NeuBase Therapeutics, Inc. - Quarter Report: 2012 December (Form 10-Q)

ohrp-10q_123112.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012

o	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: 333-88480

OHR PHARMACEUTICAL, INC .

(Exact name of registrant as specified in its charter)

Delaware		90-0577933
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

489 5th Avenue, 28th Floor

New York, NY 10017

(Address of principal executive offices)

(212) 682-8452

(Registrant’s telephone number, including area code)

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 o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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 o

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.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
Do not check if 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 o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 47,690,102 shares of Common Stock outstanding as of February 15, 2013.

OHR PHARMACEUTICAL, INC.

TABLE OF CONTENTS

Page

PART I — FINANCIAL INFORMATION			3
Item 1	Financial Statements.		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.	Quantitative and Qualitative Risk		16
Item 4.	Controls and Procedures		17

PART II — OTHER INFORMATION			18
Item 1.		Legal Proceedings	18
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds.	18
Item 3.		Defaults Upon Senior Securities.	19
Item 4.		Removed and Reserved.	19
Item 5.		Other Information	19
Item 6.		Exhibits	20

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements.

TABLE OF CONTENTS	PAGE

Balance Sheets as of December 31, 2012 and September 30, 2012 (unaudited)	4
Statements of Operations for the three months ended December 31, 2012 and 2011 and the period from inception of the Development Stage on October 1, 2007 through December 31, 2012 (unaudited)	5
Statements of Cash Flows for the three months ended December 31, 2012 and 2011 and the period from inception of the Development Stage on October 1, 2007 through December 31, 2012 (unaudited)	6
Notes to Financial Statements (unaudited)	7

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Balance Sheets

(Unaudited)

ASSETS

	December 31,			September 30,
	2012			2012
CURRENT ASSETS
Cash	$	2,068,594		$	2,632,413
Prepaid expenses		210,678			218,242

Total Current Assets		2,279,272			2,850,655

EQUIPMENT, net		40,747			43,111

OTHER ASSETS
Patent costs, net		604,047			623,654

TOTAL ASSETS	$	2,924,066		$	3,517,420

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable and accrued expenses	$	204,548		$	300,462
Notes payable		7,474			22,037
Derivative liabilities		2,171,819			768,696

Total Current Liabilities		2,383,841			1,091,195

TOTAL LIABILITIES		2,383,841			1,091,195

STOCKHOLDERS' EQUITY

Preferred stock, Series B; 6,000,000 shares authorized,
at $0.0001 par value, 5,444,447 and 5,583,336 shares
issued and outstanding, respectively		544			558
Common stock; 180,000,000 shares authorized,
at $0.0001 par value, 47,690,102 and 47,258,686
shares issued and outstanding, respectively		4,769			4,726
Additional paid-in capital		31,283,660			30,963,228
Stock subscription receivable		—			(11,891	)
Accumulated deficit		(21,628,748	)		(21,628,748	)
Deficit accumulated during the development stage		(9,120,000	)		(6,901,648	)

Total Stockholders' Equity		540,225			2,426,225
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY	$	2,924,066		$	3,517,420

The accompanying notes are an integral part of these unaudited financial statements.

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Statements of Operations

(Unaudited)

							From Inception of
							the Development
							Stage on
							October 1,
	For the Three Months Ended						2007 Through
	December 31,						December 31,
	2012			2011			2012

OPERATING EXPENSES

General and administrative	$	70,190		$	32,911		$	1,203,558
Professional fees		47,031			64,558			2,388,448
Research and development		578,513			336,155			3,004,728
Salaries and wages		119,017			63,559			1,349,891

Total Operating Expenses		814,751			497,183			7,946,625

OPERATING LOSS		(814,751	)		(497,183	)		(7,946,625	)

OTHER INCOME (EXPENSE)

Interest expense		(559	)		—			(52,099	)
Gain/(Loss) on derivative liability		(1,403,123	)		826,902			(2,087,352	)
Gain on sale of assets		—			—			70,500
Gain on settlement of debt		—			21,005			153,557
Other income and expense		81			13			63,606

Total Other Income (Expense)		(1,403,601	)		847,920			(1,851,788	)

INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES		(2,218,352	)		350,737			(9,798,413	)

PROVISION FOR INCOME TAXES		—			—			—

INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS		(2,218,352	)		350,737			(9,798,413	)
Income from discontinued operations
(including gain on disposal of $606,000)		—			—			678,413
Income tax benefit		—			—			—

GAIN ON DISCONTINUED OPERATIONS		—			—			678,413

NET INCOME (LOSS)	$	(2,218,352	)	$	350,737		$	(9,120,000	)

BASIC AND DILUTED INCOME (LOSS) PER SHARE
Continuing operations	$	(0.05	)	$	0.01
Discontinued operations		0.00			0.00
	$	(0.05	)	$	0.01

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING:
BASIC		47,571,278			40,041,350
DILUTED		47,571,278			53,142,669

The accompanying notes are an integral part of these unaudited financial statements.

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)

							From Inception
							of the
							Development
							Stage on
							October 1,
	For the Three Months Ended						2007 Through
	December 31,						December 31,
	2012			2011			2012
OPERATING ACTIVITIES
Net loss	$	(2,218,352	)	$	350,737		$	(9,120,000	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Discontinued operations		—			—			(678,413	)
Common stock issued for services		—			—			329,822
Fair value of warrants issued for services		167,966			58,572			1,351,479
Fair value of employee stock options		52,495			11,975			1,138,063
(Gain) loss on extinguishment of debt		—			(21,005	)		(89,594	)
Gain on sale of asset		—			—			(70,500	)
(Gain) loss on derivative liability		1,403,123			(826,902	)		2,087,354
Depreciation		2,364			2,364			17,674
Amortization of patent costs		19,607			19,754			195,953
Changes in operating assets and liabilities
Prepaid expenses and deposits		7,563			(41,292	)		(135,521	)
Other receivables and other current assets		—			184,358			85,025
Accounts payable and accrued expenses		(95,914	)		37,267			12,710

Net Cash Used in Operating Activities		(661,148	)		(224,172	)		(4,875,948	)

INVESTING ACTIVITIES

Proceeds from sale of asset		—			—			70,500
Purchase of equipment		—			(33,403	)		(58,421	)
Purchase of patents and other intellectual property		—			—			(300,000	)
Discontinued operations		—			—			418,000

Net Cash Provided by (Used in) Investing Activities		—			(33,403	)		130,079

FINANCING ACTIVITIES

Proceeds from the sale of preferred stock and warrants		—			—			1,005,000
Proceeds from the sale of common stock and warrants		—			1,050,000			2,150,000
Proceeds from warrants and options exercised for cash		111,891			—			4,019,451
Proceeds from related party payables		—			—			125,453
Repayments of related party payables		—			—			(125,453	)
Proceeds from short—term notes payable		—			—			64,408
Repayments of short-term notes payable		(14,562	)		—			(131,671	)
Repayment of convertible debentures		—			—			(490,000	)

Net Cash Provided by Financing Activities		97,329			1,050,000			6,617,188

NET CHANGE IN CASH		(563,819	)		792,425			1,871,319
CASH AT BEGINNING OF PERIOD		2,632,413			469,786			197,275

CASH AT END OF PERIOD	$	2,068,594		$	1,262,211		$	2,068,594

SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION

CASH PAID FOR:
Interest	$	560		$	—		$	72,300
Income Taxes		—			—			—

NON CASH FINANCING ACTIVITIES:
Reclassification of derivative liability to permanent equity		—			—			3,454,094
Financing of insurance premiums through issuance of short term notes		—			—			74,738
Conversion of preferred for common stock		14			—			14
Exercise of director options		9						9
Transfer of investment for dividends payable		—			—			186,000
Purchase of patents for debenture		—			—			500,000
Conversion of debenture		—			—			10,000
Options issued to settle accounts payable		—			—			3,991
Stock subscription receivable		—			50,000			—

The accompanying notes are an integral part of these unaudited financial statements.

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2012

(Unaudited)

NOTE 1 – CONDENSED FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on January 9, 2013. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2012, and for all periods presented herein, have been made.

Certain information and footnote disclosures that would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted. The results of operations for the periods ended December 31, 2012 and 2011 are not necessarily indicative of the operating results for the full years.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Estimates subject to change in the near term include impairment (if any) of long-lived assets and fair value of derivative liabilities.

Fair Value of Financial Instruments

In accordance with ASC 820, the carrying value of cash and cash equivalents, accounts receivable, accounts payable and notes payable approximates fair value due to the short-term maturity of these instruments. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

The following table presents the liabilities that are measured and recognized at fair value as of December 31, 2012 and September 30, 2012, on a recurring basis:

Liabilities measured at fair value on a recurring
basis at December 31, 2012	Level 1		Level 2		Level 3		Total
Stock warrant derivative liabilities	$	—	$	—	$	2,171,819	$	2,171,819
	$	—	$	—	$	2,171,819	$	2,171,819

Liabilities measured at fair value on a recurring
basis at September 30, 2012:	Level 1		Level 2		Level 3		Total
Stock warrant derivative liabilities	$	—	$	—	$	768,696	$	768,696
	$	—	$	—	$	768,696	$	768,696

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodology used to measure fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2012

(Unaudited)

Stock Warrant Derivative Liability: Market prices are not available for the Company's warrants nor are market prices of similar warrants available. The Company assessed that the fair value of this liability approximates its carrying value since carrying value has been adjusted to fair value.

The fair value of the stock warrant derivative liability was calculated using a Lattice Model that values the embedded derivatives based on future projections of the various potential outcomes. The assumptions that are analyzed and incorporated into the model include expectations of additional potential shares to be issued under the provision, the expectations of future stock price performance, expectations of future issuances based on the Company’s prior stock history, prior issuances of stock, and expected capital requirements. Probabilities were assigned to various scenarios in which the reset provisions would go into effect and weighted accordingly.

The method described above may produce a current fair value calculation that may not be indicative of net realizable value or reflective of future fair values. If a readily determined market value became available or if actual performance were to vary appreciably from assumptions used, assumptions may need to be adjusted, which could result in material differences from the recorded carrying amounts. The Company believes its method of determining fair value is appropriate and consistent with other market participants. However, the use of different methodologies or different assumptions to value certain financial instruments could result in a different estimate of fair value.

The following tables present the fair value of financial instruments as of December 31, 2012, by caption on the balance sheet and by ASC 820 valuation hierarchy described above.

	Stock Warrant
Level 3 Reconciliation:	Derivative
Level 3 assets and liabilities at September 30, 2012	$	768,696
Purchases, sales, issuances and settlements (net)		—
Mark to market adjustments		1,403,123
Total level 3 assets and liabilities at December 31, 2012	$	2,171,819

Reclassification of Financial Statement Accounts

Certain amounts in the December 31, 2011 financial statements have been reclassified to conform to the presentation in the December 31, 2012 financial statements.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of the Company’s financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3 – PATENT COSTS

Patent costs represent the capitalized purchase price of assets acquired in the secured party sale as part of the Company’s previously announced strategy to create a rollup of undervalued biotechnology companies and assets. As of December 31, 2012, the Company had purchased $800,000 worth of biotechnology patents and other intellectual property. In these acquisitions, the Company used approximately $300,000 in cash and issued a $500,000 convertible debenture for the remainder of the cost, which has been paid in full.

The Company amortizes its patents over the life of each patent. During the three months ended December 31, 2012 and 2011, the Company recognized $19,607 and $19,754 in amortization expense on the patents, respectively. The amortization expense has been included in research and development expense.

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2012

(Unaudited)

NOTE 4 – NOTES PAYABLE

On March 24, 2012, the Company entered into a premium financing arrangement for its directors and officers insurance in the amount of $48,300. The financing arrangement bears interest at 11.5% and will be fully paid in 12 months from the date of issuance. As of December 31, 2012, the Company has fully repaid the $48,300 of principal and had paid interest of $1,508 in cash.

On June 30, 2012, the Company entered into a premium financing arrangement for its clinical trial insurance in the amount of $24,438. The financing arrangement bears interest at 12.95% and will be fully paid in 12 months from the date of issuance. As of December 31, 2012, the Company had repaid $18,900 of principal and had paid interest of $869 in cash.

NOTE 5 – CAPITAL STOCK

On October 5, 2012, the Company received notice of conversion from two holders of its Series B preferred shares for the conversion of 138,889 preferred shares into common shares. The conversion rate for the preferred shares is one to one into common shares. Accordingly, the Company issued 138,889 common shares.

On October 24, 2012, the Company received notice of exercise for 200,000 warrants at an exercise price of $0.50. Accordingly, the Company issued 200,000 shares of common stock for proceeds of $100,000.

On November 30, 2012, the Company received notice from a former director to exercise 160,871 options to purchase common stock using the net exercise feature in the option. Accordingly, the Company issued 92,527 shares of common stock.

As of December 31, 2012, the company has collected the subscription recievable of $11,891.

NOTE 6 – COMMON STOCK WARRANTS

On October 30, 2012, the Company agreed to extend the term of the 11,985,367 common stock warrants issued to investors which were scheduled to expire on October 31, 2012, to April 30, 2013. The warrants were also amended to remove the cashless exercise provision and provided for the early termination of the extension period, at the sole discretion of the Company, in the event that the Company’s common stock trades at or above $1.50 for 5 consecutive days. The warrants are exercisable at $1.19.

During the three months ended December 31, 2012, the Company recognized $167,966 of expense related to vested warrants that were granted in the prior year. Unamortized warrant expense as of December 31, 2012 amount to approxiamately $34,000.

Below is a table summarizing the warrants issued and outstanding as of December 31, 2012:

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2012

(Unaudited)

Date	Number	Exercise	Contractual	Expiration	Value if
Issued	Outstanding	Price	Life (Years)	Date	Exercised
Balance 10/1/08	13,509,857	1.18	5	Various	15,941,631
03/20/09	5,000,000	0.50	5	03/31/14	2,500,000
06/03/09	11,166,672	0.18	5	06/03/14	2,010,001
09/30/09	150,000	0.40	5	06/30/14	60,000
Expired	—	—	—	—	—
Balance 9/30/09	29,826,529	0.69	—	—	20,511,632
10/09/09	88,000	0.50	5	10/29/14	44,000
11/09/09	18,000	0.50	5	11/09/14	9,000
12/04/09	130,000	0.60	2	12/04/11	78,000
12/15/09	(5,583,336)	0.18	—	—	(1,005,000)
01/15/10	5,583,336	0.55	5	01/15/15	3,070,835
01/15/10	(5,583,336)	0.18	—	—	(1,005,000)
04/09/10	10,000	0.55	5	4/9/2015	5,500
07/23/10	93,000	0.50	3	07/23/13	46,500
Expired	—	—	—	—	—
Balance 9/30/10	24,582,193	0.89	—	—	21,755,467
12/30/10	2,520,000	0.55	5	12/30/15	1,386,000
05/12/11	55,000	0.50	5	05/12/16	27,500
06/13/11	300,000	0.50	2	06/13/13	150,000
07/15/11	100,000	0.54	5	07/15/16	54,000
07/15/11	120,000	0.54	5	07/15/16	64,800
08/23/11	50,000	0.67	3	08/23/14	33,500
Expired	(1,090,568)	1.19	—	—	(1,297,776)
Balance 9/30/11	26,636,625	0.83	—	—	22,173,491
12/16/11	916,678	0.65	5	12/16/16	595,841
12/21/11	3,125	0.65	5	12/21/17	2,031
03/03/12	350,000	0.65	5	03/03/17	227,500
04/10/12	(43,392)	0.60	—	—	(26,035)
04/12/12	15,000	0.90	3	4/12/2015	13,500
05/18/12	350,000	0.95	3	5/18/2015	332,500
06/28/12	(5,299,002)	0.55	—	—	(2,914,451)
06/28/12	3,179,410	1.20	5	06/28/17	3,815,292
07/11/12	50,000	0.95	3	07/11/15	47,500
07/17/12	(30,000)	0.50	—	—	(15,000)
09/07/12	75,000	1.00	5	09/07/17	75,000
Expired	(620,530)	0.79	—	—	(490,219)
Balance 9/30/12	25,582,914	0.93	—	—	23,836,950
10/24/2012	(200,000)	0.50	—	—	(100,000)
Expired	—	—	—	—	—
Balance 12/31/12	25,382,914	0.94	—	—	23,736,950

The outstanding warrants as of December 31, 2012 have an intrinsic value of approximately $11.3 million.

NOTE 7 – COMMON STOCK OPTIONS

During the three months ended December 31, 2012, the Company recognized $52,495 of expense related to vested warrants that were granted in the prior year. Unamortized warrant expense as of December 31, 2012 amount to approxiamately $743,000.

Below is a table summarizing the options issued and outstanding as of December 31, 2012:

OHR PHARMACEUTICAL, INC.

(A Development Stage Company)

Notes to the Financial Statements

December 31, 2012

(Unaudited)

Date	Number	Exercise		Contractual	Expiration	Value if
Issued	Outstanding	Price		Life (Years)	Date	Exercised
Prior 10/1/2008	—	$	—	—	—	$	—
04/09/09	579,141		0.65	5	04/09/13		376,442
Balance 09/30/2009	579,141		0.65	—	—		376,442
04/12/10	1,000,000		0.50	5	04/12/15		500,000
Expired	(32,176)		0.65	—	—		(20,914)
Balance 9/30/2010	1,546,965	$	0.55	—	—	$	855,528
Issued	—		—	—	—		—
Expired	—		—	—	—		—
Balance 9/30/2011	1,546,965	$	0.55	—	—	$	855,528
03/09/12	1,700,000		0.57	—	3/9/2017		969,000
Expired	—		—	—	—		—
Balance 9/30/2012	3,246,965	$	0.56	—	—	$	1,824,528
Exercised	(160,871)		0.59				(95,527)
Expired	—		—	—	—		—
Balance 12/31/12	3,086,094	$	0.56	—	—	$	1,729,001

As of December 31, 2012, the outstanding options have an intrinsic value of approximately $3.80 million.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements contained in this report, including, without limitation, statements containing the words “believes,” “anticipates,” “expects,” “intends,” and words of similar import, constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission in its rules, regulations and releases, regarding the Company’s financial and business prospects. These forward-looking statements are qualified in their entirety by these cautionary statements, which are being made pursuant to the provisions of such Act and with the intention of obtaining the benefits of the “safe harbor” provisions of such Act. The Company cautions investors that any forward-looking statements it makes are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. We assume no obligation to update any forward-looking statements contained in this report, whether as a result of new information, future events or otherwise. Any investment in our common stock involves a high degree of risk. For a general discussion of some of these risks in greater detail, see our “Risk Factors” in the Company’s Annual Report on Form 10-K (the “ Form 10-K ”) for the fiscal year ended September 30, 2012, as filed with the Securities and Exchange Commission on January 9, 2012.

History and Recent Events

General and Historical

Summary

Ohr Pharmaceutical, Inc. (“we”, “Ohr”, the “Company” or the “Registrant”) is a Delaware corporation that was organized on August 4, 2009, as successor to BBM Holdings, Inc. (formerly Prime Resource, Inc., which was organized March 29, 2002) pursuant to a reincorporation merger.

The Company is a biotechnology company focused on the development of the Company’s previously acquired compounds with a focus on the clinical development of our two later stage lead products, OHR/AVR118 for the treatment of cancer cachexia (multi-symptom wasting disorder), and Squalamine for the treatment of the wet form of age-related macular degeneration (“AMD”) using an eye drop formulation. We acquired OHR/AVR118 in a secured party sale and Squalamine from the Genaera Liquidating Trust as part of the Company’s strategy to acquire undervalued biotechnology companies and assets.

On March 19, 2009, the Company acquired in a secured party sale all the patents, related intellectual property, clinical data and other assets related to AVR118 (also known now as OHR/AVR118). OHR/AVR118 is in an ongoing Phase II trial for the treatment of cachexia. The Company acquired OHR/AVR118 and related assets in a secured party sale with $100,000 in cash and $500,000 principal amount of 11% convertible secured non-recourse debenture due June 20, 2011 convertible into common stock at $0.40 per share (the “Convertible Debenture”). The Convertible Debenture was repaid on December 29, 2010 and all security interests were released. The cash portion of the purchase price was financed by short-term loans from an affiliate of Orin Hirschman and another current shareholder, which were repaid June 3, 2009.

On August 19, 2009, the Company completed the acquisition of Squalamine, Trodusquemine and related compounds from Genaera Liquidating Trust. The Company paid $200,000 in cash for the compounds.

On April 12, 2010, Dr. Irach Taraporewala was hired as the Company’s full-time CEO and Sam Backenroth was hired as the Company’s Vice President of Business Development and CFO.

The Company is currently engaged in the clinical testing of the Squalamine eye drop program for the treatment of wet-AMD and OHR/AVR118 for cancer cachexia.

Historical

Prior Business - The Company was originally formed under the name Prime Resource, Inc., a Utah corporation. After disposing of its prior insurance business, on March 30, 2007, the Company merged with Broadband Maritime Inc., a broadband maritime service supplier. No goodwill was recognized in the merger since Broadband Maritime was treated as the acquirer for accounting purposes and the Company was a “shell company.” On June 5, 2007, after cancellations of key contracts, the Company announced that it had ceased broadband maritime operations and reduced employment to a small residual force. Accordingly, the Company ceased broadband maritime operations effective September 30, 2007 and was reclassified as a development stage enterprise, from the date of cessation forward.

On August 4, 2009 the Company merged with and into Ohr Pharmaceutical, Inc., a Delaware corporation (“Ohr”). Under the terms of the merger agreement Ohr became the surviving corporation in the merger. Each outstanding share of pre-merger Company common stock and preferred stock was converted into one share of Ohr common stock. Additionally, all outstanding pre-merger Company options and warrants were assumed and converted into equivalent Ohr warrants or options and maintained substantially identical terms. Finally, each outstanding share of Ohr stock owned by the Company pre-merger immediately prior to the effective date of the merger ceased to be outstanding and was cancelled and retired.

Acquisition of Pharmaceutical Business

On March 19, 2009, the Company acquired in a secured party sale all the patents, related intellectual property, clinical data and other assets related to AVR118 (renamed OHR/AVR118). OHR/AVR118 is in an ongoing Phase II trial for the treatment of cachexia. The Company acquired the assets in the secured party sale with $100,000 in cash and by issuing a $500,000 principal amount 11% convertible secured non-recourse debenture due June 20, 2011, convertible at $0.40 per share (the “Convertible Debenture”). The Convertible Debenture was secured by the acquired assets. The cash portion of the purchase price was financed by short-term loans from an affiliate of Orin Hirschman, a director of the Company, and another current shareholder. The Convertible Debenture was paid in full on December 29, 2010 and all security interests were released.

On August 19, 2009, the Company completed the acquisition of Squalamine, Trodusquemine and related compounds from Genaera Liquidating Trust. The Company paid $200,000 in cash for the compounds.

On April 12, 2010 the Company hired Dr. Irach Taraporewala as CEO and Sam Backenroth as Vice President of Business Development and Interim CFO. In connection with the new hires, Andrew Limpert resigned as an officer of the Company.

In December 2010, the Company opened a new clinical site for its ongoing Phase II clinical trial to investigate the efficacy of OHR/AVR118 for the treatment of cancer cachexia at the Ottawa Hospital Cancer Centre.

In June 2011, the Company commenced the Squalamine eye drop program for the treatment of the wet AMD. Animal safety and biodistribution data generated using the eye drop formulation of Squalamine were reported in July 2011, with further data being presented at the Association for Research in Vision and Ophthalmology (ARVO) and Macula Society meetings in May and June 2012, respectively.

On September 24, 2012, the Company announced the initiation of a multi center, randomized, placebo controlled Phase II trial to evaluate the efficacy and safety of Squalamine eye drops for the treatment of the wet form of age-related macular degeneration.

Until the Company is able to generate significant revenue from its principal operations, it will remain classified as a development stage company. The Company can give no assurance that it will be successful in such efforts or that its limited operating funds will be adequate to continue the Company as a public company, nor is there any assurance of any additional funding being available to the Company.

Product Pipeline

Squalamine

Squalamine is a small molecule anti-angiogenic drug with a novel intracellular mechanism of action. The drug acts against the development of aberrant neovascularization by inhibiting multiple protein growth factors of angiogenesis, including vascular endothelial growth factor (“VEGF”), platelet-derived growth factor (“PDGF”) and basic fibroblast growth factor growth factor (“bFGF”). Recent clinical evidence has shown PDGF to be an additional target for the treatment of Wet Age-related Macular Degeneration (“Wet-AMD”). Using an intravenous formulation in over 250 patients in Phase I and Phase II trials for the treatment of Wet-AMD, the trials demonstrated that the molecule had biological effect and maintained and improved visual acuity outcomes, with both early and advanced lesions responding.

Ohr reformulated Squalamine for ophthalmic indications from an intravenous infusion (“IV”) to a topical eye drop. Preclinical testing has demonstrated that the eye drop formulation is both safe to ocular tissues and achieves in excess of target anti-angiogenic concentrations in the tissues of the back of the eye. The topical formulation is designed for enhanced uptake to the back of the eye and decreased potential for side effects. The Company plans on advancing its clinical wet-AMD program with this topical formulation. In May 2012, the U.S. Food and Drug Administration (“FDA”) awarded Fast Track Designation to the Squalamine eye drop program for the potential treatment of wet-AMD.

Squalamine eye drops are designed for self-administration which may provide several potential advantages over the FDA approved current standards of care (Roche/Genetech’s Lucentis® and Regeneron’s Eylea® Intravitreal Injections).

·	Eye drops versus standard of care which is an intravitreal injection directly into the eye every 4-8 weeks on a chronic basis

·	Reduction or elimination of intravitreal injections has the potential to provide patients with improved safety by reducing or eliminating side effects associated with the intravitreal injection procedure

·	Inhibition of multiple growth factors may achieve superior visual acuity outcomes. Clinical evidence has demonstrated that inhibiting VEGF and PDGF together may provide patients with better visual acuity outcomes than anti-VEGF therapy alone

·	Cost advantage of manufacturing a small molecule when compared to large molecule proteins and antibodies

In Phase II clinical trials using the intravenous formulation of Squalamine, stabilization or improvement in visual activity was observed in the vast majority of patients, with both early and advanced lesions responding and few drug-related ocular or systemic effects observed. In a number of patients whose wet-AMD had progressed to an advanced stage, the administration of Squalamine produced beneficial effects and significant improvement in best corrected visual acuity. As opposed to the approved current standard of care therapy, Squalamine does not require direct injection into the eye.

The Company conducted preclinical testing on the novel topical formulation with the following results:

	●	Ocular Tolerance and Toxicity: In a dose escalation safety study involving daily eye drop treatment in Dutch belted rabbits over a 28 day period, the formulation proved safe, and exhibited no signs of ocular toxicity or changes in intraocular pressure. Importantly, no macroscopic or histopathological changes to the ocular tissues were noted.

	●	Single Dose Biodistribution study: A single eye drop was administered to the front of the eye in Dutch belted rabbits. At all evaluated timepoints, drug concentrations in the posterior sclera-choroid region behind the retina at the back of the eye exceeded the tissue concentrations of Squalamine that are known to block the choroidal neovascularization process in Wet-AMD.

	●	Multi Dose Biodistribution Study: Squalamine eye drops were administered once or twice daily in both eyes for up to 14 days in Dutch belted rabbits. The eyes were examined one full dosing interval (12 hours when given twice daily, 24 hours when given once daily) after the last administration of Squalamine eye drops to determine concentrations of Squalamine in the posterior ocular tissues (“Trough” level). At all time point and dosing regimens, Trough Squalamine concentrations exceeded tissue concentrations of Squalamine that are known to block the choroidal neovascularization process in Wet-AMD.

	●	Long Term Ocular Tolerance and Toxicity: In a 26-week safety and toxicity study in male and female Dutch belted rabbits, Squalamine or placebo eye drops were administered via topical instillation twice a day in both eyes. Ophthalmoscopic examinations were conducted throughout the study period to assess ocular toxicity (irritation, redness, swelling, discharge). Blood and urine samples for clinical pathology evaluations were collected, and blood samples for determination of the plasma concentrations of squalamine eye drops and toxicokinetic evaluations were collected from all animals at designated time points. At study termination, necropsy examinations were performed, and organs and optical tissues were microscopically examined.

		No adverse effects of treatment were observed in any of the parameters evaluated including clinical findings, body weights, food consumption, ocular irritation, hematology, coagulation, clinical chemistry, urinalysis and macroscopic pathology examinations. Importantly, ophthalmoscopic examinations indicated no signs of clouding of the lens, no corneal opacities or deposits, and no increase in intraocular pressure. In addition, microscopic histopathology evaluations on ocular tissues were normal. Squalamine also did not build up in plasma over long term administration, indicating reduced potential for systemic side effects.

The Company presented preclinical data at the Association for Research and Vision in Opthalmology conference in May 2012, and at the Macula Society meeting in June 2012.

We commenced a clinical study, named OHR-002, at the end of September 2012. Study OHR-002 is a randomized, double blind, placebo controlled Phase II study to evaluate the efficacy and safety of Squalamine Eye Drops for the treatment of wet-AMD. The study will enroll 120 treatment naïve wet-AMD patients at twenty two clinical sites in the U.S., who will be treated with Squalamine Eye Drops or placebo eye drops twice daily for a nine month period. The primary and secondary endpoints include visual acuity parameters, need for rescue intravitreal injections, and safety. The protocol includes an interim analysis upon the completion of the treatment period in 50% of the patients (approximately 60). We expect to complete enrollment of the study in 2013 and release interim data in the fourth quarter of 2013.

Additionally, Squalamine has shown promise in the treatment of solid tumors such as ovarian cancer using the intravenous formulation in significantly higher doses than the eye drop formulation. In a Phase IIa study, patients with stage III and IV refractory and resistant ovarian cancer received Squalamine in conjunction with carboplatin, with approximately two thirds of the patients achieving a complete response, partial response or stable disease. Squalamine has been awarded Orphan Drug Status by the FDA for the treatment of late stage resistant or refractory ovarian cancer. We expect to publish or present survival data on the completed phase IIa study in 2013 at a scientific conference or appropriate forum. Because of funding constraints, Ohr is seeking a development partner to further advance development of this indication; however we currently do not have plans to enter into such a transaction and there is no assurance that the Company will complete such a transaction.

OHR/AVR118

OHR/AVR118 is a novel immunomodulator with a singular chemical structure that is terminally sterilized and endotoxin-free. The compound is composed of two small peptides, Peptide A, which is 31 amino acids long, and Peptide B, that is 21 amino acids long. Peptide B is unique in that the dinucleotide, diadenosine, is covalently attached to serine at position 18 through a phosphodiester bond. OHR/AVR118 is stable at room temperature and has a favorable safety profile both in animal toxicity studies and in human clinical trials.

Ohr is currently conducting a Phase II clinical trial of OHR/AVR 118 for the treatment of cancer cachexia at a leading cancer center in Canada. Cancer cachexia is a severe wasting disorder characterized by weight loss, muscle atrophy, fatigue, weakness, and significant loss of appetite. This disorder is often seen in late stage cancer patients. OHR/AVR118 has also anecdotally shown to have chemoprotective effects, thus potentially allowing patients to better tolerate chemotherapy and radiation as well as more intensive treatment regimens with ordinary toxic chemotherapeutic agents, while maintaining body weight and avoiding other side effects. There is currently no FDA approved drug for the treatment of cancer cachexia. The Company presented interim data on this current trial at the annual conference of the Society of Cachexia and Wasting Disorders in Barcelona, Spain in December 2009. In December 2010, the Company opened a new clinical site for the ongoing Phase II trial in cancer cachexia at the Ottawa Hospital Cancer Centre and enrolled the first three patients at the new site. Enrollment in the trial has been completed and we expect to report data in the first calendar quarter of 2013.

Ohr also owns various other compounds in earlier stages of development, including the PTP1b inhibitor, trodusquemine, and related analogs, which it is conducting preclinical research on with an academic laboratory, and will seek to develop further through a strategic partnership, joint venture, or on a sponsored basis; however we currently do not have plans to enter into such a transaction and there is no assurance that the Company will complete such a transaction.

Liquidity and Sources of Capital

The Company has limited working capital reserves with which to continue development of its pharmaceutical products and continuing operations. The Company is reliant, at present, upon its capital reserves for ongoing operations and has no revenues.

Not including the non-cash stock warrant derivative liability of $2,171,819 and $768,696, net working capital reserves decreased from the fiscal year-ended 2012 to the period ended December 31, 2012 by $460,906 (from net working capital of $2,528,156 to net working capital of $2,067,250) primarily due to the increase in the cash paid for trial and storage fees. At present, the Company has no bank line of credit or other fixed source of positive net working capital reserves. Should it need additional capitalization in the future, it will be primarily reliant upon private or public placement of its equities for which there can be no warranty or assurance that the Company may be successful in such efforts. The Company raised $2,914,451 through the exercise of warrants in June 2012, and management believes the Company has sufficient capital to meet its planned operating needs through November 2013.

Significant Subsequent Events

None

Results of Operations

Three Months Ended December 31, 2012

Three months ended December 31, 2012 (“2012”) compared to the three months ended December 31, 2011 (“2011”). Results of operations for the three months ended December 31, 2012 reflect the following changes from the prior period.

	2012			2011			Change
Operating Expenses
General and administrative		70,190			32,911			37,279
Professional fees		47,031			64,558			(17,527	)
Research and development		578,513			336,155			242,358
Salaries and wages		119,017			63,559			55,458
Total Operating Expenses		814,751			497,183			317,568

Operating Income (Loss)		(814,751	)		(497,183	)		(317,568	)

Gain (Loss) on derivative liability		(1,403,123	)		826,902			(2,230,025	)
Other income and expenses		(478	)		21,018			(21,496	)
Income (loss) from operations		(2,218,352	)		350,737			(2,569,089	)
Discontinued operations		—			—			—
Net Income (Loss)	$	(2,218,352	)	$	350,737		$	(2,569,089	)

The Company had no net revenues from continuing operations in the three months ended December 31, 2012. The Company’s products are in the development stage. Accordingly, the Company also had no cost of revenue from continuing operations in the three months ended December 31, 2012.

General and administrative expenses from continuing operations increased from $32,911 in 2011 to $70,190 in 2012. The increase in and general and administrative expenses during 2012 is primarily due to increased activity relating to its recent clinical trials. Professional fees decreased from $64,558 in 2011 to $47,031 in 2012. The decrease in professional fees during 2012 is primarily due to fewer expenses related to investor relations. Salaries and wages increased from 2011 to 2012. The Company expects salaries and wages, professional fees, and general and administrative expenses to continue to increase in future periods as development of its products continues.

The Company incurred $578,513 in research and development expenses in 2012 compared to $336,155 in 2011. The increase is a result of the commencement of the clinical trial in wet-AMD and continuation of the animal studies and lab tests which began part way through 2011 as well as maintenance and development of the products that it acquired in 2009. The Company expects research and development expenses to continue to rise as development of its products continue.

The Company issued certain securities to investors at various times that qualify for derivative accounting which requires that the value of these warrants be recorded as a liability instead of within permanent equity. These derivatives are then marked to their fair value at the end of each reporting period with changes being recorded in earnings. As the Company’s stock price increased during 2012 the value of these derivatives have increased, resulting in an increase in the liability and a non-cash loss on derivative liability of $1,403,123 for 2012 compared to a gain of $826,902 in the comparable period in 2011.

For the three months ended December 31, 2012, the Company recognized net loss of $2,218,352, reflecting the non-cash loss on derivative liabilities of $1,403,123 in other income, compared to income of $350,737 for the same period in 2011, reflecting the non-cash gain on derivative liabilities of $826,902. Excluding the non-cash gain or loss on derivative liability as well as the non-cash expense associated with the issuance of stock and warrants to employees and consultants, the Company’s net loss for 2012 would have been $594,768 and $405,618 for 2011. Until the Company is able to generate revenues, management expects to continue to incur such net losses.

Item 3.

Quantitative and Qualitative Risk

Market risk represents the risk of loss arising from adverse changes in interest rates and foreign exchange rates. The Company does not have any material exposure to interest rate or exchange rate risk.

Item 4.

Controls and Procedures

The Company’s management, including the Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud that could occur. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

The Company knows of no fraudulent activities or any material accounting irregularities. The Company does not have an independent audit committee. The Company believes that an independent committee is not required for OTC Bulletin Board listings, but may further review the advisability and feasibility of establishing such a committee in the future.

The Company is aware of the general standards and requirements of the Sarbanes-Oxley Act of 2002 and has implemented procedures and rules to comply, so far as applicable, such as a prohibition on company loans to management and affiliates. The Company does not have any audit committee as it does not believe the act requires a separate committee for companies that are reporting companies, but not registered under the Securities and Exchange Act of 1934 (e.g., companies registered under Section 15(d)) and whose shares trade only on the OTC Bulletin Board.

Management’s Quarterly Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed by, or under the supervision of, the chief executive officer and chief financial officer, and effected by the board of directors and management to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US Generally Accepted Accounting Principles (“GAAP”) including those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP and that receipts and expenditures are being made only in accordance with authorizations of management and the directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer , we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as set forth in Internal Control - Integrated Framework. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal controls over financial reporting were not effective as of December 31, 2012 based on material weaknesses identified by management. The most significant material weakness that led management to this conclusion is the lack of internal controls present in the Company’s internal control processes. Management expects to begin to address this and other weaknesses as the Company’s capital position improves and as more employees are hired.

Due to the weakness of the Company’s internal controls, our management concluded that the Company’s disclosure controls and procedures (that is, the controls and procedures enabling timely, accurate and complete public filing of information) were ineffective as of December 31, 2012. The Company’s management will use its best efforts, notwithstanding these weaknesses to file timely required reports accurately and completely.

This Quarterly Report does not include an attestation report of the Company’s current independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s current independent registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this Quarterly Report because the Company is a smaller reporting company under the SEC’s rules.

Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during our fiscal quarter ended December 31, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

In July 2012, the Company received notice that it was being named, along with twenty six other parties, as a defendant in a class action lawsuit being brought against the Genaera Liquidating Trust (“Trust”). We purchased biotechnology assets from the Trust in 2009. The Company does not believe the allegations against the Company in the complaint have merit and intends to defend the case vigorously. Recognizing that the outcome of litigation is uncertain, management believes that the litigation is unlikely to have a materially adverse impact to the Company’s financial statements.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

On November 5, 2010 the Company issued 50,000 shares of common stock to a consultant for services. The shares were valued at $0.20 per share based on the market price of the shares on the date of issuance. The Company recorded the corresponding $10,000 expense to general and administrative expense.

On December 30, 2010 the Company sold 4,200,000 shares of common stock to a group of institutional and accredited investors for gross proceeds of $1,050,000. In connection with the financing, the investors received 2,520,000 five year warrants to purchase common stock at an exercise price of $0.55 per share. The exercise price of these warrants contains certain reset provisions which require the fair value of the warrants to be reported as a stock warrant derivative liability. On the date of issuance, the Company calculated the fair value of these warrants to be $528,847. The total cash proceeds of $1,050,000 were first applied as an increase to stock warrant derivative liability with the remaining $521,153 being allocated to the common shares and being recorded in additional paid-in capital.

Between May 12 and August 23, 2011, the Company issued a total of 625,000 warrants for services rendered to the Company. These warrants fully vested at September 30, 2012, No further expenses were incurred at December 31, 2012, for these warrants. On December 16, 2011, the Company completed a private placement offering pursuant to which the Company sold 1,833,342 shares of its common stock at a price of $0.60 per share for gross proceeds of $1,100,000. Purchasers of the shares also received an aggregate of 916,678 Class J Warrants to purchase common stock at an exercise price of $0.65 per share and exercisable for a period of 5 years.

On December 21, 2011, the Company issued a total of 3,125 warrants for services rendered to the Company. In conjunction with this issuance, the Company recognized $1,967 in consulting expense. The warrants are exercisable for five years at an exercise price of $0.65 per share.

On February 15, 2012, the Company issued 166,667 shares of common stock as a deposit on a service contract. The shares were valued at $0.60 per share based on the fair market value of the services to be provided. The Company recorded the corresponding $100,000 fair market value as research and development expense.

On March 3, 2012, the Company issued a total of 350,000 fully-vested warrants with a fair market value of $220,422 as a retainer for services to be rendered to the Company. In accordance with ASC 505-50-25, the Company recorded the fair market value of the warrants as professional fees.

On March 9, 2012, the Company agreed to grant 1,700,000 options to board members and executives. The Company calculated a fair value of $0.63 per option. Of the 1,700,000 options issued, 425,000 vested upon issuance and the remaining 1,275,000 vest in 25 percent tranches on each anniversary. As of September 30, 2012, 425,000 options have vested resulting in compensation expense of $268,078.

On March 18, 2012, the Company issued 130,000 shares of common stock as a deposit on a service contract. The shares were valued at $0.84 per share based on the fair market value of the stock on the date of issuance. The Company recorded the corresponding $109,200 fair market value professional fees.

On April 10, 2012 the Company converted 43,392 warrants into shares of common stock through a cashless exercise. The cashless calculation amounted to 12,662 shares of common stock which were issued April 11, 2012.

On April 12, 2012, the Company issued a total of 15,000 fully-vested warrants with a fair market value of $12,775 as a retainer for services to be rendered to the Company. In accordance with ASC 505-50-25, the Company recorded the fair market value of the warrants as professional fees.

Between May 18, 2012 and July 11, 2012, the Company issued a total of 400,000 warrants with a fair market value of $357,394 for services yet to be rendered to the Company. The 350,000 warrants vest in two equal amounts three and six months from the date of issuance while the remaining 50,000 warrants vest over four quarters effective October 11, 2012. As of September 30, 2012, the Company has recorded $157,235 in professional fees related to the warrants that have vested to date.

On June 28, 2012, the Company issued 5,299,002 shares of common stock for total proceeds of $2,914,452 to investors who elected to convert their series H warrants at an exercise price of $0.55. As an incentive to exercise the options, the Company agreed to issue 0.6 replacement warrants for each full warrant exercised. The Company issued 3,179,410 replacement warrants under the incentive provision. The warrants were valued at $2,663,204. As the original warrants were issued as part of cash financing, the value of these warrants has been included as an offsetting entry within additional paid-in capital.

On July 9, 2012, the Company received a notice of exercise for 30,000 warrants to purchase common stock through a cashless exercise. The cashless calculation amounted to 13,333 shares of common stock which were issued on July 17, 2012.

On September 7, 2012, the Company issued warrants to a related party to purchase 75,000 shares of common stock as compensation for the use of the office facilities and receptionist. Such warrants have an exercise price of $1.00 and will be exercisable for a period of five years. We have been using the office space since April 2010 and will continue to do so in the future.

On September 12, 2012, the Company issued 100,000 shares of common stock as a deposit on a service contract. The shares were valued at $0.99 per share based on the fair market value of the stock on the date of issuance. The Company recorded the corresponding $99,000 fair market value as professional fees.

On September 19, 2012, the Company issued 1,100 shares of common stock to a consultant for services. The shares were valued at $1.02 per share based on the market price of the shares on the date of issuance. The Company recorded the corresponding $1,122 expense to general and administrative expense.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Removed and Reserved .

Item 5.

Other Information

None.

Item 6.

Exhibits

Exhibit		Number
31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 19, 2013

OHR PHARMACEUTICAL, INC. (Registrant)

By:	/s/ Irach Taraporewala
	Irach Taraporewala
	Chief Executive Officer

By:	/s/ Sam Backenroth
	Sam Backenroth
	Chief Financial Officer