THOMPSON DESIGNS INC (Form: 8-K, Received: 01/27/2014 16:19:18)

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

BioPharmX, Inc.

(a development stage enterprise)

We have audited the accompanying balance sheets of BioPharmX, Inc. (a development stage enterprise) (the “Company”) as of December 31, 2012 and 2011, and the related statements of operations and comprehensive loss, stockholders’ deficit and cash flows for the year ended December 31, 2012, the period from August 18, 2011 (date of inception) to December 31, 2011 and, cumulatively, for the period from August 18, 2011 (date of inception) to December 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BioPharmX, Inc. (a development stage enterprise) as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the year ended December 31, 2012, the period from August 18, 2011 (date of inception) to December 31, 2011 and, cumulatively, for the period from August 18, 2011 (date of inception) to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

San Jose, California

October 18, 2013

ACCOUNTANTS & CONSULTANTS

F-13

B IO P HARM X , I NC.

(a development stage enterprise)

B ALANCE S HEETS

as of December 31, 2012 and 2011

____________

	2012			2011
A SSETS
Current assets:
Cash	$	137,850		$	1,953
Prepaid expenses and other current assets		1,927			1,000
Total current assets		139,777			2,953
Property and equipment, net		12,194			-
Total assets	$	151,971		$	2,953
L IABILITIES AND S TOCKHOLDERS' D EFICIT

Current liabilities:
Accounts payable and accrued expenses	$	16,115		$	2,227
Related party payables		16,530			7,350
Total current liabilities		32,645			9,577

Convertible notes payable		162,628			-
Other long-term liabilities		2,566			-
Total liabilities		197,839			9,577

Commitments and contingencies (Note 8)
Stockholders' deficit:
Common stock, $0.0001 par value; 10,000,000 shares authorized; 7,400,000 shares issued and outstanding		740			740
Additional paid-in capital		48,487			(370	)
Receivable from stockholders		-			(370	)
Deficit accumulated during the development stage		(95,095	)		(6,624	)
Total stockholders' deficit		(45,868	)		(6,624	)
Total liabilities and stockholders' deficit	$	151,971		$	2,953

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

F-14

B IO P HARM X , I NC.

(a development stage enterprise)

S TATEMENTS OF O PERATIONS AND C OMPREHENSIVE L OSS

for the years ended December 31, 2012 and 2011 and, cumulatively,

for the period from August 18, 2011 (date of inception) to December 31, 2012

____________

	2012			2011			Cumulative for the period from August 18, 2011 (date of inception) to December 31, 2012

Operating expenses:
Research and development	$	30,616		$	4,135		$	34,751
Sales and marketing		9,133			150			9,283
General and administrative		43,527			2,339			45,866
Total operating expenses		83,276			6,624			89,900
Loss from operations		(83,276	)		(6,624	)		(89,900	)
Interest expense		(5,195	)		-			(5,195	)
Net and comprehensive loss	$	(88,471	)	$	(6,624	)	$	(95,095	)

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

F-15

B IO P HARM X , I NC.

(a development stage enterprise)

S TATEMENTS OF S TOCKHOLDERS' D EFICIT

cumulative for the period from August 18, 2011 (date of inception) to December 31, 2012

____________

											Deficit
											Accumulated
					Additional			Receivable			During the			Total
	Common Stock				Paid-in			from			Development			Stockholders'
	Shares		Amount		Capital			Stockholders			Stage			Deficit
Issuance of common stock at $0.0001 per share to Founders in August 2011		7,400,000	$	740	$	(370	)	$	(370	)	$	-		$	-
Net and comprehensive loss		-		-		-			-			(6,624	)		(6,624	)
Balance at December 31, 2011		7,400,000		740		(370	)		(370	)		(6,624	)		(6,624	)
Payment of receivable for stock		-		-		-			370			-			370
Stock-based compensation		-		-		8,857			-			-			8,857
Issuance of convertible notes payable with beneficial conversion feature		-		-		40,000			-			-			40,000
Net and comprehensive loss		-		-		-						(88,471	)		(88,471	)
Balance at December 31, 2012		7,400,000	$	740	$	48,487		$	-		$	(95,095	)	$	(45,868	)

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

F-16

B IO P HARM X , I NC.

(a development stage enterprise)

S TATEMENTS OF C ASH F LOWS

for the years ended December 31, 2012 and 2011 and, cumulatively,

for the period from August 18, 2011 (date of inception) to December 31, 2012

____________

	2012			2011			Cumulative for the period from August 18, 2011 (date of inception) to December 31, 2012
Cash flows from operating activities:
Net loss	$	(88,471	)	$	(6,624	)	$	(95,095	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		8,857			-			8,857
Depreciation expense		620			-			620
Noncash interest expense		5,194			-			5,194
Changes in assets and liabilities:
Prepaid expenses and other current assets		(927	)		(1,000	)		(1,927	)
Accounts payable and accrued expenses		13,888			2,227			16,115
Related party payables		9,180			7,350			16,530
Net cash provided by (used in) operating activities		(51,659	)		1,953			(49,706	)
Cash flows from investing activities:
Purchases of property and equipment		(12,814	)		-			(12,814	)
Net cash used in investing activities		(12,814	)		-			(12,814	)
Cash flows from financing activities:
Proceeds from issuance of common stock		370			-			370
Proceeds from issuance of convertible notes payable		200,000			-			200,000
Net cash provided by financing activities		200,370			-			200,370
Net increase in cash and cash equivalents		135,897			1,953			137,850
Cash at beginning of year		1,953			-			-
Cash at end of year	$	137,850		$	1,953		$	137,850

Non-cash financing activities:
Fair value of beneficial conversion feature issued in connection with convertible notes payable	$	40,000		$	-		$	40,000

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

F-17

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

1. Description of Business and Basis of Presentation

Description of Business

BioPharmX, Inc. (“BioPharmX” or the “Company”) is a Silicon Valley-based company, incorporated in Delaware on August 18, 2011, that seeks to provide innovative products through unique, patented platform technologies for pharmaceutical and over-the-counter (“OTC”) applications in the fast growing dermatology and health and wellness markets.

The strategy of the Company begins with obtaining novel, patented, platform technologies through exclusive licensing, joint development or acquisition. BioPharmX then develops platform technologies that can be developed into product lines through specialized formulation and clinical protocol development with a bifurcated market penetration strategy, prescription for the high dose prescription version and OTC consumer for the low dose version. Identifying such technologies requires a strong knowledge of the markets served through technology assessment and evaluation of sell-side and buy-side opportunities through relationships with major pharmaceutical companies. BioPharmX’s products are formulated to address both market pathways to address unmet needs in well-defined, multi-billion dollar markets for licensing or direct commercialization for both pharmaceutical and OTC distribution and sales.

Basis of Presentation and Principles of Consolidation

The accompanying financial statements are have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

Preparation of these financial statements requires management to make certain judgments, estimates and assumptions. These may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. They also may affect the reported amounts of revenues and expenses during the reporting period. Key estimates used in the preparation of our financial statements include stock-based compensation and deferred income taxes. Actual results could differ from those estimates upon subsequent resolution of identified matters.

Stock Split

In December 2012, the Company’s Board of Directors approved a 2-for-1 stock split of the Company’s common stock. All common stock data and stock option information in this report has been adjusted to reflect the stock split.

F-18

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

2.	Going Concern Considerations and Management’s Plan

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred recurring losses and negative cash flows from operations since inception. The Company has not generated revenues and has funded its operating losses through the issuance of convertible notes payable. The Company has a limited operating history and its prospects are subject to risks, expenses and uncertainties frequently encountered by companies in the industry. These risks include, but are not limited to, the uncertainty of availability of additional financing and the uncertainty of achieving future profitability. Management of the Company intends to raise additional funds through the issuance of equity securities. There can be no assurance that such financing will be available or on terms which are favorable to the Company. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not contain any adjustments that might result from the outcome of this uncertainty.

As shown in the accompanying financial statements, the Company incurred a net loss of $88,471 and $6,624 during the years ended December 31, 2012 and 2011, respectively, and has an accumulated deficit of $95,095 as of December 31, 2012. As of December 31, 2012, the Company had working capital of $107,132. As of December 31, 2011, the Company had a working capital deficit of $6,624. While management of the Company believes that it has a plan to fund on-going operations, there is no assurance that its plan will be successfully implemented. The Company is experiencing the following risks and uncertainties in the business:

In 2012, the Company initiated a financing with convertible notes to invite early investors at a 20% discount to the share price in a future offering. While the Company was able to secure a few investors, there is continued risk in the Company’s ability to attract additional early investors. Without access to continued funds for working capital the Company may not be able to execute its product strategy and pursue research and development activities on its novel platform technologies.

The discovery of key raw materials to formulate novel products depends on the Company’s ability to identify, negotiate and secure procurement of such materials. This also depends on the Company’s ability to establish comprehensive and long term vendor contracts and relationships.

The Company’s ability to compete and to achieve its product platform strategy depends on its ability to protect its proprietary discoveries and technologies. The Company currently relies on a combination of copyrights, trademarks, trade secret laws and confidentiality agreements to protect its intellectual property rights. The Company also relies upon unpatented know-how and continuing technological innovation.

The Company’s continued operations are dependent upon its ability to identify, recruit and retain adequate management personnel and contractors to perform certain jobs such as research and development, patent generation, regulatory affairs and general administrative functions. The Company requires highly trained professionals of varying levels and experience along with a flexible work force.

Research and development for novel prescription or OTC based products can be very extensive and lengthy in nature; along with the clinical trial process with the Food and Drug Administration which can require significant funding and time consuming patient studies. The competitive landscape could change significantly over the time period to complete targeted product development milestones. The current competition for BioPharmX’s products could also turn into strategic partners or potential acquirers in the future.

F-19

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

2.	Going Concern Considerations and Management’s Plan, continued

The significant risks and uncertainties described above could have a significant negative impact on the financial viability of BioPharmX, Inc. and raise substantial doubt about the Company’s ability to continue as a going concern. Management is working on the Company’s business model to increase working capital by managing its cash flow, securing financing and working towards bringing its first product to market.

3.	Summary of Significant Accounting Policies

Cash

Cash consists of only cash deposits with banks.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, prepaid and other current assets, accounts payable and accrued expenses and related party payables approximate fair value due to their short maturities. Based on borrowing rates currently available to the Company for loans with similar terms, the carrying value of the convertible notes payable approximates fair value.

Fair Value Measurements

The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value.

Level 1 - Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. Therefore, determining fair value for Level 1 investments generally does not require significant judgment, and the estimation is not difficult.

Level 2 - Pricing is provided by third party sources of market information obtained through investment advisors. The Company does not adjust for or apply any additional assumptions or estimates to the pricing information received from its advisors.

Level 3 - Inputs used to measure fair value are unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. The determination of fair value for Level 3 instruments involves the most management judgment and subjectivity.

As of December 31, 2012 and 2011, the Company held no assets or liabilities with instrument valuations measured on a recurring basis.

F-20

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

3.	Summary of Significant Accounting Policies, continued

Property and Equipment, net

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation of property and equipment is computed using the straight-line method over their estimated useful lives of five years. Maintenance and repairs are charged to operations as incurred.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been an impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any such impairment losses to date.

Income Taxes

The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets when management estimates, based on available objective evidence, that it is more likely than not that the benefit will not be realized for the deferred tax assets.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. As of the date of adoption of accounting for uncertain tax positions there was no accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest expense recognized during the year.

Research and Development

Research and development costs are charged to operations as incurred. Research and development costs include, but are not limited to, payroll and personnel expenses, materials, consulting costs, and allocated overhead, including rent, equipment depreciation, and utilities.

Stock-Based Compensation

The Company accounts for stock-based employee compensation arrangements which requires the recognition of compensation expense, using a fair-value based method for costs related to all employee share-based payments, including stock options. The Company estimates the fair value of share-based payment awards on the date of grant using an option pricing model. All option grants have been expensed on a straight-line basis over their vesting period. Equity instruments issued to nonemployees are recorded at their fair value on the measurement date and are subject to periodic adjustment as the underlying equity instruments vest.

F-21

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

3.	Summary of Significant Accounting Policies, continued

Comprehensive Loss

Comprehensive loss is the changes in equity of an enterprise, except those resulting from stockholder transactions. Accordingly, comprehensive loss includes certain changes in equity that are excluded from net loss. For the years ended December 31, 2012 and 2011 and, cumulatively, for the period from August 18, 2011 (date of inception) to December 31, 2012, the Company’s comprehensive loss is equal to the net loss. There were no components of comprehensive loss for any of the periods presented.

4.	Property Equipment, net

Property and equipment, net at December 31, 2012 consisted of the following (in thousands):

Furniture and fixtures	$	11,183
Lab equipment		1,631
		12,814
Less: accumulated depreciation		(620	)
	$	12,194

As of December 31, 2011 the Company did not hold any property and equipment. Depreciation expense for the year ended December 31, 2012 and for the cumulative period from August 18, 2011 (date of inception) to December 31, 2012 totaled $620.

5.	Related Party Payables

Since inception, the founding executives of the Company have made advances to cover short-term operating expenses. These advances are non-interest bearing. As of December 31, 2012 and 2011, related party payables were $16,530 and $7,350, respectively.

6.	Convertible Notes Payable

In September and November 2012, the Company issued convertible notes payable (“Notes”) to two individuals, respectively, in exchange for $200,000 cash. These Notes carry an interest rate of 6% per annum and mature in September and November 2015, respectively, with principal and interest payable at maturity.

The Notes automatically convert into preferred stock issued in a qualified financing at 80% of the price per share at which such preferred stock is issued in such an offering. Additionally, there is a special conversion that at maturity, unless the Company repays all outstanding principal and interest, the Notes shall be automatically converted into a number of shares of common stock of the Company at 80% of the then fair market value per share.

As a result of this beneficial conversion feature, the Company has recorded $40,000 as a debt discount. The debt discount is being amortized to interest expense over the term of the Notes. The amortization expense related to the debt discount was $2,628 for the year ended December 31, 2012 and for the cumulative period from August 18, 2011 (date of inception) to December 31, 2012. The note holders as a group also have the right to purchase up to an aggregate of $1,000,000 in shares in the event of a subsequent offer of equity securities.

F-22

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

7.	Stockholders’ Equity

Issuance of common stock

On August 18, 2011, the Company sold 7,400,000 shares of its Common Stock to its four founders. The fair value of the shares was $0.0001 per share, the initial par value of the Company’s Common Stock, the date of the sale.

Equity Incentive Plan

On August 18, 2011, the Company adopted the 2011 Equity Incentive Plan (the “Plan”) which permits the Company to grant stock options to directors, officers or employees of the Company or others to purchase shares of common stock of the Company through awards of incentive and nonqualified stock options (“Options”), stock (“Restricted Stock” or “Unrestricted Stock”) and stock appreciation rights (“SARs”).

The Company currently has time-based options outstanding. The time-based options generally vest in two to four years and expire ten years from the date of grant. Total number of shares reserved and available for grant and issuance pursuant to this Plan is 2,600,000. Shares issued under the Plan will be drawn from authorized and unissued shares or shares now held or subsequently acquired by the Company. At December 31, 2012 there were 1,450,000 shares available for grant under the Plan. No options were granted during the year ended December 31, 2011.

The following table summarizes the Company’s stock option activities for the year ended December 31, 2012:

					Weighted
			Weighted		Average
	Number		Average		Remaining		Aggregate
	of		Exercise Price		Contractual		Intrinsic
	Shares		Per Share		Life (Years)		Value
Outstanding at January 1, 2012		-	$	-		-	$	-
Granted		1,150,000		0.06		-		-
Exercised		-		-		-		-
Forfeited		-		-		-		-
Outstanding at December 31, 2012		1,150,000	$	0.06		9.3	$	75,000

Vested and expected to vest at December 31, 2012		1,150,000	$	0.06		9.3	$	75,000
Vested at December 31, 2012		-	$	-		-	$	-

F-23

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

7.	Stockholders’ Equity, continued

Equity Incentive Plan, continued

Information regarding options outstanding as of December 31, 2012 is as follows:

	Options Outstanding						Options Vested
			Weighted
Range			Average		Weighted				Weighted
of			Remaining		Average				Average
Exercise	Number		Contractual		Exercise		Number		Exercise
Prices	Outstanding		Life (Years)		Price		Outstanding		Price

$0.05		1,000,000		9.3	$	0.05		-	$	0.05
$0.13		150,000		9.9		0.13		-		0.13
		1,150,000		9.3	$	0.06		-	$	0.06

Additional Stock Plan Information

The fair value of stock-based awards to employees is calculated through the use of the Black-Scholes option pricing model, even though such model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from the Company’s stock option awards. This model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values.

The following assumptions were used in the estimated grant date fair value calculations for Stock Awards during the year ended December 31, 2012 and for the cumulative period from August 18, 2011 (date of inception) to December 31, 2012:

Expected term	5.52 - 6.08 years
Risk-free interest rate		0.67% - 0.89	%
Volatility		82.08	%
Dividend yield		-
Weighted average grant date fair value	$	0.05

Valuation and Amortization Method

The Company estimates the fair value of time-based stock options, if any, granted using the Black-Scholes-Merton option pricing formula. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Time-based and performance-based options, if any, typically have a ten-year life from date of grant and vesting periods of two to four years.

F-24

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

7.	Stockholders’ Equity, continued

Expected Term

The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For awards granted subject only to service vesting requirements, the Company utilizes the simplified method for estimating the expected term of the stock-based award, instead of historical exercise data.

Expected Volatility

The Company uses the historical volatility of the price of the common shares of selected public companies in the biotechnology sector.

Expected Dividend

The Company has never paid dividends on its common shares and currently does not intend to do so and, accordingly, the dividend yield percentage is zero for all periods.

Risk-Free Interest Rate

The Company bases the risk-free interest rate used in the Black-Scholes-Merton valuation method upon the implied yield curve currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term used as the assumption in the model.

The following table summarizes the stock-based compensation by line item as follows (in thousands):

					Cumulative for
					the period from
					August 18, 2011
					(date of inception) to
	2012		2011		December 31, 2012
Research and development	$	4,616	$	-	$	4,616
Selling, general and administrative		4,241		-		4,241
Total stock-based compensation expense	$	8,857	$	-	$	8,857

Stock-based compensation expense recognized in the statements of operations and comprehensive loss is based on awards ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

F-25

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

8.	Commitments and Contingencies

Lease Commitments

During the years ended December 31, 2012 and 2011, the Company’s leased facilities were on a month-to-month basis. Total rent expense was $9,920, $1,058 and $10,978 for the years ended December 31, 2012 and 2011, and for the cumulative period from August 18, 2011 (date of inception) to December 31, 2012, respectively.

Contingencies

The Company is involved from time to time with claims or legal actions in the ordinary course of business. Management does not believe that the impact of such matters will have a material adverse effect on the Company’s financial condition or results of operations.

9.	Income Taxes

No federal income taxes were provided in the years ended December 31, 2012 or 2011 or for the cumulative period from August 18, 2011 (date of inception) to December 31, 2012 due to the Company’s net losses. State minimum income and franchise taxes are included in general and administrative expenses and were immaterial for the periods presented.

At December 31, 2012, the Company had available federal net operating loss (“NOL”) carryforwards of approximately $60,000 which will begin to expire in 2031 and California state NOL carryforwards of approximately $60,000 which will begin to expire in 2021. At December 31, 2012 and 2011, the net deferred tax assets of approximately $29,000 and $0, generated primarily by NOL carryforwards, have been fully reserved due to the uncertainty surrounding the realization of such benefits. The net valuation allowance increased by approximately $29,000 and $0 during the years ended December 31, 2012 and 2011, respectively.

Current tax laws impose substantial restrictions on the utilization of net operating loss and credit carryforwards in the event of an “ownership change,” as defined by the Internal Revenue Code. If there should be an ownership change, the Company’s ability to utilize its carryforwards could be limited.

As of December 31, 2012 and 2011, the Company did not have any material unrecognized tax benefits. The 2012 and 2011 tax years remain open for examination by the federal and state authorities.

10.	Subsequent Events

During the first nine months of 2013, the Company issued additional convertible notes payable to nine individuals in exchange for $630,000 cash on similar terms to the Notes issued in 2012. These convertible notes payable carry an interest rate of 6% per annum and mature at various times in 2016 with principal and interest payable at maturity.

F-26

BioPharmX, Inc.

(a development stage enterprise)

Notes to Financial Statements

as of December 31, 2012 and 2011, and, cumulatively, for the period

from August 18, 2011 (date of inception) to December 31, 2012

____________

10.	Subsequent Events, continued

In March of 2013, the Company signed a collaboration and licensing agreement (“CLA”) with a biotechnology company with molecular iodine technology (the “Licensor”). The CLA terms included a $150,000 advanced profit sharing payment in exchange for exclusive licensing and patent indemnification rights to the Licensor’s molecular iodine technology. The payment schedule included $50,000 upon signing and an additional $100,000 to be paid in monthly increments of $10,000 starting October 15, 2013. Additionally, the terms included profit sharing and royalty fees related to future revenues generated from the technology product pipeline.

On August 23, 2013, the Company signed a lease for 10,800 square feet of office and laboratory space in Menlo Park, California. The term of the lease is 39 months from the lease commencement date of September 1, 3013.

The Company has evaluated all events occurring subsequent to December 31, 2012 through October 18, 2013, which is the date these financial statements were available to be issued, and did not identify any additional material recognizable subsequent events.

F-27

Nevada		000-54871		59-3843182
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

Item No.	Description of Item	Page No.

Item 1.01	Entry Into a Material Definitive Agreement	3

Item 2.01	Completion of Acquisition or Disposition of Assets	4

Item 3.02	Unregistered Sales of Equity Securities	18

Item 4.01	Changes in Registrant’s Certifying Accountant	18

Item 5.01	Changes in Control of Registrant	19

Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers	19

Item 5.03	Amendment of Articles of Incorporation or Bylaws; Change in Fiscal Year	19

Item 5.06	Change in Shell Company Status	20

Item 9.01	Financial Statements and Exhibits	20

●	The “Company,” “we,” “us,” or “our,” are references to the combined business of Thompson Designs, Inc. (“Thompson Designs”) and its subsidiary, BPMX.

●	“BPMX” refers to BioPharmX Inc., a Delaware corporation, and our direct, wholly owned subsidiary.

●	“U.S. dollar,” “$” and “US$” refer to the legal currency of the United States.

●	“Securities Act” refers to the Securities Act of 1933, as amended.

●	“Exchange Act” refers to the Securities Exchange Act of 1934, as amended.

Title		Patent Number
Treatment of iodine deficiency diseases		US 5,589,198
Methods and pharmaceutical compositions for oral delivery of molecular iodine		US 5,885,592
Stabilized oral pharmaceutical composition containing iodide and iodate and method		US 6,248,335
Non-staining topical iodine composition and method		US 6,432,426
Method for the eradication of pathogens including S. Aureus and antibiotic resistant microbes from the upper respiratory tract of mammals and for inhibiting the activation of immune cells		US 8,303,994

Title		Patent Application Number
Methods for inhibiting the activation of immune cells		US 2013-0039997 A1

	1098 Hamilton Court Menlo Park, CA 94025
	(Address of Principal Executive Offices)

	September 30, 2013
Current Assets	$	166,540
Current Liabilities	$	498,756
Working Capital Deficit	$	(332,216	)

Name	Age	Position
James R. Pekarsky	54	Chief Executive Officer, Chief Financial Officer, and Chairman of the Board of Directors

Anja Krammer	46	President and Director

(1)	Mr. Pekarsky was appointed as our Chief Executive Officer, Chief Financial Officer and Chairman on January 21, 2014. Mr. Pekarsky has been the Chief Executive Officer and Director of BPMX since its inception.
(2)	Ms. Krammer was appointed as our Director and President on January 21, 2014. Ms. Krammer has been the President and Director of BPMX since its inception.
(3)	Ms. Thompson resigned as our Sole Director, Chief Executive Officer, Chief Financial Officer, President, Treasurer and Secretary on January 21, 2014.

Name Officers and Directors	Office	Shares Beneficially Owned (1)		Percent of Class (2)

James Pekarsky	Chairman and CEO		2,500,000		27.7	%

Anja Krammer	Director and President		2,500,000		27.7	%

All officers and directors as a group (2 persons named above)			5,000,000		55.4	%

5% Securities Holders

Kin Chan 1098 Hamilton Court Menlo Park, California 94025			1,200,000		13.3	%

Kevin Mszanowski 211 Solana Drive Los Altos, California 94022			825,000		9.1	%


(1)	Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

(2)	Based on 9,025,000 shares of the Company’s common stock issued and outstanding.

1.	The number of shares constituting that series and the distinctive designation of that series, which may be by distinguishing number, letter or title;

2.	The dividend rate on the shares of that series, whether dividends will be cumulative, and if so, from which date(s), and the relative rights of priority, if any, of payment of dividends on shares of that series;

3.	Whether that series will have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;

4.	Whether that series will have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the board of directors determines;

5.	Whether or not the shares of that series will be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they are redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

6.	Whether that series will have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;

7.	The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the corporation, and the relative rights of priority, if any, of payment of shares of that series;

8.	Any other relative rights, preferences and limitations of that series

Exhibit No.		Description

2.1		Form of Share Exchange Agreement dated January 23, 2014 by and among the Company, BioPharmX Inc. and BioPharmX Stockholders.

4.1		Form of Notes issued pursuant to the Stock Purchase Agreement dated January 3, 2014.

4.2		Form of Warrant issuable pursuant to the Stock Purchase Agreement dated January 3, 2014.

10.1		Form of Stock Purchase Agreement dated January 23, 2014 by and between Kade Thompson and BioPharmX Inc.

10.2		Form of Employment Agreement dated January 23, 2014 by and between James Pekarsky and the Company.

10.3		Form of Employment Agreement dated January 23, 2014 by and between Anja Krammer and the Company.

10.4		Amended and Restated Collaboration and License Agreement dated as of March 1, 2013 by and between BioPharmX Inc. and Iogen LLC.

10.5		Collaboration and Supply Agreement dated as of October 22, 2013 by and between BioPharmX Inc. and Nutech Medical, Inc.

10.6		Lease Agreement dated August 23, 2013 by and between Prologis, L.P. and BioPharmX Inc.

10.7		2014 Equity Incentive Plan.

10.8		Form of Securities Purchase Agreement dated January 3, 2014 by and between BPMX and the investor.

10.9		Form of Amendment to the Securities Purchase Agreement dated January 3, 2014.

10.10		Form of Security Agreement dated January 3, 2014 by and between BPMX and the collateral agent.

16.1		Letter of Silberstein Ungar, PLLC to the SEC dated January 23, 2014.

21.1		List of Subsidiaries.

	Page
Unaudited Condensed Financial Statements as of September 30, 2013
Condensed Balance Sheets (Unaudited)		F-2
Condensed Statements of Operations and Comprehensive Loss (Unaudited)		F-3
Condensed Statements of Cash Flows (Unaudited)		F-4
Notes to Condensed Financial Statements (Unaudited)		F-5 - F-12

Financial Statements as of December 31, 2012 and 2011
Report of Independent Registered Public Accounting Firm		F-13
Balance Sheets		F-14
Statements of Operations and Comprehensive Loss		F-15
Statement of Stockholders’ Deficit		F-16
Statements of Cash Flows		F-17
Notes to Consolidated Financial Statements		F-18 - F-27

Unaudited Proforma Financial Statements of the Company		F-28
Proforma Balance Sheet (Unaudited)		F-29
Proforma Statement of Operations (Unaudited)		F-30
Notes to Proforma Financial Statements (Unaudited)		F-31

B IO P HARM X , I NC.
(a development stage enterprise)
UNAUDITED CONDENSED B ALANCE S HEETS
as of September 30, 2013 and December 31, 2012
____________
	September 30, 2013			December 31, 2012
A SSETS
Current assets:
Cash	$	24,059		$	137,850
Prepaid expenses and other current assets		142,481			1,927
Total current assets		166,540			139,777

Property and equipment, net		29,972			12,194
Intangible assets, net		150,000			-
Other assets		50,000			-
Total assets	$	396,512		$	151,971

L IABILITIES AND S TOCKHOLDERS' D EFICIT

Current liabilities:
Accounts payable and accrued expenses	$	259,476		$	16,115
Related party payables		139,280			16,530
Convertible notes, short-term		100,000			-
Total current liabilities		498,756			32,645

Convertible notes payable		590,207			162,628
Other long-term liabilities		20,717			2,566
Total liabilities		1,109,680			197,839

Commitments and contingencies (Note 8)
Stockholders' deficit:
Common stock, $0.0001 par value; 1 0,000,000 shares authorized; 7,025,000 and 7,400,000 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively		703			740
Additional paid-in capital		202,813			48,487
Deficit accumulated during the development stage		(916,684	)		(95,095	)
Total stockholders' deficit		(713,168	)		(45,868	)
Total liabilities and stockholders' deficit	$	396,512		$	151,971

B IO P HARM X , I NC.
(a development stage enterprise)
UNAUDITED CONDENSED S TATEMENTS OF O PERATIONS AND C OMPREHENSIVE L OSS
for thethree and nine months ended September 30, 2013 and 2012 and, cumulatively,
for the period from August 18, 2011 (date of inception) to September 30, 2013
____________

	Three months ended September 30,						Nine months ended September 30,						Cumulative for the period from August 18, 2011 (date of inception) to
	2013			2012			2013			2012			September 30, 2013
Operating expenses:
Research and development	$	221,653		$	1,154		$	400,726		$	3,499		$	435,477
Sales and marketing		44,725			250			72,728			550			82,011
General and administrative		162,877			4,082			306,406			7,247			352,272
Total operating expenses		429,255			5,486			779,860			11,296			869,760
Loss from operations		(429,255	)		(5,486	)		(779,860	)		(11,296	)		(869,760	)
Interest expense		(22,210	)		-			(41,729	)		-			(46,924	)
Net and comprehensive loss	$	(451,465	)	$	(5,486	)	$	(821,589	)	$	(11,296	)	$	(916,684	)

B IO P HARM X , I NC.
(a development stage enterprise)
UNAUDITED CONDENSED S TATEMENTS OF C ASH F LOWS
for the nine months ended September 30, 2013 and 2012 and, cumulatively,
for the period from August 18, 2011 (date of inception) to September 30, 2013
____________

	Nine months ended September 30,						Cumulative for the period from August 18, 2011 (date of inception) to
	2013			2012			September 30, 2013
Cash flows from operating activities:
Net loss	$	(821,589	)	$	(11,296	)	$	(916,684	)
Adjustments to reconcile net loss to net cash from
operating activities:
Stock-based compensation expense		28,308			5,145			37,165
Depreciation expense		6,251			-			6,871
Noncash interest expense		41,729			-			46,923
Changes in assets and liabilities:
Prepaid expenses and other assets		(190,554	)		-			(192,481	)
Accounts payable and accrued expenses		143,361			(2,207	)		159,476
Related party payables		122,750			8,880			139,280
Net cash provided by (used in) operating activities		(669,744	)		522			(719,450	)

Cash flows from investing activities:
Purchases of property and equipment		(24,029	)		(1,631	)		(36,843	)
Purchase of intellectual property		(50,000	)		-			(50,000	)
Net cash used in investing activities		(74,029	)		(1,631	)		(86,843	)

Cash flows from financing activities:
Repurchase of common stock		(18	)		-			(18	)
Proceeds from issuance of common stock		-			370			370
Proceeds from issuance of convertible notes payable		630,000			100,000			830,000
Net cash provided by financing activities		629,982			100,370			830,352

Net increase (decrease) in cash and cash equivalents		(113,791	)		99,261			24,059
Cash at beginning of period		137,850			1,953			-
Cash at end of period	$	24,059		$	101,214		$	24,059

Non-cash financing activities:
Fair value of beneficial conversion feature issued in connection with convertible notes payable	$	126,000		$	20,000		$	166,000
Intangible assets purchase accrued	$	100,000		$	-		$	100,000

	Three months ended September 30,				Nine months ended September 30,				Cumulative for the period from August 18, 2011 (date of i nception) to September 30,
	2013		2012		2013		2012		2013

Research and development	$	8,967	$	1,154	$	13,202	$	3,462	$	17,818
Sales and marketing		2,568		-		3,649		-		3,828
General and administrative		5,993		1,683		11,457		1,683		15,519
Total stock-based compensation expense	$	17,528	$	2,837	$	28,308	$	5,145	$	37,165

	Nine months ended September 30, 2013			Year ended December 31, 2012
Expected term	5.52 - 6.08 years			5.52 - 6.08 years
Risk-free interest rate		0.61% - 1.49	%		0.61% - 0.81	%
Volatility		82.08	%		82.08	%
Dividend yield		-			-
Weighted average grant date fair value	$	0.19		$	0.06

Year ended December 31,

2013 (remainder)	$	23,220

2014		279,337

2015		287,717

2016		270,975

Total	$	861,249

	BioPharmX, Inc. at September 30, 2013			Notes	Thompson Designs Inc. at September 30, 2013			Adjustments			Notes	Pro Forma
ASSETS:
Cash	$	24,059			$	162		$	(162	)		$	24,059
Prepaid expenses and other current assets		142,481				-							142,481
TOTAL CURRENT ASSETS		166,540				162			(162	)			166,540
Property and equipment, net		29,972				-							29,972
Intellectual property		150,000				-							150,000
Other Assets		50,000				-							50,000
TOTAL ASSETS	$	396,512			$	162		$	(162	)		$	396,512
LIABILITIES AND STOCKHOLDERS DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	259,476			$	120,032		$	(120,032	)		$	259,476
Related party payables		139,280				116			(116	)			139,280
Convertible notes payable		100,000				-			-				100,000
TOTAL CURRENT LIABILITIES		498,756				120,148			(120,148	)			498,756
Convertible notes payable		590,207				-			-				590,207
Promissory note – related party		-				2,925			(2,925	)			-
Other long-term liabilities		20,717				-			-				20,717
TOTAL LIABILITIES		1,109,680				123,073			(123,073	)			1,109,680
SHAREHOLDERS' DEFICIT
Common stock		703				9,000			(678	)	(2)		9,007
Additional paid-in-capital		202,813				13,000			678		(2)		216,509
Deficit accumulated during the development stage		(916,684	)			(144,911	)		122,911				(938,684	)
TOTAL SHAREHOLDERS' DEFICIT		(713,168	)			(122,911	)		122,911				(713,168	)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$	396,512			$	162		$	(162	)		$	396,512

	BioPharmX, Inc. Nine Months Ended September 30, 2013			Notes	Thompson Designs Inc. Nine Months Ended September 30, 2013			Adjustments			Notes	Pro Forma
OPERATING EXPENSES:
Research and development	$	400,726			$	-						$	400,726
Sales and marketing		72,728				-							72,728
General and administrative		306,406				49,524			(49,524	)			306,406
TOTAL OPERATING EXPENSES		779,860				49,524			(49,524	)			779,860
Other income (expense) - Interest expense		(41,729	)			-							(41,729	)
NET LOSS	$	(821,589	)		$	(49,524	)	$	49,524			$	(821,589	)
PER SHARE INFORMATION - BASIC AND FULLY DILUTED (Note 5):
Weighted average shares outstanding													9,0250,000
Net loss per share, basic and fully diluted												$	(0.09	)

	BioPharmX, Inc. period August 18, 2011 (Inception) to September 30, 2013			Notes	Thompson Designs Inc. period August 30, 2010 (Inception) to September 30, 2013			Adjustments		Notes	Pro Forma

OPERATING EXPENSES:
Research and development	$	435,477			$	-					$	435,477
Sales and marketing		82,011				-						82,011
General and administrative		352,272				144,419			(144,419)			352,272
TOTAL OPERATING EXPENSES		869,760				144,419			(144,419)			869,760
Other income (expense) - Interest expense		(46,924	)			3						(46,924	)
NET LOSS	$	(916,684	)		$	(144,416	)	$	144,419		$	(916,684	)
PER SHARE INFORMATION - BASIC AND FULLY DILUTED (Note 5):
Weighted average shares outstanding												9,025,000
Net loss per share, basic and fully diluted											$	(0.10	)

	Thompson Designs, Inc.

Date: January 27, 2014	By:	/s/ James R Pekarsky
		Name: James R. Pekarsky
		Title: Chief Executive Officer

BIOPHARMX INC.

By:
Name:	James Pekarsky
Title:	Chief Executive Officer


THOMPSON DESIGNS, INC.

By:
Name:	Anja Krammer
Title:	President

	If to the Company:	At the address set forth in the Purchase Agreement

	If to the Holder:	At the address set forth in the Purchase Agreement

	BiopharmX Inc.

	By:
		Name: Jim Pekarsky
		Title: Chief Executive Officer

Dated: _______________ __, 2013

	[Pubco]

	By:
	Name:	James Pekarsky
	Title:	Chief Executive Officer

Buyer

BioPharmX, Inc.

By:
Name:	James Pekarsky
Title:	Chief Executive Officer

	If to the Executive:

	James Pekarsky


	Telephone:
	E-mail:

	If to the Company:

	Thompson Designs, Inc.
	1098 Hamilton Court
	Menlo Park, California 94025
	Fax: (650) 900-4130

	With a copy to (which shall not constitute notice):

	Ofsink, LLC
	900 Third Avenue, 5 th Floor
	New York, New York 10022
	Attn: Darren Ofsink
	Fax: 646-224-9844

EXECUTIVE:	THOMPSON DESIGNS, INC.
	a Nevada corporation

	By:
Name: James Pekarsky	Name:	Anja Krammer
	Title:	President

EXECUTIVE:		THOMPSON DESIGNS, INC. a Nevada corporation

		By:
Name: Anja Krammer		Name:
		Title:

Bank’s Name and Address:	JP Morgan Chase N.A.
919 Third Avenue
	New York, NY 10022
Account #:	_________________________
ABA Routing #:	021000021
SWIFT:	CHASUS33 (for overseas transfers)

If to the Company, to:	BiopharmX Inc. 500 Ellis Street Mountain View, California 94043 Attn: Mr. Jim Pekarsky Facsimile: (650) 900-4130

With a copy to (which copy should not constitute a notice hereunder):	Ofsink, LLC 900 Third Avenue, 5 th Floor New York, NY 10022 Attn: Darren L. Ofsink, Esq. Facsimile: 646-224-9844

The USA PATRIOT Act	What is money laundering?	How big is the problem and why is it important?

The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the Unit ed States and abroad. The Act imposes new anti-money laundering requirements on brokerage firms and financial institutions. Since May 24, 2002, all brokerage firms have been required to have new, comprehensive anti-money laundering programs. To help you understand these efforts, we want to provide you with some information about money laundering and our steps to implement the USA PATRIOT Act.	Money laundering is the process of disguising illegally obtained money so that the funds appear to come from legitimate sources or activities. Money laundering occurs in connection with a wide variety of crimes, including illegal arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.	The use of the U.S. financial system by criminals to facilitate terrorism or other crimes could well taint our financial markets. According to the U.S. State Department, one recent estimate puts the amount of worldwide money laundering activity at US$1 trillion a year.