UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K/A

Amendment
No. 1



(Mark
One)



|[X] |  | ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- |  | ----------------------------------------------------------------------------------------



For
the fiscal year ended December 31, 2013



OR



|[  ] |  | TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- |  | --------------------------------------------------------------------------------------------



For
the transition period from __________ to __________



Commission
File Number: 001-35814



IMPRIMIS
PHARMACEUTICALS, INC.

(Exact
name of registrant as specified in its charter)



|Delaware                            |  | 45-0567010             
|----------------------------------- |  | -----------------------
|(State
    or other jurisdiction of |  | (IRS
    Employer      
|incorporation
    or organization)  |  | Identification
    No.)



12626
High Bluff Drive, Suite 150

San
Diego, CA 92130

(Address
of Principal Executive Offices)(Zip Code)



(858)
704-4040

(Registrant’s
telephone number, including area code)



Securities
registered pursuant to Section 12(b) of the Act:



|Title
    of Each Class                      |  | Name
    of Each Exchange on Which Registered
|-------------------------------------------- |  | ---------------------------------------------
|Common
    Stock, $0.001 par value per share |  | The
    NASDAQ Capital Market                



Securities
registered pursuant to Section 12(g) of the Act: None



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ]
No [X]



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes[  ] No [X]



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes[X] No [  ]



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes[X]
No [  ]



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [  ]



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



|Large
    accelerated filer [  ]                  |  | Accelerated
    filer [  ]       
|------------------------------------------------- |  | ---------------------------------
|Non-accelerated
    filer [  ]                    |  | Smaller
    reporting company [X]
|(Do
    not check if a smaller reporting company) |  |                                  



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ]
No [X]



As
of June 28, 2013, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate
market value of the common stock held by non-affiliates of the Registrant was approximately $57 million, based on the closing
price of $8.48 for the Registrant’s common stock as quoted on The NASDAQ Capital Market on that date (adjusted to reflect
a one-for-five reverse stock split of the Registrant’s common stock on February 7, 2013). For purposes of this calculation,
it has been assumed that shares of common stock held by each director, each officer and each person who owns 10% or more of the
outstanding common stock are held by affiliates. The treatment of these persons as affiliates for purposes of this calculation
is not conclusive as to whether such persons are, in fact, affiliates of the Registrant.



As
of April 29 2014, there were 9,100,731 shares of the Registrant’s common stock outstanding.



Documents
incorporated by reference: None.


















TABLE
OF CONTENTS



|             | PART
    III                                                                                       |    |   
|------------ | -------------------------------------------------------------------------------------------------- | -- | --
|Item
    10. | Directors,
    Executive Officers and Corporate Governance                                         |    | 3 
|Item
    11. | Executive
    Compensation                                                                         |    | 6 
|Item
    12. | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |    | 13
|Item
    13. | Certain
    Relationships and Related Transactions, and Director Independence                      |    | 14
|Item
    14. | Principal
    Accountant Fees and Services                                                         |    | 16
|             |                                                                                                    |    |   
|             | PART
    IV                                                                                        |    |   
|Item
    15. | Exhibits,
    Financial Statement Schedules                                                        |    | 17
|SIGNATURES   |                                                                                                    | 18



2







EXPLANATORY
NOTE



Imprimis
Pharmaceuticals, Inc. (the “Company,” “Imprimis,” “we,” “us” and “our”)
is filing this Amendment No. 1 on Form 10-K/A (the “Amendment”) to amend its Annual Report on Form 10-K for the year
ended December 31, 2013, filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2014 (the “Original
10-K”) to include information required by Part III of Form 10-K. Other than with respect to the inclusion of the Part III
information contained herein and the filing of the related certifications, this Amendment makes no other changes to the Original
10-K, does not modify or update any information in the Original 10-K in any way and does not reflect events occurring after the
filing of the Original 10-K.



PART
III



ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE



Directors



Our
directors hold office for one-year terms until the earlier of their death, resignation or removal or until their successors have
been elected and qualified. Set forth below is certain information regarding our directors as of April 15, 2014:



|Name                               |  | Committees                                                                                                                                       |  | Age
|---------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---
|Mark
    L. Baum, J.D.             |  | None.                                                                                                                                            |  | 41 
|                                   |  |                                                                                                                                                  |  |    
|Robert
    J. Kammer, D.D.S.       |  | None.                                                                                                                                            |  | 64 
|                                   |  |                                                                                                                                                  |  |    
|Stephen
    G. Austin, CPA, MBA    |  | Audit
                                         Committee*, Compensation Committee,
        Nomination
        and Corporate Governance Committee |  | 61 
|                                   |  |                                                                                                                                                  |  |    
|Peter
    C. Kenny                 |  | Audit
                                         Committee, Compensation Committee,
        Nomination
        and Corporate Governance Committee* |  | 55 
|                                   |  |                                                                                                                                                  |  |    
|August
    S. Bassani, Pharm.D.    |  | Audit
                                         Committee, Compensation Committee*,
        Nomination
        and Corporate Governance Committee |  | 41 
|                                   |  |                                                                                                                                                  |  |    
|*
    Chairperson of the committee |  |                                                                                                                                                  |  |    



Stephen
G. Austin, CPA, MBA has served as a director since July 2012 and currently serves as the Chair of our Audit Committee and
as a member of our Compensation Committee and Nomination and Corporate Governance Committee. He has been a Partner in Swenson
Advisors, LLP, a regional accounting firm (registered with the PCAOB), since May 1998 and has served as Managing Partner since
October 2006. At Swenson Advisors, Mr. Austin manages audit, SEC, Sarbanes-Oxley and business consulting engagements with a focus
on technology, manufacturing, service, real estate, social media and non-profit organizations. Prior to joining Swenson Advisors,
Mr. Austin accumulated over 22 years of experience as an audit partner with Price Waterhouse LLP, where he worked from 1976 to
1996, and with McGladrey & Pullen, LLP, where he worked from 1996 to 1998, serving both public and private companies. While
at Price Waterhouse, Mr. Austin worked in their national office in New York, where he addressed complex accounting and reporting
issues for publicly-traded companies and worked with various members of the FASB and EITF staffs. Mr. Austin is licensed as a
CPA in California and Georgia. He serves as a board member or advisory board member for various not-for-profit foundations, associations
and public service organizations in the United States, serves on the Global board of directors of Integra International, an international
association of accounting firms, and served as a director on the board of Avanir Pharmaceuticals, Inc. (NASDAQ: AVNR). In 2004,
Mr. Austin published a book on business ethics entitled “Rise of the New Ethics Class,” and in 2005 and 2006 he published
articles in Asia discussing The Sarbanes-Oxley Act of 2002. Mr. Austin has also authored articles for the AICPA including the
Journal of Accountancy. Mr. Austin holds a B.S. degree in accounting from Bob Jones University and an M.B.A. degree from the University
of Georgia. Mr. Austin brings to our Board financial and accounting expertise and extensive experience serving as a director of
other companies.



3







August
(“Gus”) S. Bassani, Pharm.D., has served as a director since December 2012. He currently serves as Vice-President
of Consulting, R&D and Formulations at PCCA and has been with PCCA since September 2002. Prior to joining PCCA, Mr. Bassani
was a formulation pharmacist in the Product Development Lab of a veterinary pharmaceutical company. He has worked in multiple
pharmacy practice settings, located in Alaska, Iowa and Kansas, and has taught extemporaneous compounding principles to pharmacy
students in Drake University’s Pharmaceutics Laboratory course. Mr. Bassani received his Doctor of Pharmacy degree from
Drake University College of Pharmacy and Health Sciences. He is a member of the 2010 – 2015 United States Pharmacopeia (USP)
Council of Experts – Compounding Expert Committee, and is serving on the 2012 – 2014 Drake University College of Pharmacy
and Health Sciences National Advisory Council. He is a member of the American Pharmacists Association (APhA), International Academy
of Compounding Pharmacists (IACP), American Society of Health Systems Pharmacists (ASHP) and the American Association of Pharmaceutical
Scientists (AAPS). Mr. Bassani’s widespread experience in the pharmaceutical industry and his formulation expertise provides
valued guidance to our management and board.



Mark
L. Baum, J.D.has served as a director since December 2011 and as our Chairman of our Board of Directors from December 16,
2011 through April 1, 2012. Mr. Baum has also served as our principal executive officer since December 2011, and was appointed
our Chief Executive Officer effective April 1, 2012. Mr. Baum has served as the principal of The Baum Law Firm, P.C. (now TBLF,
LLC) since 1998, and has more than 15 years experience in financing, operating and advising small capitalization publicly traded
enterprises, with a particular focus on restructured or reorganized businesses. As a manager of capital, he has completed more
than 125 rounds of financing for more than 40 publicly traded companies. As a securities attorney, Mr. Baum focused his practice
on US securities laws, reporting requirements and public company finance-related issues that affect small capitalization public
companies. Mr. Baum has actively participated in numerous public company spin-offs, restructurings and recapitalizations, venture
fundings, private-to-public mergers, asset acquisitions and divestitures. In addition to his fund management and legal experience,
Mr. Baum has operational experience in the following industries: pharmaceuticals, medical diagnostics, closed door pharmacies,
cleaner and renewable energy and retail home furnishings. Mr. Baum presently serves on the boards of directors, and including
serving as the chairman of the audit committee, of Ideal Power, Inc. (www.idealpower.com) (NASDAQ: IPWR); he is the Chairman
of the Board of Directors of Endra, Inc. (www.endrainc.com), a privately held company based in Ann Arbor, Michigan. Mr.
Baum has previously served on numerous boards of directors, including Chembio Diagnostic Systems, Inc., Applied Natural Gas Fuels,
Inc., Shrink Nanotechnologies, Inc., You on Demand, Inc. and CoConnect, Inc. Mr. Baum is a published inventor and is an inactive
member of both the State Bar of California and the State Bar of Texas. Mr. Baum brings to our board years of public company executive
experience, including knowledge of securities laws, reporting requirements and public company finance-related issues.



Robert
Kammer, D.D.S.,has served as a director since December 2011 and as Chairman of the Board of Directors since April 1, 2012.
Dr. Kammer received his Bachelor of Science Degree in 1971 from Xavier University, Cincinnati, Ohio. He received his Doctor of
Dental Surgery Degree from the University of Iowa in 1974. Dr. Kammer is a Diplomat of The American Board of Orofacial Pain and
a Founding Charter Member of The Academy for Sports Dentistry and Colorado Osseointegration Study Club. From 1979 to 1996, Dr.
Kammer was an Associate Professor and Course Director of Orofacial Pain Section in the Department of Restorative Dentistry at
The University of Colorado Health Science Center. From 1982 through 1993, he served on the Sports Medicine Advisory Committee
at The University of Colorado Intercollegiate Athletics and was the Team Dentist for Football and Basketball. From 1983 to 1990,
Dr. Kammer was a consultant to the Boulder-Denver Pain Control Center and from 1988 through 1991, he served as a Referee and Editorial
Staff Consultant of the Journal of Orofacial Pain. Dr. Kammer recently contributed a chapter to the groundbreaking text Osteoperiosteal
Flap, is consulting for Clear Choice Dental Implant Centers, co-authoring scientific papers and is a co-investigator
for a landmark study of Titanium Implant Prostheses at the Mayo Institute. Dr. Kammer was a Managing Member of DermaStar International,
LLC, our former majority stockholder. Dr. Kammer brings to our Board of Directors over 30 years of practical experience treating
patients for orofacial pain as well as a history of success in leadership positions he has been associated with.



Peter
C. Kenny, has served as a director since November 2013. Mr. Kenny is currently the Chief Executive Officer for Clearpool Group,
a company based in New York City that offers agency only execution services to institutional clients. Prior to his association
with Clearpool Group in 2013, he was the Managing Director and Chief Market Strategist at Knight Capital Group. He has more than
30 years of experience in the equity trading industry and prior to joining Knight in December 2006, he was a member of the New
York Stock Exchange for two decades. Mr. Kenny joined Knight from Jefferies Execution Services where he served for three years
as a Managing Director overseeing direct executions. Prior to that tenure, in 2001, Mr. Kenny founded and was Chief Executive
Officer of Kenny and Co., a division of Van Der Moolen N.A., a Dutch market maker. Mr. Kenny’s career also includes six
years as NYSE Senior Floor Official while serving on six internal committees, including as an AFB Board Member. Mr. Kenny appears
regularly as an equity market commentator in various broadcasting venues and publications, such as CNN, CNBC, Fox Business, Reuters,
BBC and Bloomberg TV, radio and print. “Kenny’s Commentary” – his daily morning note – is read and
used by most major media outlets in the Americas and the EU. Mr. Kenny is a member of the board of directors of Bank of the Ozarks,
Inc. (NASDAQ: OZRK). Mr. Kenny has degrees in Economics and Political Science from Warren Wilson College in North Carolina. The
Company believes that Mr. Kenny’s extensive career in the equity trading industry qualifies him to serve on the Board.



4







Our
Executive Officers



Executive
officers are elected by our Board and serve at its discretion. There are no family relationships between any of our directors
or our executive officers and any other director or executive officer. Set forth below is information regarding our executive
officers as of April 15, 2014.



|Name                    |  | Position                                            |  | Age
|----------------------- |  | --------------------------------------------------- |  | ---
|Mark
    L. Baum, J.D.  |  | Chief
    Executive Officer and Director            |  | 41 
|                        |  |                                                     |  |    
|Andrew
    R. Boll, CMA |  | Vice-President,
    Accounting and Public Reporting |  | 31 



Mr.
Baum’s biographical information is included with those of the other members of our Board.



Andrew
R. Boll, CMA,has been our Vice President of Accounting and Financial Reporting since February 2012 and was a consultant to
the Company from December 2011 to February 2012. He has over ten years of experience in financial reporting and accounting roles
with a significant portion of that experience working with small capitalization companies, with a particular focus on restructured
and reorganized businesses. From 2007 to 2011, Mr. Boll was an accountant for BCGU, LLC, a privately held fund manager, and its
related entities, that specialized in capital venture investment opportunities. There he provided CFO/Controller-type consulting
services to public company clients, compiling numerous SEC financial reports, and accounting for several public company restructurings,
financings and private to public mergers. From 2004 to 2007, Mr. Boll held various accounting roles at Welsh Companies, LLC, a
privately held commercial real estate company, its fund and its other subsidiaries. Mr. Boll is a Certified Management Accountant
and received his B.S. degree in Corporate and Public Finance, summa cum laude, from Huron University. He is also a member of the
Institute of Management Accountants, and a member of CFA Society of San Diego.



Audit
Committee



As
of April 15, 2014, our Audit Committee is composed of Messrs. Stephen Austin (Chairperson), August Bassani and Peter Kenny. Former
directors Paul Finnegan and Jeffrey Abrams served on our Audit Committee during fiscal year 2013 until their resignations from
the Board effective October 1, 2013 and September 29, 2013, respectively, and Messrs. Bassani and Kenny were subsequently nominated
to replace them on the committee. Our Board has affirmatively determined that (i) each member of the Audit Committee during fiscal
2013 was independent under Nasdaq Marketplace Rule 5605(a)(2), and satisfied all other qualifications under Nasdaq Marketplace
Rule 5065(e) and the applicable rules of the Securities and Exchange Commission and (ii) each current member of the Audit Committee
is independent under Nasdaq Marketplace Rule 5605(a)(2), and meets all other qualifications under Nasdaq Marketplace Rule 5605(e)
and the applicable rules of the Securities and Exchange Commission. Our Board has also affirmatively determined that Stephen Austin
and Peter Kenny each qualify as an “audit committee financial expert” as such term is defined in Regulation S-K under
the Securities Act of 1933. During 2013, the Audit Committee held four meetings.



The
Audit Committee acts pursuant to a written charter, which is available for review on our website at www.imprimispharma.comunder the “Investor Relations” tab. The responsibilities of the Audit Committee include overseeing, reviewing
and evaluating our financial statements, accounting and financial reporting processes, internal control functions and the audits
of our financial statements. The Audit Committee is also responsible for the appointment, compensation, retention, and as necessary,
the termination of our independent auditors.



Section
16(a) Beneficial Ownership Reporting Compliance



Section
16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who beneficially own more
than 10% of our common stock to file initial reports of ownership and reports of changes in ownership with the SEC. Such persons
are required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by such person.



5







Based
solely on our review of the copies of such forms furnished to us and the written representations from certain of the reporting
persons that no other reports were required, we believe that during the fiscal year ended December 31, 2013, all executive officers,
directors and greater than ten-percent beneficial owners complied with the reporting requirements of Section 16(a), except that
director Robert Kammer filed a late Form 5 on April 22, 2014 with respect to one transaction that occurred on September 30, 2013
and that was not reported on a Form 4 during the 2013 fiscal year.



Code
of Business Conduct and Ethics



Our
Board has adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees. The Code
of Business Conduct and Ethics is available for review on our website at www.imprimispharma.com under the “Investor
Relations” tab, and is also available in print, without charge, to any stockholder who requests a copy by writing to us
at Imprimis Pharmaceuticals, Inc., 12626 High Bluff Dr., Suite 150, San Diego, CA 92130, Attention: Investor Relations. Each of
our directors, employees and officers, including our Chief Executive Officer and Principal Financial Officer, and all of our other
executive officers, are required to comply with the Code of Business Conduct and Ethics. There have not been any waivers of the
Code of Business Conduct and Ethics relating to any of our executive officers or directors in the past year.



ITEM
11. EXECUTIVE COMPENSATION



Summary
Compensation Table



The
following table summarizes compensation earned by or awarded or paid to our named executive officers during fiscal year 2013.





|Name
    and principal position                     |  | Year |  |  | Salary |         |  | Stock
    Awards |   |           | Option
    Awards(1) |  |   | Non-Equity
    Incentive Plan Compensation(2) |     |  | All
    Other Compensation(3) |         |  | Total |  
|--------------------------------------------------- |  | ---- |  |  | ------ | ------- |  | ---------------- | - | --------- | -------------------- |  | - | --------------------------------------------- | --- |  | ----------------------------- | ------- |  | ----- | -
|(a)                                                 |  | (b)  |  |  | (c)    |         |  | (e)              |   |           | (f)                  |  |   | (g)                                           |     |  | (i)                           |         |  | (j)   |  
|Mark
    L. Baum , J.D.                             |  | 2013 |  |  | $      | 296,850 |  |                  | $ | 3,688,257 | (4)                  |  | $ | 1,401,624                                     |     |  | $                             | 125,000 |  |       | $
|Chief
    Executive Officer                         |  | 2012 |  |  | $      | 150,300 |  |                  | $ | 520,000   | (5)                  |  | $ | 655,773                                       | (6) |  | $                             | -       |  |       | $
|                                                    |  |      |  |  |        |         |  |                  |   |           |                      |  |   |                                               |     |  |                               |         |  |       |  
|Andrew R. Boll,
    CMA                             |  | 2013 |  |  | $      | 138,750 |  |                  | $ | -         |                      |  | $ | 467,298                                       |     |  | $                             | 46,500  |  |       | $
|Vice-President,
    Accounting and Public Reporting |  | 2012 |  |  | $      | 64,500  |  |                  | $ | -         |                      |  | $ | 51,780                                        |     |  | $                             | -       |  |       | $
|                                                    |  |      |  |  |        |         |  |                  |   |           |                      |  |   |                                               |     |  |                               |         |  |       |  
|Joachim P.H.
    Schupp, M.D.                       |  | 2013 |  |  | $      | 204,125 |  |                  | $ | -         |                      |  | $ | 129,805                                       |     |  | $                             | -       |  |       | $
|Former
    Chief Medical Officer(8)                 |  | 2012 |  |  | $      | 78,500  |  |                  | $ | -         |                      |  | $ | 260,100                                       |     |  | $                             | -       |  |       | $
|                                                    |  |      |  |  |        |         |  |                  |   |           |                      |  |   |                                               |     |  |                               |         |  |       |  
|Balbir Brar,
    D.V.M., Ph.D.                      |  | 2013 |  |  | $      | 28,000  |  |                  | $ | -         |                      |  | $ | -                                             |     |  | $                             | -       |  |       | $
|Former President(9)                                 |  | 2012 |  |  | $      | 84,000  |  |                  | $ | -         |                      |  | $ | 669,300                                       | (7) |  | $                             | -       |  |       | $



|(1) | Reflects
    the dollar amount of the grant date fair value of awards granted during the respective fiscal years, measured in accordance
    with Topic 718 and without adjustment for estimated forfeitures. For a discussion of the assumptions used to calculate the
    value of option awards, refer to Note 6 of Notes to Consolidated Financial Statements for the fiscal year ended December 31,
    2013 included in our Form 10-K for the year ended December 31, 2013. For a discussion of the material terms of each stock
    option award, see the table entitled “Outstanding Equity Awards at Fiscal Year End.”
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(2) | Amounts
    represent cash awards earned under the Company’s annual incentive plan based on the Company’s performance measured
    against the corporate objectives established for the named executive officer and actual individual executive officer performance
    against his individual goals. Such amounts are determined and paid after the end of each fiscal year, but reflect individual
    and Company performance for the respective fiscal years reflected above.                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(3) | “All
    Other Compensation” summarized in the table for fiscal 2012 for Mr. Boll consists of fees paid to Mr. Boll for consulting
    services performed during the fiscal year 2012 prior to his appointment as our Vice President, Accounting and Public Reporting.                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | “All
    Other Compensation” summarized in the table for fiscal 2012 for Mr. Schupp consists of fees paid to an entity beneficially
    owned by Mr. Schupp for consulting services performed during the fiscal year 2012 prior to his appointment as our Chief Medical
    Officer.                                                                                                                                                                                                                                                                                                                                           



6







|(4) | Represents
    the fair market value on the date of grant of restricted stock units (RSUs) awarded to Mr. Baum during 2013 under the Company’s
    Amended and Restated 2007 Incentive Stock and Awards Plan (the “Plan”). Of these RSUs, 200,000 vest on the third
    anniversary of the grant date contingent on continuous service to the Company through such date, and 1,050,000 RSUs 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 achieve and
    maintain certain stock price targets ranging from $10 per share to $30 per share during the three year period following the
    grant date. See the discussion under “Compensation Arrangements with Mark L. Baum – Performance Equity Award”
    below for a more detailed description of these vesting provisions. At the time of the entry into the employment agreement
    in May 2013, the per person grant limit under the Plan for grants of performance-based restricted stock units was 600,000
    shares. As a result, Mr. Baum received 600,000 of the RSUs called for by the employment agreement at that time, and the remaining
    450,000 RSUs called for by the employment agreement were deferred until an amendment to the Plan to increase to the number
    of shares available for grant and the applicable annual per person grant limit became effective on September 27, 2013. Upon
    receipt of stockholder approval, the remaining 450,000 RSUs were granted. Concurrent with the issuance of the 450,000 RSUs,
    120,000 unvested RSUs previously granted to Mr. Baum in July 2012 were cancelled. As a result, the issuance of the 450,000
    RSUs has been treated as a modification of the RSU grant made to Mr. Baum in July 2012 for accounting purposes. The amounts
    represent the aggregate grant date fair value of the awards granted to Mr. Baum computed in accordance with Financial Standards
    Accounting Board Accounting Standards Codification Topic 718 (“Topic 718”). A discussion of the assumptions used
    in calculating the grant date fair value of the RSUs is set forth in Note 6 of the Notes to Financial Statements included
    in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the SEC on March 28, 2014. For a
    discussion of the material terms of Mr. Baum’s equity awards, see the description of Mr. Baum’s employment agreement
    and the table entitled “Outstanding Equity Awards at Fiscal Year End.”
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(5) | Represents
    the aggregate grant date fair value of the RSUs granted to Mr. Baum during 2012 computed in accordance with Topic 718 based
    upon the probable outcome of such conditions. A discussion of the assumptions used in calculating the grant date fair value
    of the RSUs is set forth in Note 6 of the Notes to Financial Statements included in our Annual Report on Form 10-K for the
    fiscal year ended December 31, 2013 filed with the SEC on March 28, 2014. As described in (4) above, in September 2013 120,000
    unvested RSUs granted in 20112 were forfeited and replaced by a portion of the subsequent RSU grant to Mr. Baum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(6) | Represents
    the fair value of (i) an option to purchase up to 125,000 shares of common stock under the Plan granted on January 25, 2012
    for, among other things, his services as Chairman of the Board of Directors which vested monthly over twelve months following
    the grant date, (ii) an option to purchase up to 25,000 shares of common stock under the Plan, which was granted to each of
    the Company’s directors on April 1, 2012 for their services as directors and which vested in equal installments of 6,250
    shares on each of June 30, 2012, September 30, 2012, December 31, 2012 and March 31, 2013 subject to continued service as
    a director on each such date, and (iii) an option to purchase up to 60,000 shares of common stock under the Plan granted on
    April 1, 2012 in connection with his appointment as our Chief Executive Officer. These options vested monthly over twenty
    four months following the grant date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(7) | Represents
    the fair value of (i) an option to purchase up to 225,000 shares of common stock under the Plan granted on January 25, 2012
    in connection with his appointment as our President, which options vested monthly over thirty six months following the grant
    date, and (ii) an option to purchase up to 25,000 shares of common stock under the Plan, which was granted to each of the
    Company’s directors on April 1, 2012 for their services as directors and which vested in equal installments of 6,250
    shares on each of June 30, 2012, September 30, 2012, December 31, 2012 and March 31, 2013 subject to continued service as
    a director on each such date. On July 25, 2012, Dr. Brar resigned as a director, and as a result of such resignation, the
    25,000 unexercised options expired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(8) | Effective
    November 15, 2013, Dr. Joachim Schupp resigned from his position as Chief Medical Officer with the Company and no longer serves
    as an executive officer of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(9) | Effective
    May 7, 2013, Dr. Balbir Brar resigned from his position with the Company and no longer serves as an executive officer of the
    Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



7







Outstanding
Equity Awards at Fiscal Year-End



The
following table sets forth certain information concerning outstanding stock awards held by our named executive officers serving
during the fiscal year ended December 31, 2013.





|                        |  | Option Awards                                                           |         |      | Stock
    Awards                                                          | 
|----------------------- |  | ----------------------------------------------------------------------- | ------- | ---- | ------------------------------------------------------------------------- | 
|Name                    |  | Number of
    Securities Underlying Unexercised Options (#) Exercisable |         |      | Number of
    Securities Underlying Unexercised Options (#) Unexercisable | 
|(a)                     |  | (b)                                                                     |         |      | (c)                                                                       | 
|Mark
    L. Baum        |  |                                                                         | 125,000 | (2)  |                                                                           | 
|                        |  |                                                                         | 52,500  | (3)  |                                                                           | 
|                        |  |                                                                         | 25,000  | (4)  |                                                                           | 
|                        |  |                                                                         | 30,000  | (5)  |                                                                           | 
|                        |  |                                                                         | -       |      |                                                                           | 
|                        |  |                                                                         | -       |      |                                                                           | 
|Andrew R.
    Boll      |  |                                                                         | 9,169   | (8)  |                                                                           | 
|                        |  |                                                                         | 15,000  | (9)  |                                                                           | 
|Balbir Brar             |  |                                                                         | 175,000 | (10) |                                                                           | 
|Joachim P.H.
    Schupp |  |                                                                         | 43,748  | (11) |                                                                           | 
|                        |  |                                                                         | 4,168   | (12) |                                                                           | 
|                        |  |                                                                         | 493     | (13) |                                                                           | 





|(1)  | Calculated
    by multiplying the number of unvested shares by $3.36, the closing price per share of our common stock on The NASDAQ Capital
    Markets on December 31, 2013 (which was the last business day of the fiscal year).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(2)  | Represents
    an option granted to Mr. Baum on April 1, 2012 under the Plan for his services, including his service as Chairman of the Board
    of Directors. The option vested in 12 equal monthly installments of 10,417 shares from January 25, 2012 to January 25, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(3)  | Represents
    an option granted to Mr. Baum an April 1, 2012 under the Plan in connection with his appointment as our Chief Executive Officer.
    The option vests over a two-year period, with 15,000 shares vesting immediately upon issuance and an additional 1,875 shares
    vesting monthly for the 24 months thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(4)  | Represents
    an option granted to Mr. Baum an April 1, 2012 under the Plan in connection with his services as a director. The option vested
    in four equal quarterly installments of 6,250 shares commencing on June 30, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(5)  | Represents
    an option granted to Mr. Baum on May 2, 2013 under the Plan in connection with his services as a Chief Executive Officer.
    The option vests in quarterly installments of 15,000 shares over three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(6)  | Represents
    an award of RSUs granted to Mr. Baum on May 2, 2013. The RSUs vest in full on May 2, 2016 contingent on continuous service
    to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(7)  | Represents
    the Performance Equity Award described in more detail under “Compensation Arrangements with Mark L. Baum –
    Performance Equity Award” below. As described below, the Performance Equity Award vests upon achieving and maintaining
    certain stock price targets over a three year period.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(8)  | Represents
    an option granted to Mr. Boll on February 1, 2012 under the Plan in connection with his appointment as our Vice President,
    Accounting and Public Reporting. The option vests in equal monthly installments over the 36 month period following the date
    of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(9)  | Represents
    an option granted to Mr. Boll on April 1, 2013 under the Plan in connection with his appointment as our Vice President, Accounting
    and Public Reporting. The option vests in quarterly installments of 7,500 shares over three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(10) | Represents
    an option granted to Dr. Brar on January 25, 2012 under the Plan in connection with his appointment as our President. The
    option vests in equal monthly installments over the 36 month period following the date of grant. Following Dr. Brar’s
    resignation as President of the Company, in May 2013, we entered into a consulting agreement that allowed for these options
    to continue vesting in accordance with their original vesting schedule. On September 26, 2013, Dr. Brar’s consulting
    agreement was terminated and the vesting accelerated for 50,000 shares. All unvested stock options related to this grant were
    then forfeited. The remaining vested stock options are exercisable until September 30, 2014.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(11) | Represents
    an option granted to Dr. Schupp on February 15, 2012 under the Plan in connection with his appointment as our Chief Medical
    Officer. The option vests in equal monthly installments over the 36 month period following the date of grant. Following Dr.
    Schupp’s resignation as Chief Medical Officer of the Company in November 2013, all unvested stock options related to
    this grant were forfeited and the remaining vested stock options are exercisable until November 15, 2014.                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(12) | Represents
    an option granted to Dr. Schupp on April 1, 2013 under the Plan in connection with his appointment as our Chief Medical Officer.
    The option vests in quarterly installments of 2,083 shares over three years. Following Dr. Schupp’s resignation as Chief
    Medical Officer of the Company in November 2013, all unvested stock options related to this grant were forfeited and the remaining
    vested stock options expire on November 15, 2014.                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(13) | Represents
    an option granted to Dr. Schupp on December 15, 2011 under the Plan in connection with a release given by Dr. Schupp upon
    DermaStar International, LLC’s investment in the Company. The option was 100% vested upon its grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



8







Compensation
Arrangements with Mark L. Baum



Amended
and Restated Employment Agreement



On
May 2, 2013, we entered into an amended and restated employment agreement with Mark L. Baum, our Chief Executive Officer. The
employment agreement has an initial term of three years and will automatically renew thereafter for consecutive one year terms
unless earlier terminated by either party. The agreement provides for an initial annual base salary of $329,000 and a target annual
incentive bonus of 45% of his annual base salary. In addition, as described more fully below, in connection with the employment
agreement, Mr. Baum received the following equity incentive awards: (i) 180,000 options to purchase our common stock; (ii) 200,000
restricted stock units subject to time-based vesting; and (iii) 1,050,000 restricted stock units subject to performance-based
vesting.



2013
Performance Equity Award



Under
his employment agreement, Mr. Baum was granted a performance-based restricted stock unit award (the “Performance Equity
Award”) of 1,050,000 performance-based restricted stock units. The Performance Equity Award vests three years from the date
of grant contingent upon the satisfaction of certain performance-based vesting criteria during the three year period. The performance-based
vesting criteria are broken 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 Performance Equity Award
to vest. These market-based vesting conditions are set forth below:



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



The
closing sale price of our Common Stock on May 2, 2013, the date the performance equity award was approved, was $8.99. Accordingly,
Tranche 1 vesting requires a stock price appreciation of 11% Tranche 2 vesting requires a stock price appreciation of 67% Tranche
3 vesting requires a stock price appreciation of 122% Tranche 4 vesting requires a stock price appreciation of 178% and Tranche
5 vesting requires a stock price appreciation of 234%. 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 of the Company’s
common stock during the Measurement Period must be at or above the Target Share Price for such tranche; and (iii) with certain
limited exceptions, Mr. Baum must be in continuous service with the Company through the third anniversary of the grant date. Any
unvested restricted stock units under the Performance Equity Award will be forfeited on the third anniversary of the grant date.
In addition, the Performance Equity Award contains an incentive recoupment (or “clawback”) provision that provides
for Mr. Baum’s forfeiture or repayment of the benefits granted under the Performance Equity Award under certain circumstances.



9









At
the time of initial grant of the Performance Equity Award, (i) the per person grant limit under the Plan for grants of performance-based
restricted stock units was 600,000 shares and (ii) insufficient shares were authorized for grant under the Plan to accommodate
the Performance Equity Award. As a result, under the terms of the employment agreement with Mr. Baum, the earning and issuance
of any shares under the 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 was subject to approval by our 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, and our stockholders approved such increases
on September 27, 2013. As a result, 600,000 RSUs under the Performance Equity Award were granted to Mr. Baum effective May 2,
2013 and the remaining 450,000 RSUs were granted to Mr. Baum effective September 27, 2013.



Other
Equity Incentive Grants



In
July 2012, Mr. Baum was granted 160,000 RSUs with certain performance-based vesting features. Of these, 40,000 RSUs vested upon
the closing of our public offering in 2013. Concurrent with the issuance of the 450,000 performance-based RSUs described above
in September 2013, Mr. Baum agreed to cancel the remaining 120,000 unvested RSUs previously granted to him in July 2012. As a
result, the issuance of the 450,000 RSUs has been treated as a modification of the RSU grant made to Mr. Baum in July 2012 for
accounting purposes.



Mr.
Baum’s employment agreement also provides for the one-time grant of 180,000 stock options and 200,000 RSUs, both of which
were granted on May 2, 2013. The stock options vest on a quarterly basis over three years and have an exercise price of $8.99
per share, the fair market value of our common stock on the date of grant, and the RSUs vest on the third anniversary of the agreement,
contingent on continuous service to the Company through the applicable vesting date.



In
addition, Mr. Baum is eligible for an annual long-term incentive grants at the time grants are generally made to other senior
executives.



Termination
Provisions



In
the event the Company terminates Mr. Baum’s employment without Cause or Mr. Baum terminates his employment for Good Reason
(as those terms are defined in Mr. Baum’s employment agreement) (a termination without Cause or for Good Reason a “Qualifying
Termination”), Mr. Baum will be entitled to receive: (i) accrued and unpaid base salary through the termination date; (ii)
a prorated bonus payment for the year in which the termination occurs; (iii) a severance payment equal to the sum of (A) his annual
base salary plus (B) one times his actual bonus payment in the two prior years; and (iv) continued group health plan coverage
through COBRA for 18 months.



In
the event of a Qualifying Termination, the Performance Equity Award for which the relevant stock price vesting targets have been
satisfied at the time of such Qualifying Termination shall vest immediately. In addition, any Performance Equity Awards for which
the relevant stock price vesting targets are satisfied within 12 months following the Qualifying Termination will vest on the
date of the satisfaction of such vesting criteria. With respect to the Performance Equity Award, in the event of a Qualifying
Termination after the first anniversary and prior to the third anniversary of the grant date and within one year of a change of
control, all performance stock units subject to the Performance Equity Award that would have vested prior to such date based on
the achievement of the associated Company stock price targets will vest and all performance stock units subject to the Performance
Equity Award with an associated stock price target at or below the per share consideration in the Change of Control transaction
shall vest in full.



Employment
Agreement with Andrew R. Boll, CMA



On
January 25, 2012, we entered into an employment agreement with Mr. Boll, effective as of February 1, 2012, with an initial term
of three years. Under the terms of the employment agreement, Mr. Boll received an initial base salary of $60,000 per year and
was granted an option an option to purchase 15,000 shares of common stock under the Plan to Mr. Boll on February 1, 2012, the
date of his employment with the Company. The option has an exercise price of $3.68 per share, has a four year term and vests monthly
over a 36 month period following the date of grant. The option vests in full upon a change of control as defined in the Plan.
Mr. Boll has agreed to not sell more than 5% of the shares of the Company’s common stock acquired through the exercise of
his stock option in any monthly period without the approval of the Board of Directors. On October 1, 2012, Mr. Boll’s salary
was increased to $90,000 per year, and on April 1, 2013, Mr. Boll’s salary was increased to $155,000 per year.



10







Director
Compensation Program for Fiscal Year Ended December 31, 2013



A
summary of the non-employee director compensation program for fiscal 2013 (effective January 1, 2013) is set forth below:



|Annual Board Retainer Fee:                            |  | $ | 28,000 | 
|----------------------------------------------------- |  | - | ------ | 
|Annual Chairman Retainer Fees*:                       |  |   |        | 
|Chairman of the Board                                 |  | $ | 16,000 | 
|Audit Committee Chairman                              |  | $ | 10,000 | 
|Compensation Committee Chairman                       |  | $ | 8,800  | 
|Nominations & Corporate Governance Committee Chairman |  | $ | 4,800  | 
|Annual Committee Member Retainer Fees*:               |  |   |        | 
|Audit Committee                                       |  | $ | 7,200  | 
|Compensation Committee                                |  | $ | 6,000  | 
|Nominations & Corporate Governance Committee          |  | $ | 3,200  | 



*
These fees are in addition to the Annual Board Retainer Fee, as applicable.



Non-employee
directors are also reimbursed for their reasonable out-of-pocket expenses incurred in connection with attending Board and committee
meetings.



In
June 2013, the Board of Directors approved a one-time grant of 6,865 restricted stock units to non-employee directors. The RSUs
vest in full 13 months from the date of grant.In October 2013, the Board of Directors approved a one-time grant of 8,947
restricted stock units to Peter C. Kenny. The RSUs vest in full 13 months from the date of grant.



Director
Compensation Table



The
following table shows the compensation paid in fiscal 2013 to our non-employee directors. All compensation received by Mr. Baum,
including compensation received by him for services as a director, is disclosed in the Summary Compensation Table.



|Name                         |  | Fees Earned or Paid in Cash ($) |        |  | Stock Awards
    ($) (1)(3) |   |         | Option Awards
    ($) (2)(3) |  |   | All Other Compensation ($) |     |  | Total ($) |       
|---------------------------- |  | ------------------------------- | ------ |  | --------------------------- | - | ------- | ---------------------------- |  | - | -------------------------- | --- |  | --------- | ------
|(a)                          |  | (b)                             |        |  | (c)                         |   |         | (d)                          |  |   | (g)                        |     |  | (h)       |       
|Robert J. Kammer, D.D.S.     |  | $                               | 44,000 |  |                             | $ | 197,904 | (4)(5)                       |  | $ | -                          |     |  | $         | 40,140
|Stephen G. Austin, CPA       |  | $                               | 47,275 |  |                             | $ | 54,371  | (5)                          |  | $ | -                          |     |  | $         | -     
|August S. Bassani, Pharm.D.  |  | $                               | 33,700 |  |                             | $ | 54,371  | (5)                          |  | $ | -                          |     |  | $         | -     
|Peter C. Kenny               |  | $                               | 11,800 |  |                             | $ | 39,814  | (7)                          |  | $ | -                          |     |  | $         | -     
|Paul Finnegan, M.D. (10)     |  | $                               | 35,400 |  |                             | $ | -       | (12)                         |  | $ | 34,935                     | (8) |  | $         | -     
|Jeffrey J. Abrams, M.D. (11) |  | $                               | 33,300 |  |                             | $ | -       | (12)                         |  | $ | 34,882                     | (9) |  | $         | -     



|(1) | Represents
    the dollar value of the restricted stock awards calculated on the basis of the fair value of the underlying shares of our
    common stock on the respective grant dates in accordance with FASB ASC Topic 718 and without any adjustment for estimated
    forfeitures. The actual value that a director will realize on each restricted stock award will depend on the price per share
    of our common stock at the time shares underlying the restricted stock awards are sold. The actual value realized by a director
    may not be at or near the grant date fair value of the restricted stock awarded. For a discussion of the assumptions
    used to calculate the value of option awards, refer to Note 6 “Shareholders’ Equity” of Notes to Consolidated
    Financial Statements for the fiscal year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K
    for the fiscal year ended December 31, 2013.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(2) | Reflects
    the dollar amount of the grant date fair value of awards granted during the respective fiscal years, measured in accordance
    with Accounting Standards Codification Topic 718 and without adjustment for estimated forfeitures. For a discussion of the
    assumptions used to calculate the value of option awards, refer to Note 6 “Shareholders’ Equity” of Notes
    to Consolidated Financial Statements for the fiscal year ended December 31, 2013 included in the Company’s Annual Report
    on Form 10-K for the fiscal year ended December 31, 2013.                                                                                                                                                                                                                                                                                                                                                                                 



11







|(3) | The
    aggregate number of stock and option awards outstanding as of December 31, 2013 for each non-employee director are as follows:
|--- | --------------------------------------------------------------------------------------------------------------------------------------



|Name                        |  | Shares
    Underlying Stock Options |        |  | Restricted
    Stock |  |        | Shares
    Underlying Restricted Stock Unit Awards |  |  | Total | 
|--------------------------- |  | ----------------------------------- | ------ |  | -------------------- |  | ------ | -------------------------------------------------- |  |  | ----- | 
|Robert J. Kammer, D.D.S.    |  |                                     | 71,875 |  |                      |  | 20,000 |                                                    |  |  | 6,865 | 
|Stephen G. Austin, CPA      |  |                                     | 17,123 |  |                      |  | -      |                                                    |  |  | 6,865 | 
|August S. Bassani, Pharm.D. |  |                                     | 7,603  |  |                      |  | -      |                                                    |  |  | 6,865 | 
|Peter C. Kenny              |  |                                     | -      |  |                      |  | -      |                                                    |  |  | 8,947 | 



|(4)  | Includes
    20,000 shares of common stock earned and issued to Dr. Kammer during fiscal 2013 under his advisory agreement with us, pursuant
    to which Dr. Kammer earned 2,222.22 shares per month for certain advisory services. The advisory agreement was terminated
    on September 30, 2013.                                                                    
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(5)  | In
    June 2013, the Board of Directors approved a one-time grant of 6,865 restricted stock units to non-employee directors. The
    RSUs vest in full 13 months from the date of grant.                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(6)  | Reflects
    the total amount paid for rent related to an apartment located in Del Mar, California utilized by Mr. Kammer while providing
    services as a consultant and director of the Company.                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(7)  | In
    October 2013, the Board of Directors approved a one-time grant of 8,947 restricted stock units to Peter C. Kenny. The RSUs
    vest in full 13 months from the date of grant.                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(8)  | Represents
    an option to purchase up to 10,300 shares of common stock granted to Dr. Finnegan on October 1, 2013 under the Plan in connection
    with a consulting agreement entered into with the Company on the October 1, 2013, following Mr. Finnegan’s resignation
    as a director. The option vests in quarterly installments of 2,575 shares over one year. 
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(9)  | Represents
    an option to purchase up to 10,300 shares of common stock granted to Dr. Abrams on September 30, 2013 under the Plan in connection
    with a consulting agreement entered into with the Company on the September 30, 2013, following Dr. Abram’s resignation
    as a director. The option vests in quarterly installments of 2,575 shares over one year.
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(10) | On
    September 26, 2013, director Dr. Paul Finnegan provided notice of his resignation from the Board of Directors of the Company
    for personal reasons, effective as of October 1, 2013.                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(11) | On
    September 29, 2013, director Dr. Jeffrey Abrams resigned from the Board of Directors of the Company for personal reasons,
    effective as of that date.                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                          
|(12) | In
    June 2013, the Board of Directors approved a one-time grant of 6,865 restricted stock units to non-employee directors. The
    RSUs vest in full 13 months from the date of grant. Upon Dr. Finnegan and Dr. Abrams respective resignations from the Board,
    their respective RSUs were forfeited.                                                             



12







ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



The
following table sets forth the shares of our common stock beneficially owned by (1) each of our directors, (2) the named executive
officers, (3) all of our directors and executive officers as a group, and (4) all persons known by us to beneficially own more
than 5% of our outstanding voting stock. We have determined the beneficial ownership shown on this table in accordance with the
rules of the Securities and Exchange Commission. Under those rules, shares are considered beneficially owned if held by the person
indicated, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise
has or shares the power to vote, to direct the voting of and/or to dispose of or to direct the disposition of such security. Except
as otherwise indicated in the accompanying footnotes, beneficial ownership is shown as of April 24, 2014. Unless otherwise indicated
in the footnotes to the following table, each person named in the table has sole voting and investment power with respect to shares
of common stock and the address is c/o Imprimis Pharmaceuticals, Inc. 12626 High Bluff Drive, Suite 150, San Diego, CA 92130.
All information regarding share amounts reflects our one-for-five reverse stock split effected on February 7, 2013.



|Beneficial
    Owner                                  |  | Amount
    and Nature of Beneficial Ownership |          
|----------------------------------------------------- |  | --------------------------------------------- | ---------
|                                                      |  | Number
    of Shares                          |          
|5% + Stockholders                                     |  |                                               |          
|John W. Fish, Jr. (2)                                 |  |                                               | 603,170  
|Don Miloni (3)                                        |  |                                               | 1,243,513
|Professional Compounding Centers of America, Inc. (4) |  |                                               | 832,682  
|James E. Besser (5)                                   |  |                                               | 528,996  
|                                                      |  |                                               |          
|Directors and Officers                                |  |                                               |          
|Mark L. Baum, J.D. (6)                                |  |                                               | 481,798  
|Andrew R. Boll, CMA (7)                               |  |                                               | 41,668   
|Robert J. Kammer, D.D.S. (8)                          |  |                                               | 1,018,648
|Stephen G. Austin, CPA (9)                            |  |                                               | 17,123   
|August S. Bassani, Pharm.D. (10)                      |  |                                               | 7,603    
|Peter C. Kenny                                        |  |                                               | -        
|All executives and directors as a group (6 persons)   |  |                                               | 1,566,840



|*   | Represents
    less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(1) | Applicable
    percentage ownership is based on 9,093,863 shares of our common stock outstanding as of April 24, 2014. Shares of common stock
    subject to options or warrants and convertible notes subject to conversion into shares of our common stock currently exercisable
    or convertible, or exercisable or convertible within 60 days after April 24, 2014 are deemed outstanding for the purpose of
    computing the percentage ownership of the person holding such options, warrants or convertible notes, but are not deemed outstanding
    for computing the percentage ownership of any other person.                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(2) | Includes
    10,190 shares of common stock issuable upon the exercise of warrants exercisable within 60 days of April 24, 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) | This
    information is based on a Schedule 13G filed September 6, 2012 by Donald Miloni. Includes 878,576 shares held in his name,
    25,316 shares held by Mr. Miloni’s spouse, 151,899 shares held by 1425 Greenwood Lane, LLC, of which Mr. Miloni is the
    beneficial owner, 102,766 shares held by RCHER Financial, LLC, of which Mr. Miloni is a beneficial owner and 84,956 shares
    of common stock issuable upon the exercise of warrants exercisable within 60 days of April 24, 2014 (of which Mr. Miloni holds
    warrants to acquire 15,282 shares, Mr. Miloni’s spouse holds warrants to acquire 6,329 shares, 1425 Greenwood Lane,
    LLC holds warrants to acquire 37,975 shares, and RCHER Financial, LLC holds warrants to acquire 25,370 shares).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(4) | This
    information is based on a Schedule 13G filed September 13, 2012 by Professional Compounding Centers of America, Inc. The address
    for Professional Compounding Centers of America, Inc. is 9901 South Wilcrest Dr., Houston, TX 77099.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          





13







|(5)  | This
    information is based on a Schedule 13G filed March 7, 2014 by Mr. James Besser. The address for Mr. Besser is c/o Manchester
    Management Company, LLC 131 Charles Street, 1st Floor, Boston, MA 02114                                             
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                               
|(6)  | Includes
    270,000 shares of common stock issuable upon the exercise of stock options and 2,413 shares of common stock issuable upon
    the exercise of warrants exercisable within 60 days of April 24, 2014.                                             
|     |                                                                                                                                                                                                                                                               
|(7)  | Includes
    41,668 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of April 24, 2014.                                                                                                                          
|     |                                                                                                                                                                                                                                                               
|(8)  | Includes
    71,875 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of April 24, 2014 and
    15,282 shares of common stock issuable upon the exercise of warrants exercisable within 60 days of April 24, 2014.
|     |                                                                                                                                                                                                                                                               
|(9)  | Includes
    17,123 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of April 24, 2014.                                                                                                                          
|     |                                                                                                                                                                                                                                                               
|(10) | Includes
    7,603 shares of common stock issuable upon the exercise of stock options exercisable within 60 days of April 24, 2014.                                                                                                                           



Securities
Authorized for Issuance Under Equity Compensation Plans



The
following table summarizes our compensation plans under which our equity securities are authorized for issuance as of December
31, 2013:



EQUITY
COMPENSATION PLAN INFORMATION (1)(2)







|                                                           |  | Number
    of Shares
    to be Issued Upon
    Exercise of
    Outstanding
    Stock Options |           |     | Weighted-
    Average Exercise Price
    of Outstanding
    Stock Options |   |      | Number
    of Shares Remaining Available for Future Issuance Under Equity Compensation Plans | 
|---------------------------------------------------------- |  | -------------------------------------------------------------------------------------------- | --------- | --- | ------------------------------------------------------------------------- | - | ---- | -------------------------------------------------------------------------------------------- | 
|Equity compensation plans approved by security holders     |  |                                                                                              | 5,000,000 |     |                                                                           | $ | 5.31 |                                                                                              | 
|Equity compensation plans not approved by security holders |  |                                                                                              | -         | (3) |                                                                           |   | -    |                                                                                              | 
|Total                                                      |  |                                                                                              | 5,000,000 |     |                                                                           | $ | 5.31 |                                                                                              | 





|(1) | Includes
    the 2007 Incentive Stock and Awards Plan. See the notes to our consolidated financial statements included in our Annual
    Report on Form 10-K for the fiscal year ended December 31, 2013.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(2) | 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, May 2, 2013 and September
    27, 2013 (as amended, the “Plan”). As of December 31, 2013, the Plan provides for the issuance of a maximum of
    an aggregate of 5,000,000 shares of the Company’s common stock.                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(3) | On
    July 18, 2012, the Board granted to Mr. Baum, in connection with his services as the Chief Executive Officer of the Company,
    160,000 restricted stock units (RSUs) and Dr. Kammer, in connection with his services as a consultant, 40,000 RSUs outside
    of the Plan. The restricted stock units granted to Mr. Baum and Dr. Kammer were subject to certain performance-based vesting
    criteria. In February 2013, 40,000 shares vested under these RSUs and the remaining RSUs were subsequently been cancelled
    and are no longer outstanding. See Note 6 to our financial statements included in our Annual Report on Form 10-K for the fiscal
    year ended December 31, 2013.



ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE



Transactions
with Related Parties



Other
than as described below, since the beginning of fiscal year 2012, there were no transactions to which the Company was or is a
party or currently proposed transactions which the Company is to be a party in which the amount involved exceeds the lesser of
$120,000 or one percent of the Company’s average assets at year end for the last two completed fiscal years, and in which
any director, officer or beneficial holder of more than 5% of any class of our voting securities or member of such person’s
immediate family had or will have a direct or indirect material interest.



Our
Chief Executive Officer and director, Mr. Mark L. Baum, and the Chairman of our Board of Directors, Robert J. Kammer, served as
Managing Members of DermaStar International, LLC (“DermaStar”) prior to DermaStar’s conversion of all of the
outstanding shares of Series A Preferred Stock into common stock and the distribution of all shares of capital stock and warrants
held by it to its members in July 2012. Mr. Baum and Dr. Kammer were appointed to our Board on December 16, 2011, following the
closing of the Line of Credit Agreement and the purchase of the Series A Preferred Stock by DermaStar described below. DermaStar
was dissolved in July 2012.



14







Secured
Line of Credit



On
November 21, 2011, we entered into a Secured Line of Credit Letter Agreement (the “Line of Credit Agreement”) with
DermaStar, pursuant to which DermaStar agreed to lend us funds under a line of credit upon certain conditions, including the dismissal
of the Chapter 11 Case by the Bankruptcy Court. The Line of Credit Agreement became effective on December 9, 2011, in connection
with the dismissal of the Chapter 11 Case by the Bankruptcy Court. The Line of Credit Agreement provided for advances of up to
an aggregate of $750,000, subject to the satisfaction by us of certain conditions in connection with the initial advance and each
subsequent advance. The largest outstanding principal balance under the line of credit at any time was $750,000. Interest accrued
at 10% per annum. No interest payments were made by us during the period other than in connection with the conversion of the line
of credit described below.



On
April 25, 2012, the entire outstanding principal balance and all accrued and unpaid interest under the line of credit, an aggregate
of $762,534, was converted into 193,046 shares of common stock and warrants to purchase 48,262 shares of common stock, pursuant
to the terms of a conversion agreement we entered into with DermaStar on April 20, 2012. The line of credit was terminated upon
the completion of the conversion.



Series
A Preferred Stock Purchase



In
partial consideration for and in connection with the Line of Credit Agreement, on November 21, 2011 we executed a Securities Purchase
Agreement with DermaStar, pursuant to which we agreed to issue 10 shares of newly-designated Series A Convertible Preferred Stock
(the “Series A Preferred Stock”) to DermaStar for an aggregate purchase price of $100,000. The Securities Purchase
Agreement, as amended, became effective on December 9, 2011, in connection with the dismissal of the Chapter 11 Case by the Bankruptcy
Court. On December 12, 2011, we and DermaStar consummated the transactions contemplated by the Securities Purchase Agreement.
The shares of Series A Preferred Stock issued to DermaStar in the offering are convertible into 1,499,700 shares of our common
stock.



On
June 29, 2012, DermaStar converted the 10 shares of Series A Preferred Stock held by it into 1,499,700 shares of our common stock.
In connection with the conversion, we paid to DermaStar $200,000 as partial consideration for the conversion pursuant to a conversion
agreement. Immediately following the conversion of the Series A Preferred Stock, all 10 shares were retired to our treasury and
cancelled. The conversion agreement was unanimously approved by the Company’s disinterested directors, with Mr. Baum and
Dr. Kammer abstaining.



7.5%
Convertible Promissory Note



On
April 5, 2010, we issued a $1,000,000 7.5% Convertible Promissory Note (the “Convertible Note”) to Alexej Ladonnikov,
an existing stockholder of the Company. The Convertible Note had an annual interest rate of 7.5% and all principal and interest
were due and payable on its maturity date, April 5, 2012. During January 2012, Mr. Ladonnikov sold 80% of the Convertible Note
to DermaStar in a private transaction. Effective as of January 25, 2012, we entered into separate waiver and settlement agreements
with DermaStar and Mr. Ladonnikov. Under each of the waiver and settlement agreements, the holders of the Convertible Note agreed
to forever waive (i) their rights to accelerate the entire unpaid principal sum of the Convertible Note and all accrued interest
pursuant to Section 1 of the Convertible Note, (ii) their rights under Section 7 of the Senior Convertible Note Purchase Agreement
dated April 5, 2010, and (iii) certain conversion rights pursuant to Section 3 of the Convertible Note. Under the terms of the
waiver and settlement agreement with DermaStar, we and DermaStar agreed to the mandatory conversion of the principal and accrued
and unpaid interest of the Convertible Note and $56,087 in current accounts payable of the Company held by DermaStar into our
common stock at a conversion price of approximately $0.6668 per share at such time as we had a sufficient number of shares of
authorized common stock to effect such conversion. Under the terms of the waiver and settlement agreement with Mr. Ladonnikov,
we and Mr. Ladonnikov agreed to the mandatory conversion of the 20% of the principal and accrued and unpaid interest of the Convertible
Note held by Mr. Ladonnikov, at such time as we had a sufficient number of authorized common shares to effect such a conversion,
into our common stock at a conversion price of $0.60. Mr. Ladonnikov also agreed to make a one-time payment of $50,000 to us at
such time as the Convertible Note was converted into common stock.



On
February 28, 2012, effective immediately following the effective time of our Certificate of Amendment to our Certificate of Incorporation
increasing the number of authorized shares of common stock and implementing the one-for-eight reverse split of our common stock,
the entire outstanding balance and all accrued but unpaid interest owing under the Convertible Note and the accounts payable held
by DermaStar were converted into 1,835,830 shares of common stock, and the Convertible Note was terminated. At the time of conversion,
there was approximately $142,603 in accrued and unpaid interest due under the Convertible Note. Mr. Ladonnikov made the required
one-time payment of $50,000 to us at the time of the conversion.



15







Related-Party
Transaction Review and Approval



Our
Board has adopted policies and procedures for the review and approval of related-party transactions and has delegated to the Corporate
Governance Committee the authority to review and approve the material terms of any proposed related-party transactions. To the
extent that a proposed related-party transaction may involve a non-employee director or nominee for election as a director and
may be material to a consideration of that person’s independence, the matter may also be considered by the other disinterested
directors.



Pursuant
to our Code of Business Conduct and Ethics and our Corporate Governance Committee Charter, each of our executive officers and
directors must disclose related-party transactions to our Corporate Governance Committee. In order to avoid conflicts of interest,
our executive officers and directors may not acquire any ownership interest in any supplier, customer or competitor (other than
nominal amounts of stock in publicly traded companies), enter into any consulting or employment relationship with any customer,
supplier or competitor, or engage in any outside business activity that is competitive with any of our businesses, without first
disclosing the proposed transaction. After the proposed transaction has been disclosed, a determination will be made by our Corporate
Governance Committee as to what course to follow, depending on the nature or extent of the conflict. Furthermore, our executive
officers and directors may not serve on any board of directors of any customer, supplier or competitor unless such board service
has been disclosed to us and approved by our Board. Our Corporate Governance Committee has been delegated the task of reviewing
other directorships and consulting agreements of Board members for conflicts of interest. All members of our Board are required
to report annually all other directorships and consulting agreements.



In
determining whether to approve or ratify a related-party transaction, the Corporate Governance Committee may consider, among other
factors it deems appropriate, the potential benefits to us, the impact on a director’s or nominee’s independence or
an executive officer’s relationship with or service to us, whether the related-party transaction is on terms no less favorable
than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related
party’s interest in the transaction. In deciding to approve a transaction, the Corporate Governance Committee may, in its
sole discretion, impose such conditions as it deems appropriate on us or the related party in connection with its approval of
any transaction. Any transactions involving the compensation of executive officers, however, are to be reviewed and approved by
the Compensation Committee. If a related-party transaction will be ongoing, the Corporate Governance Committee may establish guidelines
to be followed in our ongoing dealings with the related party. Thereafter, the Corporate Governance Committee, on at least an
annual basis, will review and assess ongoing relationships with the related party to see that they are in compliance with the
committee’s guidelines and that the related-party transaction remains appropriate.



Director
Independence



Our
Board of Directors has determined that Mr. Austin, Mr. Kenny, and Mr. Bassani would each be considered an “independent director”
as defined in Rule 5605(a)(2) of the NASDAQ Rules. Mr. Baum would not be considered independent because he currently serves as
our Chief Executive Officer, and Dr. Kammer is not independent because of certain advisory relationships.



ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES



Aggregate
fees for professional services rendered to the company by KMJ Corbin & Company LLP for the years ended December 31, 2013
and 2012, were:



|                   |  | 2013 |        |  | 2012 |  
|------------------ |  | ---- | ------ |  | ---- | -
|Audit Fees         |  | $    | 66,880 |  |      | $
|Audit-Related Fees |  | $    | 25,575 |  |      | $
|Other Fees         |  | $    | 3,100  |  |      | $
|Total              |  | $    | 95,555 |  |      | $



16







“Audit
Fees” represent fees for professional services provided in connection with the audit of our annual financial statements,
and review of financial statements included in our quarterly reports. “Audit-Related Fees” represent fees for
professional services provided in connection with the review of our registration statements on Forms S-8 and S-1, and related
services normally provided in connection with statutory and regulatory filings and engagements. ”Other Fees” represent
fees for professional services provided in connection with the review of the Company’s accounting for its director compensation
package. There were no Tax Fees billed by or paid to our principal accountant during the years ended December 31, 2013 and 2012.



Pre-approval
Policy



Our
Board of Directors pre-approves all services to be provided by KMJ Corbin & Company LLP. KMJ Corbin & Company LLP performed
no services, and no fees were incurred or paid, relating to financial information systems design and implementation. All fees
paid to KMJ Corbin & Company LLP for fiscal 2013 and 2012 were pre-approved by our Board of Directors.



PART
IV



Item
15. Exhibits, Financial Statement Schedules



(b)
Exhibits filed with this Amendment no. 1:



|ExhibitNumber |  | Description
    of Documents                                                                                                           
|------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------
|              |  |                                                                                                                                        
|31.1          |  | Certification
    of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.
|              | 
|31.2          |  | Certification
    of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.



17







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.



| | IMPRIMIS
    PHARMACEUTICALS, INC.
| | ----------------------------------
| |                                   
| | By:                               
| | Name:                             
| | Title:                            
| |                                   
| | Date:                             



18