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Company and Background Imprimis Pharmaceuticals, Inc. (Imprimis or the Company), is a specialty pharmaceutical company developing non-invasive, topically delivered products. The Companys patented Accudel cream formulation technology is designed to facilitate the effective penetration of a variety of products through the tough skin barrier. Impracor, the Companys lead pain product, utilizes the Accudel platform technology to deliver the active drug, ketoprofen, a non-steroidal anti-inflammatory drug (NSAID), through the skin directly into the underlying tissues where the drug exerts its anti-inflammatory and analgesic effects. The Company intends to leverage the Accudel platform technology to expand and create a portfolio of topical products for a variety of indications. 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 to reflect the change. On February 28, 2012, the Company effected a one-for-eight reverse stock split. All per share amounts and calculations in this report reflect this change.   Imprimis has prepared the accompanying interim condensed unaudited consolidated financial statements in accordance with accounting principles generally accepted in the United Stated 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 three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.  For further information, refer to the Companys audited consolidated financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2011.     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.   In connection with the merger, 231,249 of Imprimis common shares remain outstanding and all other outstanding shares of Imprimis were cancelled. Also, at the closing of the Merger, each share of Transdel Holdings common stock issued and outstanding immediately prior to the closing of the Merger was exchanged for the right to receive 1.25 of one share of Imprimis common stock. An aggregate of 1,000,000 shares of Imprimis common stock, which includes 24,414 shares of restricted stock which were subject to forfeiture, were issued to the holders of Transdel Holdings common stock. As a result of the transaction, the former owners of Transdel Holdings became the controlling stockholders of Imprimis. Accordingly, the merger of Transdel Holdings and Imprimis is a reverse merger that has been accounted for as a recapitalization of Transdel Holdings.   Effective on September 17, 2007, and for all reporting periods thereafter, Imprimis operating activities, including any prior comparative period, include only those of Transdel Holdings. All references to share and per share amounts in the accompanying consolidated financial statements and footnotes have been restated to reflect the aforementioned share exchange. All significant intercompany accounts and transactions have been eliminated in consolidation.   On June 20, 2011, Transdel Holdings was merged with Imprimis Pharmaceuticals, Inc., at which time Transdel Holdings ceased as a corporation, and Imprimis Pharmaceuticals, Inc. remains as the sole surviving corporation.   Development Stage Enterprise   The Company is a development stage company as defined under Financial Accounting Standards Board (FASB) guidance. The Company is devoting substantially all of its present efforts to establish a new business, and its planned principal operations have not yet commenced. All losses accumulated since inception have been considered as part of the Companys development stage activities.   These consolidated financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is a development stage enterprise and has sustained significant losses since inception and expects to continue to incur losses.   Research and Development   The Company expenses all costs related to research and development as they are incurred.   Revenue Recognition and Deferred Revenue   The Company will recognize revenues in accordance with FASB guidance, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) will be based on managements judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments will be provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or for which services have not been rendered or are subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or services have been rendered or no refund will be required.   For the three months ended March 31, 2012, the Company recorded $100,000 in revenues for non-refundable royalty advances, which were previously deferred. The Company does not anticipate that it will generate any significant revenues until one or more of its drug candidates are approved by the FDA or until the Company is able to commercialize one or more of its cosmetic products. Also, effective sales and marketing support must be in place for either the drug candidates or the cosmetic products in order to generate any revenues. The FDA approval process is highly uncertain and the Company cannot estimate when it will generate revenues at this time from sales of its products.   Income Taxes   Income tax expense is provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due, plus deferred taxes.  Deferred taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes.  The differences relate primarily to the effects of net operating loss carry forwards and differing basis, depreciation methods, and lives of depreciable assets. The deferred tax assets represent the future tax return consequences of those differences, which will be deductible when the assets are recovered.   No income tax benefit (expense) was recognized for the three months ended March 31, 2012 as a result of tax losses in this period and because deferred tax benefits, derived from the Companys prior net operating losses, were previously fully reserved. The Company had federal and California net operating loss carryforwards of approximately $12.5 million and $12.3 million, respectively.   The Company is subject to taxation in the United States and California. The Companys tax years for 2000 and forward are subject to examination by the United States and state tax authorities due to the carry forward of unutilized net operating losses   Cash and Cash Equivalents   Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition.   Concentrations of Credit Risk   A financial instrument which potentially subjects the Company to concentrations of credit risk is cash.  The Company places its cash with financial institutions deemed by management to be of high credit quality. The Federal Deposit Insurance Corporation (FDIC) provides basic deposit coverage with limits to $250,000 per owner. In addition to the basic insurance deposit coverage, the FDIC is providing temporary unlimited coverage for noninterest-bearing transaction accounts from December 31, 2010 to December 31, 2012. At March 31, 2012, there were no uninsured deposits.   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. Furniture and equipment, net, as of March 31, 2012 and December 31, 2011 consisted of the following:   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td> <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center">March 31,</td><td style="font: bold 10pt Times New Roman, Times, Serif"> </td> <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center">December 31,</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="font: 10pt Times New Roman, Times, Serif"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2012</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td> <td colspan="3" style="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">2011</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Furniture and Equipment, net:</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="width: 56%; text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">  Computer Software and Hardware</td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td> <td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td style="width: 12%; text-align: right; font: 10pt Times New Roman, Times, Serif">5,640</td><td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="width: 8%; font: 10pt Times New Roman, Times, Serif"> </td> <td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td style="width: 12%; text-align: right; font: 10pt Times New Roman, Times, Serif">  </td><td style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="text-align: left; padding-bottom: 1pt; text-indent: 10pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Furniture and Equipment</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">8,967</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">  </td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="text-align: right; text-indent: 10pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Total</td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif">14,607</td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="font: 10pt Times New Roman, Times, Serif"> </td> <td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> Accumulated Depreciation</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(404</td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">  </td><td style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td style="font: bold 10pt Times New Roman, Times, Serif; text-align: right; padding-bottom: 2.5pt; padding-left: 5.4pt">Total</td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: bold 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: bold 10pt Times New Roman, Times, Serif; text-align: right">14,203</td><td style="padding-bottom: 2.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left"> </td><td style="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; font: bold 10pt Times New Roman, Times, Serif; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font: bold 10pt Times New Roman, Times, Serif; text-align: right">  </td><td style="padding-bottom: 2.5pt; font: bold 10pt Times New Roman, Times, Serif; text-align: left"> </td></tr> </table>   During the three months ended March 31, 2012 and 2011, the Company recorded $404 and $264, respectively, in depreciation expense. 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:   <table align="center" cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="width: 24px; text-autospace: none; font: 10pt Times New Roman, Times, Serif; text-align: justify">·</td> <td style="text-autospace: none; text-align: justify; font: 10pt Times New Roman, Times, Serif">Level 1: 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.</td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="text-autospace: none; font: 10pt Times New Roman, Times, Serif; text-align: justify">·</td> <td style="text-autospace: none; text-align: justify; font: 10pt Times New Roman, Times, Serif">Level 2: 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.</td></tr> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="text-autospace: none; font: 10pt Times New Roman, Times, Serif; text-align: justify">·</td> <td style="text-autospace: none; text-align: justify; font: 10pt Times New Roman, Times, Serif">Level 3: Significant unobservable inputs that reflect a reporting entitys 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.</td></tr> </table>   The fair values of the Companys cash and cash equivalents, accounts payable, amounts due to related parties, accrued expenses and notes payable approximate carrying values due to their short term maturities.   Stock-Based Compensation   All share-based payments to employees, including grants of stock options to employees, directors and consultants and restricted stock grants, are recognized in the financial statements based upon their fair values.   The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows FASB guidance. As such, the value of the applicable stock-based compensation is periodically remeasured and income or expense is recognized during their vesting terms. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is primarily recognized over the term of the consulting agreement. In accordance with FASB guidance, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor's balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company records the fair value of nonforfeitable equity instruments issued for future consulting services as prepaid consulting fees in its consolidated balance sheets.   Basic and Diluted Loss per Common Share   Basic net loss per common share is computed by dividing net loss 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 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 common shares outstanding during the period. Common stock equivalents (prior to application of the treasury stock, if converted method) from convertible notes, preferred stock, stock options and warrants were 10,569,150 and 543,646 at March 31, 2012 and 2011, respectively, are excluded from the calculation of diluted net loss per share for all periods presented because the effect is anti-dilutive.   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, stock options, deferred taxes and stock-based compensation issued to employees and non-employees. Actual results could differ from those estimates.   Recently Adopted Accounting Guidance   On January 1, 2012, we adopted guidance issued by the FASB on accounting and disclosure requirements related to fair value measurements. The guidance limits the highest-and-best-use measure to nonfinancial assets, permits certain financial assets and liabilities with offsetting positions in market or counterparty credit risks to be measured at a net basis, and provides guidance on the applicability of premiums and discounts. Additionally, the guidance expands the disclosures on Level 3 inputs by requiring quantitative disclosure of the unobservable inputs and assumptions, as well as description of the valuation processes and the sensitivity of the fair value to changes in unobservable inputs. Adoption of this new guidance did not have a material impact on our condensed consolidated financial statements.

On September 17, 2007, the Companys Board of Directors and stockholders adopted the 2007 Incentive Stock and Awards Plan (as amended on November 5, 2008, and January 25, 2012, the Plan), which provides for the issuance of a maximum of an aggregate of 3,750,000 shares of 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 Companys development and financial success. Under the Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified stock options and restricted stock. The Plan will be administered by the Companys Board of Directors until such time as such authority has been delegated to a committee of the Board of Directors. On January 25, 2012, our stockholders approved an amendment to the Plan to increase the number of shares available for issuance under the Plan from 375,000 to 3,750,000 and to modify the definition of fair market value under the Plan, among other things. The approval became effective on February 26, 2012.   A summary of the Plan activity for the three months ended March 31, 2012 is as follows: <table align="center" cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">Number of shares</td> <td colspan="2" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">Weighted Avg. Exercise Price</td> <td style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">Weighted Avg. Remaining Contractual Life</td> <td colspan="2" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">Aggregate Intrinsic Value</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Outstanding - January 1, 2012</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">150,152</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">$</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">9.68</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Granted</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">2,825,000</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">0.66</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Exercised</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">-</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">-</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Cancelled</td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">-</td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">-</td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"> </td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Outstanding - March 31, 2012</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">2,975,152</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">1.10</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">5.26</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">668,470</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Exercisable - March 31, 2012</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">327,902</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">4.60</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">5.33</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">59,958</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Vested and expected to vest - March 31, 2012</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">2,710,427</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">1.14</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">5.26</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">625,619</td></tr> </table>   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 March 31, 2012, based on the closing price of the Companys common stock of $0.90 on that date.   On January 23, 2012, the Board granted Dr. Balbir Brar,the Companys President, an option to purchase 1,125,000 shares of common stock under the Plan. Pursuant to the terms of the Plan, the exercise price of the options is $0.736. The stock option vests as follows: 1/36th of the unvested shares will vest on each of the 36 monthly periods following the date of the grant provided Dr. Brar continues to be employed by the Company as of the applicable vesting date.   On January 17, 2012, the Company granted Dr. Paul Finnegan, a director and senior advisor, an option to purchase up to 625,000 shares of common stock under the Plan. Pursuant to the terms of the Plan, the exercise price of the option is $0.64. The stock option will vest as follows: 250,000 shares on January 6, 2013, 250,000 shares on January 6, 2014 and 125,000 on January 6, 2015; provided however, that Dr. Finnegan must continue to serve as a consultant to the Company as of the applicable vesting date.   On January 25, 2012, the Board approved a one-time stock option grant to Mr. Mark Baum, the Companys current Chief Executive Officer and a director, to purchase up to 625,000 shares pursuant to the Plan. These options were issued to Mr. Baum for his uncompensated services as Chairman of the Board of Directors and significant ongoing services related, but not limited to, the Companys emergence from Chapter 11 bankruptcy protection, negotiation with creditors, pursuit of additional financing opportunities and hiring of executive officers. The option vests in twelve equal monthly periods, commencing on January 25, 2012 and ending on January 25, 2013 and has an exercise price of $0.48.   On February 1, 2012, the Board granted Andrew R. Boll, the Companys Vice-President of Accounting and Public Reporting, an option to purchase up 75,000 shares of common stock under the Plan. Pursuant to the terms of the Plan, the exercise price of the options is $0.736. The stock option will vest as follows: 1/36th of the unvested shares will vest on each of the 36 monthly periods following the date of the grant provided Mr. Boll continues to be employed by the Company as of the applicable vesting date.   On February 15, 2012, the Board granted Dr. Joachim Schupp, the Companys Chief Medical Officer, an option to purchase up to 375,000 shares of common stock under the Plan. Pursuant to the terms of the Plan, the exercise price of the options is $0.72. The stock option vests as follows: 1/36th of the unvested shares will vest on each of the 36 monthly periods following the date of the grant provided Dr. Schupp continues to be employed by the Company as of the applicable vesting date.   The outstanding options were granted to the employees, directors and consultants at exercise prices that ranged from $0.48 to $16.00, the estimated fair market value of the common stock on the dates of issuance. These options have expiration dates that range from 4 10 years of their grant date and were vested immediately, monthly, quarterly, or on an annual basis up to five years. The Company uses the Black-Scholes-Merton option pricing model to estimate the grant-date fair value of share-based awards. The Black-Scholes-Merton model requires subjective assumptions regarding future stock price volatility and expected time to exercise, along with assumptions about the risk-free interest rate and expected dividends, which affect the estimated fair values of the Companys stock-based awards. The expected term of options granted was determined in accordance with the simplified approach as the Company has very limited historical data on employee exercises and post-vesting employment termination behavior. The expected volatility is based on the historical volatilities of the common stock of the Company. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the expected term of the grant effective as of the date of the grant. The Company used 0% as an expected dividend yield assumption. These factors could change in the future, affecting the determination of stock-based compensation expense in future periods. Utilizing these assumptions, the fair value is determined at the date of grant.   The Company issued 2,825,000 options during the three months ended March 31, 2012. The weighted average fair value per share of grants issued for the three months ended March 31, 2012 was $0.54. The Company recorded stock-based compensation related to stock options for employees and directors as follows:   <table cellspacing="0" cellpadding="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">For The Three Months Ended</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">For The Three Months Ended</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none"> </td> <td style="vertical-align: top; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">March 31, 2012</td> <td style="vertical-align: top; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center"> </td> <td style="vertical-align: top; border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">March 31, 2011</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Employees - selling, general and administrative</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">$</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">2,590</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">$</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">                                       44,859</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Employees - research and development</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center; font: 10pt Times New Roman, Times, Serif">41,546</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">                                       18,366</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Directors - selling, general and administrative</td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none"> </td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">74,368</td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none"> </td> <td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none">                                         3,096</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: right; font: 10pt Times New Roman, Times, Serif">Total</td> <td nowrap="nowrap" style="border-bottom: windowtext 1.5pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 1.5pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">118,504</td> <td nowrap="nowrap" style="border-bottom: windowtext 1.5pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none">$</td> <td nowrap="nowrap" style="border-bottom: windowtext 1.5pt double; font: 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none">                                       66,321</td></tr> </table>   As of March 31, 2012, there was approximately $1,414,000 of total unrecognized compensation expense related to unvested stock options under the Plan. That expense is expected to be recognized over the weighted-average period of 2.45 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 the grants issued to employees and directors during the three months ended March 31, 2012:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" colspan="2" style="border-bottom: windowtext 1pt solid; font: bold 10pt Times New Roman, Times, Serif; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: center">2012</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 77%; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Weighted-average fair value of options granted</td> <td nowrap="nowrap" style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: right; font: 10pt Times New Roman, Times, Serif"> $</td> <td nowrap="nowrap" style="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: right; font: 10pt Times New Roman, Times, Serif">             0.54</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Expected terms (in years)</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: right; font: 10pt Times New Roman, Times, Serif">5.4</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Expected volatility</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: right; font: 10pt Times New Roman, Times, Serif">219-244%</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Risk-free interest rate</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: right; font: 10pt Times New Roman, Times, Serif">0.51-0.93%</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; font: 10pt Times New Roman, Times, Serif">Dividend yield</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-autospace: none; text-align: right; font: 10pt Times New Roman, Times, Serif">                 -  </td></tr> </table>