View Filing Data

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2013	Aug. 13, 2013
Document And Entity Information
Entity Registrant Name	Imprimis Pharmaceuticals, Inc.
Entity Central Index Key	0001360214
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
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 Common Stock, Shares Outstanding		8,961,583
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 17,970,320	$ 10,035,615
Restricted short-term investment	50,034
Prepaid expenses and other current assets	340,474	61,552
Deferred offering costs		596,281
Total current assets	18,360,828	10,693,448
Furniture and equipment, net	15,647	12,548
TOTAL ASSETS	18,376,475	10,705,996
Current liabilities
Accounts payable and accrued expenses	868,374	635,384
Accrued Phase 3 expenses	55,784	55,784
Accrued payroll and related liabilities	182,008	18,391
Deferred revenue	1,667
Total current liabilities	1,107,833	709,559
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock, $0.001 par value, 395,000,000 shares authorized, 8,961,583 and 6,772,066 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	8,961	6,772
Additional paid-in capital	45,047,482	34,093,933
Deficit accumulated during the development stage	(27,787,801)	(24,104,268)
TOTAL STOCKHOLDERS' EQUITY	17,268,642	9,996,437
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 18,376,475	$ 10,705,996

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2013	Dec. 31, 2012
STOCKHOLDERS' EQUITY
Common stock, par value	$ 0.001	$ 0.001
Common stock, authorized shares	395,000,000	395,000,000
Common stock, issued shares	8,961,583	6,772,066
Common stock, outstanding shares	8,961,583	6,772,066

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended		176 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013
Revenues:
License revenues	$ 2,500		$ 5,000	$ 100,000	$ 105,000
Operating Expenses:
Selling, general and administrative	1,556,145	984,667	2,576,094	1,293,623	15,129,795
Research and development	677,347	133,611	1,132,447	276,574	10,251,208
Loss from operations	(2,230,992)	(1,118,278)	(3,703,541)	(1,470,197)	(25,276,003)
Other income (expense):
Interest expense		(3,576)		(24,658)	(1,730,892)
Interest income	12,940	5,584	20,008	5,584	162,999
Loss from extinguishment of debt		(189,323)		(1,195,410)	(1,195,410)
Gain on settlement					375,000
Gain on forgiveness of liabilities					176,505
Total other income (expense), net	12,940	(187,315)	20,008	(1,214,484)	(2,211,798)
Net loss	(2,218,052)	(1,305,593)	(3,683,533)	(2,684,681)	(27,487,801)
Deemed dividend to preferred stockholders		(200,000)		(200,000)	(300,000)
Net loss attributable to common stockholders	$ (2,218,052)	$ (1,505,593)	$ (3,683,533)	$ (2,884,681)	$ (27,787,801)
Net loss per share of common stock, basic and diluted:	$ (0.25)	$ (0.39)	$ (0.44)	$ (1.17)
Weighted average number of shares of common stockoutstanding, basic and diluted	8,890,668	3,874,554	8,342,497	2,469,171

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended		176 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (3,683,533)	$ (2,684,681)	$ (27,487,801)
Adjustments to reconcile net loss to net cash used in operating activities:
Estimated fair value of contributed services			2,475,000
Gain on forgiveness of liabilities			(176,505)
Amortization of prepaid consulting fees			807,608
Depreciation	2,073	1,247	8,171
Loss on extinguishment of debt		1,195,410	1,195,410
Non-cash interest on notes payable		24,658	1,730,892
Stock-based compensation	1,448,384	848,038	5,733,812
Payments made on behalf of Company by related party			254,142
Changes in assets and liabilities:
Prepaid consulting costs			(140,000)
Prepaid expenses and other current assets	(278,956)	(31,148)	(340,508)
Accounts payable and accrued expenses	283,984	117,156	823,945
Accrued Phase 3 expenses			111,871
Accrued payroll and related liabilities	163,617	11,915	268,599
Deferred revenue	1,667	(100,000)	1,667
NET CASH USED IN OPERATING ACTIVITIES	(2,062,764)	(617,405)	(14,733,697)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of restricted short-term investment	(50,000)		(50,000)
Purchases of furniture and equipment	(5,172)	(15,308)	(23,818)
NET CASH USED IN INVESTING ACTIVITIES	(55,172)	(15,308)	(73,818)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment for settlement of shares in connection with reverse stock split	(191)		(191)
Proceeds from issuance of notes payable to a related party		450,000	976,300
Proceeds received in connection with debt modification		50,000	50,000
Proceeds from issuance of preferred stock			100,000
Proceeds from notes payable			2,500,000
Preferred stock deemed dividend paid at conversion		(200,000)	(200,000)
Cash advances from related party			27,537
Repayment of advances from related party			(281,679)
Capital contributions			168,707
Net proceeds from purchase of common stock and exercise of warrants and stock options			100,250
Proceeds from issuance of common stock and warrants for cash, net of offering costs	10,052,832	7,903,845	29,336,911
NET CASH PROVIDED BY FINANCING ACTIVITIES	10,052,641	8,203,845	32,777,835
NET CHANGE IN CASH AND CASH EQUIVALENTS	7,934,705	7,571,132	17,970,320
CASH AND CASH EQUIVALENTS, beginning of period	10,035,615	146,160
CASH AND CASH EQUIVALENTS, end of period	17,970,320	7,717,292	17,970,320
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	1,600	1,600	13,600
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			432,007
Deferred offering costs in connection with equity offering recorded in account payable		87,732
Conversion of related party accounts payable into common stock		56,087	56,087
Conversion of notes payable and accrued interest into common stock		1,905,137	3,435,314
Forgiveness of notes payable and accrued interest to shareholders			241,701
Conversion of advances to notes payable to shareholders			196,300
Accretion of preferred stock discount			100,000
Related party acquisition of Phase 3 liabilities			56,087
Conversion of preferred stock into common stock		1,500	1,500
Reclassification of deferred offering costs in connection with equity offering	596,281		596,281
Issuance of common stock for consulting services included in accounts payable and accrued expenses	$ 139,444		$ 139,444

1. OVERVIEW AND BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

NOTE 1. OVERVIEW AND BASIS OF PRESENTATION

NOTE 1. OVERVIEW AND BASIS OF PRESENTATION

Company and Background

Imprimis Pharmaceuticals, Inc. (“Imprimis”, the “Company”, “we”, “us”, or “our”) is a specialty pharmaceutical company focused on the commercial development of compounded drug formulations. Imprimis expects to use its proprietary Accudel™ drug delivery technologies, proprietary drug formulations, and its exclusive relationship with Professional Compounding Centers of America, Inc. (“PCCA”), to identify pharmaceutical development opportunities where there are significant unmet medical needs.

The Company’s most near term drug candidate, Impracor™, utilizes its patented Accudel topical cream formulation to enable highly targeted site-specific treatment. Impracor, which is a Phase 3 clinical trial pain product candidate, delivers the active pharmaceutical ingredient (API), ketoprofen, a non-steroidal anti-inflammatory drug (NSAID), through the skin directly into the underlying tissues where the drug exerts its localized anti-inflammatory and analgesic effects.

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 unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. For further information, refer to the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

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. All losses accumulated since inception have been considered as part of the Company’s development stage activities.

These condensed 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 $27.8 million at June 30, 2013, and anticipates incurring further losses through the remainder of the fiscal 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 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 outsourced contracts.

Intellectual Property

The costs of acquiring intellectual property rights to be used in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where we have not identified an alternative future use for the acquired rights, and are capitalized in situations where it has identified an alternative future use. No costs associated with acquiring intellectual property rights have been capitalized to date. Costs of maintaining intellectual property rights are expensed as incurred.

Revenue Recognition and Deferred Revenue

The Company will recognize revenues when all of the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. The Company believes it will not generate 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.

Product Revenues

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 collectability 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.

License Revenues

License arrangements may consist of non-refundable upfront license fees, data transfer fees, research reimbursement payments, exclusive licensed rights to patented or patent pending compounds, technology access fees, and various performance or sales milestones. These arrangements can be multiple element arrangements.

Non-refundable, up-front fees that are not contingent on any future performance by us, and require no consequential continuing involvement on our part, are recognized as revenue when the license term commences and the licensed data, technology and/or compound is delivered. Such deliverables may include physical quantities of compounds, design of the compounds and structure-activity relationships, the conceptual framework and mechanism of action, and rights to the patents or patents pending for such compounds. We defer recognition of non-refundable upfront fees if we have continuing performance obligations without which the technology, right, product or service conveyed in conjunction with the non-refundable fee has no utility to the licensee that is separate and independent of our performance under the other elements of the arrangement. In addition, if we have required continuing involvement through research and development services that are related to our proprietary know-how and expertise of the delivered technology, or can only be performed by us, then such up-front fees are deferred and recognized over the period of continuing involvement. Guaranteed minimum annual royalties are recognized on a straight-line basis over the applicable term.

During three and six months ended June 30, 2013, the Company recorded $2,500 and $5,000 in revenues, respectively, for non-refundable royalty advances. In January 2013, the Company entered into a license agreement with resolutionMD, LLC granting resolutionMD, LLC rights to its Accudel delivery technology to be used for anti-cellulite formulations. Under the license agreement, the Company will receive $10,000 as a guaranteed minimum royalty amount for fiscal 2013 and, if applicable, additional royalty payments based on a percent (generally, 5%-7%) of net sales of any products covered under the license agreement. The license agreement with resolutionMD, LLC, unless terminated earlier, has a term of ten years following the first commercial sale of a product that is covered under the license agreement. The Company does not anticipate that the license agreement with resolutionMD, LLC will generate significant revenues for the 2013 fiscal year.

Income Taxes

The Company accounts for income taxes under the provisions of Accounting Standards Codification (“ASC”) 740, “Income Taxes”, or ASC 740. As of June 30, 2013, there were no unrecognized tax benefits included in the condensed consolidated balance sheets that would, if recognized, affect the effective tax rate. 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 in its condensed consolidated balance sheets at June 30, 2013 and December 31, 2012, and has not recognized interest and/or penalties in the consolidated statements of operations for the periods ended June 30, 2013 and 2012. The Company is subject to taxation in the United States and California. The Company’s tax years for 2000 and forward are subject to examination by the federal 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. At June 30, 2013, the Company had approximately $17.7 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 on Form S-1 (as amended, the “Registration Statement”) in connection with an underwritten public offering of its common stock (the “Public Offering”). At December 31, 2012, the Company had deferred offering costs of $596,281 for legal, accounting and other expenses directly related to the Public Offering. The Public Offering closed on February 13, 2013 (see Note 4), and these deferred offering costs and any other costs directly associated with the Public Offering subsequent to December 31, 2012 were netted against the cash proceeds to the Company arising from the Public Offering. As a result, there were no deferred offering costs at June 30, 2013.

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 June 30, 2013 and December 31, 2012, the Company did not have any financial assets or liabilities which are measured on a recurring basis. At June 30, 2013 and December 31, 2012, the Company’s financial instruments include cash and cash equivalents, a restricted short-term investment, accounts payable and accrued expenses, accrued Phase 3 expenses and accrued payroll and related liabilities. The carrying amount of these financial instruments, except for the restricted short-term investment, approximates fair value due to the short-term maturities of these instruments. The Company’s restricted short-term investment is carried at amortized cost which approximates fair value.

Stock-Based Compensation

All stock-based payments to employees, including grants of stock options to employees, directors and consultants, warrants and restricted stock grants, are recognized in the condensed 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 condensed consolidated balance sheets.

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

	For The Three		For The Three		For The Six		For The Six
	Months Ended		Months Ended		Months Ended		Months Ended
	June 30, 2013		June 30, 2012		June 30, 2013		June 30, 2012
Employees - selling, general and administrative	$	378,895	$	115,634	$	464,898	$	118,224
Employees - research and development		44,619		40,866		111,750		82,412
Directors - selling, general and administrative		45,458		493,047		248,250		567,415
Consultants - selling, general and administrative		345,605		79,987		505,527		79,987
Consultants - research and development		180,559		-		117,959		-
Total	$	995,136	$	729,534	$	1,448,384	$	848,038

Basic and Diluted Net 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 3,138,004 and 1,476,987 at June 30, 2013 and 2012, 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 three and six months ended June 30, 2013 and 2012:

	For The Three			For The Three			For The Six			For The Six
	Months Ended			Months Ended			Months Ended			Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012

Net loss	$	(2,218,052	)	$	(1,305,593	)	$	(3,683,533	)	$	(2,684,681	)
Deemed dividend to preferred stockholders		-			(200,000	)		-			(200,000	)
Numerator – (loss) attributable to common stockholders		(2,218,052	)		(1,505,593	)		(3,683,533	)		(2,884,681	)
Denominator – weighted average
number of shares outstanding, basic and diluted		8,890,668			3,874,554			8,342,497			2,469,171
Net Loss per share, basic and diluted	$	(0.25	)	$	(0.39	)	$	(0.44	)	$	(1.17	)

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.

Reclassifications

Certain prior period items and amounts have been reclassified to conform to the classifications used to prepare the 2013 condensed consolidated financial statements. These reclassifications had no material impact on the Company’s financial position, results of operations, or cash flows as previously reported.

Recently Announced Accounting Pronouncements

In July 2013, the FASB issued Accounting Standards Update (“ASU”) No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” ASU 2013-11 provides explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, with an option for early adoption. The Company intends to adopt this guidance at the beginning of its first quarter of fiscal year 2014, and is currently evaluating the impact on its financial statements and disclosures.

Recently Adopted 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. The adoption of ASU 2011-11 did not have a material impact on our condensed 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. The adoption of ASU 2013-01 did not have a material impact on our condensed consolidated financial statements.

2. SHORT-TERM RESTICTED INVESTMENT

6 Months Ended

Jun. 30, 2013

Notes to Financial Statements

NOTE 2. SHORT-TERM RESTICTED INVESTMENT

NOTE 2. SHORT-TERM RESTRICTED INVESTMENT

Short-term restricted investment at June 30, 2013 consists of a certificate of deposit, which is classified as held-to-maturity. At June 30, 2013, the fair value of this investment approximated its amortized cost basis.

At June 30, 2013, the certificate of deposit of $50,034 was classified as a current asset. The certificate of deposit is required as collateral under the Company’s corporate credit card agreement and automatically renews every twelve months.

3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

NOTE 3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

NOTE 3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

	June 30,		December 31,
	2013		2012
Accounts payable	$	764,676	$	286,686
Accrued offering costs		-		185,337
Deferred rent		-		2,477
Other accrued expenses		15,248		21,440
Stock-based compensation accrual		88,450		139,444
Total accounts payable and accrued expenses	$	868,374	$	635,384

There are 10,000 and 20,000 shares of our restricted common stock underlying the stock-based compensation accrual at June 30, 2013 and December 31, 2012, respectively. The stock-based compensation related to restricted common stock issuances and accruals was $149,806 and $192,339 during the three and six months ended June 30, 2013, respectively.

4. STOCKHOLDERS' EQUITY AND STOCK- BASED COMPENSATION

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

NOTE 4. STOCKHOLDERS' EQUITY AND STOCK- BASED COMPENSATION

NOTE 4. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION

Common Stock

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 Quarterly Report has been adjusted to reflect the effect of the one-for-five reverse stock split.

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 pursuant to a cashless exercise provision.

During February and March 2013, the Company made payments totaling $191 in connection with cancelled, fractional share amounts of common stock (35 common stock share equivalents) in connection with the reverse stock split effected February 7, 2013.

On February 13, 2013, the Company closed the underwritten Public Offering of 1,840,000 shares of its common stock at a per share price to the public of $5.25, and received net proceeds of $8,140,435 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 option were $1,316,116. On February 7, 2013, the Company 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 and the over-allotment exercise, the underwriters received warrants (the “Warrants”) to purchase an aggregate of 179,860 shares, or 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.

During June 2013, the Company issued 33,333 restricted shares of common stock to Dr. Robert Kammer, a director, valued at $243,333, in consideration for consulting services provided during the year ended December 31, 2012 and through June 30, 2013.

During June 2013, the Company issued 40,000 shares of common stock to Mark Baum, the Company’s CEO and a director, related to vesting of restricted stock units (“RSUs”).

Preferred Stock

At June 30, 2013, the Company had 5,000,000 shares of preferred stock, $0.001 par value, authorized and no shares of preferred stock issued and outstanding.

Stock Option Plan

On September 17, 2007, the Company’s Board of Directors and stockholders adopted the Company’s 2007 Incentive Stock and Awards Plan, which was subsequently amended on November 5, 2008, February 26, 2012, July 18, 2012 and May 2, 2013 (as amended, the “Plan”). As of June 30, 2013, the Plan provides 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 is administered by the Compensation Committee of the Company’s Board of Directors.

A summary of the Plan activity with respect to options to purchase common stock for the six months ended June 30, 2013 is as follows:

	Number of shares			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life		Aggregate Intrinsic Value
Options outstanding - January 1, 2013		905,806		$	5.26
Options granted		519,353		$	6.95
Options exercised		(1,030	)	$	4.00
Options cancelled/forfeit		(151,500	)	$	10.91
Options outstanding - June 30, 2013		1,272,629		$	5.27		5.81	$	4,458,714
Options exercisable		648,888		$	4.15		4.87	$	3,044,856
Options vested and expected to vest		1,210,255		$	5.21		5.76	$	4,317,328

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 June 28, 2013, based on the closing price of the Company’s common stock of $8.48 on that date.

In April 2013, the Company granted options to employees of the Company to acquire 120,000 shares of the Company’s common stock under the Plan, each with an exercise price of $6.00, the current market price of the Company’s common stock at the grant date. The options each have 10-year terms and vest quarterly over three years.

In April 2013, the Company granted options to an employee of the Company to acquire 51,675 shares of the Company’s common stock under the Plan. The options have an exercise price of $9.00, the current market price of the Company’s common stock at the grant date, a 10-year term and vest over a three year period, such that 33% of the options vest on the first anniversary of the grant date and the remaining 67% of the options vest quarterly in equal installments thereafter over two years.

In May 2013, the Company granted options to Mark Baum, its CEO, to acquire 180,000 shares of the Company’s common stock under the Plan, in accordance with the terms of the Company’s amended and restated employment agreement with Mr. Baum. The options have an exercise price of $8.99, the current market price of the Company’s common stock at the grant date, a 10-year term and vest quarterly over three years.

The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees:

	Six Months Ended June 30, 2013
Weighted-average fair value of options granted	$	6.90
Expected terms (in years)		5.8
Expected volatility		123%
Risk-free interest rate		0.86 %-1.00%
Dividend yield		-

Effective April 1, 2012, the Company entered into an advisory agreement with director Dr. Robert J. Kammer (the “Advisory Agreement”) pursuant to which Dr. Kammer provides 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 Company’s clinical trials and assistance in the identification of new drug delivery technologies. As part of Dr. Kammer’s 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 vested immediately upon issuance and an additional 1,875 options vesting monthly for the next twenty four months thereafter. In accordance with accounting guidance for stock-based compensation to consultants, the unvested portion of the option will be remeasured on an interim basis until the termination of the Advisory Agreement. The Advisory Agreement will terminate on the earlier of the completion of the services or the second anniversary of the date of the agreement. As of June 30, 2013, the remeasured fair value of the unvested portion of the stock option, based on the Black-Scholes-Merton pricing model, was $129,481.

On January 13, 2013, the Company entered into a statement of work agreement with a clinical development consultant (the “SOW Agreement”). In partial consideration for the services provided under the SOW Agreement, the Company issued an option to purchase up to 11,428 shares of the Company’s common stock at an exercise price of $8.75 per share. The option will terminate on January 13, 2017 and vests over an eighteen month period, with approximately 635 options vesting monthly for eighteen months beginning in February 2013. The remeasured fair value of the unvested portion of the stock option as of June 30, 2013, based on the Black-Scholes-Merton option pricing model, was $50,901.

In May 2013, the Company granted 25,000 options to a consultant with an exercise price of $8.90 equal to the current market price of the Company’s common stock at the grant date. The options have a 3-year term and vest in full in August 2013, following completion of certain services. As of June 30, 2013, the remeasured fair value of the stock option, based on the Black-Scholes-Merton option pricing model, was $145,773. The amount of unamortized stock-based compensation that has not been expensed related to the unvested option grant is $80,175.

In May 2013, Dr. Balbir Brar resigned as President, but concurrent with his resignation entered into a senior advisory consultant agreement that allowed for his options related to his service to the Company as President to continue vesting as long as he continued service to the Company as a consultant. His original option agreement was modified to allow for the vesting to continue as a result of his service to the Company as a consultant. The unvested portion of the options prior to his resignation were treated as cancelled as of the date of the modification and subsequently re-issued. As of June 30, 2013, the remeasured fair value of the unvested portion of the stock option, based on the Black-Scholes-Merton option pricing model, was $808,591.

As of June 30, 2013, there was approximately $3,133,000 of total unrecognized compensation expense related to unvested stock options under the Plan. That expense is expected to be recognized over the weighted-average remaining vesting period of 2.13 years.

The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model. Prior to April 1, 2013, expected volatilities were based on historical volatility of the Company’s common stock and other factors, and following April 1, 2013 the expected volatility is based on the historical volatilities of the common stock of comparable publicly traded companies based on the Company’s belief the it has significantly changed its business operations and focus, and as a result, it currently has limited relevant historical data regarding the volatility of its stock price on which to base a meaningful estimate of expected volatility. The expected term of options granted was determined in accordance with the “simplified approach” as the Company has limited, relevant, historical data on employee exercises and post-vesting employment termination behavior. The expected risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the 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, the Company assigns a forfeiture factor of 10%. 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 table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to consultants:

	Six Months Ended June 30, 2013
Weighted-average fair value of options granted	$	6.73
Expected terms (in years)		2.5-4.25
Expected volatility		116% - 372%
Risk-free interest rate		0.30%-1.04%
Dividend yield		-

The following table summarizes information about stock options outstanding and exercisable at June 30, 2013:

		Options Outstanding						Options Exercisable
				Weighted
				Average		Weighted				Weighted
				Remaining		Average				Average
		Number		Contractual		Exercise		Number		Exercise
Range of Exercise Prices		Outstanding		Life in Years		Price		Exercisable		Price
$	2.40 - 3.20		250,000		6.07	$	2.80		225,000	$	2.76
$	3.60 - $4.50		624,643		3.63	$	4.07		409,832	$	4.19
$	6.00 - $9.00		383,103		9.20	$	8.08		3,174	$	8.75
$	10.75		7,603		4.46	$	10.75		3,802	$	10.75
$	28.00 - $80.00		7,280		6.63	$	40.01		7,080	$	40.35
			1,272,629		5.81	$	5.27		648,888	$	4.15

The stock-based compensation for stock options was $461,166 and $801,396 during the three and six months ended June 30, 2013, respectively.

Restricted Stock Units

Restricted stock unit, or RSU, awards are granted subject to certain restrictions, including performance and market based conditions. The grant-date fair value of the RSUs, which has been determined based upon the market value of the Company’s shares on the grant date, is expensed over the vesting period. Unvested portions of RSUs issued to consultants are remeasured on an interim basis until vesting criteria is met. On May 2, 2013, the Board of Directors of the Company amended and restated the Plan to provide for the issuance of restricted stock units under the Plan.

On May 2, 2013, the Company entered into an amended and restated employment agreement with its CEO, Mark Baum. Among other things, the amended and restated employment agreement provides for the issuance of 1,250,000 RSUs to Mr. Baum, pursuant to the Plan. Of these RSUs, 200,000 vest on the third anniversary of the RSU grant based on continued service to the Company and the remaining 1,050,000 RSUs will vest based on the satisfaction of certain market-based and continued service conditions (the “Baum Performance Equity Award”). The Baum Performance Equity Award vest three years from the date of grant contingent upon the satisfaction of certain market-based vesting criteria during the three year period. The market-based vesting criteria are separated into five equal tranches and require that the Company achieves and maintains certain stock price targets ranging from $10 per share to $30 per share during the three year period following the grant date. With certain limited exceptions, Mr. Baum must be employed with the Company on the third anniversary of the grant date in order for the Baum Performance Equity Award to vest. These market-based vesting conditions are further described below:

Tranche	Number of Shares	Target Share Price
Tranche 1	19.05% of the Baum Performance Equity Award granted	$10.00 or greater
Tranche 2	19.05% of the Baum Performance Equity Award granted	$15.00 or greater
Tranche 3	19.05% of the Baum Performance Equity Award granted	$20.00 or greater
Tranche 4	19.05% of the Baum Performance Equity Award granted	$25.00 or greater
Tranche 5	23.80% of the Baum Performance Equity Award granted	$30.00 or greater

Under the terms of the employment agreement with Mr. Baum, the earning and issuance of any shares under the Baum Performance Equity Award that would exceed the number of shares available for grant and/or the applicable annual per person grant limit for performance-based restricted stock units under the Plan are subject to approval by the Board of Directors and the Company’s stockholders of an increase in the number of shares available for grant and the applicable annual per person grant limit for performance-based restricted stock units under the Plan. The Board approved such increases on May 2, 2013. The current per person grant limit under the Plan for grants of performance-based restricted stock units is 600,000 shares. As a result, if such an amendment to the Plan is not approved by the Company’s stockholders, Mr. Baum will only be entitled to receive a maximum of 600,000 RSUs pursuant to the Baum Performance Equity Award. Effective upon approval of a Plan amendment by the Company’s stockholders and subsequent grant of the remaining 450,000 RSUs pursuant to the Baum Performance Equity Award, Mr. Baum has agreed to cancel 120,000 unvested RSUs previously granted to him in July 2012.

The initial fair value of the 200,000 RSUs and 600,000 RSUs pursuant to the Baum Performance Equity Award granted to Mr. Baum was $3,515,090 and as of June 30, 2013, the amount of unamortized stock based compensation that has not been expensed related to the unvested RSUs grants is $3,329,796. The 600,000 RSUs pursuant to the Baum Performance Equity Award were valued using a Monte Carlo Simulation with a three year life, 75% volatility and a risk free interest rate of 0.30%.

On May 24, 2013, the Company granted 100,000 RSUs to a consultant that will vest based on the satisfaction of certain market-based conditions subject to the consultant’s continued service, among other things. These market-based vesting conditions are further described below:

Tranche	Number of Shares	Target Share Price
Tranche 1	20,000 shares	$10.00 or greater
Tranche 2	20,000 shares	$15.00 or greater
Tranche 3	20,000 shares	$20.00 or greater
Tranche 4	20,000 shares	$25.00 or greater
Tranche 5	20,000 shares	$30.00 or greater

For each respective tranche to vest the following conditions must be met: (i) the Company’s common stock must have an official closing price at or above the Target Share Price for the respective tranche (each such date a “Trigger Date”); (ii) during the period that includes the Trigger Date and the immediately following 19 trading days (the “Measurement Period”), the arithmetic mean of the 20 closing prices during the Measurement Period must be at or above the Target Share Price for such tranche ((i) and (ii), the “Stock Price Conditions”); and (iii) with certain limited exceptions, 50% of the RSUs subject to a tranche will vest on the quarterly anniversary of the grant date following the satisfaction of the Stock Price Conditions with respect to that tranche, subject to the consultant being in continuous service with the Company on such quarterly anniversary and the remaining 50% shall vest on the second anniversary of the grant date if (a) the Stock Price Conditions have been satisfied with respect to that tranche prior to the second anniversary of the grant date and (b) the consultant is and has been in continuous service with the Company on the second anniversary of the grant date. All unvested RSUs will be forfeited on the second anniversary of the grant date.

The initial value of the 100,000 RSUs with market-based vesting conditions granted to the consultant was $288,000, and as of June 30, 2013 the remeasured fair value of those RSUs was $203,520. The amount of unamortized stock-based compensation that has not been expensed related to the unvested RSU grant is $195,040. The 100,000 RSUs are valued using a Monte Carlo Simulation with a 2 year life (based on the grant date), 80% volatility and risk free interest rates of 0.26%-0.36%.

In June 2013, the Board of Directors approved a one-time grant of 6,865 RSUs (34,325 RSUs total) to non-employee directors with an aggregate fair value of $271,854. The RSUs vest in full 13 months from the date of grant subject to the director being in continuous service with the Company. Once vesting conditions have been achieved, the RSUs will remain restricted until the directors resign.

A summary of the Company’s RSU activity and related information for the six months ended June 30, 2013 is as follows:

	Number of RSUs			Weighted Average Grant Date Fair Value
RSUs outstanding - January 1, 2013		200,000		$	3.25
RSUs granted		934,325		$	4.36
RSUs vested		(40,000	)	$	3.25
RSUs cancelled		-			-
Balance at June 30, 2013		1,094,325		$	4.20

On July 18, 2012, a consultant was issued RSUs (40,000 shares) valued at $130,000, and as of June 30, 2013, the remeasured fair value of those RSUs was $339,200.

As of June 30, 2013, the total unrecognized compensation expense related to unvested RSUs (including the 600,000 Baum PSUs authorized under the Plan) was approximately $4,189,000 (including recognized and unrecognized expenses of the remeasured fair value of consultant RSUs) which are expected to be recognized over a weighted-average period of 2.49 years, based on estimated vesting schedules. The stock-based compensation for RSU’s was $302,094 and $297,019 during the three and six months ended June 30, 2013, respectively.

Warrants

From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, note holders, underwriters and to non-employees for services rendered or to be rendered in the future.

In February 2013, the Company issued a warrant to purchase 30,000 shares of the Company’s common stock to a consultant with an exercise price of $5.25 per share. The warrants expire three years following the issuance date, and vest as follows: 10,000 shares vested immediately upon execution of the consulting agreement, and the remaining shares will vest evenly (4,000 shares) on each of the five monthly periods following the date of the consulting agreement provided the consultant continues to provide services to the Company as of the applicable vesting date.

A summary of the activity of the warrants for the six months ended June 30, 2013 is as follows:

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

Warrants outstanding - January 1, 2013		556,872		$	7.66
Granted		209,860		$	5.25
Exercised		-
Expired		(5,682	)	$	176.00
Warrants outstanding and exercisable - June 30, 2013		761,050		$	5.74
Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2013		2.51

The fair value of each warrant is estimated on the date of grant using the Black-Scholes-Merton option pricing model. The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing the warrants issued:

	2013
Weighted-average fair value of warrants granted	$	5.10
Expected terms (in years)		2.7-5
Expected volatility		120%-346%
Risk-free interest rate		0.32%-0.92%
Dividend yield		-

A list of the warrants outstanding as of June 30, 2013 is included in the table below:

	Warrants Outstanding					Warrants Exercisable
		Warrants		Exercise		Warrants		Expiration
Warrant Series	Issue Date	Outstanding		Price		Exercisable		Date
DermaStar	4/25/2012		48,262	$	5.93		48,262	4/25/2015
April PPM	4/25/2012		502,928	$	5.93		502,928	4/25/2015
Underwriter Warrants	2/7/2013		179,860	$	5.25		-	2/7/2018
IR Consultant	2/28/2013		30,000	$	5.25		26,000	2/28/2016
			761,050	$	5.74		577,190

The stock-based compensation for warrants was $82,070 and $157,630 during the three and six months ended June 30, 2013, respectively.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

5. COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

NOTE 5. COMMITMENTS AND CONTINGENCIES

NOTE 5. COMMITMENTS AND CONTINGENCIES

Commitments

In April 2013, the Company entered into a lease agreement for 3,874 square feet of office space from May 1, 2013 to September 30, 2016, effective May 1, 2013. Monthly rent began on May 1, 2013 in the amount of $10,406, with a 3% increase in the base rent amount on an annual basis. The lease agreement allows for the monthly rent amount to be abated for five months at various times during the lease agreement. The total lease obligation is approximately $387,900. For the remaining fiscal year 2013, the Company’s lease commitment is approximately $62,400.

The Company also leases an office facility under a noncancelable operating lease, which expires on February 28, 2014, with $3,715 due monthly until expiration. For the remaining fiscal year 2013, the Company’s lease commitment is approximately $22,300.

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 condensed consolidated balance sheets.

PCCA License Agreement

Professional Compounding Centers of America, or 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.

PCCA Strategic Alliance Agreement

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.

Buderer Asset Purchase Agreement

On June 11, 2013, we acquired intellectual property rights related to certain proprietary innovations from the compounding pharmacy operations of Buderer Drug Company, Inc. (“Buderer”) pursuant to an Asset Purchase Agreement (the “APA”). In addition, the Company has a right of first refusal on additional Buderer intellectual property and drug development opportunities. The APA provides that Buderer will cooperate with the Company in obtaining patent protection for the acquired intellectual property and that the Company will use commercially reasonable efforts to research, develop and commercialize a product based on the acquired intellectual property.

In consideration for the acquisition of the intellectual property rights, the Company is obligated to make the following payments to Buderer: (1) one payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) one payment payable within 30 days after the Company files the first Investigational New Drug application (“IND”) with the U.S. Food and Drug Administration for the first product arising from the acquired intellectual property (if any); and (3) certain royalty payments based on the net receipts received by the Company in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) the Company’s development costs associated with such product. If the Company does not file an IND for any product based on the acquired intellectual property within five years of the date of the APA, Buderer may terminate the agreement and the Company shall re-assign the acquired technology to Buderer.

6. SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

NOTE 6. SUBSEQUENT EVENTS

NOTE 6. SUBSEQUENT EVENTS

The Company has performed an evaluation of events occurring subsequent to June 30, 2013 through the filing date of this Quarterly Report. Based on our evaluation, nothing other than the events described below need to be disclosed.

In July 2013, the Company issued warrants to purchase 60,000 shares of the Company’s common stock to a consultant with an exercise price of $8.50 per share. The warrants become exercisable on January 20, 2014 and expire five years following the issuance date.

Novel Drug and Eye Care Northwest Asset Purchase Agreement

On August 8, 2013, we acquired intellectual property rights related to certain proprietary innovations from the compounding pharmacy operations of Novel Drug Solutions, LLC and from Eye Care Northwest, Inc. (together referred to as the “Sellers”) pursuant to an Asset Purchase Agreement (the “Novel APA”). As part of this acquisition we have acquired intellectual property assets, including a provisional patent application related to injectable ophthalmological compositions having anti-bacterial and anti-inflammatory properties for the prevention of post-ophthalmic surgery complications. In addition, under the Novel APA, we have a right of first refusal on any of the Sellers’ additional intellectual property and drug development opportunities. The Novel APA provides that the Sellers will cooperate with us in obtaining patent protection for the acquired intellectual property, among other things, and that we will use commercially reasonable efforts to research, develop and commercialize a product based on the acquired intellectual property.

In consideration for the acquisition, we are obligated to make the following payments to the Sellers: (1) one payment payable within 30 days after the issuance of the first patent in the United States arising from the acquired intellectual property (if any); (2) one payment payable within 30 days after we file the first IND with the FDA for the first product arising from the acquired intellectual property (if any); (3) one payment payable within 30 days after we file the first New Drug application with the FDA for the first product; and (4) certain royalty payments based on the net receipts received by us in connection with the sale or licensing of any product based on the acquired intellectual property (if any), after deducting (among other things) our development costs associated with such product. If we do not file an IND for any product based on the acquired intellectual property within five years of the date of the Novel APA, the Sellers may terminate the Novel APA and we must re-assign the acquired technology to the Sellers.

OVERVIEW AND BASIS OF PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Company and Background

Company and Background

Basis of Presentation

Basis of Presentation

Principles of Consolidation

Principles of Consolidation

Development Stage Enterprise

Development Stage Enterprise

Research and Development

Research and Development

Intellectual Property

Intellectual Property

Revenue Recognition and Deferred Revenue

Revenue Recognition and Deferred Revenue

Product Revenues

License Revenues

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.

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 Three		For The Three		For The Six		For The Six
	Months Ended		Months Ended		Months Ended		Months Ended
	June 30, 2013		June 30, 2012		June 30, 2013		June 30, 2012
Employees - selling, general and administrative	$	378,895	$	115,634	$	464,898	$	118,224
Employees - research and development		44,619		40,866		111,750		82,412
Directors - selling, general and administrative		45,458		493,047		248,250		567,415
Consultants - selling, general and administrative		345,605		79,987		505,527		79,987
Consultants - research and development		180,559		-		117,959		-
Total	$	995,136	$	729,534	$	1,448,384	$	848,038

Basic and Diluted Loss per Common Share

Basic and Diluted Net Loss per Common Share

The following table shows the computation of basic and diluted loss per share of common stock for the three and six months ended June 30, 2013 and 2012:

	For The Three			For The Three			For The Six			For The Six
	Months Ended			Months Ended			Months Ended			Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012

Net loss	$	(2,218,052	)	$	(1,305,593	)	$	(3,683,533	)	$	(2,684,681	)
Deemed dividend to preferred stockholders		-			(200,000	)		-			(200,000	)
Numerator – (loss) attributable to common stockholders		(2,218,052	)		(1,505,593	)		(3,683,533	)		(2,884,681	)
Denominator – weighted average
number of shares outstanding, basic and diluted		8,890,668			3,874,554			8,342,497			2,469,171
Net Loss per share, basic and diluted	$	(0.25	)	$	(0.39	)	$	(0.44	)	$	(1.17	)

Use of Estimates

Use of Estimates

Reclassifications

Reclassifications

Recently Announced Accounting Pronouncements

Recently Announced Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

OVERVIEW AND BASIS OF PRESENTATION (Tables)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Stock-Based Compensation

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

	For The Three		For The Three		For The Six		For The Six
	Months Ended		Months Ended		Months Ended		Months Ended
	June 30, 2013		June 30, 2012		June 30, 2013		June 30, 2012
Employees - selling, general and administrative	$	378,895	$	115,634	$	464,898	$	118,224
Employees - research and development		44,619		40,866		111,750		82,412
Directors - selling, general and administrative		45,458		493,047		248,250		567,415
Consultants - selling, general and administrative		345,605		79,987		505,527		79,987
Consultants - research and development		180,559		-		117,959		-
Total	$	995,136	$	729,534	$	1,448,384	$	848,038

Earnings per share

The following table shows the computation of basic and diluted loss per share of common stock for the three and six months ended June 30, 2013 and 2012:

	For The Three			For The Three			For The Six			For The Six
	Months Ended			Months Ended			Months Ended			Months Ended
	June 30, 2013			June 30, 2012			June 30, 2013			June 30, 2012

Net loss	$	(2,218,052	)	$	(1,305,593	)	$	(3,683,533	)	$	(2,684,681	)
Deemed dividend to preferred stockholders		-			(200,000	)		-			(200,000	)
Numerator – (loss) attributable to common stockholders		(2,218,052	)		(1,505,593	)		(3,683,533	)		(2,884,681	)
Denominator – weighted average
number of shares outstanding, basic and diluted		8,890,668			3,874,554			8,342,497			2,469,171
Net Loss per share, basic and diluted	$	(0.25	)	$	(0.39	)	$	(0.44	)	$	(1.17	)

3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Schedule of accounts payable and accrued expenses

Accounts payable and accrued expenses consisted of the following:

	June 30,		December 31,
	2013		2012
Accounts payable	$	764,676	$	286,686
Accrued offering costs		-		185,337
Deferred rent		-		2,477
Other accrued expenses		15,248		21,440
Stock-based compensation accrual		88,450		139,444
Total accounts payable and accrued expenses	$	868,374	$	635,384

4. STOCKHOLDERS EQUITY AND STOCK BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2013

Mark Baum Chief Executive Officer

Market-based vesting conditions for Restricted Stock Units Granted

Tranche	Number of Shares	Target Share Price
Tranche 1	19.05% of the Baum Performance Equity Award granted	$10.00 or greater
Tranche 2	19.05% of the Baum Performance Equity Award granted	$15.00 or greater
Tranche 3	19.05% of the Baum Performance Equity Award granted	$20.00 or greater
Tranche 4	19.05% of the Baum Performance Equity Award granted	$25.00 or greater
Tranche 5	23.80% of the Baum Performance Equity Award granted	$30.00 or greater

Consultant

Market-based vesting conditions for Restricted Stock Units Granted

Tranche	Number of Shares	Target Share Price
Tranche 1	20,000 shares	$10.00 or greater
Tranche 2	20,000 shares	$15.00 or greater
Tranche 3	20,000 shares	$20.00 or greater
Tranche 4	20,000 shares	$25.00 or greater
Tranche 5	20,000 shares	$30.00 or greater

Stock Option Plan [Member]

Schedule of Plan Activity

A summary of the Plan activity with respect to options to purchase common stock for the six months ended June 30, 2013 is as follows:

	Number of shares			Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life		Aggregate Intrinsic Value
Options outstanding - January 1, 2013		905,806		$	5.26
Options granted		519,353			6.95
Options exercised		(1,030	)		4.00
Options cancelled/forfeit		(151,500	)		10.91
Options outstanding - June 30, 2013		1,272,629		$	5.27		5.81	$	4,458,714
Options exercisable		648,888		$	4.15		4.87	$	3,044,856
Options vested and expected to vest		1,210,255		$	5.21		5.76	$	4,317,328

Schedule of fair value assumption

The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees:

	Six Months Ended June 30, 2013
Weighted-average fair value of options granted	$	6.90
Expected terms (in years)		5.8
Expected volatility		123%
Risk-free interest rate		0.86 %-1.00%
Dividend yield		-

Schedule of shares outstanding and exercisable

The following table summarizes information about stock options outstanding and exercisable at June 30, 2013:

		Options Outstanding						Options Exercisable
				Weighted
				Average		Weighted				Weighted
				Remaining		Average				Average
		Number		Contractual		Exercise		Number		Exercise
Range of Exercise Prices		Outstanding		Life in Years		Price		Exercisable		Price
$	2.40 - 3.20		250,000		6.07	$	2.80		225,000	$	2.76
$	3.60 - $4.50		624,643		3.63	$	4.07		409,832	$	4.19
$	6.00 - $9.00		383,103		9.20	$	8.08		3,174	$	8.75
$	10.75		7,603		4.46	$	10.75		3,802	$	10.75
$	28.00 - $80.00		7,280		6.63	$	40.01		7,080	$	40.35
			1,272,629		5.81	$	5.27		648,888	$	4.15

Options granted to consultants

Schedule of fair value assumption

The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to consultants:

	Six Months Ended June 30, 2013
Weighted-average fair value of options granted	$	6.73
Expected terms (in years)		2.5-4.25
Expected volatility		116% - 372%
Risk-free interest rate		0.30%-1.04%
Dividend yield		-

Restricted Stock Units [Member]

Schedule of Plan Activity

	Number of RSUs			Weighted Average Grant Date Fair Value
RSUs outstanding - January 1, 2013		200,000		$	3.25
RSUs granted		934,325			4.36
RSUs vested		(40,000	)		3.25
RSUs cancelled		-			-
Balance at June 30, 2013		1,094,325		$	4.20

Warrant

Schedule of Plan Activity

A summary of the activity of the warrants for the six months ended June 30, 2013 is as follows:

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

Warrants outstanding - January 1, 2013		556,872		$	7.66
Granted		209,860			5.25
Exercised		-
Expired		(5,682	)		176.00
Warrants outstanding and exercisable - June 30, 2013		761,050		$	5.74
Weighted average remaining contractual life of the outstanding warrants in years - June 30, 2013		2.51

Schedule of fair value assumption

	2013
Weighted-average fair value of warrants granted	$	5.10
Expected terms (in years)		2.7-5
Expected volatility		120%-346%
Risk-free interest rate		0.32%-0.92%
Dividend yield		-

Schedule of shares outstanding and exercisable

A list of the warrants outstanding as of June 30, 2013 is included in the table below:

	Warrants Outstanding					Warrants Exercisable
		Warrants		Exercise		Warrants		Expiration
Warrant Series	Issue Date	Outstanding		Price		Exercisable		Date
DermaStar	4/25/2012		48,262	$	5.93		48,262	4/25/2015
April PPM	4/25/2012		502,928	$	5.93		502,928	4/25/2015
Underwriter Warrants	2/7/2013		179,860	$	5.25		-	2/7/2018
IR Consultant	2/28/2013		30,000	$	5.25		26,000	2/28/2016
			761,050	$	5.74		577,190

1. OVERVIEW AND BASIS OF PRESENTATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Compensation Expenses	$ 995,136	$ 729,534	$ 1,448,384	$ 848,038
EmployeesSellingAndAdminstrativeMember
Compensation Expenses	378,895	115,634	464,898	118,224
EmployeesResearchAndDevelopmentMember
Compensation Expenses	44,619	40,866	111,750	82,412
DirectorSellingAndAdminstrativeMember
Compensation Expenses	45,458	493,047	248,250	567,415
ConsultantsSellingAndAdminstrativeMember
Compensation Expenses	345,605	79,987	505,527	79,987
ConsultantsResearchAndDevelopment [Member]
Compensation Expenses	$ 180,559		$ 117,959

1. OVERVIEW AND BASIS OF PRESENTATION (Details 1) - USD ($)	3 Months Ended		6 Months Ended		176 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013
Overview And Basis Of Presentation Details 1
Net loss	$ (2,218,052)	$ (1,305,593)	$ (3,683,533)	$ (2,684,681)	$ (27,487,801)
Deemed dividend to preferred stockholders		(200,000)		(200,000)	(300,000)
Net loss attributable to common stockholders	$ (2,218,052)	$ (1,505,593)	$ (3,683,533)	$ (2,884,681)	$ (27,787,801)
Denominator - weighted average number of shares outstanding, basic and diluted	8,890,668	3,874,554	8,342,497	2,469,171
Loss per share, basic and diluted	$ (0.25)	$ (0.39)	$ (0.44)	$ (1.17)

- 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=31042434&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=26872669&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=28358780&loc=d3e565-108580

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 19
-Article 5

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

+ Details

1. OVERVIEW AND BASIS OF PRESENTATION (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		176 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Dec. 31, 2012
Overview And Basis Of Presentation Details Narrative
Revenue	$ 2,500		$ 5,000	$ 100,000	$ 105,000
Deferred offering costs						$ 596,281
Antidilutive securities excluded from earnings per share			3,138,004	1,476,987

2. SHORT-TERM RESTICTED INVESTMENT (Details Narrative)	Jun. 30, 2013 USD ($)
Short-Term Resticted Investment Details Narrative
Certificate of deposit	$ 50,034

3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2013	Dec. 31, 2012
Accounts Payable And Accrued Expenses Details
Accounts payable	$ 764,676	$ 286,686
Accrued offering costs		185,337
Deferred rent		2,477
Other accrued expenses	15,248	21,440
Stock-based compensation accrual	88,450	139,444
Total accounts payable and accrued expenses	$ 868,374	$ 635,384

3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Accounts Payable And Accrued Expenses Details Narrative
Restricted common stock underlying the stock-based compensation accrual	10,000	10,000	20,000
Stock-based compensation related to restricted common stock issuances and accruals	$ 149,806	$ 192,339

4. STOCKHOLDERS EQUITY AND STOCK - BASED COMPENSATION (Details) - Stock Option Plan [Member]	6 Months Ended
	Jun. 30, 2013 USD ($) $ / shares shares
Number of shares
Beginning Balance \| shares	905,806
Granted \| shares	519,353
Exercised \| shares	(1,030)
Cancelled/Forfeited \| shares	(151,500)
Ending Balance \| shares	1,272,629
Exercisable Ending Balance \| shares	648,888
Vested and expected to vest - end of period \| shares	1,210,255
Weighted Avg. Exercise Price
Beginning Balance \| $ / shares	$ 5.26
Granted \| $ / shares	6.95
Exercised \| $ / shares	4
Cancelled/Forfeited \| $ / shares	10.91
Ending Balance \| $ / shares	5.27
Exercisable Ending Balance \| $ / shares	4.15
Vested and expected to vest - end of period \| $ / shares	$ 5.21
Weighted Avg. Remaining Contractual Life
Ending Balance	5 years 9 months 22 days
Exercisable Ending Balance	4 years 10 months 13 days
Vested and expected to vest - end of period	5 years 2 months 16 days
Ending Balance \| $	$ 4,458,714
Exercisable Ending Balance \| $	3,044,856
Vested and expected to vest - end of period \| $	$ 4,317,328

4. STOCKHOLDERS EQUITY AND STOCK - BASED COMPENSATION (Details 1)	6 Months Ended
	Jun. 30, 2013 $ / shares
Options granted to employees
Weighted-average fair value of options granted	$ 6.9
Expected terms	5 years 9 months 18 days
Expected volatility minimum	123.00%
Expected volatility maximum	123.00%
Risk-free interest rate Minimum	0.86%
Risk-free interest rate Maximum	1.00%
Expected Dividend Yield	0.00%
Options granted to consultants
Weighted-average fair value of options granted	$ 6.73
Expected terms (range)	2.5-4.25 years
Expected volatility minimum	116.00%
Expected volatility maximum	372.00%
Risk-free interest rate Minimum	0.30%
Risk-free interest rate Maximum	1.04%
Expected Dividend Yield	0.00%

4. STOCKHOLDERS EQUITY AND STOCK - BASED COMPENSATION (Details 2)	6 Months Ended
	Jun. 30, 2013 $ / shares shares
Stock Option Plan [Member]
Number Outstanding \| shares	1,272,629
Weighted Average Remaining Contractual Life in Years	5 years 9 months 22 days
Weighted Average Outstanding Exercise Price	$ 5.27
Number Exercisable \| shares	648,888
Weighted Average Exercisable Exercise Price	$ 4.15
Stock Option [Member]
Range of Exercise Prices Minimum	2.40
Range of Exercise Prices Maximum	$ 3.20
Number Outstanding \| shares	250,000
Weighted Average Remaining Contractual Life in Years	6 years 25 days
Weighted Average Outstanding Exercise Price	$ 2.8
Number Exercisable \| shares	225,000
Weighted Average Exercisable Exercise Price	$ 2.76
Stock Option [Member]
Range of Exercise Prices Minimum	3.60
Range of Exercise Prices Maximum	$ 4.50
Number Outstanding \| shares	624,643
Weighted Average Remaining Contractual Life in Years	3 years 7 months 17 days
Weighted Average Outstanding Exercise Price	$ 4.07
Number Exercisable \| shares	409,832
Weighted Average Exercisable Exercise Price	$ 4.19
Stock Option [Member]
Range of Exercise Prices Minimum	6.00
Range of Exercise Prices Maximum	$ 9.00
Number Outstanding \| shares	383,103
Weighted Average Remaining Contractual Life in Years	9 years 2 months 12 days
Weighted Average Outstanding Exercise Price	$ 8.08
Number Exercisable \| shares	3,174
Weighted Average Exercisable Exercise Price	$ 8.75
Stock Option [Member]
Range of Exercise Prices Minimum	10.75
Range of Exercise Prices Maximum	$ 10.75
Number Outstanding \| shares	7,603
Weighted Average Remaining Contractual Life in Years	4 years 5 months 16 days
Weighted Average Outstanding Exercise Price	$ 10.75
Number Exercisable \| shares	3,802
Weighted Average Exercisable Exercise Price	$ 10.75
Stock Option [Member]
Range of Exercise Prices Minimum	28.00
Range of Exercise Prices Maximum	$ 80.00
Number Outstanding \| shares	7,280
Weighted Average Remaining Contractual Life in Years	6 years 7 months 17 days
Weighted Average Outstanding Exercise Price	$ 40.01
Number Exercisable \| shares	7,080
Weighted Average Exercisable Exercise Price	$ 40.35

4. STOCKHOLDERS EQUITY AND STOCK BASED COMPENSATION (Details 3)	6 Months Ended
	Jun. 30, 2013 shares
Tranche 1 CEO
Percentage of Number of Shares Granted	19.05%
Target Share Price	$10.00 or greater
Tranche 2 CEO
Percentage of Number of Shares Granted	19.05%
Target Share Price	$15.00 or greater
Tranche 3 CEO
Percentage of Number of Shares Granted	19.05%
Target Share Price	$20.00 or greater
Tranche 4 CEO
Percentage of Number of Shares Granted	19.05%
Target Share Price	$25.00 or greater
Tranche 5 CEO
Percentage of Number of Shares Granted	23.80%
Target Share Price	$30.00 or greater
Consultant Tranche 1
Number of Shares	20,000
Target Share Price	$10.00 or greater
Consultant Tranche 2
Number of Shares	20,000
Target Share Price	$15.00 or greater
Consultant Tranche 3
Number of Shares	20,000
Target Share Price	$20.00 or greater
Consultant Tranche 4
Number of Shares	20,000
Target Share Price	$25.00 or greater
Consultant Tranche 5
Number of Shares	20,000
Target Share Price	$30.00 or greater

4. STOCKHOLDERS EQUITY AND STOCK - BASED COMPENSATION (Details 4) - Restricted Stock Units [Member]	6 Months Ended
	Jun. 30, 2013 $ / shares shares
Number of Shares
Beginning Balance \| shares	200,000
Granted \| shares	934,325
Vested \| shares	(40,000)
Cancelled \| shares
Ending \| shares	1,094,325
Weighted Average Grant Date Fair Value
Beginning \| $ / shares	$ 3.25
Granted \| $ / shares	4.36
Vested \| $ / shares	3.25
Cancelled \| $ / shares
Ending \| $ / shares	$ 4.2

4. STOCKHOLDERS' EQUITY AND STOCK- BASED COMPENSATION (Details 5) - Warrant [Member]	6 Months Ended
	Jun. 30, 2013 $ / shares shares
Number of shares
Beginning Balance	556,872
Granted	209,860
Exercised
Expired	(5,682)
Ending Balance	761,050
Weighted average remaining contractual life of the outstanding warrants in years - March 31, 2013	2 years 6 months 4 days
Weighted Avg. Exercise Price
Beginning Balance \| $ / shares	$ 7.66
Granted \| $ / shares	5.25
Expired \| $ / shares	176
Ending Balance \| $ / shares	$ 5.74

4. STOCKHOLDERS' EQUITY AND STOCK- BASED COMPENSATION (Details 6) - Warrant [Member]	6 Months Ended
	Jun. 30, 2013 $ / shares
Weighted-average fair value of awards granted	$ 5.1
Expected terms Minimum	2 years 8 months 12 days
Expected terms Maximum	5 years
Expected volatility minimum	120.00%
Expected volatility maximum	346.00%
Risk-free interest rate Minimum	0.32%
Risk-free interest rate Maximum	0.92%
Dividend yield

4. STOCKHOLDERS' EQUITY AND STOCK- BASED COMPENSATION (Details 7)	Jun. 30, 2013 $ / shares shares
Warrant [Member]
Warrants Outstanding	761,050
Exercise Price \| $ / shares	$ 5.74
Warrants Exercisable	577,190
DermaStar
Issue Date	Apr. 25, 2012
Warrants Outstanding	48,262
Exercise Price \| $ / shares	$ 5.93
Warrants Exercisable	48,262
Expiration Date	Apr. 25, 2015
April PPM
Issue Date	Apr. 25, 2012
Warrants Outstanding	502,928
Exercise Price \| $ / shares	$ 5.93
Warrants Exercisable	502,928
Expiration Date	Apr. 25, 2015
Underwriter Warrants
Issue Date	Feb. 07, 2013
Warrants Outstanding	179,860
Exercise Price \| $ / shares	$ 5.25
Warrants Exercisable
Expiration Date	Feb. 07, 2018
IR Consultant
Issue Date	Feb. 28, 2013
Warrants Outstanding	30,000
Exercise Price \| $ / shares	$ 5.25
Warrants Exercisable	26,000
Expiration Date	Feb. 28, 2016

4. STOCKHOLDERS EQUITY AND STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended		176 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013
Preferred authorized, shares	5,000,000	5,000,000		5,000,000
Preferred stock, par value	$ 0.001	$ 0.001		$ 0.001
Preferred stock, shares issued	0	0		0
Preferred stock, shares outstanding	0	0		0
Stock-based compensation for awards		$ 1,448,384	$ 848,038	$ 5,733,812
Warrant [Member]
Stock-based compensation for awards		$ 157,630
Restricted Stock Units [Member]
Restricted stock awards in period		During June 2013, the Company issued 33,333 restricted shares of common stock to Dr. Robert Kammer, a director, valued at $243,333, in consideration for consulting services provided during the year ended December 31, 2012 and through June 30, 2013. During June 2013, the Company issued 40,000 shares of common stock to Mark Baum, the Company’s CEO and a director, related to vesting of restricted stock units (“RSUs”).
Unrecognized compensation expense related to Restricted Stock Units		$ 4,189,000
Weighted-average period for expense recognition of Restricted Stock Units		2 years 5 months 26 days
Unrecognized compensation expense related to unvested stock options	$ 195,040	$ 195,040		195,040
Stock-based compensation for awards	302,094	297,019
Stock Option Plan [Member]
Remeasured fair value of the unvested portion of the stock option	129,481	129,481		$ 129,481
Stock-based compensation for awards		$ 801,396
Stock Option Plan [Member]
Stock-based compensation for awards	461,166
Warrant [Member]
Stock-based compensation for awards	$ 82,070