10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended November 30, 2012

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: 000-52218

PEDIATRX INC.
(Exact name of registrant as specified in its charter)

Nevada	20-2590810
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

90 Fairmount Road West, Califon, New Jersey 07830
(Address of principal executive offices) (Zip Code)

(908) 975-0753
(Registrant's telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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 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 [ ]

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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [  ] No [  ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date 20,836,000 shares of common stock are issued and outstanding as of January 22, 2013.

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TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION	1
Item 1. Financial Statements (Unaudited)	1
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3. Quantitative and Qualitative Disclosures about Market Risk	28
Item 4. Controls and Procedures	28
PART II—OTHER INFORMATION	29
Item 1. Legal Proceedings.	29
Item 1A. Risk Factors	29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3. Defaults Upon Senior Securities.	34
Item 4. Mine Safety Disclosures	34
Item 5. Other Information.	34
Item 6. Exhibits	36
SIGNATURES	39

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED).

PediatRx Inc.
(A Development Stage Company)

Financial Statements
November 30, 2012

PediatRx Inc.

(A Development Stage Company)

Balance Sheets

		As of			As of
		November 30,			February 29,
		2012			2012
		(Unaudited)			(Audited)
Assets
Current assets
Cash and cash equivalents	$	31,403		$	258,140
Investment in Apricus		704,343		$	-
Accounts receivable, net of reserves		40,208			106,635
Inventories, net of reserve for obsolescence		-			2,169
Prepaid expenses		17,258			17,349
Total current assets		793,212			384,293
Intangible assets, net of accumulated amortization		678,685			743,040
Security deposits		992			992
Total assets	$	1,472,889		$	1,128,325
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	340,299		$	382,960
Promissory notes		500,000			500,000
Total current liabilities		840,299			882,960
Stockholders’ equity
Capital stock
Authorized    150,000,000 common shares, par value $0.0001 Issued and outstanding    February 29, 2012 – 20,836,000 common shares    November 30, 2012 – 20,836,000 common shares		2,084			2,084
Additional paid-in capital		2,626,745			2,494,607
Deficit accumulated during the development stage		(1,996,239	)		(2,251,326	)
Total stockholders' equity		632,590			245,365
Total liabilities and stockholders' equity	$	1,472,889		$	1,128,325

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

2

PediatRx Inc.

(A Development Stage Company)

Statements of Operations

		For the period
		from the date			For the three			For the three			For the nine		For the nine
		of inception on			month period			month period			month period		month period
		March 18, 2005			ended			ended			ended		ended
		to November 30, 2012			November 30, 2012			November 30, 2011			November 30, 2012		November 30, 2011
Net revenues	$	1,168,498		$	-		$	125,715		$	120,640	$	362,061
Cost of Goods Sold		341,277			1,152			32,855			36,276		94,218
Gross Margin		827,221			(1,152	)		92,860			84,364		267,843
Expenses
Employee expenses		654,162			35,970			91,711			145,075		283,925
Stock based compensation		346,050			-			58,024			132,138		173,516
Consulting fees		620,394			242			67,655			3,276		201,619
Marketing expense		640,776			30,949			53,877			46,883		305,994
Travel expense		67,641			85			3,468			8,299		32,222
Interest expense		72,056			14,959			3,972			31,081		16,346
Legal and accounting fees		512,927			13,189			29,025			123,564		94,934
Mineral property expenditures		15,124			-			-			-		-
Insurance expense		175,169			21,752			17,708			58,098		35,691
Regulatory expense		119,098			749			6,685			13,577		44,314
Rent		19,406			-			1,663			-		4,793
General and administrative expense		264,229			12,132			13,787			30,738		53,227
Amortization expense		204,135			20,214			22,070			64,355		66,211
Write down of mineral property acquisition costs		5,000			-			-			-		-
Total Expenses		3,716,167			150,241			369,645			657,084		1,312,792
Gain on sale of product rights		64,900			-			-			-		-
Other income (loss)		827,807			(172,193	)		-			827,807		-
Net income (loss) for the period	$	(1,996,239	)	$	(323,586	)	$	(276,785	)	$	255,087	$	(1,044,949	)
Basic and diluted income (loss) per common share				$	(0.016	)	$	(0.013	)	$	0.012	$	(0.050	)
Weighted average number of common shares used in per share calculations					20,836,000			20,836,000			20,836,000		20,836,000

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

3

PediatRx Inc.

(A Development Stage Company)

Statements of Changes in Stockholders' Equity (Deficit)

										Deficit,
										accumulated			Total
							Additional			during the			stockholders’
	Number of			Capital			paid-in			development			equity
	shares issued			stock			capital			stage			(deficit)
Balance as of March 18, 2005 (inception)	-		$	-		$	-		$	-		$	-
Restricted common shares issued for  cash ($0.0005 per share) – September  2005	10,000,000			1,000			4,000			-			5,000
Contributions to capital by related  parties – expenses	-			-			600			-			600
Net loss for the period	-			-			-			(21,237	)		(21,237	)
Balance as of February 28, 2006	10,000,000			1,000			4,600			(21,237	)		(15,637	)
Common shares issued for cash ($0.005  per share) – May 2006	10,000,000			1,000			49,000			-			50,000
Common shares issued for services  ($0.005 per share) – August 2006 and  February 2007	6,000			1			29			-			30
Contributions to capital by related  parties – expenses	-			-			11,400			-			11,400
Net loss for the year	-			-			-			(50,890	)		(50,890	)
Balance as of February 28, 2007	20,006,000			2,001			65,029			(72,127	)		(5,097	)
Contributions to capital by related  parties – expenses	-			-			14,400			-			14,400
Common shares returned and cancelled  for cash ($0.005 per share) – April 2007	(1,000,000	)		(100	)		(4,900	)		-			(5,000	)
Common shares issued for cash ($0.01  per share) – May 2007	1,000,000			100			4,900			-			5,000
Net loss for the year	-			-			-			(65,411	)		(65,411	)
Balance as of February 29, 2008	20,006,000			2,001			79,429			(137,538	)		(56,108	)
Contributions to capital by related  parties – expenses	-			-			14,400			-			14,400
Contributions to capital by related  parties – loan forgiveness	-			-			38,950			-			38,950
Common shares issued for cash ($0.10  per share) – November 2008	500,000			50			49,950			-			50,000
Net loss for the year	-			-			-			(53,957	)		(53,957	)
Balance as of February 28, 2009	20,506,000			2,051			182,729			(191,495	)		(6,715	)
Contributions to capital by related  parties expenses	-			-			14,399			-			14,399
Net loss for the year	-			-			-			(58,201	)		(58,201	)
Balance as of February 28, 2010	20,506,000			2,051			197,128			(249,696	)		(50,517	)
Contributions to capital by related  parties – expenses	-			-			3,600			-			3,600
Common shares issued for cash ($0.20  per share) – June 2010	1,500,000			150			299,850			-			300,000
Common shares issued for cash ($0.50  per share) – July 2010	1,500,000			150			749,850			-			750,000
Common shares issued for cash ($1.00  per share) – November 2010	825,000			83			824,917			-			825,000
Common shares returned and cancelled –   November 2010	(3,700,000	)		(370	)		370			-			-
Common shares issued for debt  cancellation ($1.00 per share) –  November 2010	205,000			20			204,980			-			205,000
Net loss for the year	-			-			-			(1,049,087	)		(1,049,087	)
Balance as of February 28, 2011	20,836,000			2,084			2,280,695			(1,298,783	)		983,996
Stock based compensation	-			-			213,912			-			213,912
Net loss for the year	-			-			-			(952,543	)		(952,543	)
Balance as of February 29, 2012	20,836,000			2,084			2,494,607			(2,251,326	)		245,365
Stock based compensation	-			-			132,138			-			132,138
Net income for the period	-			-			-			255,087			255,087
Balance as of November 30, 2012	20,836,000		$	2,084		$	2,626,745		$	(1,996,239	)	$	632,590

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

4

PediatRx Inc.

(A Development Stage Company)

Statements of Cash Flows

		For the period
		from the date			For the nine			For the nine
		of inception on			month period			month period
		March 18, 2005			ended			ended
		to November 30, 2012			November 30, 2012			November 30, 2011
Cash flows from operating activities
Net income (loss) for the period	$	(1,996,239	)	$	255,087		$	(1,044,949	)
Adjustments to reconcile loss to net cash used in    operating activities
Amortization expense		204,135			64,355			66,211
Inventory obsolescence expense		90,500			-			-
Gain on sale of product rights (Note 2)		(64,900	)		-			-
Gain from additional consideration received from         Apricus (Note 2)		(1,000,000	)		(1,000,000	)
Contributions to capital by related parties –         expenses		58,799			-			-
Contributions to capital by related party –         forgiveness of debt		38,950			-			-
Common shares issued for services		30			-			-
Write down of mineral property acquisition costs		5,000			-			-
Loss on sale of investment in Apricus		18,517			18,517			-
Impairment loss on investment in Apricus		153,676			153,676
Stock based compensation		346,050			132,138			173,516
Changes in operating assets and liabilities; net of effects from acquisition of Granisol product line and mineral property interest
Decrease (increase) in accounts receivable		(40,208	)		66,427			(1,020	)
Decrease in inventories		26,680			2,169			11,034
Decease (increase) in prepaids and deposits		(18,250	)		91			(17,230	)
Increase (decrease) in accounts payable and accrued    liabilities		345,299			(42,661	)		101,722
Cash used in operating activities		(1,831,961	)		(350,201	)		(710,716	)
Cash flows from investing activities
Acquisition of mineral property interest		(10,000	)		-			-
Proceeds from sale of product rights		64,900			-			-
Proceeds from Apricus investment		123,464			123,464			-
Acquisition of Granisol product line		(1,000,000	)		-			-
Cash used in investing activities		(821,636	)		123,464			-
Cash flows from financing activities
Decrease in due to related party		-			-			-
Proceeds from issuance of promissory notes		705,000			-			250,000
Common shares returned to treasury		(5,000	)		-			-
Proceeds from issuance of common stock		1,985,000			-			-
Cash provided by financing activities		2,685,000			-			250,000
Increase (decrease) in cash and cash equivalents		31,403			(226,737	)		(460,716	)
Cash and cash equivalents, beginning of period		-			258,140			549,392
Cash and cash equivalents, end of period	$	31,403		$	31,403		$	88,676

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

5

1.	Basis of Presentation
	The accompanying unaudited condensed financial statements of PediatRx Inc. (the "Company" or “PediatRx”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X.
	In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine month periods and for the period from the date of inception have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms "Company", "we", "us" or "our" mean PediatRx Inc..
	Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended February 29, 2012.
2.	Nature and Continuance of Operations
	Striker Energy Corp. was incorporated under the laws of the State of Nevada on March 18, 2005. The Company originally intended to engage in the acquisition and exploration of mineral properties. In 2008, the Company transitioned its business from mineral property exploration to oil and natural gas exploration.
	Effective September 12, 2008, the Company completed a stock split by the issuance of two new common shares for each one outstanding common share of the Company. Unless otherwise noted, all references herein to number of shares, price per share or weighted average number of shares outstanding have been adjusted to reflect this stock split on a retroactive basis.
	On June 17, 2010, the Company entered into a letter of intent with Cypress Pharmaceutical, Inc. (“Cypress”) to acquire all of the assets associated with Granisol® (granisetron HC1) oral solution (“Granisol”). First approved in 2008, Granisol is the only oral, liquid granisetron solution, formerly distributed by Hawthorn Pharmaceuticals, a subsidiary of Cypress. The Food and Drug Administration has approved the use of Granisol in cancer care to treat nausea and vomiting associated with cancer therapy. On June 18, 2010, the Company incorporated PediatRx Inc., the Company’s wholly-owned subsidiary under the laws of the state of Nevada. On July 23, 2010, PediatRx Inc. concluded a definitive agreement to acquire Granisol from Cypress and the Company turned its focus to the pharmaceutical industry and terminated its interest in oil and natural gas exploration. Effective December 28, 2010, the Company merged with its subsidiary (PediatRx Inc.) and changed its name to PediatRx Inc..
	On September 12, 2011 the Company entered into a co-promotion agreement with Bi-Coastal Pharmaceutical Corp. (“Bi-Coastal”). Pursuant to the co-promotion agreement, Bi-Coastal granted the Company the non-exclusive right to promote Aquoral™ within the United States of America. Aquoral, another oncology supportive care product, is an FDA-cleared treatment for xerostomia (the medical term for dry mouth due to a lack of saliva). Xerostomia is especially prevalent in patients undergoing various treatments for cancer and those with Sjogren’s syndrome. The Company is required to include Aquoral in no less than 85% of its sales calls.

6

In return for the Company’s promotional efforts, it will receive compensation for each unit sold. The agreement with Bi-Coastal is for an initial term of two years and will automatically renew for one year terms unless either party provides notice of non-renewal at least six months prior to the expiration of the then-current term. The agreement is terminable at any time, by either party, upon six months prior written notice to the other party and is also terminable for cause.

On January 26, 2012, the Company entered into a binding term sheet (the "Term Sheet") with Apricus Biosciences, Inc. ("Apricus") for (1) a Co-Promotion Agreement in the United States for Granisol (the "Co-Promotion Agreement"), (2) the assignment of its Co-Promotion Agreement with Bi-Coastal for Aquoral to Apricus (the "Assignment Agreement”) and (3) a Sale Agreement for Granisol outside of the United States (the "Asset Purchase Agreement"). Also in the Term Sheet, the Company entered into a non-binding arrangement (the "Arrangement") for the sale of the Company to Apricus in a proposed merger transaction (the "Acquisition").

On February 21, 2012 the Company entered into three definitive agreements and one side letter with Apricus which include the Co-Promotion Agreement, the Assignment Agreement and the Asset Purchase Agreement. Pursuant to the Co-Promotion Agreement, the Company granted to Apricus the exclusive right to commercialize Granisol in six U.S. states and the non-exclusive right to commercialize Granisol in all other U.S. States, in addition to the right to manufacture Granisol. In addition, the Company has agreed that, for a period of five years from the effective date of the Co-Promotion Agreement, it will not license any co-promotion rights in the non-exclusive states to any third party. The Company has retained the right to commercialize Granisol in the non-exclusive states. The Company will recognize sales in the non-exclusive states that it generates through its own promotional efforts. Each party has agreed to cooperate with the other in respect of promotional materials and efforts on terms specified in the Co-Promotion Agreement.

The initial term of the Co-Promotion Agreement is for a period of ten years from the effective date, though it may be terminated prior to expiration under certain conditions. If the Co-Promotion Agreement is terminated by the Company prior to the end of the initial term, the Company will be required to pay to Apricus an amount based upon a varying percentage of its net operating income related to Granisol for a period subsequent to termination depending upon when the termination occurs.

Pursuant to the Assignment Agreement, the Company has assigned all of its rights and responsibilities under the Co-Promotion Agreement with Bi-Coastal for Aquoral, and Apricus has assumed all rights and responsibilities under the Co-Promotion Agreement for Aquoral as of the effective date. Bi-Coastal has consented to the assignment of the Co-Promotion Agreement for Aquoral.

Pursuant to the Asset Purchase Agreement, the Company sold to Apricus all of its rights related to Granisol in all countries and territories outside of the United States. The Company has also agreed that it and its officers and directors will not compete in the field of anti-emetic products in certain areas outside of the United States.

As consideration for entering into these three Agreements the Company received an initial payment of $325,000 from Apricus. The agreements also provide for the payment to the Company of a royalty that will be calculated based upon Apricus' United States generated net operating income related to Granisol. The Company has recognized revenues of $260,000 associated with the exclusive rights for Apricus to commercialize Granisol in six U.S. states. In addition, the Company has recognized a gain on sale of product rights totaling $64,900 associated with the Asset Purchase Agreement.

7

The binding term sheet between the Company and Apricus contemplates, in addition to the transactions reflected in the three agreements described above, a non-binding expression of interest in the merger of the Company with Apricus. The non-binding portion of the term sheet contemplated that the Company would be acquired by Apricus in a merger in exchange for $4,000,000 to be paid in the common stock of Apricus, with $3,600,000 distributed to the shareholders of the Company immediately and $400,000 held back from shares that would be distributed to the Company's Chief Executive Officer and Chief Financial Officer for a period of six months as an indemnity for breaches by the Company of its representations and warranties. Additionally, it contemplated that Apricus would assume certain debt and liabilities of the Company up to $675,000. The side letter referred to above refines the timing with respect to the parties' agreement that Apricus would pay to the Company an additional fee as full consideration for the Co-Promotion Agreement and the Asset Purchase Agreement (in the form of restricted stock of Apricus having a value of $1,000,000) if the two companies did not merge by June 1, 2012, (or such other date as may be mutually agreed to by the Parties) unless, prior to that date, the Company filed for bankruptcy or the Granisol asset was materially impaired.

On June 27, 2012, the Company entered into a Termination Agreement (the “Termination Agreement”) with Apricus Biosciences, Inc. (“Apricus”) pursuant to which the parties acknowledged that they have formally terminated discussion regarding the proposed merger of the two companies.

Pursuant to the Termination Agreement, Apricus issued and delivered to the Company 373,134 shares of its common stock in full satisfaction of its obligation to pay the Company $1,000,000 in common stock as a break-up fee. The Company has recognized other income of $1,000,000 related to the break-up fee.

In addition, pursuant to the Termination Agreement, on July 16, 2012, Apricus filed a Registration Statement on Form S-3 registering these shares for resale, which the Registration Statement was declared effective by the Securities and Exchange Commission on October 3, 2012. The Company has agreed that if it proposes to sell any of the shares on a public market or quotation service, it will only be permitted to sell on any given trading day, such number of shares as does not exceed 5% of the average daily volume of the Apricus’s common stock traded in the previous five trading days. Due to the sales restrictions, the Company determined the fair value using quoted prices for similar assets in active markets that are directly observable and thus represent a Level 2 fair value measurement. The fair value of the investment in Apricus was $1,000,000 at the effective date of the termination and August 31, 2012. The Company has recognized a loss on sale of investment in its statements of operations totaling $18,517 for the three and nine month period ended November 30, 2012 related to common stock of Apricus sold during the period. The Company determined the fair value of the investment in Apricus to be $704,343 at November 30, 2012. The Company has continued to sell the common stock of Apricus subsequent to November 30, 2012 and does not expect to recover the entire original basis in the common stock. The Company concluded the decline in fair value is other than temporary and has recognized an impairment loss of $153,676 in its statements of operations for the three and nine month period ended November 30, 2012.

PediatRx intends to utilize the proceeds from the sale of Apricus common stock to pay off certain notes payable and other liabilities and for continuing operations. The Company is investigating other business development and product opportunities and strategic alternatives.

The Company is a development stage enterprise, as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915, Development Stage Entities. The Company has devoted substantially most of its efforts to the initial marketing of Granisol and has been seeking to secure rights to other pharmaceutical products through acquisition, licensing and reformulation activities.

8

The Company has net income of $255,087 for the nine month period ended November 30, 2012, a net loss of $1,044,949 for the nine month period ended November 30, 2011, a net loss of $1,996,239 for the period from inception on March 18, 2005 through November 30, 2012 and has a working capital deficit at November 30, 2012 of $47,087 (February 29, 2012 – working capital deficit of $498,667). The Company's financial statements as of November 30, 2012 and for the nine month period ended November 30, 2012 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. As of November 30, 2012, the Company's assets consisted of cash and cash equivalents of $31,403, investment in Apricus of $704,343 and accounts receivable from product sales, net of sales allowances, of $40,208. Management believes that the Company's capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending February 28, 2013. The Company had fully intended to pursue the merger with Apricus. Pursuant to the Termination Agreement, the Company will utilize the proceeds from sales of Apricus common stock to pay certain notes payable and other liabilities and is investigating business development and other strategic alternatives. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital, secure additional lending in the near future or complete business development activities which leverage remaining Granisol opportunities, or to secure other product opportunities to leverage its infrastructure, management expects that the Company will need to curtail or cease operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company was in the process of transitioning to its new operating business and expects to incur operating losses for the next twelve months as it moves forward with its co-promotion efforts with Apricus for Granisol and explores other product and business development opportunities.

9

3. Net Loss Per Common Share

The Company computes net income or loss per share in accordance with ASC 260, Earnings per Share ("ASC 260"). ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the statement of operations. Basic EPS is computed by dividing net income or loss available to common shareholders (numerator) by the weighted average number of common stock equivalents outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common stock equivalents outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive and excludes any common stock equivalents that are out-of-the-money. For the nine month period ended November 30, 2012 there were no warrants exercisable. For the nine month period ended November 30, 2011 there were 515,000 warrants and 1,152,000 options which have been excluded from the calculation because their effect would be anti-dilutive.

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4. The Granisol Acquisition

On July 23, 2010 (the “Closing Date”), the Granisol product line was acquired by the Company’s wholly owned subsidiary PediatRx Inc. for cash consideration totaling $1 million. All inventories and intangibles associated with the Granisol product line were included in the purchase. The related inventory was received in October 2010. The Company is amortizing the product rights and know-how over the estimated useful life of ten years on a straight line basis, beginning with August 2010. Operations of the Granisol product line are included in the Company’s statement of operations since the Closing Date.

As part of the closing and transfer of assets to PediatRx Inc. on July 23, 2010, PediatRx Inc. assumed a single product manufacturing and supply agreement with Therapex, a division of E-Z-EM Canada, Inc. to enable the manufacturing of the Granisol product line. Under the terms of the agreement, Therapex will manufacture the product in compliance with current Good Manufacturing Practice (cGMP) and oversee all quality control and packaging through to finished product to meet PediatRx's requirements for Granisol.

The purchase price for the Granisol product line was allocated in accordance with the acquisition method of accounting. The acquisition method of accounting is based on ASC 805, Business Combinations, and uses the fair value concepts defined in ASC 820, Fair Value Measurements and Disclosures.

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5. Promissory Notes

	November 30,	February 29,
	2012	2012
Issued on June 15, 2009, this unsecured promissory note, bearing simple interest at five percent (5%) per annum on the principal balance of $50,000, was originally due on June 15, 2011. This promissory note was amended effective on May 18, 2011, April 19, 2012 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty.	$ 50,000	$ 50,000
Issued on July 26, 2010, this unsecured promissory note, bearing simple interest at five percent (5%) per annum on the principal balance of $200,000, was originally due on July 26, 2011. This promissory note was amended effective May 23, 2011 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.	200,000	200,000
Issued on May 6, 2011 this unsecured promissory note, bearing simple interest at five percent (5%) per annum on the principal balance of $250,000, was originally due on May 6, 2012. Effective April 19, 2012 this promissory note was amended on April 19, 2012 and again on July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.	250,000	250,000
Total Promissory Notes	$ 500,000	$ 500,000

     The promissory notes were not paid on their due dates of December 31, 2012 and are due on demand.

6. Related Party Transactions

Effective May 28, 2010, PediatRx entered into a consulting agreement with Dr. Cameron Durrant, a shareholder of the Company, to assist management in the identification of opportunities available to the Company in the healthcare industry and to recommend terms of potential acquisitions. Dr. Durrant's agreement with the Company dated May 28, 2010 was terminated in lieu of a new agreement on September 24, 2010.

On September 24, 2010, with retroactive effect to July 1, 2010, the Company entered into a second consulting agreement with Dr. Cameron Durrant. Pursuant to the consulting agreement, Dr. Durrant agreed to perform such duties as are regularly and customarily performed by the Chief Executive Officer of a corporation. The term of the consulting agreement is one year from July 1, 2010, unless both parties agree to extend. On July 1, 2011, the agreement was extended for an additional two year period. On January 1, 2012, Dr. Durrant agreed to forgo any further consulting fees.

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In addition, of the 4,250,000 shares of the Company's common stock owned by Dr. Durrant, 2,833,333 shares are subject to a lockup agreement between the Company and Dr. Durrant, which lockup agreement became effective February 9, 2011. Pursuant to the terms of the lockup agreement, Dr. Durrant agreed not to sell, assign or convey or otherwise dispose of any shares subject to the lockup agreement until December 31, 2015. The lockup agreement expires on December 31, 2015.

During the nine month period ended November 30, 2012, the Company incurred consulting fees of $0 (November 30, 2011 - $187,500, cumulative – $449,500) in connection with Dr. Durrant's consulting agreements. The Company has recorded a payable to Dr. Durrant of $170,253 related to consulting fees. Of that, $286 has been paid to Dr. Durrant, leaving a payable of $169,697 as of November 30, 2012. In addition, the Company has recorded a payable to Dr. Durrant of $51,342 related to business establishment expenses incurred by Dr. Durrant. Of that, $49,714 has been paid to Dr. Durrant, leaving a payable of $1,628 as of November 30, 2012.

On September 14, 2010, with retroactive effect to July 1, 2010, the Company entered into an employment agreement with Mr. David Tousley, Chief Financial Officer, Treasurer and Secretary of PediatRx. Pursuant to the employment agreement, Mr. Tousley agreed to perform such duties as are regularly and customarily performed by the Chief Financial Officer of a Corporation. Mr. Tousley is also eligible to receive an annual bonus and an annual stock option award at the end of each year at the discretion of the Board of Directors of PediatRx. The term of the employment agreement is two years from July 1, 2010, unless both parties agree to extend.

As of March 1, 2012, the Company gave notice to Mr. Tousley, that it will be terminating the employment agreement between Mr. Tousley and the Company pursuant to Section 6.3(b) of Mr. Tousley's Employment Agreement. As a result, Mr. Tousley's employment agreement was terminated effective October 31, 2012.

In addition, of the 400,000 shares of the Company's common stock owned by Mr. Tousley, 266,666 shares are subject to a lockup agreement between the Company and Mr. Tousley, which lockup agreement became effective February 9, 2011. Pursuant to the terms of the lockup agreement, Mr. Tousley agreed not to sell, assign, convey, or otherwise dispose of any shares subject to the lockup agreement until December 31, 2015. The lockup agreement expires on December 31, 2015.

On September 14, 2010, with retroactive effect to July 1, 2010, the Company entered into an employment agreement with Mr. Jorge Rodriguez, Chief Commercial Officer of PediatRx. Pursuant to the employment agreement, Mr. Rodriguez agreed to perform such duties as are regularly and customarily performed by the Chief Commercial Officer of a corporation. Mr. Rodriguez is also eligible to receive an annual bonus and an annual stock option award at the end of each year at the discretion of the Board of Directors of PediatRx. The term of the employment agreement is two years from July 1, 2010, unless both parties agree to extend. On December 15, 2011, Mr. Rodriguez, resigned from all positions with the Company and the Company entered into an agreement with Mr. Rodriguez pursuant to which it terminated his employment agreement and amended his stock option agreement (dated March 4, 2011) in order to terminate all unvested

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options effective immediately and to extend the exercise period for his 105,000 vested options to December 15, 2012. In connection with the termination, the Company paid Mr. Rodriguez the amount of $19,500.

On November 3, 2010, 3,700,000 shares of the Company owned by Opex Energy Corp., which corporation is controlled by Joseph Carusone, a director of PediatRx Inc., were returned to the Company for no cash or other consideration. These shares were cancelled.

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7. Stock Options

Effective February 18, 2011, the Board of Directors adopted and approved the 2011 stock option plan. The purpose of the 2011 stock option plan is to enhance the long-term stockholder value of the Company by offering opportunities to directors, key employees, officers, independent contractors and consultants of the Company to acquire and maintain stock ownership in the Company in order to give these persons the opportunity to participate in the Company’s growth and success, and to encourage them to remain in the service of the Company. A total of 2,000,000 shares of the Company’s common stock are available for issuance during the 12-month period after the first anniversary of the adoption of the 2011 stock option plan by the Board of Directors. During each 12-month period thereafter, the Board of Directors is authorized to increase the number of shares issuable by up to 500,000 shares.

A summary of the status of the Company’s outstanding stock option activity for the nine months ended November 30, 2012 is as follows:

				Weighted
				Average
	Number			Exercise
	of Options			Price
Balance, February 29, 2012	887,500		$	1.13
Cancelled	(887,500	)	$	1.13
Balance, November 30, 2012	-		$	-

As of February 29, 2012, unrecognized compensation costs related to non-vested stock option awards totaled $306,189. During the nine months ended November 30, 2012, unrecognized compensation costs was reduced by approximately $178,000 for estimated forfeitures of unvested stock options a result of notice provided to Mr. Tousley of termination of his employment agreement effective October 31, 2012. On May 23, 2012, the Company agreed with all option holders to cancel any and all options outstanding as of that date. As a result, the Company expensed all unrecognized compensation costs as of the cancelation date. Total stock-based compensation expense for the nine months ended November 30, 2012 and 2011 was $132,138 and $173,516, respectively. The weighted average fair value of stock options granted during the nine months ended November 30, 2011 was $0.60. There were no stock options granted during the nine months ended November 30, 2012.

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The fair value of stock options granted has been determined using the Black-Scholes option pricing model using the following weighted average assumptions applied to stock options granted during the periods:

	November 30,	November 30,
	2012	2011
Risk-free interest rate	NA	2.15%
Expected life of options	NA	3.5 years
Annualized volatility	NA	77.0%
Dividend rate	NA	0

The volatility was determined based on an index of volatility from comparable companies. The expected term of the options granted to employees is derived from the simplified method as prescribed by SEC Staff Accounting Bulletin Topic 14, “Share-Based Payments” (“Topic 14”), given that the Company has no historical experience with the exercise of options for which to base an estimate of the expected term of options granted. Under the simplified method, the Company determined the expected life of the options based on an average of the graded vesting period and original contractual term. The Company anticipates it will discontinue the use of the simplified method of Topic 14 once sufficient historical option exercise behavior becomes apparent.

8. Income Taxes

The Company has losses to carry forward for income tax purposes as of November 30, 2012. There are no current or deferred tax expenses for the period ended November 30, 2012 due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.

A reconciliation between the income tax expense (benefit) recognized in the Company’s statements of operations and the income tax expense (benefit) computed by applying the domestic federal statutory income tax rate to the net income (loss) for the nine month periods ended November 30, 2012 and 2011 is as follows:

		Nine Months Ended November 30,
		2012			2011
Income tax benefit at federal statutory rate (34%)		86,729			(355,283	)
State income tax expense (benefit)		20,388			(50,052	)
Non-deductible stock based compensation		36,363			57,167
Change in valuation allowance		(143,000	)		347,000
Other		(480	)		1,168
Total income tax expense	$	-		$	-

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The composition of the Company’s deferred tax assets as of November 30, 2012 and February 29, 2012 is as follows:

		As of			As of
		November 30,			February 29,
		2012			2012
Net operating loss carry-forward	$	539,000		$	695,000
Other		95,000			82,000
Less: Valuation allowance		(634,000	)		(777,000	)
Net deferred tax asset	$	-		$	-

As of November 30, 2012, the Company’s unused net operating loss carry forward of approximately $1,347,000 is available to offset future taxable income. The potential income tax benefit of these losses has been offset by a full valuation allowance. This unused net operating loss carry-forward balance expires at various dates from 2026 to 2031.

9. Subsequent Events

The following events occurred after the nine month period ended November 30, 2012:

On Thursday, January 3, 2013, Apricus announced their intentions to sell off their oncology supportive care business, which includes Granisol. We are currently evaluating the impact of this decision by Apricus on the Company’s future operations.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

This quarterly report contains forward-looking statements. All statements other than statements of historical facts contained in this quarterly report, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" or "continue" or the negative of these terms or other comparable terminology. Such forward-looking statements include, without limitation, statements regarding our future products, statements regarding our anticipated future regulatory submissions and statements regarding our anticipated future cash position.

We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy, and financial needs. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" that may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Moreover, we are a relatively new entrant to the pharmaceutical business and our management cannot predict all of the risks we will face in establishing our company in this industry, nor can we assess the impact that these risk factors might have on our business or the extent to which any risk factor, or any combination of risk factors, may cause actual results to differ materially from those contained in any forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this quarterly report and unless otherwise indicated, the terms "we", "us", "PediatRx" and "our" refer to PediatRx Inc., a Nevada corporation. Unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in PediatRx's capital stock.

Corporate Overview

Our company was incorporated under the laws of Nevada on March 18, 2005 under the name "Striker Energy Corp.". From inception until the summer of 2008, we were engaged in the mineral exploration business. During the summer of 2008, we abandoned our mineral exploration properties and made the transition to oil and gas. On July 23, 2010, our wholly owned subsidiary PediatRx Inc., a Nevada corporation, completed the acquisition of Granisol from Cypress Pharmaceutical, Inc. ("Cypress") and we abandoned our interest in the oil and gas business in favor of pursuing opportunities in the pharmaceutical industry. Effective December 28, 2010, we changed our name from "Striker Energy Corp." to "PediatRx Inc." to better reflect our new business. We effected this name change by a merger with our wholly-owned subsidiary, PediatRx Inc., a Nevada corporation.

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Our Business

On June 17, 2010, we entered into a letter of intent with Cypress to acquire all of the assets associated with Granisol. First approved in 2008, Granisol is an oral, liquid granisetron HCl solution, formerly distributed by Hawthorn Pharmaceuticals, a wholly-owned subsidiary of Cypress. The Food and Drug Administration has approved Granisol's use in cancer care to prevent nausea and vomiting associated with cancer therapy. On June 18, 2010, we caused PediatRx Inc. to be incorporated as a wholly-owned subsidiary of Striker Energy Corp. under the laws of the state of Nevada. On July 23, 2010 we, through our wholly-owned subsidiary PediatRx Inc., acquired Granisol from Cypress and we turned our focus to the pharmaceutical industry and terminated our interest in oil and natural gas exploration. Effective December 28, 2010, we changed our name from "Striker Energy Corp." to "PediatRx Inc." to better reflect our new business. We effected this name change by a merger with our wholly-owned subsidiary, PediatRx Inc.

Granisol is our first acquisition. We were the sole distributor of Granisol and have focused our marketing efforts on specialists in the field of oncology and supportive care. We do not now, nor do we intend to manufacture our products. We contracted manufacturing to Therapex, a division of E-Z-EM Canada Inc., a subsidiary of E-Z-EM, Inc., the entity that manufactured Granisol for Cypress.

On September 12, 2011 we entered into a co-promotion agreement with Bi-Coastal Pharmaceutical Corp. ("Bi-Coastal"). Pursuant to the co-promotion agreement, Bi-Coastal granted us the non-exclusive right to promote Aquoral™ within the United States of America. Aquoral, a product which can be used in oncology supportive care, is an FDA-cleared treatment for xerostomia (the medical term for dry mouth due to a lack of saliva). Xerostomia is especially prevalent in patients undergoing various treatments for cancer and those with Sjogren's syndrome. We were required to include Aquoral in no less than 85% of our sales calls. In return for our promotional efforts, we were to receive compensation for each unit sold. The agreement with Bi-Coastal was for an initial term of two years and automatically renews for one year terms unless either party provides notice of non-renewal at least six months prior to the expiration of the then-current term. The agreement was terminable at any time, by either party, upon six months prior written notice to the other party and was also terminable for cause.

On January 26, 2012, we entered into a binding term sheet (the "Term Sheet") with Apricus Biosciences, Inc. ("Apricus") for (1) a Co-Promotion Agreement in the United States for Granisol (the "Co-Promotion Agreement"), (2) the assignment of our Co-Promotion Agreement with Bi-Coastal for Aquoral to Apricus (the "Assignment Agreement and (3) a Sale Agreement for Granisol outside of the United States (the "Asset Purchase Agreement"). Also in the Term Sheet, we entered into a non-binding arrangement (the "Arrangement") for the sale of our company to Apricus in a proposed merger transaction.

On February 21, 2012 we entered into three definitive agreements and one side letter (the “Letter Agreement”) with Apricus. The three definitive agreements consist of the Co-Promotion Agreement, the Assignment Agreement and the Asset Purchase Agreement. Pursuant to the Co-Promotion Agreement, we granted to Apricus the exclusive right to commercialize Granisol in six U.S. states and the non-exclusive right to commercialize Granisol in all other U.S. States, in addition to the right to manufacture Granisol. In addition, we have agreed that, for a period of five years from the effective date of the Co-Promotion Agreement, we will not license any co-promotion rights in the non-exclusive states to any third party. We have retained the right to commercialize Granisol in the non-exclusive states. We intend to book sales in the non-exclusive states that we generate through our own promotional efforts. Each party has agreed to cooperate with the other in respect of promotional materials and efforts on terms specified in the Co-Promotion Agreement.

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The initial term of the Co-Promotion Agreement is for a period of ten years from the effective date, though it may be terminated prior to expiration under certain conditions. If the Co-Promotion Agreement is terminated by us prior to the end of the initial term, we will be required to pay to Apricus an amount based upon a varying percentage of our net operating income related to Granisol for a period subsequent to termination depending upon when the termination occurs.

Pursuant to the Assignment Agreement, we have assigned all of our rights and responsibilities under our co-promotion agreement with Bi-Coastal for Aquoral, and Apricus has assumed all rights and responsibilities under the co-promotion agreement as of the effective date. Bi-Coastal has consented to the assignment of the co-promotion agreement for Aquoral.

Pursuant to the Asset Purchase Agreement, we have sold to Apricus all of our rights related to Granisol in all countries and territories outside of the United States. We have also agreed that we and our officers and directors will not compete in the field of anti-emetic products in certain areas outside of the United States.

As consideration for entering into these three Agreements we received an initial payment of $325,000 from Apricus. The Co-Promotion agreement also provides for the payment to our company of a royalty that will be calculated based upon Apricus' U.S. generated net operating income related to Granisol.

The Term Sheet also contemplated a non-binding expression of interest in the merger of our company with Apricus. The Letter Agreement refined the timing with respect to the parties' agreement that Apricus would pay to our company $1,000,000 in Apricus unregistered common stock as a breakup fee if our two companies did not merge by June 1, 2012, (or such other date as may be mutually agreed to by the parties). As of June 1, 2012, Apricus and our company had mutually agreed to terminate discussions regarding the proposed merger.

On June 27, 2012, we entered in to a Termination Agreement (the “Termination Agreement”) with Apricus pursuant to which the parties acknowledged that they have formally terminated discussions regarding the proposed merger of the two companies. Pursuant to the Termination Agreement, Apricus has issued and delivered to us 373,134 shares of its common stock in full satisfaction of its obligation to pay us $1,000,000 in common stock as additional consideration to be paid by Apricus under each of the Asset Purchase Agreement and Co-Promotion Agreement.

In addition, pursuant to the Termination Agreement, on July 16, 2012, Apricus filed a Registration Statement on Form S-3 registering these shares for resale, which the Registration Statement was declared effective by the Securities and Exchange Commission on October 3, 2012. The Company has agreed that if it proposes to sell any of the shares on a public market or quotation service, it will only be permitted to sell on any given trading day, such number of shares as does not exceed 5% of the average daily volume of the Apricus’s common stock traded in the previous five trading days. Due to the sales restrictions, the Company determined the fair value using quoted prices for similar assets in active markets that are directly observable and thus represent a Level 2 fair value measurement. The fair value of the investment in Apricus was $1,000,000 at the effective date of the termination and August 31, 2012. The Company has recognized a loss on sale of investment in its statements of operations totaling $18,517 for the three and nine month period ended November 30, 2012. The Company determined fair value of the investment in Apricus to be $704,343 at November 30, 2012. The Company has continued to sell the common stock of Apricus and does not expect to recover the entire original basis in the common stock. The Company concluded the decline in fair value is other than temporary and has recognized an impairment loss of $153,676 in its statements of operations for the three and nine month period ended November 30, 2012.

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We are no longer pursuing the merger with Apricus, but are continuing to focus our promotional efforts for Granisol on healthcare professionals, payers, end-users and their caregivers, and are investigating other business development and strategic alternatives.

Liquidity and Capital Resources

Our financial condition for the nine month periods ended November 30, 2012 and 2011 and as of November 30, 2012 and February 29, 2012 for the respective items are summarized below.

We have suffered recurring losses from inception. Our ability to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new or existing shareholders, and our ability to achieve and maintain profitable operations. There can be no assurance that we will be able to acquire such additional financing on acceptable terms or at all. We currently have no agreements for such additional financing in place.

Working Capital Deficit

		November 30,			February 29,
		2012			2012
Current assets	$	793,212		$	384,293
Current liabilities		840,299			882,960
Working capital surplus (deficit)	$	(47,087	)	$	(498,667	)

From February 29, 2012 to November 30, 2012, our working capital increased by approximately $450,000, due primarily to the receipt of $1,000,000 in Apricus common stock offset by cash used in operations for the nine month period of approximately $350,000 as well as a decrease in accounts receivable of approximately $66,000 during the same period. Other current assets decreased by approximately $2,000 while accounts payable and accrued liabilities decreased by approximately $42,000.

Cash Flows

		Nine Months Ended
		November 30,
		2012			2011
Cash used in operating activities	$	(350,201	)	$	(710,716	)
Cash provided by investing activities		123,464			-
Cash provided by financing activities		-			250,000
Net decrease in cash	$	(226,737	)	$	(460,716	)

Cash Used in Operating Activities

Our cash used in operating activities for the nine months ended November 30, 2012 compared to our cash used in operating activities for the nine months ended November 30, 2011 decreased by $360,515, primarily due to a reduction in infrastructure costs, G&A consulting costs, regulatory and marketing expenses as a result of the co-promotion with Apricus. Apricus is now responsible for many of the commercialization expenses associated with Granisol.

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Cash Provided by Financing Activities

Our cash provided by financing activities for the nine months ended November 30, 2012 decreased by $250,000 compared to our cash provided by financing activities for the nine months ended November 30, 2011. This decrease was due to financing activities consisting of the issuance during the nine month period ended November 30, 2011 of a $250,000, 5% unsecured promissory note while no financing activity occurred during the same period in 2012.

Cash Provided by Investing Activities

Our cash provided by investing activities for the nine months ended November 30, 2012 increased by $123,464 compared to our cash provided by investing activities for the nine months ended November 30, 2011. This increase was due to the sale of Apricus funds totaling $123,464 during the period ended November 30, 2012, while no investing activity occurred during the same period in 2012.

Results of Operations

The following summary of our results of operations should be read in conjunction with our unaudited financial statements for the three and nine month periods ended November 30, 2012 and 2011.

Revenues

We recognized $0 in net product revenue during the three month period ended November 30, 2012 and $125,715 in net product revenue during the three month period ended November 30, 2011. During the 2012 period, wholesaler demand was lowered due to the transition between an expiring lot of Granisol, restocking with a newly manufactured lot, the transition of distribution activities to Apricus and the impact of their decision to sell off their oncology supportive care business.

We recognized $120,640 in net product revenue during the nine month period ended November 30, 2012 and $362,061 in net product revenue during the nine month period ended November 30, 2011. During the 2012 period, wholesaler demand was lowered due to the transition between an expiring lot of Granisol and restocking with a newly manufactured lot and also the transition of distribution activities to Apricus. Additionally, during the nine month period ended November 30, 2012 we recorded a reserve for returns as a charge against net product revenue of approximately $48,195 related to inventory at the wholesalers with less than six months dating, while during the same period in 2011 we recorded a charge for returns of only approximately $12,815.

Cost of Goods Sold

We recognized $1,152 in cost of goods sold during the three month period ended November 30, 2012, and $32,855 during the three month period ended November 30, 2011. This decrease reflects a lower demand from wholesalers during the period as well as lower third party logistics provider costs compared to the 2011 period.

We recognized $36,276 in cost of goods sold during the nine month period ended November 30, 2012, and $94,218 during the nine month period ended November 30, 2011. This decrease reflects a lower demand from wholesalers during the period as well as lower third party logistics provider costs compared to the 2011 period.

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Our cost of goods sold consists primarily of our third-party manufacturing costs, third-party inventory management and distribution costs, wholesaler fee for services costs and freight-in on inventory purchases.

Expenses

The table below shows our expenses for the three and nine month periods ended November 30, 2012 and 2011.

		Three Months Ended				Nine Months Ended
		November 30,				November 30,
Expense		2012		2011		2012		2011
Employee expenses	$	35,970	$	91,711	$	145,075	$	283,925
Stock based compensation		-		58,024		132,138		173,516
Consulting fees		242		67,655		3,276		201,619
Marketing expense		30,949		53,877		46,883		305,994
Travel expense		85		3,468		8,299		32,222
Interest expense		14,959		3,972		31,081		16,346
Legal and accounting fees		13,189		29,025		123,564		94,934
Insurance expense		21,752		17,708		58,098		35,691
Regulatory expense		749		6,685		13,577		44,314
Rent		-		1,663		-		4,793
General and administrative expense		12,132		13,787		30,738		53,227
Amortization expense		20,214		22,070		64,355		66,211
Total Expenses	$	150,241	$	369,645	$	657,084	$	1,312,792

Three Months Ended November 30, 2012 and 2011

Our expenses decreased by approximately $219,000 from $369,645 for the three months ended November 30, 2011 to $150,241 for the three months ended November 30, 2012.

This decrease was primarily due to decreases of approximately $208,000 in employee expenses, stock based compensation, consulting fees, marketing expenses and travel expenses from a total of approximately $274,735 for the three month period ended November 30, 2011 to approximately $67,000 for the three month period ended November 30, 2012. This decrease represents a transition from full time sales reps to commission only, reductions in other marketing programs, and reductions in employees and other consultants. This decrease to stock based compensation expense is due to the accelerated amortization of fair value amounts due the stock option cancellations during the three month period ended May 31, 2012, resulting in no expense for the three month period ended November 30, 2012.

Additionally, there were decreases of approximately $21,000 in general and administrative expenses, including rent, legal and accounting fees, other general and administrative expenses and amortization from a total of approximately $67,000 for the three month period ended November 30, 2011 to $46,000 for the three month period ended November 30, 2012. These decreases are due primarily to general reductions in general and administration activities and the elimination of rent in the 2012 period.

Regulatory expenses also declined by approximately $6,000 from a total of approximately $7,000 for the three month period ended November 30, 2011 to $1,000 for the three month period ended November 30, 2012. This decrease is due primarily to initial set up fees in managing the regulatory aspects of our company in the 2011 period.

These decreases in expense were offset to some degree by a) an increase in interest expense of approximately $11,000 from approximately $4,000 in the three month period ended November 30, 2011 to approximately $15,000 for the same period in 2012 as a result of the amendments to the promissory notes, and b) an increase in insurance expense of approximately $4,000 due to the addition of a directors and officers liability insurance policy in September of 2011 and approximately $22,000 expense in the three month period ended November 30, 2012 to approximately $18,000 for the same period in 2011.

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Nine Months Ended November 30, 2012 and 2011

Our expenses decreased by approximately $655,000 from $1,312,792 for the nine months ended November 30, 2011 to $657,084 for the nine months ended November 30, 2012.

This decrease was primarily due to decreases of approximately $665,000 in employee expenses, stock based compensation, consulting fees, marketing expenses and travel expenses from a total of approximately $1,000,000 for the nine month period ended November 30, 2011 to approximately $335,000 for the nine month period ended November 30, 2012. This decrease represents a transition from full time sales reps to commission only, reductions in other marketing programs, and reductions in employees and other consultants. This increase to stock based compensation expense is due to the accelerated amortization of fair value amounts due the stock option cancellations during the nine month period ended November 30, 2012.

Additionally, there were decreases of approximately $29,000 in general and administrative expenses, including rent, other general and administrative expenses and amortization from a total of approximately $124,000 for the nine month period ended November 30, 2011 to approximately $95,000 for the nine month period ended November 30, 2012. These decreases are due primarily to general reductions in general and administration activities and the elimination of rent in the 2012 period.

Regulatory expenses also declined by approximately $30,000 from a total of approximately $44,000 for the nine month period ended November 30, 2011 to $14,000 for the nine month period ended November 30, 2012. This decrease is due primarily to initial set up fees in managing the regulatory aspects of our company in the 2011 period.

These decreases in expense were offset to some degree by a) an increase in interest expense of approximately $15,000 from approximately $16,000 in the nine month period ended November 30, 2011 to approximately $31,000 for the same period in 2012 as a result of the amendments to the promissory notes, b) an increase in insurance expense of approximately $22,000 due to the addition of a directors and officers liability insurance policy in September of 2011 and approximately $58,000 expense in the nine month period ended November 30, 2012 to approximately $36,000 for the same period in 2011 and c) an increase in legal and accounting fees of approximately $30,000 related to the work done in connection with the Apricus co-promotion and merger negotiations during the nine months ended November 30, 2012.

Cash Requirements

Our primary objective for the next twelve months is to continue to commercialize Granisol in the non-exclusive states and to support the co-promotion efforts of Apricus in the exclusive states.

Specifically, we estimate our operating expenses, excluding non-cash charges for amortization, for the next 12 months to be as follows:

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Expense		Amount
Bank charges and interest	$	5,000
Filing fees		10,000
Investor relations		10,000
Legal and accounting fees		100,000
Licenses and permits		10,000
Marketing expense		80,000
Insurance expense		100,000
Personnel and consulting expense		100,000
Regulatory & pharmacovigilance expense		20,000
Transfer agent fees		5,000
Other general & administrative expense		30,000
Total:	$	470,000

These expenses and working capital requirements may be offset to some degree by revenue generation from sales and co-promotion of Granisol. There can be no assurance that we will generate revenues significant enough to offset these expenses to some or any degree and that we will not have significant needs for other financing to support the activities of our company. As a result of the termination of merger discussions with Apricus, we have received 373,134 shares of Apricus common stock in full satisfaction of its obligation to pay us $1,000,000 in common stock. The value of the stock may be more or less than $1,000,000 in the aggregate if and when all of the 373,134 shares are sold. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease the operation of our business.

Future Financing

We will require additional financing to fund our planned operations. We currently do not have committed sources of additional financing and may not be able to obtain additional financing, particularly, if the volatile conditions in the stock and financial markets, and more particularly the market for early development stage pharmaceutical company stocks persist.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, if and when it is needed, we will be forced to further delay or further scale down some or all of our activities or perhaps even cease the operation of our business.

Since inception we have funded our operations primarily through equity and debt financings and we expect that we will continue to fund our operations through the equity and debt financing, either alone or through strategic alliances. If we are able to raise additional financing by issuing equity securities, our existing stockholders' ownership will be diluted. Obtaining commercial or other loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his, her, or its investment in our common stock. Further, we may continue to be unprofitable.

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Going Concern

Our financial statements and information for the three and nine month periods ended November 30, 2012, have been prepared by our management on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. We have generated limited revenues to date and have generated net income of $255,087 during the nine month period ended November 30, 2012, and a net loss of $1,996,239 from inception (March 18, 2005) through November 30, 2012. We cannot provide any assurance that we will ultimately achieve profitable operations or become cash flow positive, or raise additional funds through the sale of debt and/or equity.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure controls and procedures

We maintain "disclosure controls and procedures", as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal accounting officer to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, as amended, our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company's disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q, our disclosure controls and procedures were not effective.

The ineffectiveness of our disclosure controls and procedures was due a material weakness which we identified in our internal control over financial reporting primarily attributable to limited SEC reporting expertise within our company. Due to our development stage, we have limited financial ability to remedy this staffing deficiency at this time.

Changes in internal control over financial reporting

Except as disclosed below, there were no changes in our internal control over financial reporting during the fiscal quarter ended November 30, 2012 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Effective March 1, 2012, we gave notice to David Tousley, our former Chief Financial Officer, Secretary, Treasurer, and director, that we would be terminating his employment agreement with an effective date of October 31, pursuant to Section 6.3(b) of the agreement. As a result, Mr. Tousley’s employment agreement was terminated with an effective date of October 31, 2012. Also effective October 31, 2012, Mr. Tousley resigned from all of his offices with our company. On November 16, 2012, Mr. Tousley resigned from our Board of Directors.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS.

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company and its business before purchasing shares of our company's common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.

Risks Related to Our Company

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

While we have generated revenue from operations since our incorporation, during the nine month period ended November 30, 2012, we generated net income of $255,087. From inception through November 30, 2012, we incurred an aggregate loss of $1,996,239. We anticipate that we will continue to incur operating expenses which may be offset to some degree by revenues from the sales and co-promotion of Granisol. Unless we are able to grow the revenues from Granisol significantly through our own efforts and the co-promotion effort of Apricus, we may never reach a point where we have positive net income. If we cannot substantially increase our revenues from sales of Granisol, we will continue to generate losses and will require additional funding to remain in business. We estimate our average monthly expenses over the next 12 months to be approximately $39,000, including general and administrative expenses, but excluding any development or product acquisition costs. On November 30, 2012, we had cash and cash equivalents of $31,403. In order to fund our anticipated budget for the next 12 months, excluding any development or product acquisition costs, we believe that we will need to raise in excess of $500,000. This amount could increase if we encounter difficulties that we cannot anticipate at this time. We have traditionally raised our operating capital from the sale of equity securities and the placement of notes payable, but there can be no assurance that we will continue to be able to do so. As a result of the termination of merger discussions with Apricus, we have received an additional payment from them of 373,134 shares of Apricus common stock in full satisfaction of their obligation to pay us $1,000,000. The value of the stock may be more than or less than $1,000,000 in the aggregate if and when all of the 373,134 shares are sold. This will be dependent on the actual share price of Apricus stock and does not take into account any stockbroker commissions. If for some reason we are unable to convert such stock proceeds into cash and could not otherwise raise the money that we need in order to continue to operate our business, we will be forced to delay, scale back or eliminate some or all of our operations. If any of these were to occur, there is a substantial risk that our business would fail.

These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph to our independent auditors' report on our financial statements for the year ended February 29, 2012. Although our financial statements raise substantial doubt about our ability to continue as a going concern, they do not reflect any adjustments that might result if we are unable to continue our business. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.

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Our substantial debt and other financial obligations could impair our financial condition and our ability to fulfill our debt obligations. Any refinancing of this substantial debt could be at significantly higher interest rates.

As of November 30, 2012, we had total debt of $564,192 (including accrued interest of $64,192). Our substantial indebtedness and other current financial obligations and any that we may become a party to in the future could:

• impair our ability to obtain financing in the future for working capital, capital expenditures, partnerships, acquisitions or general corporate purposes;

• have a material adverse effect on us if we fail to comply with financial and affirmative and restrictive covenants in debt agreements and an event of default occurs as a result of a failure that is not cured or waived;

• require us to dedicate a substantial portion of our cash flow for interest payments on our indebtedness and other financial obligations, thereby reducing the availability of our cash flow to fund working capital and capital expenditures;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

• place us at a competitive disadvantage compared to our competitors that have proportionally less debt.

If we are unable to meet our debt service obligations and other financial obligations, we could be forced to restructure or refinance our indebtedness and other financial transactions, seek additional equity capital or sell our assets. We might then be unable to obtain such financing or capital or sell our assets on satisfactory terms, if at all. Any refinancing of our indebtedness could be at significantly higher interest rates, and/or incur significant transaction fees.

We are an early-stage company with a limited operating history, which may hinder our ability to successfully meet our objectives.

We are an early-stage company with a limited operating history upon which to base an evaluation of our current business and future prospects. Our sales of Granisol have been relatively minimal and, there can be no assurance that we will be successful in our efforts to increase sales. As a result, the revenue and income potential of our business is unproven. In addition, because of our limited operating history, we have limited insight into trends that may emerge and affect our business. Errors may be made in predicting and reacting to relevant business trends and we will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.

Our CEO and CFO is engaged elsewhere and his time and effort will not be devoted to our company full-time.

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Our CEO and CFO is engaged in other positions with other companies. As a result, our company is and will continue to be managed on a part-time basis. Our business could be adversely impacted by the lack of full time management.

If we are unable to successfully recruit qualified managerial and field personnel, we may not be able to continue our operations.

In order to successfully implement and manage our business plan, we will depend upon, among other things, successfully recruiting qualified managerial and field personnel having experience in the pharmaceutical industry. Competition for qualified individuals is intense. We may not be able to find, attract and retain qualified personnel on acceptable terms. If we are unable to find, attract and retain qualified personnel with technical expertise, our business operations could suffer.

Risks Relating to the Pharmaceutical Business

Our pharmaceutical expenditures may not result in commercially successful products.

We cannot be sure our business expenditures will result in the successful partnering, acquisition, development or launch of products that will prove to be commercially successful or will improve the long-term profitability of our business. If such business expenditures do not result in successful partnering, acquisition, development or launch of commercially successful brand products our results of operations and financial condition could be materially adversely affected.

Third-parties may claim that we infringe their proprietary rights and may prevent us from manufacturing and selling some of our products.

The manufacture, use and sale of new products that are the subject of conflicting patent rights have been the subject of substantial litigation in the pharmaceutical industry. These lawsuits relate to the validity and infringement of patents or proprietary rights of third parties. Litigation may be costly and time-consuming, and could divert the attention of our management and technical personnel. In addition, if we infringe on the rights of others, we could lose our right to develop, manufacture or market products or could be required to pay monetary damages or royalties to license proprietary rights from third parties. Although the parties to patent and intellectual property disputes in the pharmaceutical industry have often settled their disputes through licensing or similar arrangements, the costs associated with these arrangements may be substantial and could include on-going royalties. Furthermore, we cannot be certain that the necessary licenses would be available to us on commercially reasonable terms, or at all. As a result, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing and selling a number of our products, and could have a material adverse effect on our business, results of operations, financial condition and cash flows.

The loss of or inability to attract key personnel could cause our business to suffer.

The success of our present and future operations will depend, to a significant extent, upon the experience, abilities and continued services of key personnel. We cannot assure you that we will be able to attract and retain key personnel. Employment or consulting agreements with our senior executives do not guarantee that our senior executive officers will continue to work for us for a significant period of time, or at all. We do not carry key-employee life insurance on any of our officers.

We may need to raise additional funds in the future which may not be available on acceptable terms or at all.

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We may consider issuing additional debt or equity securities in the future to fund potential acquisitions or investments, to refinance existing debt, or for general corporate purposes. If we issue equity or convertible debt securities to raise additional funds, our existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of our existing stockholders. If we incur additional debt, it may increase our leverage relative to our earnings or to our equity capitalization, requiring us to pay additional interest expenses. We may not be able to market such issuances on favorable terms, or at all, in which case, we may not be able to develop or enhance our products, execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated customer requirements.

Extensive industry regulation has had, and will continue to have, a significant impact on our business, especially our product development, manufacturing and distribution capabilities.

All pharmaceutical companies are subject to extensive, complex, costly and evolving government regulation. For the U.S., this is principally administered by the FDA and to a lesser extent by the DEA and state government agencies, as well as by varying regulatory agencies in foreign countries where products or product candidates are being manufactured and/or marketed. The Federal Food, Drug and Cosmetic Act, the Controlled Substances Act and other federal statutes and regulations, and similar foreign statutes and regulations, govern or influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval, advertising, promotion, sale and distribution of our products.

Under these regulations, we may become subject to periodic inspection of our facilities, procedures and operations and/or the testing of our products by the FDA, the DEA and other authorities, which conduct periodic inspections to confirm that we are in compliance with all applicable regulations. In addition, the FDA and foreign regulatory agencies conduct pre-approval and post-approval reviews and plant inspections to determine whether our systems and processes are in compliance with cGMP and other regulations. Following such inspections, the FDA or other agency may issue observations, notices, citations and/or Warning Letters that could cause us to modify certain activities identified during the inspection. FDA guidelines specify that a Warning Letter is issued only for violations of "regulatory significance" for which the failure to adequately and promptly achieve correction may be expected to result in an enforcement action. We are required to report adverse events associated with our products to FDA and other regulatory authorities. Unexpected or serious health or safety concerns would result in labeling changes, recalls, market withdrawals or other regulatory actions.

The range of possible sanctions includes, among others, FDA issuance of adverse publicity, product recalls or seizures, fines, total or partial suspension of production and/or distribution, suspension of the FDA's review of product applications, enforcement actions, injunctions, and civil or criminal prosecution. Any such sanctions, if imposed, could have a material adverse effect on our business, operating results, financial condition and cash flows. Under certain circumstances, the FDA also has the authority to revoke previously granted drug approvals. Similar sanctions as detailed above may be available to the FDA under a consent decree, depending upon the actual terms of such decree. If internal compliance programs do not meet regulatory agency standards or if compliance is deemed deficient in any significant way, it could materially harm our business.

The pharmaceutical industry is highly competitive.

The pharmaceutical industry has an intensely competitive environment that will require an on-going, extensive search for technological innovations and the ability to market products effectively, including the ability to communicate the effectiveness, safety and value of products to healthcare professionals in private practice, group practices and managed care organizations ("MCOs"). We are smaller than most of our competitors. Most of our competitors have been in business for a longer period of time than us, have a greater number of products on the market and have greater financial and other resources than we do.

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Furthermore, recent trends in this industry are toward further market consolidation of large drug companies into a smaller number of very large entities, further concentrating financial, technical and market strength and increasing competitive pressure in the industry. If we directly compete with them for the same markets and/or products, their financial strength could prevent us from capturing a profitable share of those markets. It is possible that developments by our competitors will make any products or technologies that we acquire non- competitive or obsolete.

Risks Relating to Our Common Stock

If we issue additional shares in the future, it will result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up to 150,000,000 shares of common stock with a par value of $0.0001 per share. Our Board of Directors may choose to issue some or all of such shares to acquire one or more products and to fund our overhead and general operating requirements. The issuance of any such shares will reduce the book value per share and may contribute to a reduction in the market price of the outstanding shares of our common stock. If we issue any such additional shares, such issuance will reduce the proportionate ownership and voting power of all current shareholders. Further, such issuance may result in a change of control of our corporation.

Trading of our stock is restricted by the Securities Exchange Commission's penny stock regulations, which may limit a stockholder's ability to buy and sell our common stock.

The Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority (known as "FINRA") has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

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Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Although our common stock is currently listed for quotation on the OTC Bulletin Board, trading through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock's price. This may never happen and investors may lose all of their investment in our company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

The promissory notes in the aggregate principal balances of $500,000 bearing simple interest at 12% annum were not paid on their due dates of December 31, 2012 and are due on demand.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

On Thursday, January 3, 2013, Apricus Biosciences, Inc. announced their intentions to sell off their oncology supportive care business, which includes Granisol. We are currently evaluating the impact of this decision by Apricus on our future operations.

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ITEM 6. EXHIBITS.

Exhibits required by Item 601 of Regulation S-K:

No.	Description
3.1	Articles of Incorporation (attached as an exhibit to our registration statement on Form 10-SB filed on September 8, 2006)
3.2	Certificate of Change (attached as an exhibit to our current report on Form 8-K filed on September 15, 2008)
3.3	Articles of Merger (attached as an exhibit to our current report on Form 8-K filed on December 28, 2010)
3.4	Amended and Restated Bylaws (attached as an exhibit to our registration statement on Form 8-K filed on November 3, 2010)
10.1	Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on November 6, 2008)
10.2	Form of Private Placement Subscription Agreement dated June 15, 2009 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 16, 2009)
10.3	Form of promissory note dated June 15, 2009 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 16, 2009)
10.4	Consulting Agreement with Cameron Durrant dated May 28, 2010 (attached as an exhibit to our quarterly report on Form 10-Q filed on June 28, 2010)
10.5	Letter of Intent with Cypress Pharmaceuticals Inc. (attached as an exhibit to our quarterly report on Form 10-Q filed on June 28, 2010)
10.6	Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on June 17, 2010)
10.7	Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on July 9, 2010)
10.8	Asset Purchase Agreement dated July 22, 2010 with Cypress Pharmaceuticals, Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.9	Assignment and Assumption of Contract dated July 22, 2010 with Cypress Pharmaceuticals, Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010)
10.10	Consent to Assignment by Therapex and E-Z-EM Canada Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010)
10.11	Manufacturing and Supply Agreement dated July 22 2010 between Cypress Pharmaceuticals, Inc. and Therapex, a division of E-Z-EM Canada Inc. (attached as an exhibit to our current report on Form 8-K filed on July 28, 2010) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.12	Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on July 29, 2010)
10.13	Form of Promissory Note dated July 26, 2010 (attached as an exhibit to our current report on Form 8-K filed on July 29, 2010)
10.14	Employment Agreement effective July 1, 2010 with David L. Tousley (attached as an exhibit to our current report on Form 8-K filed on September 16, 2010)
10.15	Employment Agreement effective July 1, 2010 with Jorge Rodriguez (attached as an exhibit to our current report on Form 8-K filed on September 16, 2010)
10.16	Consulting Agreement effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)
10.17	Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)
10.18	Form of Promissory Note dated September 16, 2010 (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)
10.19	Termination Agreement effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 28, 2010)
10.20	Management Stock Agreement made effective July 1, 2010 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010)

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No.	Description
10.21	Management Stock Agreement made effective July 1, 2010 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010)
10.22	Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on November 3, 2010)
10.23	Form of Private Placement Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on December 2, 2010)
10.24	Form of Shares for Debt Subscription Agreement (attached as an exhibit to our current report on Form 8-K filed on December 2, 2010)
10.25	Cancellation Agreement dated February 9, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)
10.26	Cancellation Agreement dated February 9, 2011 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)
10.27	Lock-up Agreement dated February 9, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)
10.28	Lock-up Agreement dated February 9, 2011 with David Tousley (attached as an exhibit to our current report on Form 8-K filed on February 10, 2011)
10.29	2011 Stock Option Plan (attached as an exhibit to our current report on Form 8-K filed on February 22, 2011)
10.30	Form of Stock Option Agreement (attached as an exhibit to our current report on Form 8-K filed on March 7, 2011)
10.31	Form of Private Placement Subscription Agreement including Form of Promissory Note dated May 6, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 11, 2011)
10.32	Form of Promissory Note Amendment dated May 18, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 18, 2011)
10.33	Form of Promissory Note Amendment dated May 23, 2011 (attached as an exhibit to our current report on Form 8-K filed on May 23, 2011)
10.34	Form of Stock Option Agreement (attached as an exhibit to our current report on Form 8-K filed on July 26, 2011)
10.35	Co-Promotion Agreement dated September 12, 2011 with Bi-Coastal Pharmaceutical Corp., (attached as an exhibit to our current report on Form 8-K filed on September 14, 2011) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.36	Form of Stock Option Agreement (attached as an exhibit to our current report on Form 8-K filed on September 15, 2011
10.37	Independent Contractor Agreement effective July 1, 2011 with Cameron Durrant (attached as an exhibit to our current report on Form 8-K filed on September 30, 2011)
10.38	Amendment to Stock Option Agreement, Waiver and Release dated December 15, 2011 with Jorge Rodriguez (attached as an exhibit to our quarterly report on Form 10-Q filed on January 17, 2012)
10.39	Binding term sheet for (1) Granisol and Aquoral US Co-promotion Agreement, (2) Sale of ex- US rights for Granisol and non-binding term sheet for merger of PediatRx Inc. and Apricus Biosciences, Inc. dated January 26, 2012 (attached as an exhibit to our current report on Form 8-K filed on January 27, 2012)
10.40	Asset Purchase Agreement dated February 21, 2012 with Apricus Biosciences, Inc. (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012)
10.41	Co-Promotion Agreement dated February 21, 2012 with Apricus Biosciences, Inc. (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012) (portions of the exhibit have been omitted pursuant to a request for confidential treatment)
10.42	Form of $50,000 Promissory Note Amendment dated April 19, 2012 (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012)
10.43	Form of $250,000 Promissory Note Amendment dated April 19, 2012 (attached as an exhibit to our annual report on Form 10-K filed on May 18, 2012)

35

No.	Description
10.44	Termination Agreement dated June 27, 2012 with Apricus Biosciences, Inc. (attached as an exhibit to our current report on Form 8-K filed on June 28, 2012)
10.45	Form of $200,000 Promissory Note Amendment dated July 25, 2012 (attached as an exhibit to our current report on Form 8-K filed on July 27, 2012)
10.46	Form of $50,000 Promissory Note Amendment dated July 25, 2012 (attached as an exhibit to our current report on Form 8-K filed on July 31, 2012)
10.47	Form of $250,000 Promissory Note Amendment dated July 25, 2012 (attached as an exhibit to our current report on Form 8-K filed on July 31, 2012)
31.1*	Certification of Cameron Durrant Pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002
32.1*	Certification of Cameron Durrant Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002
101.INS*	XBRL INSTANCE DOCUMENT
101.SCH*	XBRL TAXONOMY EXTENSION SCHEMA
101.CAL*	XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*	XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*	XBRL TAXONOMY EXTENSION LABEL LINKBASE
101.PRE*	XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE

* Filed herewith.

36

SIGNATURES

Pursuant to the requirements 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.

PEDIATRX INC.

/s/ Cameron Durrant           
Cameron Durrant
President, Chief Executive Officer, Chief Financial Officer,
Treasurer and Director
(Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer)

Date: January 22, 2013

37

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Cameron Durrant, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of PediatRx Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

January 22, 2013

/s/ Cameron Durrant  

Cameron Durrant

President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Cameron Durrant, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that

1.	the quarterly report on Form 10-Q of PediatRx Inc. for the period ended November 30, 2012 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of PediatRx Inc.

January 22, 2013

/s/ Cameron Durrant

Cameron Durrant

President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

XML

Schedule of Debt (Details) (USD $)	Nov. 30, 2012	Feb. 29, 2012	Nov. 30, 2012 Unsecured Promissory Note Issued on June 15, 2009 [Member]	Feb. 29, 2012 Unsecured Promissory Note Issued on June 15, 2009 [Member]	Jun. 15, 2009 Unsecured Promissory Note Issued on June 15, 2009 [Member]	Nov. 30, 2012 Unsecured Promissory Note Issued on July 26, 2010 [Member]	Feb. 29, 2012 Unsecured Promissory Note Issued on July 26, 2010 [Member]	Jul. 26, 2010 Unsecured Promissory Note Issued on July 26, 2010 [Member]	Nov. 30, 2012 Unsecured Promissory Note Issued on May 6, 2011 [Member]	Feb. 29, 2012 Unsecured Promissory Note Issued on May 6, 2011 [Member]	May 06, 2011 Unsecured Promissory Note Issued on May 6, 2011 [Member]
Debt Instrument, Interest Rate, Stated Percentage			12.00%		5.00%	12.00%		5.00%	12.00%		5.00%
Promissory notes	$ 500,000	$ 500,000	$ 50,000	$ 50,000	$ 50,000	$ 200,000	$ 200,000	$ 200,000	$ 250,000	$ 250,000	$ 250,000

XML

Net Loss Per Common Share

9 Months Ended

Nov. 30, 2012

Net Loss Per Common Share [Text Block]

3. Net Loss Per Common Share

The Company computes net income or loss per share in accordance with ASC 260, Earnings per Share ("ASC 260 "). ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the statement of operations. Basic EPS is computed by dividing net income or loss available to common shareholders (numerator) by the weighted average number of common stock equivalents outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common stock equivalents outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive and excludes any common stock equivalents that are out-of-the-money. For the nine month period ended November 30, 2012 there were no warrants exercisable. For the nine month period ended November 30, 2011 there were 515,000 warrants and 1,152,000 options which have been excluded from the calculation because their effect would be anti-dilutive.

XML

Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)	Nov. 30, 2012	Feb. 29, 2012
Net operating loss carry-forward	$ 539,000	$ 695,000
Other	95,000	82,000
Less: Valuation allowance	(634,000)	(777,000)
Net deferred tax asset	$ 0	$ 0

XML

Schedule of Components of Income Tax Expense (Benefit) (Details) (USD $)	9 Months Ended
	Nov. 30, 2012	Nov. 30, 2011
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	34.00%	34.00%
Income tax benefit at federal statutory rate	$ 86,729	$ (355,283)
State income tax benefit	20,388	(50,052)
Non-deductible stock based compensation	36,363	57,167
Change in valuation allowance	(143,000)	347,000
Other	(480)	1,168
Total income tax expense	$ 0	$ 0

XML

Nature and Continuance of Operations

9 Months Ended

Nov. 30, 2012

Nature and Continuance of Operations [Text Block]

2.	Nature and Continuance of Operations
	Striker Energy Corp. was incorporated under the laws of the State of Nevada on March 18, 2005. The Company originally intended to engage in the acquisition and exploration of mineral properties. In 2008, the Company transitioned its business from mineral property exploration to oil and natural gas exploration.
	Effective September 12, 2008, the Company completed a stock split by the issuance of two new common shares for each one outstanding common share of the Company. Unless otherwise noted, all references herein to number of shares, price per share or weighted average number of shares outstanding have been adjusted to reflect this stock split on a retroactive basis.
	On June 17, 2010, the Company entered into a letter of intent with Cypress Pharmaceutical, Inc. (“Cypress”) to acquire all of the assets associated with Granisol® (granisetron HC1) oral solution (“Granisol”). First approved in 2008, Granisol is the only oral, liquid granisetron solution, formerly distributed by Hawthorn Pharmaceuticals, a subsidiary of Cypress. The Food and Drug Administration has approved the use of Granisol in cancer care to treat nausea and vomiting associated with cancer therapy. On June 18, 2010, the Company incorporated PediatRx Inc., the Company’s wholly-owned subsidiary under the laws of the state of Nevada. On July 23, 2010, PediatRx Inc. concluded a definitive agreement to acquire Granisol from Cypress and the Company turned its focus to the pharmaceutical industry and terminated its interest in oil and natural gas exploration. Effective December 28, 2010, the Company merged with its subsidiary (PediatRx Inc.) and changed its name to PediatRx Inc..
	On September 12, 2011 the Company entered into a co-promotion agreement with Bi-Coastal Pharmaceutical Corp. (“Bi-Coastal”). Pursuant to the co-promotion agreement, Bi-Coastal granted the Company the non-exclusive right to promote Aquoral™ within the United States of America. Aquoral, another oncology supportive care product, is an FDA-cleared treatment for xerostomia (the medical term for dry mouth due to a lack of saliva). Xerostomia is especially prevalent in patients undergoing various treatments for cancer and those with Sjogren’s syndrome. The Company is required to include Aquoral in no less than 85% of its sales calls.

In return for the Company’s promotional efforts, it will receive compensation for each unit sold. The agreement with Bi-Coastal is for an initial term of two years and will automatically renew for one year terms unless either party provides notice of non-renewal at least six months prior to the expiration of the then-current term. The agreement is terminable at any time, by either party, upon six months prior written notice to the other party and is also terminable for cause.

On January 26, 2012, the Company entered into a binding term sheet (the "Term Sheet") with Apricus Biosciences, Inc. ("Apricus") for (1) a Co-Promotion Agreement in the United States for Granisol (the "Co-Promotion Agreement"), (2) the assignment of its Co-Promotion Agreement with Bi-Coastal for Aquoral to Apricus (the "Assignment Agreement”) and (3) a Sale Agreement for Granisol outside of the United States (the "Asset Purchase Agreement"). Also in the Term Sheet, the Company entered into a non-binding arrangement (the "Arrangement") for the sale of the Company to Apricus in a proposed merger transaction (the "Acquisition").

On February 21, 2012 the Company entered into three definitive agreements and one side letter with Apricus which include the Co-Promotion Agreement, the Assignment Agreement and the Asset Purchase Agreement. Pursuant to the Co-Promotion Agreement, the Company granted to Apricus the exclusive right to commercialize Granisol in six U.S. states and the non-exclusive right to commercialize Granisol in all other U.S. States, in addition to the right to manufacture Granisol. In addition, the Company has agreed that, for a period of five years from the effective date of the Co-Promotion Agreement, it will not license any co-promotion rights in the non-exclusive states to any third party. The Company has retained the right to commercialize Granisol in the non-exclusive states. The Company will recognize sales in the non-exclusive states that it generates through its own promotional efforts. Each party has agreed to cooperate with the other in respect of promotional materials and efforts on terms specified in the Co-Promotion Agreement.

The initial term of the Co-Promotion Agreement is for a period of ten years from the effective date, though it may be terminated prior to expiration under certain conditions. If the Co-Promotion Agreement is terminated by the Company prior to the end of the initial term, the Company will be required to pay to Apricus an amount based upon a varying percentage of its net operating income related to Granisol for a period subsequent to termination depending upon when the termination occurs.

Pursuant to the Assignment Agreement, the Company has assigned all of its rights and responsibilities under the Co-Promotion Agreement with Bi-Coastal for Aquoral, and Apricus has assumed all rights and responsibilities under the Co-Promotion Agreement for Aquoral as of the effective date. Bi-Coastal has consented to the assignment of the Co-Promotion Agreement for Aquoral.

Pursuant to the Asset Purchase Agreement, the Company sold to Apricus all of its rights related to Granisol in all countries and territories outside of the United States. The Company has also agreed that it and its officers and directors will not compete in the field of anti-emetic products in certain areas outside of the United States.

As consideration for entering into these three Agreements the Company received an initial payment of $325,000 from Apricus. The agreements also provide for the payment to the Company of a royalty that will be calculated based upon Apricus' United States generated net operating income related to Granisol. The Company has recognized revenues of $260,000 associated with the exclusive rights for Apricus to commercialize Granisol in six U.S. states. In addition, the Company has recognized a gain on sale of product rights totaling $64,900 associated with the Asset Purchase Agreement.

The binding term sheet between the Company and Apricus contemplates, in addition to the transactions reflected in the three agreements described above, a non-binding expression of interest in the merger of the Company with Apricus. The non-binding portion of the term sheet contemplated that the Company would be acquired by Apricus in a merger in exchange for $4,000,000 to be paid in the common stock of Apricus, with $3,600,000 distributed to the shareholders of the Company immediately and $400,000 held back from shares that would be distributed to the Company's Chief Executive Officer and Chief Financial Officer for a period of six months as an indemnity for breaches by the Company of its representations and warranties. Additionally, it contemplated that Apricus would assume certain debt and liabilities of the Company up to $675,000. The side letter referred to above refines the timing with respect to the parties' agreement that Apricus would pay to the Company an additional fee as full consideration for the Co-Promotion Agreement and the Asset Purchase Agreement (in the form of restricted stock of Apricus having a value of $1,000,000) if the two companies did not merge by June 1, 2012, (or such other date as may be mutually agreed to by the Parties) unless, prior to that date, the Company filed for bankruptcy or the Granisol asset was materially impaired.

On June 27, 2012, the Company entered into a Termination Agreement (the “Termination Agreement”) with Apricus Biosciences, Inc. (“Apricus”) pursuant to which the parties acknowledged that they have formally terminated discussion regarding the proposed merger of the two companies.

Pursuant to the Termination Agreement, Apricus issued and delivered to the Company 373,134 shares of its common stock in full satisfaction of its obligation to pay the Company $1,000,000 in common stock as a break-up fee. The Company has recognized other income of $1,000,000 related to the break-up fee.

In addition, pursuant to the Termination Agreement, on July 16, 2012, Apricus filed a Registration Statement on Form S-3 registering these shares for resale, which the Registration Statement was declared effective by the Securities and Exchange Commission on October 3, 2012. The Company has agreed that if it proposes to sell any of the shares on a public market or quotation service, it will only be permitted to sell on any given trading day, such number of shares as does not exceed 5% of the average daily volume of the Apricus’s common stock traded in the previous five trading days. Due to the sales restrictions, the Company determined the fair value using quoted prices for similar assets in active markets that are directly observable and thus represent a Level 2 fair value measurement. The fair value of the investment in Apricus was $1,000,000 at the effective date of the termination and August 31, 2012. The Company has recognized a loss on sale of investment in its statements of operations totaling $18,517 for the three and nine month period ended November 30, 2012 related to common stock of Apricus sold during the period. The Company determined the fair value of the investment in Apricus to be $704,343 at November 30, 2012. The Company has continued to sell the common stock of Apricus subsequent to November 30, 2012 and does not expect to recover the entire original basis in the common stock. The Company concluded the decline in fair value is other than temporary and has recognized an impairment loss of $153,676 in its statements of operations for the three and nine month period ended November 30, 2012.

PediatRx intends to utilize the proceeds from the sale of Apricus common stock to pay off certain notes payable and other liabilities and for continuing operations. The Company is investigating other business development and product opportunities and strategic alternatives.

The Company is a development stage enterprise, as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 915, Development Stage Entities . The Company has devoted substantially most of its efforts to the initial marketing of Granisol and has been seeking to secure rights to other pharmaceutical products through acquisition, licensing and reformulation activities.

The Company has net income of $255,087 for the nine month period ended November 30, 2012, a net loss of $1,044,949 for the nine month period ended November 30, 2011, a net loss of $1,996,239 for the period from inception on March 18, 2005 through November 30, 2012 and has a working capital deficit at November 30, 2012 of $47,087 (February 29, 2012 – working capital deficit of $498,667). The Company's financial statements as of November 30, 2012 and for the nine month period ended November 30, 2012 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. As of November 30, 2012, the Company's assets consisted of cash and cash equivalents of $31,403, investment in Apricus of $704,343 and accounts receivable from product sales, net of sales allowances, of $40,208. Management believes that the Company's capital resources are not currently adequate to continue operating and maintaining its business strategy for the fiscal year ending February 28, 2013. The Company had fully intended to pursue the merger with Apricus. Pursuant to the Termination Agreement, the Company will utilize the proceeds from sales of Apricus common stock to pay certain notes payable and other liabilities and is investigating business development and other strategic alternatives. Although the Company has historically raised capital from sales of equity and from the issuance of promissory notes, there is no assurance that it will be able to continue to do so. If the Company is unable to raise additional capital, secure additional lending in the near future or complete business development activities which leverage remaining Granisol opportunities, or to secure other product opportunities to leverage its infrastructure, management expects that the Company will need to curtail or cease operations. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company was in the process of transitioning to its new operating business and expects to incur operating losses for the next twelve months as it moves forward with its co-promotion efforts with Apricus for Granisol and explores other product and business development opportunities.

XML

Balance Sheets (USD $)	Nov. 30, 2012	Feb. 29, 2012
Current assets
Cash and cash equivalents	$ 31,403	$ 258,140
Investment in Apricus	704,343	0
Accounts receivable, net of reserves	40,208	106,635
Inventories, net of reserve for obsolescence	0	2,169
Prepaid expenses	17,258	17,349
Total current assets	793,212	384,293
Intangible assets, net of accumulated amortization	678,685	743,040
Security deposits	992	992
Total assets	1,472,889	1,128,325
Current liabilities
Accounts payable and accrued liabilities	340,299	382,960
Promissory notes	500,000	500,000
Total current liabilities	840,299	882,960
Stockholders' equity
Capital stock Authorized 150,000,000 common shares, par value $0.0001 Issued and outstanding February 29, 2012 - 20,836,000 common shares November 30, 2012 - 20,836,000 common shares	2,084	2,084
Additional paid-in capital	2,626,745	2,494,607
Deficit accumulated during the development stage	(1,996,239)	(2,251,326)
Total stockholders' equity	632,590	245,365
Total liabilities and stockholders' equity	$ 1,472,889	$ 1,128,325

XML

Statements of Changes in Stockholders' Equity (Deficit) (USD $)	Capital Stock [Member]	Additional Paid-In Capital [Member]	Deficit, accumlated during the development stage [Member]	Total
Beginning Balance at Mar. 18, 2005
Restricted common shares issued for cash ($0.0005 per share) September 2005	$ 1,000	$ 4,000		$ 5,000
Restricted common shares issued for cash ($0.0005 per share) September 2005 (Shares)	10,000,000
Contributions to capital by related parties expenses		600		600
Net loss for the period			(21,237)	(21,237)
Ending Balance at Feb. 28, 2006	1,000	4,600	(21,237)	(15,637)
Ending Balance (Shares) at Feb. 28, 2006	10,000,000
Common shares issued for cash ($0.005 per share) May 2006	1,000	49,000		50,000
Common shares issued for cash ($0.005 per share) May 2006 (Shares)	10,000,000
Common shares issued for services ($0.005 per share) August 2006 and February 2007	1	29		30
Common shares issued for services ($0.005 per share) August 2006 and February 2007 (Shares)	6,000
Contributions to capital by related parties expenses		11,400		11,400
Net loss for the period			(50,890)	(50,890)
Ending Balance at Feb. 28, 2007	2,001	65,029	(72,127)	(5,097)
Ending Balance (Shares) at Feb. 28, 2007	20,006,000
Contributions to capital by related parties expenses		14,400		14,400
Common shares returned and cancelled for cash ($0.005 per share) April 2007	(100)	(4,900)		(5,000)
Common shares returned and cancelled for cash ($0.005 per share) April 2007 (Shares)	(1,000,000)
Common shares issued for cash ($0.01 per share) May 2007	100	4,900		5,000
Common shares issued for cash ($0.01 per share) May 2007 (Shares)	1,000,000
Net loss for the period			(65,411)	(65,411)
Ending Balance at Feb. 29, 2008	2,001	79,429	(137,538)	(56,108)
Ending Balance (Shares) at Feb. 29, 2008	20,006,000
Contributions to capital by related parties expenses		14,400		14,400
Contributions to capital by related parties loan forgiveness		38,950		38,950
Common shares issued for cash ($0.10 per share) November 2008	50	49,950		50,000
Common shares issued for cash ($0.10 per share) November 2008 (Shares)	500,000
Net loss for the period			(53,957)	(53,957)
Ending Balance at Feb. 28, 2009	2,051	182,729	(191,495)	(6,715)
Ending Balance (Shares) at Feb. 28, 2009	20,506,000
Contributions to capital by related parties expenses		14,399		14,399
Net loss for the period			(58,201)	(58,201)
Ending Balance at Feb. 28, 2010	2,051	197,128	(249,696)	(50,517)
Beginning Balance (Shares) at Feb. 28, 2010	20,506,000
Contributions to capital by related parties expenses		3,600		3,600
Common shares issued for cash ($0.20 per share) June 2010	150	299,850		300,000
Common shares issued for cash ($0.20 per share) June 2010 (Shares)	1,500,000
Common shares issued for cash ($0.50 per share) July 2010	150	749,850		750,000
Common shares issued for cash ($0.50 per share) July 2010 (Shares)	1,500,000
Common shares issued for cash ($1.00 per share) November 2010	83	824,917		825,000
Common shares issued for cash ($1.00 per share) November 2010 (Shares)	825,000
Common shares returned and cancelled November 2010	(370)	370
Common shares returned and cancelled November 2010 (Shares)	(3,700,000)
Common shares issued for debt cancellation ($1.00 per share) November 2010	20	204,980		205,000
Common shares issued for debt cancellation ($1.00 per share) November 2010 (Shares)	205,000
Net loss for the period			(1,049,087)	(1,049,087)
Ending Balance at Feb. 28, 2011	2,084	2,280,695	(1,298,783)	983,996
Ending Balance (Shares) at Feb. 28, 2011	20,836,000
Stock based compensation		213,912		213,912
Net loss for the period			(952,543)	(952,543)
Ending Balance at Feb. 29, 2012	2,084	2,494,607	(2,251,326)	245,365
Ending Balance (Shares) at Feb. 29, 2012	20,836,000
Stock based compensation		132,138		132,138
Net loss for the period			255,087	255,087
Ending Balance at Nov. 30, 2012	$ 2,084	$ 2,626,745	$ (1,996,239)	$ 632,590
Ending Balance (Shares) at Nov. 30, 2012	20,836,000

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Related Party Transactions (Narrative) (Details) (USD $)	9 Months Ended		92 Months Ended			3 Months Ended	9 Months Ended		92 Months Ended		3 Months Ended			1 Months Ended
	Nov. 30, 2012	Nov. 30, 2011	Nov. 30, 2012	Feb. 29, 2012	Nov. 30, 2012 Dr. Durrant [Member]	Nov. 30, 2012 Dr. Durrant [Member] Consulting [Member]	Nov. 30, 2012 Dr. Durrant [Member] Consulting [Member]	Nov. 30, 2011 Dr. Durrant [Member] Consulting [Member]	Nov. 30, 2012 Dr. Durrant [Member] Consulting [Member]	Aug. 31, 2012 Dr. Durrant [Member] Consulting [Member]	Nov. 30, 2012 Dr. Durrant [Member] Business Establishment Expenses [Member]	Aug. 31, 2012 Dr. Durrant [Member] Business Establishment Expenses [Member]	Nov. 30, 2012 Mr. Tousley [Member]	Nov. 30, 2010 Opex Energy Corp. [Member]	Dec. 31, 2011 Mr. Rodriguez [Member] Termination of Employment [Member]	Dec. 15, 2011 Mr. Rodriguez [Member] Termination of Employment [Member]
Common Stock, Shares, Outstanding	20,836,000		20,836,000	20,836,000	4,250,000								400,000
Shares subject to a Lockup Agreement					2,833,333								266,666
Related Party Transaction, Amounts of Transaction							$ 0	$ 187,500	$ 449,500						$ 19,500
Due to Related Parties, Current						169,697	169,697		169,697	170,253	1,628	51,342
Repayments of Related Party Debt	$ 0	$ 0	$ 0			$ 286					$ 49,714
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number																105,000
Stock Repurchased and Retired During Period, Shares														3,700,000

XML

Income Taxes (Narrative) (Details) (USD $)	Nov. 30, 2012
Operating Loss Carryforwards	$ 1,347,000

XML

Basis of Presentation

9 Months Ended

Nov. 30, 2012

Basis of Presentation [Text Block]

1.	Basis of Presentation
	The accompanying unaudited condensed financial statements of PediatRx Inc. (the "Company" or “PediatRx”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or the SEC, including the instructions to Form 10-Q and Regulation S-X.
	In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine month periods and for the period from the date of inception have been made. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year. When used in these notes, the terms "Company", "we", "us" or "our" mean PediatRx Inc..
	Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements for the year ended February 29, 2012.

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Balance Sheets (Parenthetical) (USD $)	Nov. 30, 2012	Feb. 29, 2012
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Par Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares, Issued	20,836,000	20,836,000
Common Stock, Shares, Outstanding	20,836,000	20,836,000

XML

Stock Options (Tables)

9 Months Ended

Nov. 30, 2012

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

				Weighted
				Average
	Number			Exercise
	of Options			Price
Balance, February 29, 2012	887,500		$	1.13
Cancelled	(887,500	)	$	1.13
Balance, November 30, 2012	-		$	-

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	November 30,	November 30,
	2012	2011
Risk-free interest rate	NA	2.15%
Expected life of options	NA	3.5 years
Annualized volatility	NA	77.0%
Dividend rate	NA	0

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Document and Entity Information	9 Months Ended
	Nov. 30, 2012	Jan. 22, 2013
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Nov. 30, 2012
Trading Symbol	pedx
Entity Registrant Name	PediatRx Inc.
Entity Central Index Key	0001362703
Current Fiscal Year End Date	--02-28
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		20,836,000
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Income Taxes (Tables)

9 Months Ended

Nov. 30, 2012

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

		Nine Months Ended November 30,
		2012			2011
Income tax benefit at federal statutory rate (34%		86,729			(355,283	)
State income tax expense (benefit)		20,388			(50,052	)
Non-deductible stock based compensation		36,363			57,167
Change in valuation allowance		(143,000	)		347,000
Other		(480	)		1,168
Total income tax expense	$	-		$	-

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

		As of			As of
		November 30,			February 29,
		2012			2012
Net operating loss carry-forward	$	539,000		$	695,000
Other		95,000			82,000
Less: Valuation allowance		(634,000	)		(777,000	)
Net deferred tax asset	$	-		$	-

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Statement of Operations (USD $)	3 Months Ended		9 Months Ended		92 Months Ended
	Nov. 30, 2012	Nov. 30, 2011	Nov. 30, 2012	Nov. 30, 2011	Nov. 30, 2012
Net revenues	$ 0	$ 125,715	$ 120,640	$ 362,061	$ 1,168,498
Cost of Goods Sold	1,152	32,855	36,276	94,218	341,277
Gross Margin	(1,152)	92,860	84,364	267,843	827,221
Expenses
Employee expenses	35,970	91,711	145,075	283,925	654,162
Stock based compensation	0	58,024	132,138	173,516	346,050
Consulting fees	242	67,655	3,276	201,619	620,394
Marketing expense	30,949	53,877	46,883	305,994	640,776
Travel expense	85	3,468	8,299	32,222	67,641
Interest expense	14,959	3,972	31,081	16,346	72,056
Legal and accounting fees	13,189	29,025	123,564	94,934	512,927
Mineral property expenditures	0	0	0	0	15,124
Insurance expense	21,752	17,708	58,098	35,691	175,169
Regulatory expense	749	6,685	13,577	44,314	119,098
Rent	0	1,663	0	4,793	19,406
General and administrative expense	12,132	13,787	30,738	53,227	264,229
Amortization expense	20,214	22,070	64,355	66,211	204,135
Write down of mineral property acquisition costs	0	0	0	0	5,000
Total Expenses	150,241	369,645	657,084	1,312,792	3,716,167
Gain on sale of product rights	0	0	0	0	64,900
Other income (loss)	(172,193)	0	827,807	0	827,807
Net income (loss) for the period	$ (323,586)	$ (276,785)	$ 255,087	$ (1,044,949)	$ (1,996,239)
Basic and diluted income (loss) per common share	$ (0.016)	$ (0.013)	$ 0.012	$ (0.050)
Weighted average number of common shares used in per share calculations	20,836,000	20,836,000	20,836,000	20,836,000

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Related Party Transactions

9 Months Ended

Nov. 30, 2012

Related Party Transactions [Text Block]

6. Related Party Transactions

Effective May 28, 2010, PediatRx entered into a consulting agreement with Dr. Cameron Durrant, a shareholder of the Company, to assist management in the identification of opportunities available to the Company in the healthcare industry and to recommend terms of potential acquisitions. Dr. Durrant's agreement with the Company dated May 28, 2010 was terminated in lieu of a new agreement on September 24, 2010.

On September 24, 2010, with retroactive effect to July 1, 2010, the Company entered into a second consulting agreement with Dr. Cameron Durrant. Pursuant to the consulting agreement, Dr. Durrant agreed to perform such duties as are regularly and customarily performed by the Chief Executive Officer of a corporation. The term of the consulting agreement is one year from July 1, 2010, unless both parties agree to extend. On July 1, 2011, the agreement was extended for an additional two year period. On January 1, 2012, Dr. Durrant agreed to forgo any further consulting fees.

In addition, of the 4,250,000 shares of the Company's common stock owned by Dr. Durrant, 2,833,333 shares are subject to a lockup agreement between the Company and Dr. Durrant, which lockup agreement became effective February 9, 2011. Pursuant to the terms of the lockup agreement, Dr. Durrant agreed not to sell, assign or convey or otherwise dispose of any shares subject to the lockup agreement until December 31, 2015. The lockup agreement expires on December 31, 2015.

During the nine month period ended November 30, 2012, the Company incurred consulting fees of $0 (November 30, 2011 - $187,500, cumulative – $449,500) in connection with Dr. Durrant's consulting agreements. The Company has recorded a payable to Dr. Durrant of $170,253 related to consulting fees. Of that, $286 has been paid to Dr. Durrant, leaving a payable of $169,697 as of November 30, 2012. In addition, the Company has recorded a payable to Dr. Durrant of $51,342 related to business establishment expenses incurred by Dr. Durrant. Of that, $49,714 has been paid to Dr. Durrant, leaving a payable of $1,628 as of November 30, 2012.

On September 14, 2010, with retroactive effect to July 1, 2010, the Company entered into an employment agreement with Mr. David Tousley, Chief Financial Officer, Treasurer and Secretary of PediatRx. Pursuant to the employment agreement, Mr. Tousley agreed to perform such duties as are regularly and customarily performed by the Chief Financial Officer of a Corporation. Mr. Tousley is also eligible to receive an annual bonus and an annual stock option award at the end of each year at the discretion of the Board of Directors of PediatRx. The term of the employment agreement is two years from July 1, 2010, unless both parties agree to extend.

As of March 1, 2012, the Company gave notice to Mr. Tousley, that it will be terminating the employment agreement between Mr. Tousley and the Company pursuant to Section 6.3(b) of Mr. Tousley's Employment Agreement. As a result, Mr. Tousley's employment agreement was terminated effective October 31, 2012.

In addition, of the 400,000 shares of the Company's common stock owned by Mr. Tousley, 266,666 shares are subject to a lockup agreement between the Company and Mr. Tousley, which lockup agreement became effective February 9, 2011. Pursuant to the terms of the lockup agreement, Mr. Tousley agreed not to sell, assign, convey, or otherwise dispose of any shares subject to the lockup agreement until December 31, 2015. The lockup agreement expires on December 31, 2015.

On September 14, 2010, with retroactive effect to July 1, 2010, the Company entered into an employment agreement with Mr. Jorge Rodriguez, Chief Commercial Officer of PediatRx. Pursuant to the employment agreement, Mr. Rodriguez agreed to perform such duties as are regularly and customarily performed by the Chief Commercial Officer of a corporation. Mr. Rodriguez is also eligible to receive an annual bonus and an annual stock option award at the end of each year at the discretion of the Board of Directors of PediatRx. The term of the employment agreement is two years from July 1, 2010, unless both parties agree to extend. On December 15, 2011, Mr. Rodriguez, resigned from all positions with the Company and the Company entered into an agreement with Mr. Rodriguez pursuant to which it terminated his employment agreement and amended his stock option agreement (dated March 4, 2011) in order to terminate all unvested

options effective immediately and to extend the exercise period for his 105,000 vested options to December 15, 2012. In connection with the termination, the Company paid Mr. Rodriguez the amount of $19,500.

On November 3, 2010, 3,700,000 shares of the Company owned by Opex Energy Corp., which corporation is controlled by Joseph Carusone, a director of PediatRx Inc., were returned to the Company for no cash or other consideration. These shares were cancelled.

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Promissory Notes

9 Months Ended

Nov. 30, 2012

Promissory Notes [Text Block]

5. Promissory Notes

	November 30,	February 29,
	2012	2012
Issued on June 15, 2009, this unsecured promissory note, bearing simple interest at five percent (5% per annum on the principal balance of $50,000, was originally due on June 15, 2011. This promissory note was amended effective on May 18, 2011, April 19, 2012 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty.	$50,000	$50,000
Issued on July 26, 2010, this unsecured promissory note, bearing simple interest at five percent (5% per annum on the principal balance of $200,000, was originally due on July 26, 2011. This promissory note was amended effective May 23, 2011 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.	200,000	200,000
Issued on May 6, 2011 this unsecured promissory note, bearing simple interest at five percent (5% per annum on the principal balance of $250,000, was originally due on May 6, 2012. Effective April 19, 2012 this promissory note was amended on April 19, 2012 and again on July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.	250,000	250,000
Total Promissory Notes	$500,000	$500,000

     The promissory notes were not paid on their due dates of December 31, 2012 and are due on demand.

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Stock Options (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended	92 Months Ended
	Nov. 30, 2012	Nov. 30, 2011	Nov. 30, 2012	Nov. 30, 2011	Feb. 29, 2012	Nov. 30, 2012	Feb. 18, 2013	Feb. 18, 2012
Common Stock, Capital Shares Reserved for Future Issuance								2,000,000
Common Stock, Maximum Authorized Increase of Capital Shares Reserved for Future Issuance							500,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options					$ 306,189
Decrease In Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options			178,000
Stock based compensation	$ 0	$ 58,024	$ 132,138	$ 173,516	$ 213,912	$ 346,050
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value				$ 0.60

XML

Nature and Continuance of Operations (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended							89 Months Ended	92 Months Ended		1 Months Ended
	Sep. 30, 2008	Nov. 30, 2012	Nov. 30, 2011	Aug. 31, 2012	Nov. 30, 2012	Nov. 30, 2011	Feb. 28, 2006	Feb. 29, 2012	Feb. 28, 2011	Feb. 28, 2010	Feb. 28, 2009	Feb. 29, 2008	Feb. 28, 2007	Aug. 31, 2012	Nov. 30, 2012	Mar. 17, 2005	Feb. 29, 2012 Apricus [Member]	Nov. 30, 2012 Apricus [Member]	Feb. 21, 2012 Apricus [Member] Contemplated Merger [Member]	Feb. 21, 2012 Apricus [Member] Contemplated Merger [Member] Amounts distributed to shareholders [Member]	Feb. 21, 2012 Apricus [Member] Contemplated Merger [Member] Amounts distributed to CEO and CFO [Member]	Nov. 30, 2012 Apricus [Member] Termination Agreement [Member]	Jun. 27, 2012 Apricus [Member] Termination Agreement [Member]
Stockholders' Equity Note, Stock Split, Conversion Ratio	2
Proceeds from Sale of Intangible Assets					$ 0	$ 0									$ 64,900		$ 325,000
Proceeds from Sale of Rights																	260,000
Gain (Loss) on Disposition of Intangible Assets		0	0		0	0									64,900		64,900
Business Acquisition, Cost of Acquired Entity, Equity Interests Issued and Issuable																			4,000,000	3,600,000	400,000
Business Acquisition, Purchase Price Allocation, Liabilities Assumed																			675,000
Value of restricted stock to be paid if the two companies do not merge by June 1, 2012																			1,000,000				1,000,000
Investment Owned, at Cost		704,343			704,343			0							704,343			704,343				704,343	1,000,000
Number of Shares Receivable																							373,134
Other Income		(172,193)	0	1,000,000	827,807	0									827,807
Loss on sale of investment in Apricus					18,517	0									18,517
Impairment loss on investment in Apricus					153,676	0									153,676
Net (income) loss for the period		323,586	276,785		(255,087)	1,044,949	21,237	952,543	1,049,087	58,201	53,957	65,411	50,890	1,996,239	1,996,239
Working Capital Surplus (Deficit)		(47,087)			(47,087)			(498,667)							(47,087)
Cash and cash equivalents		31,403	88,676		31,403	88,676		258,140	549,392						31,403	0
Accounts receivable, net of reserves		$ 40,208			$ 40,208			$ 106,635							$ 40,208

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Subsequent Events

9 Months Ended

Nov. 30, 2012

Subsequent Events [Text Block]

9. Subsequent Events

The following events occurred after the nine month period ended November 30, 2012:

On Thursday, January 3, 2013, Apricus announced their intentions to sell off their oncology supportive care business, which includes Granisol. We are currently evaluating the impact of this decision by Apricus on the Company’s future operations.

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Stock Options

9 Months Ended

Nov. 30, 2012

Stock Options [Text Block]

7. Stock Options

Effective February 18, 2011, the Board of Directors adopted and approved the 2011 stock option plan. The purpose of the 2011 stock option plan is to enhance the long-term stockholder value of the Company by offering opportunities to directors, key employees, officers, independent contractors and consultants of the Company to acquire and maintain stock ownership in the Company in order to give these persons the opportunity to participate in the Company’s growth and success, and to encourage them to remain in the service of the Company. A total of 2,000,000 shares of the Company’s common stock are available for issuance during the 12-month period after the first anniversary of the adoption of the 2011 stock option plan by the Board of Directors. During each 12-month period thereafter, the Board of Directors is authorized to increase the number of shares issuable by up to 500,000 shares.

A summary of the status of the Company’s outstanding stock option activity for the nine months ended November 30, 2012 is as follows:

				Weighted
				Average
	Number			Exercise
	of Options			Price
Balance, February 29, 2012	887,500		$	1.13
Cancelled	(887,500	)	$	1.13
Balance, November 30, 2012	-		$	-

As of February 29, 2012, unrecognized compensation costs related to non-vested stock option awards totaled $306,189. During the nine months ended November 30, 2012, unrecognized compensation costs was reduced by approximately $178,000 for estimated forfeitures of unvested stock options a result of notice provided to Mr. Tousley of termination of his employment agreement effective October 31, 2012. On May 23, 2012, the Company agreed with all option holders to cancel any and all options outstanding as of that date. As a result, the Company expensed all unrecognized compensation costs as of the cancelation date. Total stock-based compensation expense for the nine months ended November 30, 2012 and 2011 was $132,138 and $173,516, respectively. The weighted average fair value of stock options granted during the nine months ended November 30, 2011 was $0.60. There were no stock options granted during the nine months ended November 30, 2012.

The fair value of stock options granted has been determined using the Black-Scholes option pricing model using the following weighted average assumptions applied to stock options granted during the periods:

	November 30,	November 30,
	2012	2011
Risk-free interest rate	NA	2.15%
Expected life of options	NA	3.5 years
Annualized volatility	NA	77.0%
Dividend rate	NA	0

The volatility was determined based on an index of volatility from comparable companies. The expected term of the options granted to employees is derived from the simplified method as prescribed by SEC Staff Accounting Bulletin Topic 14, “Share-Based Payments” (“Topic 14 ”), given that the Company has no historical experience with the exercise of options for which to base an estimate of the expected term of options granted. Under the simplified method, the Company determined the expected life of the options based on an average of the graded vesting period and original contractual term. The Company anticipates it will discontinue the use of the simplified method of Topic 14 once sufficient historical option exercise behavior becomes apparent.

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Income Taxes

9 Months Ended

Nov. 30, 2012

Income Taxes [Text Block]

8. Income Taxes

The Company has losses to carry forward for income tax purposes as of November 30, 2012. There are no current or deferred tax expenses for the period ended November 30, 2012 due to the Company's loss position. The Company has fully reserved for any benefits of these losses. The deferred tax consequences of temporary differences in reporting items for financial statement and income tax purposes are recognized, as appropriate. Realization of the future tax benefits related to the deferred tax assets is dependent on many factors, including the Company's ability to generate taxable income within the net operating loss carry-forward period. Management has considered these factors in reaching its conclusion as to the valuation allowance for financial reporting purposes.

A reconciliation between the income tax expense (benefit) recognized in the Company’s statements of operations and the income tax expense (benefit) computed by applying the domestic federal statutory income tax rate to the net income (loss) for the nine month periods ended November 30, 2012 and 2011 is as follows:

		Nine Months Ended November 30,
		2012			2011
Income tax benefit at federal statutory rate (34%		86,729			(355,283	)
State income tax expense (benefit)		20,388			(50,052	)
Non-deductible stock based compensation		36,363			57,167
Change in valuation allowance		(143,000	)		347,000
Other		(480	)		1,168
Total income tax expense	$	-		$	-

The composition of the Company’s deferred tax assets as of November 30, 2012 and February 29, 2012 is as follows:

		As of			As of
		November 30,			February 29,
		2012			2012
Net operating loss carry-forward	$	539,000		$	695,000
Other		95,000			82,000
Less: Valuation allowance		(634,000	)		(777,000	)
Net deferred tax asset	$	-		$	-

As of November 30, 2012, the Company’s unused net operating loss carry forward of approximately $1,347,000 is available to offset future taxable income. The potential income tax benefit of these losses has been offset by a full valuation allowance. This unused net operating loss carry-forward balance expires at various dates from 2026 to 2031.

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Promissory Notes (Tables)

9 Months Ended

Nov. 30, 2012

Schedule of Debt [Table Text Block]

	November 30,	February 29,
	2012	2012
Issued on June 15, 2009, this unsecured promissory note, bearing simple interest at five percent (5% per annum on the principal balance of $50,000, was originally due on June 15, 2011. This promissory note was amended effective on May 18, 2011, April 19, 2012 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty.	$50,000	$50,000
Issued on July 26, 2010, this unsecured promissory note, bearing simple interest at five percent (5% per annum on the principal balance of $200,000, was originally due on July 26, 2011. This promissory note was amended effective May 23, 2011 and July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.	200,000	200,000
Issued on May 6, 2011 this unsecured promissory note, bearing simple interest at five percent (5% per annum on the principal balance of $250,000, was originally due on May 6, 2012. Effective April 19, 2012 this promissory note was amended on April 19, 2012 and again on July 25, 2012, whereby the maturity date of the note was extended until December 31, 2012 and the interest rate was increased from the original 5% to 12% per annum effective July 25, 2012, calculated monthly in arrears and payable at maturity. When not in default, the unsecured promissory note and any accrued interest can be repaid in whole or in part without notice or penalty with a minimum of six months interest due if repaid prior to the six month anniversary.	250,000	250,000
Total Promissory Notes	$500,000	$500,000

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The Granisol Acquisition (Narrative) (Details) (USD $)	1 Months Ended	9 Months Ended		92 Months Ended
	Jul. 31, 2010	Nov. 30, 2012	Nov. 30, 2011	Nov. 30, 2012
Acquisition of Granisol product line	$ 1,000,000	$ 0	$ 0	$ 1,000,000
Granisol Product Line Rights [Member]
Finite-Lived Intangible Asset, Useful Life	10 years

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Schedule of Share-based Compensation, Stock Options, Activity (Details) (USD $)	9 Months Ended
	Nov. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning of Period	887,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning of Period	$ 1.13
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period	(887,500)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period, Weighted Average Exercise Price	$ 1.13
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, End of Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, End of Period	$ 0.00

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Statement of Cash Flows (USD $)	9 Months Ended		92 Months Ended
	Nov. 30, 2012	Nov. 30, 2011	Nov. 30, 2012
Cash flows from operating activities
Net income (loss) for the period	$ 255,087	$ (1,044,949)	$ (1,996,239)
Adjustments to reconcile loss to net cash used in operating activities
Amortization expense	64,355	66,211	204,135
Inventory obsolescence expense	0	0	90,500
Gain on sale of product rights	0	0	(64,900)
Gain from additional consideration received from Apricus	(1,000,000)	0	(1,000,000)
Contributions to capital by related parties - expenses	0	0	58,799
Contributions to capital by related party - forgiveness of debt	0	0	38,950
Common shares issued for services	0	0	30
Write down of mineral property acquisition costs	0	0	5,000
Loss on sale of investment in Apricus	18,517	0	18,517
Impairment loss on investment in Apricus	153,676	0	153,676
Stock based compensation	132,138	173,516	346,050
Changes in operating assets and liabilities; net of effects from acquisition of Granisol product line and mineral property interest
Decrease (increase) in accounts receivable	66,427	(1,020)	(40,208)
Decrease in inventories	2,169	11,034	26,680
Decease (increase) in prepaids and deposits	91	(17,230)	(18,250)
Increase (decrease) in accounts payable and accrued liabilities	(42,661)	101,722	345,299
Cash used in operating activities	(350,201)	(710,716)	(1,831,961)
Cash flows from investing activities
Acquisition of mineral property interest	0	0	(10,000)
Proceeds from sale of product rights	0	0	64,900
Proceeds from Apricus investment	123,464	0	123,464
Acquisition of Granisol product line	0	0	(1,000,000)
Cash used in investing activities	123,464	0	(821,636)
Cash flows from financing activities
Decrease in due to related party	0	0	0
Proceeds from issuance of promissory notes	0	250,000	705,000
Common shares returned to treasury	0	0	(5,000)
Proceeds from issuance of common stock	0	0	1,985,000
Cash provided by financing activities	0	250,000	2,685,000
Increase (decrease) in cash and cash equivalents	(226,737)	(460,716)	31,403
Cash and cash equivalents, beginning of period	258,140	549,392	0
Cash and cash equivalents, end of period	$ 31,403	$ 88,676	$ 31,403

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The Granisol Acquisition

9 Months Ended

Nov. 30, 2012

The Granisol Acquisition [Text Block]

4. The Granisol Acquisition

On July 23, 2010 (the “Closing Date”), the Granisol product line was acquired by the Company’s wholly owned subsidiary PediatRx Inc. for cash consideration totaling $1 million. All inventories and intangibles associated with the Granisol product line were included in the purchase. The related inventory was received in October 2010. The Company is amortizing the product rights and know-how over the estimated useful life of ten years on a straight line basis, beginning with August 2010. Operations of the Granisol product line are included in the Company’s statement of operations since the Closing Date.

As part of the closing and transfer of assets to PediatRx Inc. on July 23, 2010, PediatRx Inc. assumed a single product manufacturing and supply agreement with Therapex, a division of E-Z-EM Canada, Inc. to enable the manufacturing of the Granisol product line. Under the terms of the agreement, Therapex will manufacture the product in compliance with current Good Manufacturing Practice (cGMP) and oversee all quality control and packaging through to finished product to meet PediatRx's requirements for Granisol.

The purchase price for the Granisol product line was allocated in accordance with the acquisition method of accounting. The acquisition method of accounting is based on ASC 805, Business Combinations , and uses the fair value concepts defined in ASC 820, Fair Value Measurements and Disclosures .

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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)	9 Months Ended
	Nov. 30, 2011
Risk-free interest rate	2.15%
Expected life of options	3 years 6 months
Annualized volatility	77.00%
Dividend rate	0.00%

XML

Net Loss Per Common Share (Narrative) (Details)	9 Months Ended
	Nov. 30, 2011
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	515,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,152,000