursuant to a Stand-alone Restricted Stock Unit Agreement (the “Baum RSUs”) outside of the Company’s 2007 Incentive Stock and Awards Plan (as amended on November 5, 2008, January 25, 2012 and July 18, 2012) (the “Plan”). The Baum RSUs are subject to certain performance-based vesting criteria, such that 40,000 RSUs will vest upon the satisfaction of each of the following events: (i) successful completion of a financing that results in aggregate cash proceeds to the Company of at least $5,000,000 at any time following the effective date of the grant; (ii) the Company meets the primary endpoints of its Phase 3 clinical studies for its drug candidate, Impracor; (iii) the Company submits a New Drug Application for Impracor to the U.S. Food and Drug Administration; and (iv) the Company enters into a definitive license, collaboration or similar agreement for Impracor that would reasonably be expected to generate cash flow for the Company. The Baum RSUs vest in full upon a change in control of the Company. The Company expects to successfully complete each performance based event required for the Baum RSUs to fully vest, and has accounted for them in such a manner.

On July 18, 2012, the Company granted to Dr. Kammer, in connection with his services as a consultant and advisor to the Company, 40,000 RSUs, pursuant to a Stand-alone Restricted Stock Unit Agreement (“Kammer RSUs”) outside of the Plan. The Kammer RSUs are subject to certain performance-based vesting criteria, such that all 40,000 RSUs will vest when the Company meets the primary endpoints of its Phase 3 clinical studies for its drug candidate, Impracor. The Kammer RSUs vest in full upon a change in control of the Company. The Company expects to successfully complete the performance based event required for the Kammer RSUs to fully vest, and has accounted for them in such a manner. In accordance with accounting guidance for share-based compensation to consultants, the unvested portion of the Kammer RSUs will be revalued on an interim basis until the performance-based vesting criteria is met. Once the performance-based vesting criteria is met, the fair value and total expense amount of the Kammer RSUs will be calculated based on the market value of the Company’s common stock on that day. On the date of issuance, July 18, 2012, the Kammer RSUs were valued at $130,000, and as of December 31, 2012, the revalued estimated fair value of the Kammer RSUs was $390,000.

A summary of the Company’s RSU activity and related information for the year ended December 31, 2012 is as follows:

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested – January 1, 2012		-	$	-
RSUs granted		200,000		3.25
RSUs vested		-		-
RSUs cancelled		-		-
Unvested - December 31, 2012		200,000	$	3.25

The grant-date fair value of RSUs granted during the year ended December 31, 2012 was approximately $650,000. As of December 31, 2012, the total unrecognized compensation expense related to unvested RSUs was approximately $546,000 (including recognized and unrecognized expenses of the revalued fair value of the Kammer RSUs) which is expected to be recognized over a weighted-average period of 0.85 years, based on the estimated vesting schedules.

Stock Option Plan

On September 17, 2007, the Company’s Board of Directors and stockholders adopted the Plan, which, as of December 31, 2012, provided for the issuance of a maximum of an aggregate of 2,400,000 shares of the Company’s common stock. The purpose of the Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in the Company’s development and financial success. Under the Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options and restricted stock. The Plan will be administered by the Company’s Board of Directors until such time as such authority has been delegated to a committee of the Board of Directors. On January 25, 2012, our stockholders approved an amendment to the Plan to increase the number of shares available for issuance under the Plan from 75,000 to 750,000 and to modify the definition of “fair market value” under the Plan, among other things. The approval became effective on February 26, 2012. Effective as of July 18, 2012, our Board of Directors and stockholders holding a majority of the Company’s outstanding voting power approved a further amendment to the Plan to increase the number of shares available for issuance under the Plan from 750,000 to 2,400,000 and to increase the per person limit on the maximum number of shares of the Company’s common stock that may be granted to an individual under the Plan in a calendar year. The Company had 1,477,888 shares available for future issuances under the Plan at December 31, 2012.

A summary of the Plan activity for the year ended December 31, 2012 is as follows:

	Number of shares			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life		Aggregate Intrinsic Value
Options outstanding – January 1, 2012		30,030		$	48.40
Options granted		1,019,726			3.71
Options exercised		(200	)		4.00
Options cancelled		(143,750	)		3.37
Options outstanding - December 31, 2012		905,806		$	5.26		4.76	$	5,290,234
Options exercisable		480,464		$	6.44		5.49	$	2,795,233
Options vested and expected to vest		863,272		$	5.32		4.80	$	5,040,734

The aggregate intrinsic value in the table above represents the total pre-tax amount of the proceeds, net of exercise price, which would have been received by option holders if all option holders had exercised and immediately sold all options with an exercise price lower than the market price on December 31, 2012, based on the closing price of the Company’s common stock of $9.75 on that date.

The Company’s outstanding options have been granted to the employees, directors and consultants at exercise prices that range from $2.40 to $80.00, the estimated fair market value of the common stock on the dates of issuance. These options have expiration dates that range from 3 – 10 years from their grant date and vest immediately, monthly, quarterly, or on an annual basis for a period of up to five years. The Company uses the Black-Scholes-Merton option pricing model to estimate the grant-date fair value of share-based awards. The Black-Scholes-Merton option pricing model requires subjective assumptions regarding future stock price volatility and expected time to exercise, along with assumptions about the risk-free interest rate and expected dividends, which affect the estimated fair values of the Company’s stock-based awards. The expected term of options granted was determined in accordance with the “simplified approach” as the Company has limited historical data on employee exercises and post-vesting employment termination behavior. The expected volatility is based on the historical volatilities of the common stock of the Company that correspond to the expected term. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected term of the grant effective as of the date of the grant. The Company used 0% as an expected dividend yield assumption. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. Utilizing these assumptions, the fair value is determined at the date of grant.

The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. For option grants to employees and directors in 2012, the Company assigned a forfeiture factor of 10%. This percentage was determined based on consideration of actual forfeitures realized to date and estimated forfeitures to potentially occur in the future. All option grants during 2011 were immediately exercisable; therefore, there was no forfeiture factor assigned.

As of December 31, 2012, there was approximately $1,348,000 of total unrecognized compensation expense related to unvested stock options under the Plan. That expense is expected to be recognized over the weighted-average period of 1.03 years.

On October 5, 2011, priority claims of former employees in the amount of $119,667 originating as a result of the Company’s Bankruptcy petition filed June 26, 2010 (the “Priority Claimants”), were settled and paid by the Company. These amounts consisted of accrued and owed payroll amounts, accrued vacation and any other claims held against the Company at October 5, 2011. The Priority Claimants were given cash in the amount $47,975 and 7,500 stock options valued at $11,400 and the difference of $60,292 was recognized as a gain on forgiveness of liabilities during the year ended December 31, 2011. These options have an exercise price of $4.00, vested immediately upon issuance, and have a three year life from the date of issuance.

On January 25, 2012, the Board approved the grant to Dr. Balbir Brar, the Company’s President, of an option to purchase 225,000 shares of common stock under the Plan. The exercise price of the option is $3.68 and the option vests as follows: 1/36th of the unvested shares will vest on each of the 36 monthly periods following the date of the grant provided Dr. Brar continues to be employed by the Company as of the applicable vesting date.

On January 25, 2012, in connection with a senior advisory agreement, the Board approved the grant to Dr. Paul Finnegan, a director, an option to purchase up to 125,000 shares of common stock under the Plan. The exercise price of the option is $3.20. The option was originally scheduled to vest as follows: 50,000 shares on January 6, 2013, 50,000 shares on January 6, 2014 and 25,000 on January 6, 2015. On May 9, 2012, the Company entered into a termination agreement to terminate its senior advisory agreement with Dr. Finnegan, and, in connection therewith, entered into an amendment to Dr. Finnegan’s option agreement. The amendment to the option agreement modifies the vesting schedule of the option to provide that 40% of the shares covered by the grant will vest on September 30, 2012, 40% will vest on March 31, 2013 and 20% will vest on September 30, 2013, provided that Dr. Finnegan is serving as a director, employee or consultant at the time of such vesting. In connection with the termination of the senior advisory agreement, the option agreement was also modified to provide for the issuance of the option as compensation for Dr. Finnegan’s services as a director rather than a consultant. This option is accounted for as an employee stock option agreement, the final valuation of the option was determined at the date of modification and the remaining expense of the option agreement will be recognized ratably over the remaining vesting periods in accordance with the modified terms.

On January 25, 2012, the Board approved a one-time stock option grant to Mr. Baum, the Company’s current Chief Executive Officer and a director, to purchase up to 125,000 shares of the Company’s common stock under the Plan. The option was issued to Mr. Baum for his uncompensated services as Chairman of the Board and significant ongoing services related, but not limited to, the Company’s emergence from Chapter 11 bankruptcy protection, negotiation with creditors, pursuit of additional financing opportunities and hiring of executive officers. The option vests in twelve equal monthly periods, commencing on January 25, 2012 and ending on January 25, 2013 and has an exercise price of $2.40.

On January 25, 2012 the Board approved the grant to Andrew R. Boll, the Company’s Vice-President of Accounting and Public Reporting, of an option to purchase up to 15,000 shares of common stock under the Plan, which option was granted on February 1, 2012, the commencement date of Mr. Boll’s employment with the Company. The exercise price of the option is $3.68 and the option vests as follows: 1/36th of the unvested shares will vest on each of the 36 monthly periods following the date of the grant provided Mr. Boll continues to be employed by the Company as of the applicable vesting date.

On January 25, 2012 the Board approved the grant to Dr. Joachim Schupp, the Company’s Chief Medical Officer, of an option to purchase up to 75,000 shares of common stock under the Plan, which option was granted on February 15, 2012, the commencement date of Dr. Schupp’s employment with the Company. The exercise price of the option is $3.60 and the option vests as follows: 1/36th of the unvested shares will vest on each of the 36 monthly periods following the date of the grant provided Dr. Schupp continues to be employed by the Company as of the applicable vesting date.

On April 1, 2012, the Board of Directors approved the issuance of options to purchase 25,000 shares of the Company’s common stock to each of the Company’s directors, including the Company’s employee and non-employee directors, under the Plan. Each of the options has an exercise price of $4.50 per share. The options have a term of five years and vest quarterly over a one year period, such that the option to purchase 6,250 shares vests on each of June 30, 2012, September 30, 2012, December 31, 2012 and March 31, 2013.

On April 1, 2012, in recognition and consideration for his services as a director to the Company during 2010 and 2011, the Board approved the issuance to Dr. Jeff Abrams of an additional option to purchase 60,000 shares of the Company’s common stock with an exercise price of $4.50 per share under the Plan. The option has a ten year term and vests monthly over a one year period.

On April 1, 2012, the Company granted to Mr. Baum an option to purchase up to 60,000 shares of the Company’s common stock at an exercise price of $4.50 per share under the Plan pursuant to the Company’s form of Nonqualified Stock Option Agreement. The option terminates on March 31, 2017 and vests over a two year period, with 15,000 options vesting immediately upon issuance and an additional 1,875 options vesting monthly for the next twenty four months thereafter.

Effective as of the close of business on July 25, 2012, Dr. Brar submitted his resignation as a director on the Board of Directors of the Company. Dr. Brar continues in his capacity as the President of the Company. At the time of his resignation as a director, options to purchase 6,250 shares had vested under Dr. Brar’s April 1, 2012 option grant related to his Board service, and all unvested shares subject to the option were forfeited. Dr. Brar was granted an extension of 240 days from his resignation date to exercise the 6,250 vested shares.

On July 26, 2012, the Board of Directors of the Company appointed Stephen G. Austin, CPA, as a new director on the Board of Directors of the Company. In connection with his appointment as a director, the Board approved the issuance to Mr. Austin of an option to purchase up to 17,123 shares of the Company’s common stock under the Plan. Such option has an exercise price of $4.50 per share, has a term of five years, and vests monthly over a period of one year commencing on January 1, 2013.

On December 14, 2012, the Board of Directors of the Company appointed August Bassani, Pharm.D., as a new director on the Board of Directors of the Company. In connection with his appointment as a director, the Board approved the issuance to Mr. Bassani of an option to purchase up to 7,603 shares of the Company’s common stock under the Plan. Such option has an exercise price of $10.75 per share, has a term of five years, and vests monthly over a period of one year commencing on January 1, 2013.

The table below illustrates the weighted-average fair value per share computed using the Black-Scholes-Merton option pricing model and the assumptions used for the options granted to the employees and directors during the years ended December 31, 2012 and 2011:

	2012			2011
Weighted-average fair value of options granted	$	3.20		$	1.60
Expected terms (in years)		2.5-5.5			3.0
Expected volatility		219-360	%		85	%
Risk-free interest rate		0.31-1.03	%		0.46	%
Dividend yield		-			-

Effective April 1, 2012, the Company entered into an advisory agreement with director Dr. Robert Kammer (the “Advisory Agreement”) pursuant to which Dr. Kammer will provide certain services to the Company in addition to his services as a director, including, but not limited to, providing management and advice regarding the operations of the registration clinical trials including start-up and on-going clinical operational and development activities, manufacturing and quality control of the clinical and commercial supplies, project and operational management, assistance in the identification of new drug delivery technologies that may be available for acquisition or license and assistance in the development of the Company’s intellectual property. As compensation under the Advisory Agreement, the Company granted to Dr. Kammer on April 1, 2012 an option to purchase up to 60,000 shares of the Company’s common stock at an exercise price of $4.50 per share under the Plan. The option terminates on March 31, 2017 and vests over a two year period, with 15,000 options vesting immediately upon issuance and an additional 1,875 options vesting monthly for the next twenty four months thereafter. In accordance with accounting guidance for share-based compensation to consultants, the unvested portion of the option will be revalued on an interim basis until the termination of the Advisory Agreement. The Advisory Agreement is to terminate on the earlier of the completion of the services or the second anniversary of the date of the agreement. As of December 31, 2012, the revalued aggregate estimated fair value of the stock option, based on the Black-Scholes-Merton option pricing model, was $448,916.

No options were issued to consultants during the year ended December 31, 2011.

The table below illustrates the weighted-average fair value per share computed using the Black-Scholes-Merton option pricing model and the assumptions used for the options granted to the consultants during the year ended December 31, 2012:

	2012
Weighted-average fair value of options granted	$	7.48
Expected terms (in years)		4.25-5.00
Expected volatility		306% - 361	%
Risk-free interest rate		0.48%-1.03	%
Dividend yield		-

Other Stock Based Compensation

As additional compensation under the Advisory Agreement, Dr. Kammer is to be compensated $10,000 per month in the form of common stock based on a $4.50 price per share being allocated to each dollar of payment due to Dr. Kammer. Upon the completion of a financing transaction yielding not less than $15 million to the Company, Dr. Kammer may unilaterally choose to be paid in either cash or common stock, based on the same $4.50 price per share. Dr. Kammer and the Company have agreed that the common stock issuable to Dr. Kammer as compensation under the Advisory Agreement is to be accrued and issued on a quarterly or annual basis; accordingly, as of the date hereof no such shares have been issued to Dr. Kammer. The balance due to Dr. Kammer at December 31, 2012 under the Advisory Agreement was $139,444 (share equivalent of 20,000 common shares) and is included in accounts payable and accrued expenses in the accompanying consolidated balance sheet.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
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-Paragraph 7, 11A
-Chapter 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 23: http://www.xbrl.org/2003/role/presentationRef
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+ Details

8. WARRANTS

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

WARRANTS

NOTE 8. WARRANTS

On April 25, 2012, at the closing of the April Private Placement (see Note 7), the Company issued warrants to certain accredited investors to purchase up to an aggregate amount of 502,928 shares of common stock with an exercise price of $5.925. The warrants have an initial exercise date of April 25, 2012 and a three-year term. Also on April 25, 2012, in connection with the Conversion Agreement (see Note 6) between the Company and DermaStar, a related party, the Company issued to DermaStar a warrant to purchase up to 48,262 shares of the Company’s common stock with an exercise price of $5.925 per share. The warrant has an initial exercise date of April 25, 2012 and a three-year term.

The warrants issued as part of the April Private Placement and to DermaStar have mandatory exercise provisions providing that the Company may require the holders of the warrants to exercise the warrants in full but not in part within twenty (20) business days after the date of a written notice delivered by the Company to each holder of a warrant; provided that (i) the value weighted average price of the Company’s common stock for ten (10) consecutive trading days is equal to or greater than the exercise price, (ii) the Company has received a Filing Review Notification (commonly referred to as a “74 Day Letter”) from the U.S. Food and Drug Administration regarding the status of the Company’s Impracor topical non-steroidal anti-inflammatory drug, and (iii) sufficient shares of the Company’s common stock are authorized and reserved for issuance upon full exercise of the warrants.

A summary of the activity of the warrants for the year ended December 31, 2012 is as follows:

	Number of Shares Subject to Warrants Outstanding			Weighted Avg. Exercise Price

Warrants outstanding - December 31, 2011		19,100		$	165.80
Granted		551,190			5.93
Exercised		-
Expired		(13,418	)		160.00
Warrants outstanding and exercisable - December 31, 2012		556,872		$	7.66
Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2012

9. INCOME TAXES

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9. INCOME TAXES

The Company is subject to taxation in the United States and California. The provision for income taxes for the years ended December 31, 2012 and 2011 are summarized below:

	December 31,		December 31,
	2012		2011
Current income tax expense (benefit)
Federal	$	-	$	-
State		1,600		-
		1,600		-
Deferred income tax expense (benefit)
Federal		-		-
State		-		-
		-		-
Provision for income taxes	$	1,600	$	-

Income taxes for the year ended December 31, 2012, are recorded in selling, general and administrative expenses line item in the accompanying consolidated statement of operations.

The provision for income taxes using the statutory federal income tax rate of 34% as compared to the Company’s effective tax rate is summarized as follows:

	December 31,			December 31,
	2012			2011
Federal tax benefit at statutory rate	$	(1,843,963	)	$	(319,489	)
State tax benefit, net		1,056			(58,881	)
Research and development credits		-			(10,123	)
Employee stock-based compensation		139,184			-
Loss on debt conversion		406,439			-
Other differences		153,216			-
Change in valuation allowance		1,145,668			388,493
Provision for income taxes	$	1,600		$	-

At December 31, 2012 and 2011, the Company had deferred tax assets of approximately $7,300,000 and $6,200,000, respectively. Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize these assets, a full valuation allowance has been established to offset the net deferred tax asset. Additionally, the future utilization of the Company’s net operating loss to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code Section 382, as a result of ownership changes that may have occurred previously or that could occur in the future. The Company has not performed a Section 382 analysis to determine the limitation of the net operating loss and research and development credit carry forwards.

Significant components of the Company’s deferred tax assets are as follows:

	December 31,			December 31,
	2012			2011
Deferred tax assets
Federal and state net operating loss carryforwards	$	5,438,500		$	4,886,429
Stock-based compensation		1,367,580			743,789
Tax credits		473,499			532,278
Other		33,570			4,985
Total deferred tax assets		7,313,149			6,167,481
Less: Valuation allowance		(7,313,149	)		(6,167,481	)
Net deferred income tax asset	$	-		$	-

Realization of the deferred tax assets is dependent upon the generation of future taxable income, the amount and timing of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by approximately $1,100,000 and $388,000 in 2012 and 2011, respectively.

As of December 31, 2012, we have federal and state net operating loss carryforwards of approximately $14.7 million and $11.5 million, which expire through 2021 and 2019, respectively. The utilization of net operating loss carryforwards may be subject to limitations under provision of the Internal Revenue Code Section 382 and similar state provisions. The Company estimates its federal and California research and development tax credit carryforwards of approximately $308,000 and $251,000, respectively, which begin to expire in 2027 unless previously utilized.

A portion of the net operating loss carry forwards as of December 31, 2012 and 2011 include amounts related to stock option deductions. Excess tax benefits, if any, from share-based compensation are only realized when income taxes payable is reduced, with the corresponding credit posted to Additional Paid-in Capital.

The impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has 50% or less likelihood of being sustained upon examination. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest or penalties at December 31, 2012 and 2011, and has not recognized interest and/or penalties in the consolidated statements of operations for the years ended December 31, 2012 and 2011.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

+ Details

10. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 10. COMMITMENTS AND CONTINGENCIES

Commitments

The Company leases its office facilities under a noncancelable operating lease, which expires on February 28, 2014, with a monthly amount due of $2,972 for the first 12 months which began March 1, 2012, and $3,715 due monthly for the next 12 months. Rent expense for the years ended December 31, 2012, 2011 and the period from Inception through December 31, 2012 was $32,467, $18,299 and $276,422, respectively.

Indemnities and Guarantees

In addition to the indemnification provisions contained in the Company’s charter documents, the Company generally enters into separate indemnification agreements with the Company’s directors and officers. These agreements require the Company, among other things, to indemnify the director or officer against specified expenses and liabilities, such as attorneys’ fees, judgments, fines and settlements, paid by the individual in connection with any action, suit or proceeding arising out of the individual’s status or service as the Company’s director or officer, other than liabilities arising from willful misconduct or conduct that is knowingly fraudulent or deliberately dishonest, and to advance expenses incurred by the individual in connection with any proceeding against the individual with respect to which the individual may be entitled to indemnification by the Company. The Company also indemnifies its lessor in connection with its facility lease for certain claims arising from the use of the facility. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated nor incurred any payments for these obligations and, therefore, no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheets.

Cato Research Ltd. Agreement

In accordance with the Master Services Agreement, dated April 10, 2007, between the Company and Cato Research Ltd. (“Cato”), a contract research and development organization, the Company entered into a clinical trial services agreement (“Agreement”) with Cato on June 10, 2008. Under the Agreement, Cato served as the Company’s strategic partner and contract research organization in conducting the Company’s Phase 3 clinical trial for Ketotransdel. The Company has incurred approximately $3.2 million (original estimate of costs was $3.3 million) related to Cato’s fees as well as pass-through costs incurred by Cato or payable to the clinical sites for patients enrolled in the study. The Company does not anticipate incurring any additional costs related to this Agreement.

PCCA License Agreement

Pursuant to the terms of the PCCA License Agreement entered in connection with the PCCA Transaction, effective August 30, 2012, PCCA has granted to the Company and its affiliates certain exclusive rights under PCCA’s proprietary formulations, other technologies and data, and the Company has agreed to pay to PCCA certain royalties on net sales relating to the sale of certain future products, which royalties range from 4.5% to 9% for each product, subject to certain minimum royalty payments. PCCA may terminate the PCCA License Agreement if the Company fails to commence efforts to research and develop future products within certain time periods, as set forth in the PCCA License Agreement.

Cosmetic License Agreements - Terminated

On May 20, 2009, the Company and JH Direct, LLC (“JH Direct”) entered into a licensing agreement providing JH Direct with the exclusive worldwide rights to the Company’s anti-cellulite cosmetic product which utilizes the Company’s patented topical delivery system technology, Accudel. Under the terms of the agreement, JH Direct must pay the Company initial royalty advances and a continuing licensing royalty on the worldwide sales of the anti-cellulite product. The Company received non-refundable royalty advances totaling $100,000 from JH Direct. During the year ended December 31, 2012, management of the Company concluded that JH Direct had abandoned its efforts to commercialize the anti-cellulite cream and the Company exercised its rights to terminate the agreement in January 2012, at which time all revenues from this agreement were recognized in full. The Company does not expect to receive any additional funds from JH Direct under this contract.

In June 2010, the Company and Jan Marini Skin Research, Inc. (“JMSR”) entered into a licensing agreement providing JMSR with the exclusive U.S. rights to Imprimis topical delivery technology for use in an anti-cellulite cosmetic product for the dermatological market. Under the terms of the agreement, JMSR would pay a licensing royalty on the U.S. and worldwide sales of an anti-cellulite product using Imprimis’ delivery technology. JMSR obtained an exclusive right to promote and sell a product in the U.S. dermatological market for approximately one year after which time they have a non-exclusive right. Also, JMSR obtained a non-exclusive right to promote and sell the product in the ex-U.S. dermatological market. In accordance with the cosmetic products consulting agreement, the cosmetic consultants will receive a percentage of the royalties paid to the Company. Management believes JMSR has abandoned its efforts to commercialize the anti-cellulite cream and the Company terminated this agreement in January 2012. No revenues or amounts were paid to or on behalf of the Company related to this agreement.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 20
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

11. OTHER RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2012

OTHER RELATED PARTY TRANSACTIONS

NOTE 11. OTHER RELATED PARTY TRANSACTIONS

During the year ended December 31, 2011, the Company received cash advances from its Board member Jeffery Abrams and former Board member Anthony Thornley in the amount of $27,537 to extend insurance policies of the Company. Following the dismissal of the Chapter 11 Case by the Bankruptcy Court on December 9, 2011, $27,537 was paid back by the Company in cash to Mr. Thornley and Mr. Abrams. There are currently no amounts due to Mr. Thornley and/or Dr. Abrams related to this or any other transaction.

During the year ended December 31, 2011, DermaStar purchased trade debt from third party vendors totaling $56,087. The amount owed to DermaStar related to this debt is included in the accounts payable – related party line item on the consolidated balance sheet as of December 31, 2011. No amounts were paid to DermaStar related to this debt for the year ended December 31, 2011. DermaStar also made cash payments on behalf of the Company during the year ended December 31, 2011 in the amount of $254,142. On December 31, 2011, the Company made a payment to DermaStar totaling $254,142, as reimbursement for DermaStar’s cash payments made on behalf of the Company. No amounts were due to DermaStar at December 31, 2012. For information regarding our relationship and other transactions with DermaStar, please see Notes 6 and 7.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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+ Details

12. SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2012

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12. SUBSEQUENT EVENTS

The Company has performed an evaluation of events occurring subsequent to December 31, 2012 through the issuance date of this Annual Report. Based on our evaluation, nothing other than the events described below need to be disclosed.

In February 2013, the Company issued 219 shares of common stock at a price of $4.00 per share. The shares of common stock were issued to net settle total common stock options to purchase 1,030 shares of common stock.

In February 2013, the Company made payments totaling $184 in connection with cancelled, fractional share amounts of common stock (35 common stock share equivalents) in connection with our reverse stock split effected February 7, 2013.

Public Offering of the Company’s Common Stock; Underwriting Agreement

On February 13, 2013, the Company closed an underwritten public offering of 1,840,000 shares of its common stock at a per share price to the public of $5.25 (the “Public Offering”), and received net proceeds of approximately $8,140,000 after deducting underwriter fees and commissions and other offering expenses. The underwriters also exercised their option to purchase an additional 276,000 shares of common stock from the Company at $5.25 per share to cover over-allotments on March 14, 2013. Net cash proceeds from the exercise of the over-allotment were approximately $1,320,000. The shares issued upon the closing of the Public Offering and the exercise of the over-allotment were registered on a Registration Statement on Form S-1 (File No. 333-182846), which was declared effective by the SEC on February 7, 2013. On February 7, 2013, we entered into an Underwriting Agreement (the “Underwriting Agreement”) with MDB Capital Group, LLC. As contemplated by the Underwriting Agreement, at the closing of the Public Offering the underwriters received warrants (the “Warrants”) to purchase 8.5% of the number of shares sold in the offering (including 8.5% of shares sold pursuant to their over-allotment option). The Warrants are exercisable at $5.25 per share (100% of the price of the common stock sold in the offering), commencing on the effective date of the offering and expiring five years from the effective date of the offering.

One-for-Five Reverse Stock Split; NASDAQ Listing

In connection with the Public Offering, after the effectiveness of the Registration Statement on February 7, 2013, the Company effected a one-for-five reverse stock split of its common stock and on February 8, 2013, the Company's common stock began trading on The NASDAQ Capital Market on a split-adjusted basis. All information included in this Annual Report has been adjusted to reflect the effect of the one-for-five reverse stock split.

Strategic Alliance Agreement - PCCA

On February 18, 2013, we entered into a Strategic Alliance Agreement (the “Agreement) with PCCA. Under the Agreement, PCCA has agreed that during the term of the Agreement, it will not introduce any of PCCA’s members or customers meeting certain criteria (the “Member/Customers”) to any third party whereby such third party licenses or otherwise acquires the intellectual property rights of such Member/Customer, without first presenting such an opportunity to the Company. PCCA may, but is not required to, present such opportunities to the Company, use reasonable efforts to facilitate an introductory meeting between the Member/Customer and the Company, and to further provide certain key technical assistance to a potential development project associated with the Member/Customer’s intellectual property rights. In the event the Company and a Member/Customer introduced to the Company by PCCA enter into a commercial agreement for the license or acquisition of the intellectual property rights owned by the Member/Customer, PCCA will be entitled to receive certain cash fees up to an aggregate of $100,000, as well as a commission based on net sales, if any, generated by the Company as a result of the acquired intellectual property rights. The Agreement has a term of one year and is automatically extended for successive one year periods unless either party gives the other written notice of non-renewal.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Imprimis has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Principles of Consolidation

Principles of Consolidation

Development Stage Enterprise

Development Stage Enterprise

Research and Development

Research and Development

Revenue Recognition and Deferred Revenue

Revenue Recognition and Deferred Revenue

Income Taxes

Income Taxes

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition.

Concentrations of Credit Risk

Concentrations of Credit Risk

Deferred Offering Costs

Deferred Offering Costs

Furniture and Equipment

Furniture and Equipment

Furniture and equipment is stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of three to five years.

Deferred Rent

Deferred Rent

Fair Value Measurements

Fair Value Measurements

●	Level 1: Applies to assets or liabilities for which there are quoted prices (unadjusted) for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and must be used to measure fair value whenever available.
●	Level 2: Applies to assets or liabilities for which there are significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
●	Level 3: Applies to assets or liabilities for which there are significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. For example, level 3 inputs would relate to forecasts of future earnings and cash flows used in a discounted future cash flows method.

Beneficial Conversion Features and Debt Discounts

Beneficial Conversion Features and Debt Discounts

Stock-Based Compensation

Stock-Based Compensation

The Company recorded stock-based compensation related to equity instruments granted to employees, directors and consultants as follows:

	For the Years Ended				For the Period From July 24, 1998(Inception) through
	December 31,				December 31,
	2012		2011		2012
Employees - selling, general and administrative	$	384,859	$	134,922	$	1,776,312
Employees - research and development		250,380		37,754		865,051
Directors - selling, general and administrative		1,225,350		19,477		1,348,042
Consultants - selling, general and administrative		137,745		-		945,353
Consultants - research and development		158,278		-		158,278
Total	$	2,156,612	$	192,153	$	5,093,036

Basic and Diluted Loss per Common Share

Basic and Diluted Loss per Common Share

The following table shows the computation of basic and diluted loss per share of common stock for the years ended December 31, 2012 and 2011:

	For the year ended December 31,
	2012			2011

Net loss	$	(5,383,535	)	$	(953,936	)
Deemed dividend to preferred stockholders		(200,000	)		(100,000	)
Numerator – loss attributable to common stockholders		(5,583,535	)		(1,053,936	)
Denominator – weighted average number of shares
of common stock outstanding, basic and diluted		4,493,535			397,803
Net loss per share, basic and diluted	$	(1.24	)	$	(2.65	)

Use of Estimates

Use of Estimates

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recent Accounting Pronouncements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2012

Accounting Policies [Abstract]

Stock based compensation

	For the Years Ended				For the Period From July 24, 1998(Inception) through
	December 31,				December 31,
	2012		2011		2012
Employees - selling, general and administrative	$	384,859	$	134,922	$	1,776,312
Employees - research and development		250,380		37,754		865,051
Directors - selling, general and administrative		1,225,350		19,477		1,348,042
Consultants - selling, general and administrative		137,745		-		945,353
Consultants - research and development		158,278		-		158,278
Total	$	2,156,612	$	192,153	$	5,093,036

Basic and Diluted EPS

	For the year ended December 31,
	2012			2011

Net loss	$	(5,383,535	)	$	(953,936	)
Deemed dividend to preferred stockholders		(200,000	)		(100,000	)
Numerator – loss attributable to common stockholders		(5,583,535	)		(1,053,936	)
Denominator – weighted average number of shares
of common stock outstanding, basic and diluted		4,493,535			397,803
Net loss per share, basic and diluted	$	(1.24	)	$	(2.65	)

4. FURNITURE AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Furniture and equipment

	December 31,			December 31,
	2012			2011
Furniture and Equipment, net:
Computer Software and Hardware	$	6,525		$	-
Furniture and Equipment		8,967			-
		15,492			-
Accumulated Depreciation		(2,944	)		-
	$	12,548		$	-

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

12 Months Ended

Dec. 31, 2012

Payables and Accruals [Abstract]

Accounts payable and accrued expenses

	December 31,		December 31,
	2012		2011
Accounts payable	$	286,686	$	218,612
Accrued offering costs		185,337
Deferred rent		2,477		-
Other accrued expenses		21,440		-
Stock-based compensation accrual		139,444		-
Total accounts payable and accrued expenses	$	635,384	$	218,612

6. NOTES PAYABLE (Tables)

12 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

Notes payable

	December 31,		December 31,
	2012		2011
10% convertible notes	$	-	$	300,000
7.5% convertible note		-		1,000,000
Total convertible notes payable		-		1,300,000
Less: Current portion		-		(1,300,000	)
Long-term portion	$	-	$	-

7. STOCKHOLDERS EQUITY AND STOCK BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2012

Stockholders Equity And Stock Based Compensation Tables

Schedule of RSU activity

	Number of Shares		Weighted Average Grant Date Fair Value
Unvested – January 1, 2012		-	$	-
RSUs granted		200,000		3.25
RSUs vested		-		-
RSUs cancelled		-		-
Unvested - December 31, 2012		200,000	$	3.25

Schedule of Stock Option Plan

	Number of shares			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life		Aggregate Intrinsic Value
Options outstanding – January 1, 2012		30,030		$	48.40
Options granted		1,019,726			3.71
Options exercised		(200	)		4.00
Options cancelled		(143,750	)		3.37
Options outstanding - December 31, 2012		905,806		$	5.26		4.76	$	5,290,234
Options exercisable		480,464		$	6.44		5.49	$	2,795,233
Options vested and expected to vest		863,272		$	5.32		4.80	$	5,040,734

Assumption schedule

	2012			2011
Weighted-average fair value of options granted	$	3.20		$	1.60
Expected terms (in years)		2.5-5.5			3.0
Expected volatility		219-360	%		85	%
Risk-free interest rate		0.31-1.03	%		0.46	%
Dividend yield		-			-

The table below illustrates the weighted-average fair value per share computed using the Black-Scholes-Merton option pricing model and the assumptions used for the options granted to the consultants during the year ended December 31, 2012:

	2012
Weighted-average fair value of options granted	$	7.48
Expected terms (in years)		4.25-5.00
Expected volatility		306% - 361	%
Risk-free interest rate		0.48%-1.03	%
Dividend yield		-

8. WARRANTS (Tables)

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

WARRANTS

	Number of Shares Subject to Warrants Outstanding			Weighted Avg. Exercise Price

Warrants outstanding - December 31, 2011		19,100		$	165.80
Granted		551,190			5.93
Exercised		-
Expired		(13,418	)		160.00
Warrants outstanding and exercisable - December 31, 2012		556,872		$	7.66
Weighted average remaining contractual life of the outstanding warrants in years - December 31, 2012

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

9. INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Provision for income taxes

	December 31,		December 31,
	2012		2011
Current income tax expense (benefit)
Federal	$	-	$	-
State		1,600		-
		1,600		-
Deferred income tax expense (benefit)
Federal		-		-
State		-		-
		-		-
Provision for income taxes	$	1,600	$	-

Income tax reconciliation

	December 31,			December 31,
	2012			2011
Federal tax benefit at statutory rate	$	(1,843,963	)	$	(319,489	)
State tax benefit, net		1,056			(58,881	)
Research and development credits		-			(10,123	)
Employee stock-based compensation		139,184			-
Loss on debt conversion		406,439			-
Other differences		153,216			-
Change in valuation allowance		1,145,668			388,493
Provision for income taxes	$	1,600		$	-

Significant components of the Company’s deferred tax assets

	December 31,			December 31,
	2012			2011
Deferred tax assets
Federal and state net operating loss carryforwards	$	5,438,500		$	4,886,429
Stock-based compensation		1,367,580			743,789
Tax credits		473,499			532,278
Other		33,570			4,985
Total deferred tax assets		7,313,149			6,167,481
Less: Valuation allowance		(7,313,149	)		(6,167,481	)
Net deferred income tax asset	$	-		$	-

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	12 Months Ended		173 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Selling, general and administrative	$ 2,980,374	$ 827,674	$ 12,553,701
Research and development	1,298,503	111,554	9,118,761
Compensation Expenses	2,156,612	192,153	5,093,036
Employees
Selling, general and administrative	384,859	134,922	1,776,312
Research and development	250,380	37,754	865,051
Directors
Selling, general and administrative	1,225,350	19,477	1,348,042
ConsultantsMember
Selling, general and administrative	137,745		945,353
Research and development	$ 158,278		$ 158,278

- Definition

Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees.

+ References + Details

- Definition

The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use.

+ References + Details

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($)	6 Months Ended	12 Months Ended														173 Months Ended
	Dec. 31, 1998	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2006	Dec. 31, 2005	Dec. 31, 2004	Dec. 31, 2003	Dec. 31, 2002	Dec. 31, 2001	Dec. 31, 2000	Dec. 31, 1999	Dec. 31, 2012
Summary Of Significant Accounting Policies Details 2
Net loss	$ (100,000)	$ (5,383,535)	$ (953,936)	$ (2,531,228)	$ (4,553,636)	$ (3,304,388)	$ (4,284,540)	$ (584,232)	$ (539,622)	$ (508,226)	$ (207,196)	$ (228,217)	$ (208,420)	$ (213,092)	$ (204,000)	$ (23,804,268)
Deemed dividend to preferred stockholders		(200,000)	(100,000)													(300,000)
Numerator – loss attributable to common stockholders		$ (5,583,535)	$ (1,053,936)													$ (24,104,268)
Denominator – weighted average number of shares outstanding, basic and diluted		4,493,535	397,803
Loss per share, basic and diluted		$ (1.24)	$ (2.65)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Net Income
-URI http://asc.fasb.org/extlink&oid=6518256

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3602-108585

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.19)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.18)
-URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.22)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Other Comprehensive Income
-URI http://asc.fasb.org/extlink&oid=6519514

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e565-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 10, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph A7
-Appendix A

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 87-21
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 19
-Article 5

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28, 29, 30
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

+ Details

NOTES PAYABLE - RELATED PARTY (Details) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Convertible notes Payable	$ 0	$ 1,300,000

4. FURNITURE AND EQUIPMENT (Details) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Furniture and Equipment, net:
Computer Software and Hardware	$ 6,525	$ 0
Furniture and Equipment	8,967	0
Furniture and equipment, gross	15,492	0
Accumulated Depreciation	(2,944)	0
Furniture and equipment, net	$ 12,548	$ 0

- Definition

The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement.

+ References + Details

5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Accounts Payable And Accrued Expenses Details
Accounts payable	$ 286,686	$ 218,612
Accrued offering costs	185,337	0
Deferred rent	2,477	0
Other accrued expenses	21,440	0
Stock-based compensation accrual	139,444	0
Total accounts payable and accrued expenses	$ 635,384	$ 218,612

- Definition

For a classified balance sheet, the cumulative difference as of the balance sheet date between the payments required by a lease agreement and the rental income or expense recognized on a straight-line basis, or other systematic and rational basis more representative of the time pattern in which use or benefit is granted or derived from the leased property, expected to be recognized in income or expense, by the lessor or lessee, respectively, within one year of the balance sheet date.

+ References + Details

- Definition

Aggregate carrying amount of current liabilities (due within one year or within the normal operating cycle if longer) not separately disclosed in the balance sheet. Includes costs that are statutory in nature, are incurred on contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered and of liabilities not separately disclosed.

+ References + Details

6. NOTES PAYABLE (Details) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Notes Payable Details
10% convertible notes	$ 0	$ 300,000
7.5% convertible note	0	1,000,000
Total convertible notes payable	0	1,300,000
Less: Current portion	0	(1,300,000)
Long-term portion	$ 0	$ 0

7. STOCKHOLDERS' EQUITY (Details)	12 Months Ended
7. STOCKHOLDERS' EQUITY (Details)	Dec. 31, 2012 shares
Number of Shares
Beginning, Unvested	0
Granted	200,000
Vested	0
Cancelled	0
Ending, Unvested	200,000
Weighted Average Grant Date Fair Value
Beginning, Unvested	0
Granted	3.25
Vested	0
Cancelled	0
Ending, Unvested	3.25

7. STOCKHOLDERS' EQUITY (Details 1)	12 Months Ended
7. STOCKHOLDERS' EQUITY (Details 1)	Dec. 31, 2012 USD ($) $ / shares shares
Number of shares
Beginning Balance \| shares	30,030
Granted \| shares	1,019,726
Exercised \| shares	(200)
Cancelled/Forfeited \| shares	(143,750)
Ending Balance \| shares	905,806
Exercisable Ending Balance \| shares	480,464
Vested and expected to vest \| shares	863,272
Weighted Avg. Exercise Price
Beginning Balance \| $ / shares	$ 48.40
Granted \| $ / shares	3.71
Exercised \| $ / shares	4
Cancelled/Forfeited \| $ / shares	3.37
Ending Balance \| $ / shares	5.26
Exercisable Ending Balance \| $ / shares	6.44
Vested and expected to vest \| $ / shares	$ 5.32
Aggregate Intrinsic Value
Ending Balance \| $	$ 5,290,234
Exercisable Ending Balance \| $	2,795,233
Vested and expected to vest \| $	$ 5,040,734

7. STOCKHOLDERS' EQUITY (Details 2) - $ / shares	12 Months Ended
7. STOCKHOLDERS' EQUITY (Details 2) - $ / shares	Dec. 31, 2012	Dec. 31, 2011
Employee and Directors
Weighted-average fair value of options granted	$ 3.2	$ 1.6
Expected terms Minimum	2 years 6 months	3 years
Expected terms Maximum	5 years 6 months	3 years
Expected volatility minimum	219.00%	85.00%
Expected volatility maximum	360.00%	85.00%
Risk-free interest rate Minimum	0.31%	0.46%
Risk-free interest rate Maximum	1.03%	0.46%
Dividend yield	0.00%	0.00%
ConsultantsMember
Weighted-average fair value of options granted	$ 7.48
Expected terms Minimum	4 years 3 months
Expected terms Maximum	5 years
Expected volatility minimum	306.00%
Expected volatility maximum	361.00%
Risk-free interest rate Minimum	0.48%
Risk-free interest rate Maximum	1.03%
Dividend yield	0.00%

8. WARRANTS (Details) - WarrantMember	12 Months Ended
8. WARRANTS (Details) - WarrantMember	Dec. 31, 2012 $ / shares shares
Number of shares
Warrants Outstanding, Beginning Balance	19,100
Granted	551,190
Exercised	0
Expired	(13,418)
Warrants Outstanding, Ending Balance	556,872
Weighted average remaining contractual life of the outstanding warrants in years - September 30, 2012	2 years 3 months 10 days
Weighted Avg. Exercise Price
Exercise Price Outstanding, Beginning Balance \| $ / shares	$ 165.80
Exercise Price Granted \| $ / shares	5.93
Exercise Price Expired \| $ / shares	160
Exercise Price Outstanding, Ending Balance \| $ / shares	$ 7.66

9. INCOME TAXES (Details) - USD ($)	3 Months Ended	12 Months Ended
9. INCOME TAXES (Details) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Current income tax expense (benefit)
Federal	$ 0	$ 0
State	1,600	0
Current income tax expense (benefit)	1,600	0
Deferred income tax expense (benefit)
Federal	0	0
State	0	0
Deferred income tax expense (benefit)	0	0
Provision for income taxes	$ 1,600	$ 0

- Definition

The component of income tax expense for the period representing amounts paid or payable (or refundable) as determined by applying the provisions of enacted federal tax law to the domestic taxable Income or Loss from continuing operations.

+ References

+ Details

- Definition

The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable Income or Loss from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
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-Subparagraph (SX 210.4-08.(h))
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+ Details

- Definition

The component of income tax expense for the period representing amounts paid or payable (or refundable) as determined by applying the provisions of enacted state and local tax law to relevant amounts of taxable Income or Loss from continuing operations.

+ References

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+ Details

- Definition

The component of total income tax expense for the period comprised of the increase (decrease) during the period in the entity's domestic deferred tax assets and liabilities attributable to continuing operations as determined by applying the provisions of the federally enacted tax law.

+ References

+ Details

- Definition

The component of income tax expense for the period representing the increase (decrease) in the entity's deferred tax assets and liabilities pertaining to continuing operations.

+ References

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+ Details

- Definition

The component of total income tax expense for the period comprised of the increase (decrease) in the entity's state and local deferred tax assets and liabilities attributable to continuing operations as determined by applying the provisions of the applicable enacted tax laws.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Number 210
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+ Details

9. INCOME TAXES (Details 1) - USD ($)	3 Months Ended	12 Months Ended
9. INCOME TAXES (Details 1) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Income Taxes Details 1
Federal tax benefit at statutory rate	$ (1,843,963)	$ (319,489)
State tax benefit, net	1,056	(58,881)
Research and development credits	0	(10,123)
Employee stock-based compensation	139,184	0
Loss on debt conversion	406,439	0
Other differences	153,216	0
Change in valuation allowance	1,145,668	388,493
Provision for income taxes	$ 1,600	$ 0

- Definition

The sum of the current income tax expense or benefit and the deferred income tax expense or benefit pertaining to pretax Income or Loss from continuing operations; income tax expense or benefit may include interest and penalties on tax uncertainties based on the entity's accounting policy.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 48
-Paragraph 15, 16, 19
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

9. INCOME TAXES (Details 2) - USD ($)	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets
Federal and state net operating loss carryforwards	$ 5,438,500	$ 4,886,429
Stock-based compensation	1,367,580	743,789
Tax credits	473,499	532,278
Other	33,570	4,985
Total deferred tax assets	7,313,149	6,167,481
Less: Valuation allowance	(7,313,149)	(6,167,481)
Net deferred income tax asset	$ 0	$ 0

- Definition

Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences from share-based compensation.

+ References + Details

10. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	12 Months Ended		173 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012
Commitments And Contingencies Details Narrative
Rent expense	$ 32,467	$ 18,299	$ 276,422