HealthWarehouse.com (HEWA) 10-Q 22 Oct 13 2013 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Oct. 18, 2013
Document And Entity Information
Entity Registrant Name	HealthWarehouse.com, Inc.
Entity Central Index Key	754813
Document Type	10-Q
Document Period End Date	30-Jun-13
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,529,091
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash	$808
Restricted cash		850,002
Accounts receivable, net	288,901	214,973
Inventories - finished goods, net	357,597	395,584
Prepaid expenses and other current assets	53,107	52,292
Total current assets	700,413	1,512,851
Property and equipment, net	748,124	768,021
Total assets	1,448,537	2,280,872
Current liabilities:
Accounts payable - trade	2,768,410	2,973,774
Accounts payable - related parties	184,983	147,933
Accrued expenses and other current liabilities	625,188	1,942,769
Deferred revenue	18,605	73,787
Current portion of equipment lease payable	52,565	49,122
Convertible notes		1,000,000
Notes payable and other advances, net of debt discount of $0 and $44,363 as of June 30, 2013 and December 31, 2012, respectively	40,000	1,955,637
Note payable and other advances - related parties		765,000
Redeemable preferred stock - Series C; par value $0.001 per share; 10,000 designated Series C: 10,000 issued and outstanding as of June 30, 2013 and December 31, 2012 (aggregate liquidation preference of $1,000,000)	1,000,000	1,000,000
Total current liabilities	4,689,751	9,908,022
Long term liabilities:
Long term portion of equipment lease payable	139,005	166,286
Note payable, net of debt discount of $247,900 as of June 30, 2013	225,100
Total long term liabilities	364,105	166,286
Total liabilities	5,053,856	10,074,308
Commitments and contingencies
Preferred stock - par value $0.001 per share; authorized 1,000,000 shares; issued and outstanding as of June 30, 2013 and December 31, 2012 as follows:
Convertible preferred stock - Series A - 200,000 shares designated Series A; 44,443 shares available to be issued; no shares issued and outstanding
Convertible preferred stock - Series B - 625,000 shares designated Series B; 422,315 and 394,685 shares issued and outstanding as of June 30, 2013 and December 31, 2012 , respectively (aggregate liquidation preference of $4,130,557 and $3,990,877 as of June 30, 2013 and December 31, 2012, respectively)	422	395
Common stock - par value $0.001 per share; authorized 50,000,000 shares; 27,100,119 and 13,030,397 shares issued and 25,920,907 and 11,851,185 shares outstanding as of June 30, 2013 and December 31, 2012, respectively	27,100	13,031
Additional paid-in capital	26,698,877	16,460,385
Employee advances	-63,574	-18,858
Treasury stock, at cost, 1,179,212 shares as of March 31, 2013 and December 31, 2012	-3,419,715	-3,419,715
Accumulated deficit	-26,848,429	-20,828,674
Total stockholders' deficiency	-3,605,319	-7,793,436
Total liabilities and stockholders' deficiency	$1,448,537	$2,280,872

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current liabilities:
Current Portion Notes Payable, deferred debt discount	$0	$44,363
Redeemable preferred stock Series C, par value	0.001	0.001
Redeemable preferred stock Series C, shares designated	10,000	10,000
Redeemable preferred stock Series C, shares issued	10,000	10,000
Redeemable preferred stock Series C, shares outstanding	10,000	10,000
Redeemable preferred stock Series C, aggregate liquidation preference	1,000,000	1,000,000
Note payable, net of debt discount	247,900
Stockholders' deficiency:
Preferred stock, par value	$0.00	$0.00
Preferred stock, authorized	1,000,000	1,000,000
Preferred stock, shares issued	1,000,000	1,000,000
Preferred stock, shares outstanding	1,000,000	1,000,000
Series A Convertible preferred stock, shares designated	200,000	200,000
Series A Convertible preferred stock, shares available to be issued	44,443	44,443
Series A Convertible preferred stock, shares issued	0	0
Series A Convertible preferred stock, shares outstanding	0	0
Series B Convertible preferred stock, shares designated	625,000	625,000
Series B Convertible preferred stock, shares issued	422,315	394,685
Series B Convertible preferred stock, shares outstanding	422,315	394,685
Series B Convertible preferred stock, aggregate liquidation preference	$4,130,557	$3,990,877
Common stock, par value	$0.00	$0.00
Common stock, authorized	50,000,000	50,000,000
Common stock, shares issued	27,100,119	13,030,397
Common stock, shares outstanding	25,920,907	11,851,185
Treasury stock, shares	1,179,212	1,179,212

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Condensed Consolidated Statements Of Operations
Net sales	$2,674,761	$2,997,326	$5,084,677	$6,150,933
Cost of sales	1,339,120	1,515,608	2,574,276	3,220,255
Gross profit	1,335,641	1,481,718	2,510,401	2,930,678
Operating expenses:
Selling, general and administrative expenses	1,546,446	2,824,358	3,935,549	5,508,836
Loss from operations	-210,805	-1,342,640	-1,425,148	-2,578,158
Other income (expense):
Loss on extinguishment of debt			-2,792,900
Interest income		1,210		3,758
Interest expense	-58,182	-261,240	-129,305	-578,582
Total other expense	-58,182	-260,030	-2,922,205	-574,824
Net loss	-268,987	-1,602,670	-4,347,353	-3,152,982
Series B convertible contractual dividends	-69,840	-65,271	-139,680	-130,542
Series B convertible deemed dividends			-1,532,722
Series C redeemable deemed dividends		-92,916		-185,832
Loss attributable to common stockholders	($338,827)	($1,760,857)	($6,019,755)	($3,469,356)
Per share data:
Net loss - basic and diluted	($0.01)	($0.15)	($0.21)	($0.31)
Series B convertible contractual dividends		($0.01)	($0.01)	($0.01)
Series B convertible deemed dividends			($0.07)
Series C redeemable deemed dividends		($0.01)		($0.02)
Net loss attributable to common stockholders - basic and diluted	($0.01)	($0.17)	($0.29)	($0.34)
Weighted average number of common shares outstanding - basic and diluted	25,216,138	10,378,713	20,439,551	10,229,003

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (USD $)	Convertible Series B Preferred Stock	Common Stock	Additional Paid-In Capital	Employee Advances	Treasury Stock	Accumulated Deficit	Total
Beginning Balance, Amount at Dec. 31, 2012	$395	$13,031	$16,460,385	($18,858)	($3,419,715)	($20,828,674)	($7,793,436)
Beginning Balance, Shares at Dec. 31, 2012	394,685	13,030,397			1,179,212
Stock-based compensation			353,407				353,407
Warrants issued to 2012 private placement investors			487,200				487,200
Issuance of Series B preferred stock as payment-in-kind for dividend, Amount	27		261,057				261,084
Issuance of Series B preferred stock as payment-in-kind for dividend, Shares	27,630
Cashless exercise of warrants into common stock, Amount		9,734	-9,734
Cashless exercise of warrants into common stock, Shares		9,734,747
Contractual dividends on Series B convertible preferred stock						-139,680	-139,680
Beneficial conversion feature and deemed dividend on Series B convertible preferred stock			1,532,722			-1,532,722
Warrants issued as debt discount in connection with notes payable			315,300				315,300
Conversion of notes and accounts payable into common stock and warrants, Amount		833	3,625,067				3,625,900
Conversion of notes and accounts payable into common stock and warrants, Shares		833,000
Issuance of common stock and warrants for cash, Amount		3,502	3,498,473				3,501,975
Issuance of common stock and warrants for cash, Shares		3,501,975
Imputed value of services contributed			175,000				175,000
Reduction in value of employee advance reserve				-44,716			-44,716
Net loss						-4,347,353	-4,347,353
Ending Balance, Amount at Jun. 30, 2013	$422	$27,100	$26,698,877	($63,574)	($3,419,715)	($26,848,429)	($3,605,319)
Ending Balance, Shares at Jun. 30, 2013	422,315	27,100,119			1,179,212

CONDENSED_CONSOLIDATED_STATEME2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	6 Months Ended				12 Months Ended
	Jun. 30, 2013		Jun. 30, 2012		Dec. 31, 2012
Cash flows from operating activities
Net loss	($4,347,353)		($3,152,982)		($5,574,775)
Adjustments to reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts	-44,716		10,521
Depreciation and amortization	71,693		179,647
Stock-based compensation	353,407		549,630
Warrants issued to 2012 private placement investors	487,200
Loss on extinguishment of notes and accounts payable	2,792,900
Imputed value of services contributed	175,000
Amortization of debt discount	84,763		431,422
Changes in operating assets and liabilities:
Accounts receivable	-73,928		34,386
Inventories - finished goods	37,987		26,878
Prepaid expenses and other current assets	-815		10,542
Accounts payable - trade	-205,364		1,120,686
Accounts payable - related parties	159,050		-4,116
Accrued expenses and other current liabilities	-360,175		211,438
Deferred revenue	-55,182
Net cash used in operating activities	-925,533		-581,948		-947,911
Cash flows from investing activities
Change in restricted cash	850,002
Changes in employee advances			138,241
Website development costs	-51,796
Net cash provided by investing activities	798,206		138,241
Cash flows from financing activities
Principal payments on equipment leases payable	-23,838		-32,691
Proceeds from exercise of common stock options			26,662
Proceeds from issuance of notes payable	500,000
Repayment of notes payable	-2,000,000
Repayment of convertible notes payable	-1,000,000
Proceeds from the sale of common stock	2,651,973	[1]	175,000	[1]
Cash overdraft			-46,313
Proceeds from notes payable and other advances - related parties			605,000
Repayment of notes payable and other advances - related parties			-283,812
Net cash provided by financing activities	128,135		443,846
Net increase in cash	808		139
Cash - beginning of year			40		40
Cash - end of year	808		179
Interest	399,374		21,491
Taxes	899
Non-cash investing and financing activities:
Issuance of Series B preferred stock for settlement of accrued dividends	261,084		244,001
Cashless exercise of warrants into common stock	9,734		1,465
Cashless exercise of options into common stock			93
Warrants issued as debt discount in connection with notes payable	315,300
Accrual of contractual dividends on Series B convertible preferred stock	139,680		130,542
Deemed dividends on Series B convertible preferred stock	1,532,722
Reclassification of accounts payable - trade to equipment lease payable			257,583
Deemed dividend - redeemable Series C preferred stock			185,832
Common stock and warrants issued in exchange of notes and accounts payable	$3,625,900
[1]	Excludes $850,002 of cash received during 2012 but closed on during the six months ended June 30, 2013.

Organization_and_Basis_of_Pres

Organization and Basis of Presentation	6 Months Ended
	Jun. 30, 2013
Organization And Basis Of Presentation
Note 1 - Organization and Basis of Presentation	HealthWarehouse.com, Inc., a Delaware company incorporated in 1998, (the “Company”) is a U.S. licensed virtual retail pharmacy (“VRP”) and healthcare e-commerce company that sells brand name and generic prescription drugs as well as over-the-counter (“OTC”) medical products. The Company’s objective is to be viewed by individual healthcare product consumers as a low-cost, reliable and hassle-free provider of prescription drugs and OTC medical products. The Company is presently licensed as a mail-order pharmacy for sales to 50 states and the District of Columbia.
	The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial statements of the Company as of June 30, 2013 and for the three and six months ended June 30, 2013 and 2012. The results of operations for the three and six months ended June 30, 2013 are not necessarily indicative of the operating results for the full year ending December 31, 2013. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related disclosures of the Company as of December 31, 2012 and for the year then ended, which were filed with the Securities and Exchange Commission on Form 10-K on July 23, 2013.

Going_Concern_and_Managements_

Going Concern and Management's Liquidity Plans	6 Months Ended
	Jun. 30, 2013
Going Concern And Managements Liquidity Plans
Note 2 - Going Concern and Management's Liquidity Plans	Since inception, the Company has financed its operations primarily through debt and equity financings and advances from related parties. As of June 30, 2013, the Company had a working capital deficiency of $3,989,338 and an accumulated deficit of $26,848,429. During the six months ended June 30, 2013 and year ended December 31, 2012, the Company incurred net losses of $4,347,353 and $5,574,775 and used cash in operating activities of $925,533 and $947,911, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
	Subsequent to June 30, 2013, the Company (a) raised an aggregate of $149,000 in debt financings; and (b) continues to incur net losses, use cash in operating activities and experience cash and working capital constraints. See Note 11.
	On February 13, 2013, the Company received a Notice of Redemption related to its Series C Redeemable Preferred Stock aggregating $1,000,000 (see Note 7). As a result of receiving the Notice of Redemption, the Company must now apply all of its assets to redemption of the Series C Preferred Stock and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders (the Company is not permitted to utilize toward the redemption those assets required to pay its debts as they come due and those assets required to continue as a going concern).
	The Company recognizes it will need to raise additional capital in order to fund operations, meet its payment obligations and execute its business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, attempt to extend note repayments, attempt to negotiate the preferred stock redemption and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.  If the Company is unable to obtain financing on a timely basis, the Company could be forced to sell its assets, discontinue its operation and /or seek reorganization under the U.S. bankruptcy code.
	Accordingly, the accompanying condensed consolidated financial statements have been prepared in conformity with GAAP, which contemplates continuation of the Company as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Summary_of_Significant_Account

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2013
Summary Of Significant Accounting Policies
Note 3 - Summary of Significant Accounting Policies	Principles of Consolidation
	On June 4, 2013, the Company formed a wholly-owned subsidiary called Pagosa Health LLC (“Pagosa”). The condensed consolidated financial statements include the accounts of HealthWarehouse.com, Inc., Hwareh.com, Inc., Hocks.com, Inc., ION Holding NV, ION Belgium NV and Pagosa, its wholly-owned subsidiaries. ION Holding NV and ION Belgium NV are inactive subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.
	Use of Estimates
	The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The Company’s significant estimates include reserves related to accounts receivable and inventory, the recoverability and useful lives of long-lived assets, the valuation allowance related to deferred tax assets, the valuation of equity instruments and debt discounts.
	Reclassifications
	Certain accounts in the prior period condensed consolidated financial statements have been reclassified for comparison purposes to conform to the presentation of the current period condensed consolidated financial statements.  These reclassifications had no effect on the previously reported net loss.
	Revenue Recognition
	Revenues for the sales of products are recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed and determinable and collectability is reasonably assured. The Company defers revenue when cash has been received from the customer but delivery has not yet occurred.  Such amounts are reflected as deferred revenues in the accompanying condensed consolidated financial statements.
	Net Loss Per Share of Common Stock
	Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted net loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock.  Potentially dilutive securities are excluded from the computation of diluted net loss per share if their inclusion would be anti-dilutive and consist of the following:
		June 30,
		2013		2012
	Options		2,235,650		2,025,475
	Warrants		2,798,771		562,846
	Series B Convertible Preferred Stock		3,438,275		1,973,427
	Convertible Promissory Notes		-		529,100
	Total potentially dilutive shares		8,472,696		5,090,848
	Stock-Based Compensation
	Stock-based compensation expense for all stock-based payment awards is based on the estimated fair value of the award. For employees and directors, the award is measured on the grant date.  For non-employees, the award is measured on the grant date and is then remeasured at each vesting date and financial reporting date.  The Company recognizes the estimated fair value of the award as compensation cost over the requisite service period of the award, which is generally the option vesting term.  The Company generally issues new shares of common stock to satisfy option and warrant exercises.
	Recently Issued Accounting Pronouncements
	In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU addresses the requirements regarding the financial statement presentation of an unrecognized tax benefit within Accounting Standards Codification ("ASC") Topic 740 for the purpose of providing consistency between the financial reporting of U.S. GAAP entities. Generally, this ASU provides guidance for the preparation of financial statements and disclosures when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  This ASU is effective for periods beginning after December 15, 2013 and is not expected to have any impact on the Company’s condensed consolidated financial statements or disclosures.

Accrued_Expenses_and_Other_Cur

Accrued Expenses and Other Current Liabilities	6 Months Ended
	Jun. 30, 2013
Accrued Expenses And Other Current Liabilities
Note 4 - Accrued Expenses and Other Current Liabilities	Accrued expenses and other current liabilities consisted of the following:
		June 30,		December 31,
		2013		2012
	Deferred rent	$	42,677	$	39,100
	Advertising		75,000		75,000
	Salaries and benefits		153,899		166,118
	Professional fees		110,000		81,872
	Dividends payable		139,681		261,084
	Accrued interest		44,250		410,101
	Due to investors (1)		-		850,002
	Customer payables		32,406		51,333
	Other		27,275		8,159
	Total	$	625,188	$	1,942,769
	(1) - Proceeds received from investors in advance of equity offering closing.

Convertible_Notes_Payable

Convertible Notes Payable	6 Months Ended
	Jun. 30, 2013
Convertible Notes Payable
Note 5 - Convertible Notes Payable	On February 1, 2013, the Company repaid convertible notes with an outstanding principal balance of $1,000,000 plus outstanding accrued interest of $163,861. The convertible notes bore interest at a rate of 7% per annum compounded annually and were due on December 31, 2012. The Company recorded amortization of debt discount associated with convertible notes payable of $82,617 and $165,233 for the three and six months ended June 30, 2012, respectively, using the effective interest method. As of December 31, 2012, the debt discount had been fully amortized.

Notes_Payable

Notes Payable	6 Months Ended
	Jun. 30, 2013
Notes Payable
Note 6 - Notes Payable	On February 1, 2013, the Company repaid notes with an outstanding principal balance of $2,000,000 plus outstanding accrued interest of $199,260. The notes bore interest at a rate of 7% per annum and were due on January 15, 2013.
	On March 28, 2013, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with a lender (the "Lender"). Under the terms of the Loan Agreement, the Company borrowed $500,000 from the Lender (the “Loan”). The Loan is evidenced by a promissory note (the “March Note”) and bears interest on the unpaid principal balance of the March Note until the full amount of principal has been paid at a floating rate equal to the Prime Rate plus four and one-quarter percent (4.25%) per annum (as of June 30, 2013, the Prime Rate was 3.25% per annum). Under the terms of the Loan Agreement, the Company has agreed to make monthly payments of accrued interest on the first day of every month, beginning on May 1, 2013. The principal amount and all unpaid accrued interest on the March Note is payable on March 1, 2015, or earlier in the event of default or a sale or liquidation of the Company. The Loan may be prepaid in whole or in part at any time by the Company without penalty.
	The Company granted the Lender a first, priority security interest in all of the Company’s assets, in order to secure the Company’s obligation to repay the Loan. The Loan Agreement contains customary negative covenants restricting the Company’s ability to take certain actions without the Lender’s consent, including incurring additional indebtedness, transferring or encumbering assets, paying dividends or making certain other payments, and acquiring other businesses. Upon the occurrence of an event of default, the Lender has the right to impose interest at a rate equal to five percent (5.0%) per annum above the otherwise applicable interest rate (the “Default Rate”). The repayment of the Loan may be accelerated prior to the maturity date upon certain specified events of default, including failure to pay, bankruptcy, breach of covenant, and breach of representations and warranties.
	In consideration of the Loan, the Company granted the Lender a five-year warrant to purchase 750,000 shares of common stock at an exercise price of $0.35 per share. The warrants contain customary anti-dilution provisions. The warrant had a relative fair value of $315,300 which was setup as debt discount and is being amortized using the effective interest method over the term of the Loan.  Including the value of the warrant, the March Note had an effective interest rate of 40% per annum.
	The Company recorded amortization of debt discount associated with notes payable of $40,400 and $84,763 for the three and six months ended June 30, 2013, respectively, and $133,094 and $266,189 for the three and six months ended June 30, 2012, respectively, using the effective interest method.
	See Note 7 – Stockholders’ Deficiency – Common Stock for details regarding the conversion of outstanding notes payable – related parties into common stock and warrants.
	See Note 11 – Subsequent Events for additional details.

Stockholders_Deficiency

Stockholders' Deficiency	6 Months Ended
	Jun. 30, 2013
Stockholders Deficiency
Note 7 - Stockholders' Deficiency	Common Stock
	During the six months ended June 30, 2013, pursuant to a private placement offering of units that commenced on October 4, 2012 (the “Private Placement”), the Company received an aggregate of $3,501,975 of proceeds related to the sale of 3,501,975 units at a price of $1.00 per unit. The aggregate amount includes $500,000, which was received from an officer, and $850,002, which was received during the fourth quarter of 2012 and classified as restricted cash as of December 31, 2012. Each unit consists of (i) one share of the Company’s common stock and (ii) a five-year warrant to purchase three shares of the Company’s common stock at an exercise price of $0.25 per share, such that warrants to purchase an aggregate of 10,505,925 shares of common stock were issued. Substantially all of the proceeds from the sale of the units were used by the Company to satisfy all of its obligations under the convertible notes and notes (see Notes 5 and 6). In connection with the Private Placement, an officer has entered into repurchase agreements with certain purchasers of units, pursuant to which he has agreed to repurchase, subject to certain conditions, one-half of these holder’s units at a purchase price of $1.00 per unit if the closing price of the Common Stock is less than $0.25 on five consecutive trading days at any time within one year of February 1, 2013. Cape Bear, which holds a substantial equity position in the Company, also entered into repurchase agreements with certain purchasers, other than the officer, that are substantially similar to the officer’s agreements, except that Cape Bear’s obligations are secured by a lien over certain real estate.
	On March 13, 2013, the Company exchanged $761,000 of notes payable and other advances – related parties and $72,000 of accounts payable to a related party into an aggregate of 833,000 units at a price of $1.00 per unit. Each unit consists of (i) one share of the Company’s common stock, and (ii) a five-year warrant to purchase two and three-quarters shares of the Company’s common stock at an exercise price of $0.25 per share (such that warrants to purchase an aggregate of 2,290,750 shares of common stock were issued). The $3,625,900 aggregate fair value of the securities issued ($2,639,700 related to the warrants and $986,200 related to the common stock) was credited to equity at conversion. The Company recorded a $2,792,900 extinguishment loss which represents the incremental fair value of the securities issued as compared to the carrying value of the liabilities.
	Series B Preferred Stock
	On January 1, 2013, the Company issued 27,630 shares of Series B Convertible Preferred Stock valued at $261,084, representing approximately $0.66 in value per share of Series B Preferred Stock outstanding to the Series B Convertible Preferred Stockholders as payment in kind for dividends (the “2013 Series B Dividend”). In connection with the 2013 Series B Dividend, the Company recognized a beneficial conversion feature of $202,305 during the six months ended June 30, 2013, which represents the difference between the commitment date value of the shares and the effective conversion price. In connection with the outstanding preferred stock, during the three and six months ended June 30, 2013, the Company recorded $69,840 and $139,689 as contractual dividends, respectively, and recorded $65,271 and $130,542 during the three and six months ended June 30, 2012, respectively. As of December 31, 2012, February 1, 2013, March 13, 2013 and April 11, 2013, Series B holders were entitled to convert into 5.00, 7.61, 8.07 and 8.14 shares, respectively, of the Company’s common stock for each share of Series B Preferred Stock due to the anti-dilution provision. The anti-dilution provision represents a contingent beneficial conversion feature.  As of June 30, 2013, an incremental 1,326,700 shares of common stock are issuable at conversion of the Series B Convertible Preferred Stock as compared to the original terms.   Using the commitment date common stock price in effect, the commitment date value of the incremental shares is $3,348,975. However, recognition of beneficial conversion features is limited to the aggregate gross proceeds allocated to the preferred stock of $3,199,689 (422,315 shares of Series B Convertible Preferred Stock times $9.45 per share less the proceeds allocated to the warrants of $791,188) less the $1,666,967 beneficial conversion feature already recognized on the original 365,265 shares of Series B Preferred Stock (prior to the issuance of additional shares as payment-in-kind in lieu of cash dividends) and the $202,305 recognized related to the 2013 Series B Dividend. Due to these limitations, a beneficial conversion feature of $0 and $1,330,417 related to the incremental shares was recognized during the three and six months ended June 30, 2013, respectively.
	Series C Preferred Stock
	On February 13, 2013, the Company received a Notice of Redemption of Series C Preferred Stock. As a result of the Convertible Notes coming due and not being paid on December 31, 2012, the Company accelerated the accretion rate of the deemed dividend on the Redeemable Preferred Stock – Series C and reclassified the Redeemable Preferred Stock – Series C from temporary equity to current liabilities. The Company recorded Series C deemed dividends of $92,916 and $185,832 during the three and six months ended June 30, 2012, respectively. As of December 31, 2012, the discount associated with the Series C Preferred Stock was fully amortized.
	Stock Options
	In applying the Black-Scholes option pricing model to stock options granted, the Company used the following weighted average assumptions:
			For The Three Months Ended				For The Six Months Ended
			June 30,				June 30,
			2013		2012		2013		2012
	Risk free interest rate		1.50%		n/a		1.13% to 1.50%		1.04%
	Dividend yield		0.00%		n/a		0.00%		0.00%
	Expected volatility		175.00%		n/a		166.0% to 175.0%		172.20%
	Expectd life in years		6		n/a		6		6
	The weighted average fair value of the stock options granted during the three and six months ended June 30, 2013 was $1.45 and $1.57 per share, respectively. The weighted average fair value of the stock options granted during the six months ended June 30, 2012 was $6.99 per share.  There were no stock options granted during the three months ended June 30, 2012.
	On February 15, 2013, the Company granted options to employees to purchase an aggregate of 330,500 shares of common stock under the 2009 Plan at an exercise price of $1.60 per share for an aggregate grant date value of $395,041. The options vest over a three year period and have a term of ten years.
	On June 19, 2013, the Company granted an option to a director to purchase 100,000 shares of common stock under the 2009 Plan at an exercise price of $1.45 per share for a grant date value of $109,600.  The option vests over a three year period and has a term of ten years.
	Stock-based compensation expense related to stock options was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses and totaled $13,799 and $326,243 for the three and six months ended June 30, 2013, respectively, and $290,221 and $549,630 for the three and six months ended June 30, 2012, respectively.  As of June 30, 2013, stock-based compensation expense related to stock options of $1,987,548 remains unamortized, including $1,095,979 which is being amortized over the weighted average remaining period of 2.1 years.  The remaining $891,569 is related to a performance based option where vesting is currently deemed to be improbable and no amount is being amortized.
	A summary of the stock option activity during the six months ended June 30, 2013 is presented below:
			Number				Weighted Average				Weighted Average Remaining
			of				Exercise				Life				Intrinsic
			Options				Price				In Years				Value
	Outstanding, January 1, 2013			2,183,899			$	3.42
	Granted			430,500				1.57
	Exercised			-				-
	Forfeited			(378,749	)			4.4
	Outstanding, June 30, 2013			2,235,650			$	2.89				5.7			$	143,937
	Exercisable, June 30, 2013			1,183,483			$	2.67				4.5			$	141,733
	The following table presents information related to stock options at June 30, 2013:
			Options Outstanding				Options Exercisable
			Weighted				Weighted		Weighted
	Range of		Average		Outstanding		Average		Average		Exercisable
	Exercise		Exercise		Number of		Exercise		Remaining Life		Number of
	Price		Price		Options		Price		In Years		Options
	$0.80 - $2.20		$         1.57		906,400		$         1.58		2.2		485,900
	$2.21 - $3.80		3.21		868,250		2.96		5.3		500,917
	$3.81 - $6.99		4.88		461,000		4.65		7.9		196,666
			$         2.89		2,235,650		$         2.67		4.5		1,183,483
	Warrants
	In applying the Black-Scholes option pricing model to stock warrants granted, the Company used the following weighted average assumptions:
			For The Three Months Ended				For The Six Months Ended
			June 30,				June 30,
			2013		2012		2013		2012
	Risk free interest rate		0.74%		n/a		0.87%		n/a
	Dividend yield		0.00%		n/a		0.00%		n/a
	Expected volatility		166.00%		n/a		164.30%		n/a
	Expectd life in years		5		n/a		5		n/a
	The weighted average fair value of the stock warrants granted during the three and six months ended June 30, 2013 was $0.71 and $1.36 per share, respectively.  There were no warrants granted during the three and six months ended June 30, 2012.
	On February 15, 2013, the Company granted vested five-year warrants to purchase an aggregate of 408,345 shares of common stock at an exercise price of $1.00 per share to investors who purchased shares in private placements at $4.50 per share during 2012. The warrants had an issuance date fair value of $487,200 which was expensed immediately.
	See Note 7 – Stockholders’ Deficiency – Common Stock for details regarding warrants granted in connection with the Private Placement and the conversion of related party notes payable, other advances and accounts payable into equity.
	During the six months ended June 30, 2013, the Company issued an aggregate of 9,734,747 shares of common stock to several holders of warrants who elected to exercise warrants to purchase 11,749,098 shares of common stock on a "cashless" basis under the terms of the warrants. The warrants had an exercise prices of $0.25 per share (10,590,750 gross shares), $0.35 per share (750,000 gross shares), and $1.00 per share (408,348 gross shares). The aggregate intrinsic value of the warrants exercised was $16,171,952 for the six months ended June 30, 2013.
	Stock-based compensation expense related to warrants for the three and six months ended June 30, 2013 was recorded in the condensed consolidated statements of operations as a component of selling, general and administrative expenses and totaled $9,587 and $514,364, respectively. There was no stock-based compensation expense related to warrants during the three and six months ended June 30, 2012. As of June 30, 2013, stock-based compensation expense related to warrants of $664,724 remains unamortized, including $87,884 which is being amortized over the weighted average remaining period of 2.3 years.  The remaining $576,840 is related to a performance based warrant where vesting is currently deemed to be improbable and no amount is being amortized.
	A summary of the stock warrant activity during the three months ended June 30, 2013 is presented below:
							Weighted Average				Weighted Average Remaining
			Number of				Exercise				Life				Intrinsic
			Warrants				Price				In Years				Value
	Outstanding, January 1, 2013			592,846			$	3.01
	Granted			13,955,023				0.28
	Exercised			(11,749,098	)			0.28
	Forfeited			-				-
	Outstanding, June 30, 2013			2,798,771			$	0.83				4.3			$	2,695,729
	Exercisable, June 30, 2013			2,518,771			$	0.58				4.4			$	2,695,729
The following table presents information related to stock warrants at June 30, 2013:
				Warrants Outstanding								Warrants Exercisable
				Weighted								Weighted				Weighted Average
Range of				Average				Outstanding				Average				Remaining		Exercisable
Exercise				Exercise				Number of				Exercise				Life		Number of
Price				Price				Warrants				Price				In Years		Warrants
$	0.25 - $0.35			$	0.25				2,205,925			$	0.25				4.6		2,205,925
$	0.36 - $3.00				2.91				562,846				2.91				3.2		312,846
$	3.01 - $4.95				4.95				30,000				-				-		-
				$	0.83				2,798,771			$	0.58				4.4		2,518,771
Services Contributed
Effective January 1, 2013, an executive officer of the Company waived payment for services contributed during 2013. As a result, the Company imputed the value of the services contributed and recorded salary expense of $87,500 and $175,000 for the three and six months ended June 30, 2013, respectively, with a corresponding credit to stockholders’ deficiency.

Commitments_and_Contingent_Lia

Commitments and Contingent Liabilities	6 Months Ended
	Jun. 30, 2013
Commitments And Contingent Liabilities
Note 8 - Commitments and Contingent Liabilities	Operating Leases
	On March 13, 2013, the Company gave notice of early termination for a lease agreement for a corporate apartment dated May 31, 2011. Accordingly, the lease expired on March 31, 2013. The Company did not incur any penalties related to the early termination of the lease agreement.
	On June 7, 2013, Pagosa signed a three year lease for $1,000 per month to house an office, pharmacy as well as inventory and is located in Lawrenceburg, Indiana. A redundant facility is required by Verified Internet Pharmacy Practice Sites (“VIPPS”) and a newly acquired contract.  Pagosa will serve as a backup facility and will function as a closed door pharmacy. On July 8, 2013, the parties agreed to extend the lease for two additional years, such that the new termination date is now June 7, 2018.
	During the three and six months ended June 30, 2013, the Company recorded aggregate rent expense of $47,617 and $93,336, respectively, and $46,307 and $98,764 during the three and six months ended June 30, 2012, respectively.
	Litigation
	On February 9, 2012, two of our former stockholders, Rock Castle and Jason Smith (“Plaintiffs”), filed suit against the Company in the Hamilton County, Ohio Court of Common Pleas, alleging that the Company had breached the terms of certain stock options the Company granted to the Plaintiffs in connection with the Company’s now-terminated oral consulting arrangements with the Plaintiffs, by among other things, refusing Plaintiffs’ purported exercise of options to purchase 233,332 shares of the Company’s common stock at an exercise price of $2.00 per share in December 2011.  Plaintiffs have requested that, among other things, the court require the Company to permit the exercise of the 233,332 options.  Plaintiffs have also provided an expert report indicating damages of $2.086 million. Also named as defendants were two individuals, Michael Peppel and Gary Singer, whom Plaintiffs claim acted as agents for the Company in connection with its purchase of shares of its common stock from Plaintiffs in September 2011. On April 26, 2013, Plaintiffs dismissed Mr. Singer from the lawsuit.  Trial of the case is currently scheduled for April of 2014.  The Company denies all of the Plaintiffs’ claims and intends to contest this matter vigorously.
	On October 9, 2012, American Express Travel Related Services Company, Inc. brought legal action against the Company in the Boone County, Kentucky Circuit Court. The action seeks to recover the unpaid balance on a credit card account in the amount of $87,029, plus interest and costs. The Company filed an answer in November 2012.  This litigation was resolved on July 10, 2013 by a negotiated settlement. Such amount has been accrued in the accompanying consolidated balance sheet as of June 30, 2013.
	On November 5, 2012, HD Smith, Inc., one of the Company’s vendors, (“Plaintiff”) filed a complaint against the Company alleging that it breached its vendor credit agreement. The Plaintiff is seeking damages of $170,316 plus pre-judgment interest and attorneys’ fees. This litigation was resolved on January 25, 2013, as amended on June 20, 2013, by a negotiated settlement. Such amount has been accrued in the accompanying consolidated balance sheet as of June 30, 2013.
	On March 13, 2013, a former vendor filed suit against the Company in the Hamilton County, Ohio Court of Common Pleas, alleging that the Company had breached its contract. The plaintiff is seeking damages of $17,800 plus pre-judgment interest and other costs and expenses. The Company answered the complaint and trial was set for June 2014. This matter was resolved by a negotiated settlement. Such amount has been accrued in the accompanying consolidated balance sheet as of June 30, 2013.
	On March 20, 2013, a complaint was filed in the Delaware Court of Chancery by two shareholders of the Company, HWH Lending, LLC and Milfam I L.P., seeking to compel the holding of an annual meeting of stockholders for the election of directors under Delaware law.  The Company filed an answer to the complaint on April 12, 2013.  On May 13, 2013, the Company publicly announced that the Board of Directors had set the date for the Company’s next annual meeting of stockholders as August 15, 2013 at 11:00 a.m. Eastern time.  In lieu of further litigation, on July 18, 2013, the parties submitted to the court a proposed order confirming August 15, 2013 as the annual meeting date and establishing certain procedures related to the annual meeting.  On July 18, 2013, the court entered the proposed order providing that (i) the Company shall notice and hold its annual meeting on August 15, 2013 for the election of directors and for the transaction of any other business properly brought before the meeting, and the date of the  meeting shall not be adjourned, continued or postponed prior to the election of directors absent an order of the court; (ii) the shares of the Company’s stock represented at the annual meeting, either in person or by proxy, and entitled to vote thereat shall constitute a quorum for purposes of the meeting, notwithstanding any contrary provision in the Company’s certificate of incorporation or bylaws, and (iii) the record date for the determination of stockholders entitled to notice of and to vote at the annual meeting is July 1, 2013, and if the annual meeting noticed for August 15, 2013 is adjourned, continued or postponed prior to the election of directors pursuant to an order of the court, the Company may set a new record date in accordance with the Company’s bylaws. In accordance with the Court order, the Company’s annual meeting of stockholders was held on August 15, 2013 at which time Lalit Dhadphale, Youssef Bennani, Joseph Savarino, and Ambassador Ned Siegel each received a plurality of the total votes cast at the annual meeting and each was elected as a director by the stockholders of the Company. On September 24, 2013, this action was dismissed without prejudice by a joint stipulation of dismissal.
	On April 23, 2013, the Company’s Board of Directors formed a Special Committee, chaired by Youssef Bennani, a director and Chairman of the Company’s Audit Committee, to investigate certain stockholder demands.  Since March 1, 2013, the Company has received three letters from stockholders alleging certain breaches of fiduciary duties by directors of the Company and demanding that the Company commence investigations of the alleged conduct.  On March 1, 2013, the Company received a letter on behalf of the holders of the Company’s Series B Preferred Stock (“Preferred Holders”) alleging that a convicted felon appears to be a consultant to the Company, owes the Company money, and exercises control over the Company.  On March 8, 2013, the Company received a letter on behalf of stockholder Wayne Corona alleging that two directors, Matthew Stecker and John Backus, breached their fiduciary duties and demanding that the Company investigate legal claims against those directors.  The letter alleges that the director designee of the holders of the Company’s Series B Preferred Stock and the director designee of New Atlantic Ventures Fund III, L.P. (“NAV”) acted in concert to attempt to scuttle the Company’s recent financing plan.  The letter also alleged that the director designee of the Preferred Holders and the director designee of NAV sought to prevent the Company from paying back its lenders in 2010 and 2011.  On March 18, 2013, the Company received a letter on behalf of the two directors denying the allegations and stating there was no proper basis for launching an investigation.  On March 27, 2013, a letter on behalf of Messrs. Backus and Stecker, in their capacities as directors and stockholders, demanded that the Company (i) investigate alleged breaches of confidentiality and fiduciary duties by the Company’s President and CEO and two other directors in connection with the purported stockholder demand letter of Mr. Corona dated March 8, 2013, and (ii) assert related claims against those individuals.  The letter also asserted that the director constituting the special committee, Youssef Bennani, is subject to alleged conflicts of interest that disqualify him from serving on any proposed special committee to evaluate the pending stockholder demands.  The Special Committee has retained an independent law firm to conduct the investigation and advise the Special Committee.
	On April 30, 2013, a purported class-action complaint was filed against the Company in the United States District Court for the Northern District of Illinois.  The complaint alleges that the Company sent an unsolicited advertising fax to Glen Ellyn Pharmacy, the named plaintiff, and other recipients.  The complaint alleges that such a fax violates the federal Telephone Consumer Protection Act (the “TCPA”), the Illinois Consumer Fraud Act and Illinois common law.  Under the TCPA, recipients of unsolicited fax advertisements are entitled to damages of up to $500 per fax for inadvertent violations and up to $1,500 for knowing or willful violations.  At the time of filing the complaint, the plaintiff also filed a motion asking the Court to certify a class of persons and entities who were sent advertising faxes by the Company which did not contain an opt out notice.  On June 19, 2013, the plaintiff filed an amended class-action complaint which withdrew the two counts for alleged violations of the Illinois Consumer Fraud Act and the common law tort of conversion.  The amended complaint eliminates claims for damages under Illinois law and leaves only a single count for an alleged violation of the TCPA.  The Company filed an answer to the amended complaint on July 8, 2013 contesting class certification and liability. The District Court has not established or recognized any class.  This litigation was resolved on September 24, 2013. The settlement amount is deemed to be de minimis.
	On May 7, 2013, a putative stockholder derivative action was filed in the Court of Chancery of the State of Delaware against certain directors and the chief executive officer of the Company and against the Company, as a nominal defendant.  The complaint alleges claims for breach of fiduciary duty, entrenchment and corporate waste arising out of the alleged failure to conduct annual meetings, SEC filing obligations, advances to a former employee and a $500,000 secured loan to the Company which the entire board of directors approved.  The derivative complaint seeks unspecified compensatory damages and other relief.  The Company and the individual defendants believe that the allegations stated in the complaint are without merit and they intend to defend themselves vigorously against the allegations. The individual director defendants filed a motion to dismiss the complaint on July 22, 2013 and filed an opening brief in support of the motion to dismiss on August 2, 2013.  The Company joined in the motion to dismiss.  Plaintiff’s brief in opposition to the motion to dismiss was due on September 16, 2013.  Instead of filing a brief in opposition to the motion to dismiss, on September 16, 2013, plaintiff filed an amended complaint against the same defendants alleging two claims for breach of fiduciary duty and corporate waste and deleting the claim for entrenchment.  The claims in the amended complaint arise out of allegations regarding a failure to conduct stockholder annual meetings, a failure to comply with SEC filing obligations, a lack of internal controls and unauthorized advances to a former employee and a $500,000 secured loan approved by the Company’s entire board.  The Company and the individual defendants continue to believe the allegations are without merit and intend to vigorously defend themselves against the allegations. On October 3, 2013, the individual director defendants moved to dismiss the amended complaint, and the Company joined in the motion to dismiss.  Under a briefing schedule approved by the court, defendants’ brief on the motion to dismiss is due by November 4, 2013, plaintiff’s answering brief is due by December 13, 2013, and defendants’ reply brief is due by January 10, 2014.
	On May 15, 2013, a former consultant filed suit in Boone County, Kentucky Circuit Court alleging breach of contract and unjust enrichment for unpaid consulting fees and expenses of approximately $27,000.  The Company filed an answer to the complaint on July 22, 2013 and intends to vigorously defend itself against the allegations.
	On August 9, 2013, two shareholders of the Company, HWH Lending, LLC and Milfam I L.P., filed in the Delaware Court of Chancery a verified complaint for injunctive and declaratory relief, seeking to prevent the Company from including a 10.5% block of shares held by a stockholder in the vote count at the Company’s upcoming annual meeting of stockholders scheduled for August 15, 2013.  The complaint alleged that the Company and its Chief Executive Officer did not follow proper procedures in issuing the shares to the stockholder and caused those shares to be issued in violation of Delaware law.  Following an expedited briefing schedule, the court held a hearing on August 14, 2013 and denied plaintiffs’ request for a temporary restraining order.  On August 21, 2013, the plaintiffs filed a notice of voluntary dismissal, dismissing the action without prejudice.
	On October 11, 2013, two former directors of the Company sent a letter demanding payment of $80,766 in legal fees and expenses pursuant to certain Company indemnification and advancement provisions.  The Company is evaluating the demand and has requested additional information.
	In the normal course of business the Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. Legal fees for such matters are expensed as incurred and we accrue for adverse outcomes as they become probable and estimable. Currently, other than discussed above, the Company is not involved in any such material matters.
	Settlement Agreement
	On February 22, 2013, the Company entered into a settlement agreement with a counterparty for amounts owed related to the return of expired goods and inventory and the Company wrote down the accounts receivable to the settlement amount as of December 31, 2012. On February 28, 2013, the Company received $50,000 in connection with the agreement in complete satisfaction of all outstanding and past due accounts receivable from the counterparty, such that there was no balance due to the Company as of June 30, 2013.

Concentrations

Concentrations	6 Months Ended
	Jun. 30, 2013
Concentrations
Note 9 - Concentrations	The Company maintains deposits in financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”). At various times, the Company has deposits in these financial institutions in excess of the amount insured by the FDIC.
	As of June 30, 2013, three companies represented approximately 17%, 13% and 10% of accounts receivable.  As of December 31, 2012, two companies represented approximately 18% and 14% of accounts receivable.
	During the three months ended June 30, 2013, two vendors represented 35% and 12% of total inventory purchases. During the six months ended June 30, 2013, two vendors represented 33% and 11% of total inventory purchases. During the three months ended June 30, 2012, two vendors represented 26% and 21% of total inventory purchases. During the six months ended June 30, 2012, two vendors represented 33% and 14% of total inventory purchases.

Related_Party_Transactions

Related Party Transactions	6 Months Ended
	Jun. 30, 2013
Related Party Transactions
Note 10 - Related Party Transactions	During the three and six months ended June 30, 2013, a director was paid $0 for general financial and business consulting. During the three and six months ended June 30, 2012, the director was paid $30,000 and $43,800, respectively, for general financial and business consulting. Beginning July 1, 2013, the director is to be paid $3,000 per month and is entitled to expense reimbursements as compensation for serving on the Company’s Board committees.
	From March 2011 to April 2013, a wife of a director served as the agent for the Company's D&O insurance. During the three and six months ended June 30, 2013, the Company recorded insurance premium expense of $14,100 and $28,200, respectively. During the three and six months ended June 30, 2012, the Company recorded insurance premium expense of $11,750 and $23,500, respectively.
	See Note 7 – Stockholders’ Deficiency – Common Stock for details regarding the exchange of common stock and warrants in satisfaction of related party notes payable, advances and accounts payable.

Subsequent_Events

Subsequent Events	6 Months Ended
	Jun. 30, 2013
Subsequent Events
Note 11 - Subsequent Events	The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements, except as disclosed below.
	Warrant Exercises
	Subsequent to June 30, 2013, the Company issued an aggregate of 608,184 shares of common stock to holders of warrants who elected to exercise warrants to purchase an aggregate of 756,000 shares of common stock on a "cashless" basis under the terms of the warrants. The warrants had exercise prices of $0.25 per share.
	Related Party Advances
	Subsequent to June 30, 2013, an officer advanced approximately $2,000 to the Company and he was repaid approximately $46,000. As of June 30, 2013, the outstanding payable to the officer was approximately $112,000.
	Notes Payable
	On August 15, 2013, the Company issued a note payable to a related party with a principal balance of $49,000, bearing interest at a rate of 10% per annum.  The note has a maturity date of November 7, 2013 and will be repaid in weekly payments of principal and interest beginning in September 2013.
	Effective September 30, 2013, the Company entered into an Amended and Restated Promissory Note (the “September Note”) which supersedes the March Note (see Note 6 – Notes Payable) with the same Lender.  The Company borrowed an additional $100,000 from the Lender, which brought the face value of the September Note to $600,000.  The September Note contains financial covenants which require the Company to meet certain minimum targets for earnings before interest, taxes and non-cash expenses, including depreciation, amortization and stock-based compensation (“EBITDAS”) for the calendar quarters and years ended between December 31, 2013 and 2014, inclusive. In addition, the September Note extended the deadline for providing the March 31, 2013 and June 30, 2013 quarterly financial statements and financial covenant certifications from 45 days after quarter end to October 31, 2013. The remainder of the material September Note terms are unchanged from the March Note.  In consideration of the Lender providing additional funds and entering into the September Note, the Company granted the Lender a five-year warrant to purchase 150,000 shares of common stock at an exercise price of $0.35 per share. The warrant contains customary anti-dilution provisions. The warrant had a relative fair value of $51,200 which was set up as debt discount and will be amortized using the effective interest method over the term of the September Note.  Including the value of warrants issued in connection with the March Note and September Note, the September Note had an effective interest rate of 41% per annum.
	Sublease Agreement
	On October 10, 2013, the Company entered into a sublease agreement for 15,000 square feet of warehouse space at the Company’s corporate headquarters in Florence, Kentucky. The initial term of the sublease expires on January 31, 2014 with rent of $4,688 per month. After the expiration of the initial term, the tenant may extend the term of the sublease agreement on a month to month basis.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2013
Summary Of Significant Accounting Policies Policies
Principles of Consolidation	On June 4, 2013, the Company formed a wholly-owned subsidiary called Pagosa Health LLC (“Pagosa”). The condensed consolidated financial statements include the accounts of HealthWarehouse.com, Inc., Hwareh.com, Inc., Hocks.com, Inc., ION Holding NV, ION Belgium NV and Pagosa, its wholly-owned subsidiaries. ION Holding NV and ION Belgium NV are inactive subsidiaries. All material inter-company balances and transactions have been eliminated in consolidation.
Use of Estimates	The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  The Company’s significant estimates include reserves related to accounts receivable and inventory, the recoverability and useful lives of long-lived assets, the valuation allowance related to deferred tax assets, the valuation of equity instruments and debt discounts.
Reclassifications	Certain accounts in the prior period condensed consolidated financial statements have been reclassified for comparison purposes to conform to the presentation of the current period condensed consolidated financial statements.  These reclassifications had no effect on the previously reported net loss.
Revenue Recognition	Revenues for the sales of products are recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed and determinable and collectability is reasonably assured. The Company defers revenue when cash has been received from the customer but delivery has not yet occurred.  Such amounts are reflected as deferred revenues in the accompanying condensed consolidated financial statements.
Net Loss Per Share of Common Stock	Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted net loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock.  Potentially dilutive securities are excluded from the computation of diluted net loss per share if their inclusion would be anti-dilutive and consist of the following:
		June 30,
		2013		2012
	Options		2,235,650		2,025,475
	Warrants		2,798,771		562,846
	Series B Convertible Preferred Stock		3,438,275		1,973,427
	Convertible Promissory Notes		-		529,100
	Total potentially dilutive shares		8,472,696		5,090,848
Stock-Based Compensation	Stock-based compensation expense for all stock-based payment awards is based on the estimated fair value of the award. For employees and directors, the award is measured on the grant date.  For non-employees, the award is measured on the grant date and is then remeasured at each vesting date and financial reporting date.  The Company recognizes the estimated fair value of the award as compensation cost over the requisite service period of the award, which is generally the option vesting term.  The Company generally issues new shares of common stock to satisfy option and warrant exercises.
Recently Issued Accounting Pronouncements	In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU addresses the requirements regarding the financial statement presentation of an unrecognized tax benefit within Accounting Standards Codification ("ASC") Topic 740 for the purpose of providing consistency between the financial reporting of U.S. GAAP entities. Generally, this ASU provides guidance for the preparation of financial statements and disclosures when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists.  This ASU is effective for periods beginning after December 15, 2013 and is not expected to have any impact on the Company’s condensed consolidated financial statements or disclosures.

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2013
Summary Of Significant Accounting Policies Tables
Schedule of Potentially Dilutive Securities	Potentially dilutive securities are excluded from the computation of diluted net loss per share if their inclusion would be anti-dilutive and consist of the following:
		June 30,
		2013		2012
	Options		2,235,650		2,025,475
	Warrants		2,798,771		562,846
	Series B Convertible Preferred Stock		3,438,275		1,973,427
	Convertible Promissory Notes		-		529,100
	Total potentially dilutive shares		8,472,696		5,090,848

Accrued_Expenses_and_Other_Cur1

Accrued Expenses and Other Current Liabilities (Tables)	6 Months Ended
	Jun. 30, 2013
Accrued Expenses And Other Current Liabilities Tables
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities consisted of the following:
		June 30,		December 31,
		2013		2012
	Deferred rent	$	42,677	$	39,100
	Advertising		75,000		75,000
	Salaries and benefits		153,899		166,118
	Professional fees		110,000		81,872
	Dividends payable		139,681		261,084
	Accrued interest		44,250		410,101
	Due to investors (1)		-		850,002
	Customer payables		32,406		51,333
	Other		27,275		8,159
	Total	$	625,188	$	1,942,769

Stockholders_Deficiency_Tables

Stockholders' Deficiency (Tables)	6 Months Ended
	Jun. 30, 2013
Stockholders Deficiency Tables
Schedule of Stock Options Granted	In applying the Black-Scholes option pricing model to stock options granted, the Company used the following weighted average assumptions:
			For The Three Months Ended				For The Six Months Ended
			June 30,				June 30,
			2013		2012		2013		2012
	Risk free interest rate		1.50%		n/a		1.13% to 1.50%		1.04%
	Dividend yield		0.00%		n/a		0.00%		0.00%
	Expected volatility		175.00%		n/a		166.0% to 175.0%		172.20%
	Expectd life in years		6		n/a		6		6
Summary of Stock Option Activity	A summary of the stock option activity during the six months ended June 30, 2013 is presented below:
			Number				Weighted Average				Weighted Average Remaining
			of				Exercise				Life				Intrinsic
			Options				Price				In Years				Value
	Outstanding, January 1, 2013			2,183,899			$	3.42
	Granted			430,500				1.57
	Exercised			-				-
	Forfeited			(378,749	)			4.4
	Outstanding, June 30, 2013			2,235,650			$	2.89				5.7			$	143,937
	Exercisable, June 30, 2013			1,183,483			$	2.67				4.5			$	141,733
Summary of Stock Option Outstanding and Exercisable	The following table presents information related to stock options at June 30, 2013:
			Options Outstanding				Options Exercisable
			Weighted				Weighted		Weighted
	Range of		Average		Outstanding		Average		Average		Exercisable
	Exercise		Exercise		Number of		Exercise		Remaining Life		Number of
	Price		Price		Options		Price		In Years		Options
	$0.80 - $2.20		$         1.57		906,400		$         1.58		2.2		485,900
	$2.21 - $3.80		3.21		868,250		2.96		5.3		500,917
	$3.81 - $6.99		4.88		461,000		4.65		7.9		196,666
			$         2.89		2,235,650		$         2.67		4.5		1,183,483
Schedule of Stock Warrants Granted	In applying the Black-Scholes option pricing model to stock warrants granted, the Company used the following weighted average assumptions:
			For The Three Months Ended				For The Six Months Ended
			June 30,				June 30,
			2013		2012		2013		2012
	Risk free interest rate		0.74%		n/a		0.87%		n/a
	Dividend yield		0.00%		n/a		0.00%		n/a
	Expected volatility		166.00%		n/a		164.30%		n/a
	Expectd life in years		5		n/a		5		n/a
Summary of Stock Warrant Activity	A summary of the stock warrant activity during the three months ended June 30, 2013 is presented below:
							Weighted Average				Weighted Average Remaining
			Number of				Exercise				Life				Intrinsic
			Warrants				Price				In Years				Value
	Outstanding, January 1, 2013			592,846			$	3.01
	Granted			13,955,023				0.28
	Exercised			(11,749,098	)			0.28
	Forfeited			-				-
	Outstanding, June 30, 2013			2,798,771			$	0.83				4.3			$	2,695,729
	Exercisable, June 30, 2013			2,518,771			$	0.58				4.4			$	2,695,729
Summary of Stock Warrants Outstanding and Exercisable	The following table presents information related to stock warrants at June 30, 2013:
					Warrants Outstanding								Warrants Exercisable
					Weighted								Weighted				Weighted Average
	Range of				Average				Outstanding				Average				Remaining		Exercisable
	Exercise				Exercise				Number of				Exercise				Life		Number of
	Price				Price				Warrants				Price				In Years		Warrants
	$	0.25 - $0.35			$	0.25				2,205,925			$	0.25				4.6		2,205,925
	$	0.36 - $3.00				2.91				562,846				2.91				3.2		312,846
	$	3.01 - $4.95				4.95				30,000				-				-		-
					$	0.83				2,798,771			$	0.58				4.4		2,518,771

Going_Concern_and_Managements_1

Going Concern and Management's Liquidity Plans (Details Narrative) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Going Concern And Managements Liquidity Plans Details Narrative
Working Capital Deficiency	$3,989,338		$3,989,338
Accumulated deficit	26,848,429		26,848,429		20,828,674
Net Losses	268,987	1,602,670	4,347,353	3,152,982	5,574,775
Net Cash Used in Operating Activities			925,533	581,948	947,911
Proceeds from debt financing			$149,000

Summary_of_Significant_Account3

Summary of Significant Accounting Policies (Details) (USD $)	Jun. 30, 2013	Jun. 30, 2012
Summary Of Significant Accounting Policies Details
Options	$2,235,650	$2,025,475
Warrants	2,798,771	562,846
Series B Convertible Preferred Stock	3,438,275	1,973,427
Convertible Promissory Notes		529,100
Total potentially dilutive shares	$8,472,696	$5,090,848

Accrued_Expenses_and_Other_Cur2

Accrued Expenses and Other Current Liabilities (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Accrued Expenses And Other Current Liabilities Details
Deferred rent	$42,677	$39,100
Advertising	75,000	75,000
Salaries and benefits	153,899	166,118
Professional fees	110,000	81,872
Dividends payable	139,681	261,084
Accrued interest	44,250	410,101
Due to investors (1)		850,002
Customer payables	32,406	51,333
Other	27,275	8,159
Total	$625,188	$1,942,769

Convertible_Notes_Payable_Deta

Convertible Notes Payable (Details Narrative) (USD $)	Jun. 30, 2013	Jun. 30, 2012
Convertible Notes Payable Details Narrative
Convertible Notes Payable	$82,617	$165,233

Notes_Payable_Details_Narrativ

Notes Payable (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Notes Payable Details Narrative
Notes payable	$40,400	$133,094	$84,763	$266,189

Stockholders_Deficiency_Detail

Stockholders' Deficiency (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2013
				Minimum [Member]	Maximum [Member]
Risk free interest rate	1.50%		1.04%	1.13%	1.50%
Dividend yield	0.00%		0.00%		0.00%
Expected volatility	175.00%		172.20%	166.00%	175.00%
Expectd life in years	6 years		6 years		6 years

Stockholders_Deficiency_Detail1

Stockholders' Deficiency (Details 1) (USD $)	6 Months Ended
	Jun. 30, 2013
Number of options, outstanding
Outstanding, beginning of period (in shares)	2,183,899
Granted	430,500
Exercised
Forfeited	-378,749
Outstanding, end of period (in shares)	2,235,650
Exercisable, June 30, 2013	1,183,483
Options, weighted average exercise price
Outstanding, beginning of period (in dollars per share)	$3.42
Granted	$1.57
Exercised
Forfeited	$4.40
Outstanding, end of period (in dollars per share)	$2.89
Exercisable, June 30, 2013	$2.67
Weighted Average Remaining Life In Years
Weighted Average Remaining Life (in years) Outstanding	5 years 8 months 12 days
Weighted Average Remaining Life (in years) Exercisable	4 years 6 months
Aggregate Intrinsic Value Outstanding	$143,937
Aggregate Intrinsic Value Exercisable	$141,733

Stockholders_Deficiency_Detail2

Stockholders' Deficiency (Details 2) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Number Outstanding	2,235,650	2,183,899
Weighted Average Remaining Years of Contractual Life	4 years 6 months
Weighted Average Exercise Price Outstanding	$2.89	$3.42
Number Exercisable	1,183,483
Weighted Average Exercise Price Exercisable	$2.67
$0.80-2.20
Number Outstanding	906,400
Weighted Average Remaining Years of Contractual Life	2 years 2 months 12 days
Weighted Average Exercise Price Outstanding	$1.57
Number Exercisable	485,900
Weighted Average Exercise Price Exercisable	$1.58
$2.21-3.80
Number Outstanding	868,250
Weighted Average Remaining Years of Contractual Life	5 years 3 months 18 days
Weighted Average Exercise Price Outstanding	$3.21
Number Exercisable	500,917
Weighted Average Exercise Price Exercisable	$2.96
$3.81-6.99
Number Outstanding	461,000
Weighted Average Remaining Years of Contractual Life	7 years 10 months 24 days
Weighted Average Exercise Price Outstanding	$4.88
Number Exercisable	196,666
Weighted Average Exercise Price Exercisable	$4.65

Stockholders_Deficiency_Detail3

Stockholders' Deficiency (Details 3)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Stockholders Deficiency Details 3
Risk free interest rate	0.74%		0.87%
Dividend yield	0.00%		0.00%
Expected volatility	166.00%		164.30%
Expectd life in years	5 years	0 years	5 years	0 years

Stockholders_Deficiency_Detail4

Stockholders' Deficiency (Details 4) (USD $)	6 Months Ended
	Jun. 30, 2013
Number of warrants, outstanding
Outstanding, beginning of period (in shares)	592,846
Granted	13,955,023
Exercised	-11,749,098
Forfeited
Outstanding, end of period (in shares)	2,798,771
Exercisable, June 30, 2013	2,518,771
Warrants, weighted average exercise price
Outstanding, beginning of period (in dollars per share)	$3.01
Granted	$0.28
Exercised	$0.28
Forfeited
Outstanding, end of period (in dollars per share)	$0.83
Exercisable, June 30, 2013	$0.58
Weighted Average Remaining Life In Years
Weighted Average Remaining Life (in years) Outstanding	4 years 3 months 18 days
Weighted Average Remaining Life (in years) Exercisable	4 years 4 months 24 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding	$2,695,729
Aggregate Intrinsic Value Exercisable	$2,695,729

Stockholders_Deficiency_Detail5

Stockholders' Deficiency (Details 6) (USD $)	Jun. 30, 2013
Number Outstanding	2,798,771
Weighted Average Remaining Contractual Term	4 years 4 months 24 days
Weighted Average Exercise Price Outstanding	$0.83
Number Exercisable	0.58
Weighted Average Exercise Price Exercisable	$2,518,771
$0.25 - $0.35
Number Outstanding	2,205,925
Weighted Average Remaining Contractual Term	4 years 7 months 6 days
Weighted Average Exercise Price Outstanding	$0.25
Number Exercisable	0.25
Weighted Average Exercise Price Exercisable	$2,205,925
$0.36 - $1.60
Number Outstanding	562,846
Weighted Average Remaining Contractual Term	3 years 2 months 12 days
Weighted Average Exercise Price Outstanding	$2.91
Number Exercisable	2.91
Weighted Average Exercise Price Exercisable	$312,846
$3.01 - $4.95
Number Outstanding	30,000
Weighted Average Remaining Contractual Term	0 years
Weighted Average Exercise Price Outstanding	$4.95
Number Exercisable
Weighted Average Exercise Price Exercisable

Stockholders_Deficiency_Detail6

Stockholders' Deficiency (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Aggregate shares			$3,501,975
Shares price			1.00%
Beneficial Conversion Feature			202,305
Common Stock Issuable	1,326,700		1,326,700
Beneficial Conversion Feature Related to Incremental Shares	0		1,330,417
Weighted Average Fair Value	$6.99		$6.99
Selling, General And Administrative Expenses	13,799	290,221	326,243	549,630
Stock-Based Compensation Expense				1,987,548
Weighted Average Remaining Period				2 years 1 month 6 days
Common Stock Warrant Issued			9,734,747
Warrants Exercise Purchase			16,171,952
Warrants Exercise Price Per Share			$0.25
Salary expense	87,500		175,000
Stock Options Granted	145.00%		157.00%
Series B Preferred Stock [Member]
Preferred Stock Contractual Dividends	69,840		139,689
Preferred Stock Recorded Shares	65,271		130,542
Series C Preferred Stock [Member]
Preferred Stock Deemed Dividend	92,916		185,832
Stock Warrants [Member]
Weighted Average Fair Value	$0.71	$0	$1.36	$0
Selling, General And Administrative Expenses	9,587	0	514,364	0
Stock-Based Compensation Expense			$664,724
Weighted Average Remaining Period			2 years 3 months 18 days

Commitments_and_Contingent_Lia1

Commitments and Contingent Liabilities (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Commitments And Contingent Liabilities Details Narrative
Rent Expense	$47,617	$46,307	$93,336	$98,764

Concentrations_Details_Narrati

Concentrations (Details Narrative)

6 Months Ended

12 Months Ended

6 Months Ended

12 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

Jun. 30, 2013

Dec. 31, 2012

Jun. 30, 2013

Dec. 31, 2012

Jun. 30, 2013

Jun. 30, 2013

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Customer 1 [Member]

Customer 1 [Member]

Customer 2 [Member]

Customer 2 [Member]

Customer 3 [Member]

Vendor 1 [Member]

Vendor 1 [Member]

Vendor 1 [Member]

Vendor 1 [Member]

Vendor 2 [Member]

Vendor 2 [Member]

Vendor 2 [Member]

Vendor 2 [Member]

Concentration Percentage

17.00%

18.00%

13.00%

14.00%

10.00%

35.00%

26.00%

33.00%

33.00%

12.00%

21.00%

11.00%

14.00%

Related_Party_Transactions_Det

Related Party Transactions (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Related Party Transactions Details Narrative
General financial and business consulting		$43,800	$0	$30,000
Insurance Premium Expense	$14,100	$23,500	$28,200	$11,750