UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

FOR THE QUARTERLY PERIOD ENDED March 31, 2013

OR

FOR THE TRANSITION PERIOD FROM ___________ TO ___________ 

Commission file number 000-14691

INDEPENDENCE RESOURCES PLC

(Exact name of registrant as specified in its charter)

Registrant’s telephone number including area code: (843) 715-9504

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes x   No ¨

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

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

As of May16, 2013, the registrant had 69,956,372 ordinary shares outstanding, including 31,180,764 shares issued as of May16, 2013 represented by American Depositary shares.

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PART I - FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

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

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

3

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

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INDEPENDENCE RESOURCES PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2013

(Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Historically, Independence Resources PLC was a life sciences company engaged in the research, development and commercialization of technologies that targeted the science of healthy aging. In early 2010, after an extensive review by the Board of Directors of the Company and outside advisors, the Board elected to change the overall direction of the Company from these sectors to the natural resources sector.

Independence Resources PLC, together with its subsidiaries (the “Company” which may be referred to as “Independence”), is a public limited company organized under the laws of England in 1983. Independence has three wholly-owned subsidiaries, Senetek Drug Delivery Technologies Inc. (“SSDT”) and Carmé Cosmeceutical Sciences Inc. (“CCSI”), both Delaware corporations, Iron Eagle Acquisitions, Inc. (“Iron Eagle”), a Nevada corporation. On April 18, 2012, Independence acquired 70% of Coeur d’ Alene Mine Contracting LLC.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

In the opinion of management, the unaudited interim financial statements included herein reflect all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position as of March 31, 2013 and the results of operations and cash flows for the periods ended March 31, 2013 and 2012.  The interim results of operations are not necessarily indicative of the results that may be expected for the full fiscal year.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Oil and gas revenues are recorded using the sales method.  Under this method, the Company recognized revenues based on actual volumes of oil and gas sold to purchasers.

The Company recognizes revenue from its mine contracting services, which are generally performed on an hourly basis, when services are performed and the customer accepts the work.

Earnings per Ordinary Share

Basic earnings per share are computed using the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share incorporate the incremental shares issuable upon the assumed exercise of dilutive stock options and warrants using the treasury stock method.

Options and warrants totaling 23,761,676 and 33,840,880 shares were outstanding at March 31, 2013 and 2012, respectively, but were excluded from the calculation of diluted earnings per share as their effect would have been antidilutive.

Going Concern

As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through March 31, 2013. These factors raise substantial doubt the Company may be able to continue in existence in the absence of receiving additional funding. The financial statements do not include any adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence

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INDEPENDENCE RESOURCES PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2013

(Unaudited)

NOTE 3 – INVESTMENTS – AVAILABLE FOR SALE

The following summarizes the securities available for sale at March 31, 2013.  

* Related parties, see Note 10

The fair value of securities is determined by quoted market prices.

NOTE 4 – PROPERTY AND EQUIPMENT

In February 2013, the Company sold equipment to ABM Mining Company, with a carrying value of $49,853 for $7,000 cash and a note receivable of $30,000, a loss on disposal was recognized in the amount of $12,853. This transaction in considered a related party. See Note 11

NOTE 5 – SETTLEMENT AGREEMENT

On January 1, 2013, the Company signed a Settlement Agreement and Mutual General Release (“Settlement”) related to the Asset Purchase Agreement (“APA”) and Note dated March 10, 2010 with Pyratine LLC (formerly Skinvera LLC). (See Note 8) Under the terms of the Settlement, Pyratine is released from making royalty payments as set forth in the original APA. Additionally, the original note was being amended and restated to include a partial pay down of $100,000, less one-half of the attorneys’ fees incurred by Pyratine in drafting the agreement (capped at $1,500), which was received in January 2013, a credit on the original note of $100,000 for unanticipated attorneys’ fees in defending against a claim against Pyratine, and the forgiveness of any amounts outstanding due Pyratine from the Company. The new balance of the note under this agreement is $1,876,657 with interest of 1.17% per annum until the new maturity date of July 1, 2021, no payments shall be owed until the Maturity Date and there is no prepayment penalty.

Prior to 2012, the Company reserved the balance of the initial note and interest receivable based on an estimate to the ultimate collectability of amounts due, based on the Company’s knowledge of Skinvera’ s business activities.  Any monies received in connection with the above settlement agreement will be recognized as income.

NOTE 6 – MINERAL PROPERTIES

Iron Creek Project, Salmon, Idaho

The Iron Creek Project consists of seven patented mining claims of approximately 118 acres in Lemhi County, Idaho and has a carrying value of $2,095,020.

Gray Eagle Copper Mine, Happy Camp, California

The Gray Eagle Copper Mine (“Gray Eagle”) consists of approximately 294 acres of patented mining claims in Siskiyou County, the northernmost county of the State of California and has a carrying value of $4,290,000.

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INDEPENDENCE RESOURCES PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2013

(Unaudited)

The Gray Eagle Mine has been subject to an EPA clean up action in the past. According to publicly available EPA documents, the EPA has expended about $3 million in response costs cleaning up old mining tailings. The Company understands that several companies have been identified as potential responsible parties for this clean up. The Company has not to date received any communication from the EPA with respect to recovery of these costs or any environmental issues that may be present at the Gray Eagle property.

East Mullan Claims

The East Mullan Claims consist of fifteen unpatented mining claims, three of which are very proximate to the east of the Lucky Friday/Gold Hunter Mine complex in Shoshone County, Idaho.  The remainder of the claims are located on a down dip possible extension of the historic Snowstorm Mine. These claims were purchased during the first quarter of 2012 from Consolidated Goldfields for $60,000 in cash.  This transaction is considered related party as the Company and Consolidated Goldfields have directors in common.

NOTE 7– STOCKHOLDERS EQUITY

The following warrants were outstanding at March 31, 2013 and March 31, 2012:

There were no issuances, exercise, or expiration of warrants during the three month period ended March 31, 2013

The convertible debt warrants were issued in association with the March 2010 Security Purchase Agreement with DMRJ Group, LLC. The warrants entitle the holder to purchase ordinary shares of the Company at the purchase price referred to above at any time prior to the expiration date. Although the related convertible debt was paid off in 2011, the warrants are still exercisable and were repriced to $1.00 per the termination agreement.

NOTE 8– SEGMENT REPORTING AND CONCENTRATION OF RISK

Financial information regarding the operating segments was as follows:

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INDEPENDENCE RESOURCES PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2013

(Unaudited)

The Company’s customers are principally in the United States.

NOTE 9 – DISCONTINUED OPERATIONS

During the year ended December 31, 2011, with the exception of the Reliaject product, the Company has sold or otherwise disposed of the remainder of its pharmaceutical and skincare assets which has continued to reduce expenses associated with the biomedical lines of business.

The following table details selected financial information included in the income from discontinued operations in the consolidated statements of operations for the three months ended March 31, 2013 and 2012:

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Claims against the Company

In the fall of 2010 Miller Tabak & Company, a New York based investment banking firm, filed a breach of contract action against the Company in New York Supreme Court seeking an amount of approximately $360,000 for alleged non-payment of a commission. On September 19, 2012, the Court granted Miller Tabak & Company’s summary judgment and ordered the Company to pay $250,000 plus statutory interest in the amount $56,219 and 133,333 ordinary shares. A loss of $350,219 has been recognized as an expense for the quarter ended September 30, 2012 for this judgment. As of March 31, 2013, the amount has not been paid; the ordinary shares valued at $42,297 were issued on November 28, 2012.

NOTE 11 – RELATED PARTY

Wesley Holland, a former director, provided certain consulting services to the Company in connection with developing and marketing our life science technologies and products. The Company has paid Dr. Holland a total of approximately $0 and $6,750 during the three months ended March 31, 2013 and 2012, respectively.

John Ryan (the Company’s chief executive officer), and Howard Crosby (a director of the Company) are Directors of Shoshone Silver/Gold Mines, Inc and Mineral Mountain Mining and Milling Co. Mr. Ryan was a Director of Consolidated Goldfields when the Company purchased the investment but resigned in the fall of 2011. At March 31, 2013, the Company has investments in shares of common stock in these companies (See Note 3).

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INDEPENDENCE RESOURCES PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2013

(Unaudited)

In August 2011, the Company loaned $5,500 to Big Bear Mining Co which has directors in common with the Company. This receivable is outstanding at March 31, 2013.

On April 16, 2012 the Company sold mining equipment for cash at its carrying value of $576,500 to ABM Mining Company (“ABM”); no gain was recognized on the sale. This transaction is considered related party as the Company and ABM have directors in common. Additionally, all contracting income was received from ABM Mining.  Additionally, in February 2013 the Company sold additional equipment to ABM, which included a note receivable from ABM of $30,000. See Note 4.  The Company received $28,000 payment in the second quarter of 2013 and the remaining payment of $2,000 was collected in the third quarter of 2013.

NOTE 12 – SUBSEQUENT EVENTS

In September 2013, the Company exchanged its Iron Creek property for a 70% undivided interest in mineral rights, including oil and gas full column rights, located in Orange County, CA.

On September 15, 2013, the Company decided to dispose of its 70% subsidiary, Coeur d’ Alene Mine Contracting. A loss was recognized on the transaction in the amount of $423,324, which included the return of 3,000,000 stock options valued at $1,017,000.

The Company’s appeal in the Miller Tabek lawsuit was argued in January 2014. No decision has been made by the court through February 2014.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “would,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. The risk factors described in the Company’s Form 10-K for the fiscal year ended December 31, 2011 provide examples of risks, uncertainties and events that may cause the Company’s actual results to differ materially from the expectations described in its forward-looking statements.   The Company assumes no obligation to correct or update any forward-looking statements which may prove to be inaccurate, whether as a result of new information, future events or otherwise, except as may be required by law.

Overview

Historically, Independence Resources PLC (the “Company”) had been focused on the skincare and pharmaceutical businesses. In March 2010, after an extensive review by our Board of Directors and our outside advisors, our Board elected to change our overall direction from these sectors to the natural resources sector. Our Board realized that the business prospects of the existing portfolio of assets were not capable of generating sufficient revenue, and we had insufficient cash on hand to reach significant revenue generation from any of the product lines in our portfolio. We elected to pursue additional opportunities in the resources sector because this sector has experienced significant growth and investor interest in the past few years and our Board believes the resources sector has continued growth prospects and significant opportunities.

During 2011 we continued the transition from a biomedical company to one focused on natural resources. The Company terminated its participation in the secured notes related to the Relief Canyon Mine and in the process it eliminated the convertible debt associated with that acquisition leaving the Company debt free. With the exception of the Reliaject product the Company has sold or otherwise disposed of the remainder of its biomedical assets which has continued to reduce expenses associated with the biomedical lines of business. We made significant progress during the 2011 work season at our Iron Creek Project by conducting a number of geophysical surveys which have identified the existing known zones of mineralization. As a result, we believe we have discovered additional extensions to the known zones as well as possibly identified several new zones of mineralization. We had planned on undertaking a drilling program to verify these results for the 2012 work season, but could not do so due to lack of funding. Similarly, we were unable to execute our planned work program at our Gray Eagle property in California due to lack of funding.

Subsequent to March 31, 2013, the Company exchanged its Iron Creek Project for a 70% undivided interest in mineral rights, including oil and gas full column rights, located in Orange County, CA.  Additionally, we disposed of our 70% subsidiary Couer d’Alene Mine Contracting, a loss of $423, 323 was recognized on the disposal.

For detailed financial information, please consult our financial statements included in this Report.

Unless the context otherwise requires, throughout this report, the words “Independence,” “the Company,” “we,” “us,” and “our” mean Independence Resources PLC and its consolidated subsidiaries. All amounts in this report are in U.S. Dollars, unless otherwise indicated.

Mineral Property Operations

In March 2011, we acquired 100% ownership of Iron Eagle Acquisitions, Inc (“Iron Eagle”) by issuing 8,150,000 ordinary shares valued at $0.78 or a total value of $6,357,000. As a result of the acquisition, Iron Eagle became our wholly-owned subsidiary.

Iron Eagle owns two mineral projects, one in Idaho known as the Iron Creek project and one in California known as the Gray Eagle Copper Mine.

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Iron Creek Project, Salmon, Idaho

The Iron Creek Project consisted of seven patented mining claims of approximately 118 acres in Lemhi County, and 187 unpatented mining claims and located about 26 miles southwest of the town of Salmon, Idaho. The unpatented mining claims were dropped in September 2012 due to lack of funding.

Past work by previous operators has identified several mineralized zones of copper and cobalt, and numerous other exploration targets on the property that have not as yet been evaluated. However, extensive drilling, sampling, and geologic work have been done on two of the most advanced areas. In these areas, previous operators calculated tonnages and grades (which are non-43-101 compliant) contained in an area called the “No Name Zone”.

The first mineral resource of interest referenced in the literature is an underground target described by Noranda Exploration in a 1980 report as “two distinct lenses of cobalt mineralization”. The first lens was called a “reserve” and was estimated to contain 1,050,000 tons grading 0.61% cobalt and 0.3% copper and having a strike length of about 750 feet. A second lens of high-grade cobalt mineralization occurs to the northwest, and again is described as a “reserve”. This lens extends for 600 feet of strike length, is deeper than the first lens, and averages about 0.48% cobalt and 0.24% copper. The authors estimated this resource to be around 229,000 tons.

The second area of major interest, also in the "No Name Zone" is described by Centurion Minerals in a 1988 report as containing at least 10,000,000 tons of open pit resources grading 2% copper equivalent grade (accounting for the cobalt as a by-product). This number was based on over 20 diamond drill holes along approximately 5,000 feet of strike length and over 200 feet of width, at an average spacing of around 200 feet. The author of the report concluded that these resources could be classified as “possible” reserves (under a S.E.C. classification) and recommended an additional 30 holes be drilled to reduce the drill spacing to something less than 200 feet. Significantly more infill drilling will be required to upgrade and verify this mineral resource.

Additionally, we obtained permits from the Forest Service to undertake sampling, induced polarization, magnetic surveys, and geologic mapping on the ground. These activities were undertaken during the field season of 2011. These activities confirmed the mineral zones as outlined in historic reports and identified several potential new zones of mineralization that were previously not recognized.

No additional work was done during 2012 or the first quarter of 2013 due to lack of funding and no additional work is planned at the time unless funding is obtained.

Gray Eagle Copper Mine, Happy Camp, California

The Gray Eagle Copper Mine (“Gray Eagle”) is a past producer of significant amounts of both copper and gold. The property consists of approximately 294 acres of patented mining claims and 42 unpatented mining claims in Siskiyou County, the northernmost county of the State of California. Major production of valuable metals occurred during two different periods at Gray Eagle. Newmont Mining produced significant copper at the property in the 1940’s and Noranda Mining produced significant gold at the property in the 1980’s.

In the early 1990’s, a feasibility study was completed by Siskon Corporation which was reviewed by a major U.S. based mineral consulting firm which concluded that a mineral resource of just over 1.1 million tons of ore grading 2.59% copper and .027 ounces per ton gold using a 3.3 to 1 strip ratio, a copper cutoff grade of 1%, and recovery factors of 90% on copper and 30% on gold. We intend to confirm this resource and undertake additional drilling to further refine the mineral resources which have been identified by past work at this project, and to explore for undiscovered possible deposits in the area.

Based upon our internal evaluations we elected to acquire by staking an additional 42 unpatented claims. During the upcoming months we plan on obtaining the needed permits to undertake sampling and geophysical surveys on the property. We plan on beginning these geologic activities in the spring of 2012 as weather and ground conditions allow. Once we have the results from this testing, these results will aid the Company in designing a drill program which we intend to undertake in the fall of 2012 field and season of 2013. All of these activities are dependent on raising additional capital in order to undertake this work.

The Gray Eagle Mine has been subject to an Environmental Protection Agency (“EPA”) clean up action in the past. According to publicly available EPA documents, the EPA has expended about $3 million in response costs cleaning up old mining tailings. The Company understands that several companies have been identified as potential responsible parties for this clean up. The Company has not to date received any communication from the EPA with respect to recovery of these costs or any environmental issues that may be present at the Gray Eagle property.

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East Mullan Claims

The East Mullan Claims consist of fifteen unpatented mining claims, three of which are very proximate to the east of the Lucky Friday/Gold Hunter Mine complex in Shoshone County, Idaho.  The remainder of the claims are located on a down dip possible extension of the historic Snowstorm Mine. These claims were purchased during the first quarter of 2012 from Consolidated Goldfields for $60,000 in cash.  This transaction is considered related party as the Company and Consolidated Goldfields have directors in common. These claims were dropped due to lack of funding.

Oil and Gas Operations

South Fork II Prospect, Clinton County Kentucky

On January 6, 2011, the Company entered into a Joint Venture (“Agreement”) with Ameratex Securities, in which the Company purchased a 4.5% working interest and 3% net revenue interest in three oil wells located in Clinton County, Kentucky for $41,250. The Company is receiving a small royalty from this project and plans no further investment in these wells. Management has determined that this oil and gas project is not material to the current business of the Company.

Working Interest, Dawson County, Texas

In May 210, we entered into a participation agreement with SDX Resources, Inc (“SDX” pursuant to which we purchased a 15% working interest in certain oil and gas leases located in Dawson County, Texas of which SDX was the lessee of record, for $108,397.  

On October 4, 2012, we sold our oil and gas properties and related assets located in Dawson County, Texas for cash in the amount of $260,000. A loss was recognized on the transaction in the amount of $429,519 in the third quarter of 2012.

Overview of Operating Results

Revenues for the three months ended March 31, 2013 totaled $80,852 compared to revenues of $14,599 for the three months ended March 31, 2012.  

Operating expenses for the three months ended March 31, 2013 decreased 151% as compared to the three months ended March 31, 2012, primarily due to a decrease in administration and sales expense , exploration expense offset by an increase in contracting expense and a loss on disposal of assets.

Net loss for the three months ended March 31, 2013 was $100,612 as compared to a net loss of $467,518 for the three months ended March 31, 2012. The decrease in net loss is primarily due to an overall reduction in expenses, offset by an increase in contracting expense and forgiveness of debt.

Discontinued Operations

During the year ended December 31, 2011, with the exception of the Reliaject product, the Company has sold or otherwise disposed of the remainder of its pharmaceutical and skincare assets which has continued to reduce expenses associated with the biomedical lines of business.

Income from discontinued operations for the three months ended March 31, 2013 increased 30% as compared to the three months ended March 31, 2012.

Results of Operations for the three months ended March 31, 2013 and 2012

This data has been derived from the statements of operations elsewhere in this Report and in the Form 10-Q for the quarterly period ended March 31, 2013. The operating results for any period should not be considered indicative of results for any future period. This information should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Report and in the Annual Report on Form 10-K for the year ended December 31, 2013.

Total revenues for the three months ended March 31, 2013 were $80,852, a 453% increase from total revenue of $14,599 for the three months ended March 31, 2012 The increase is principally attributed to an increase in revenue from contracting.

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Total operating expenses for the three months ended March 31, 2013 were $257,054, a decrease from total operating expenses of $525,856 for the three months ended March 31, 2012. The decrease is principally attributed to a reduction in administration, sales and marketing expense, and exploration expense, offset by an increase in contracting expense.

Administrative, sales and marketing expenses of the Company in comparable form are shown below by major categories of expense.

For the three months ended March 31, 2013, administration, sales and marketing expenses decreased 30%, primarily due to a decrease in payroll, benefits and consulting.

Liquidity and Capital Resources

As of March 31, 2013, the Company’s principal sources of liquidity included cash and cash equivalents resulting from the Company’s financing activities. Management believes its cash and cash equivalents and cash expected to be generated by its business and financing activities will be sufficient to meet its working capital needs for at least the next twelve months. Should the Company be faced with currently unanticipated significant cash requirements, the Company’s present capital resources might be inadequate to fund its capital needs. Additionally, if the Company were to engage in a business combination transaction, its current cash position could be adversely impacted and its need for additional financing accelerated, although the impact of any such transaction cannot be evaluated at this time.

Net cash used by operating activities totaled $102,959 for the three months ended March 31, 2013 compared to net cash used by operating activities of $669,826 for the three months ended March 31, 2012. The decrease is primarily due to a decrease in accounts payable and accrued liabilities. The Company expects to continue to use cash in operating activities and investments for the remainder of 2013.

Net cash provided by investing activities totaled $7,000 for the three months ended March 31, 201 compared to net cash used by investing activities of $137,315 for the three months ended March 31, 2012. The change is due to the Company not buying any new properties or equipment and selling existing equipment.

Net cash provided by financing activities totaled $0 for the three months ended March 31, 2013 and March 31, 2012.

Cash and cash equivalents decreased to $98,088 at March 31, 2013, from $711,426 at March 31, 2012.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles for interim period financial reports. Management reviews the accounting policies used in reporting Independence’s financial results on a regular basis. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates processes used to develop estimates, including those related to the allowance for doubtful accounts, sales reserves, depreciation and amortization, contingencies, deferred tax assets, and other assets. Estimates are based on historical experience, expectations of future results, and on various other assumptions that are believed to be reasonable for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates due to actual outcomes being different from those on which assumptions were based. Management, on an ongoing basis, reviews these estimates and judgments. Independence’s Board of

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Directors reviews any changes in the Company’s methodology for arriving at its estimates, and discusses the appropriateness of any such changes with management and its independent auditors on a quarterly basis.

Refer to Item 7 of Independence’s Annual Report on Form 10-K for the year ended December 31, 2012, for information pertaining to its critical accounting policies, which include the following:

There have been no changes to Independence’s critical accounting policies since December 31, 2011, the date of its last audited financial statements.

Interest Income and Expense

Interest income for the three month period ended March 31, 2013 has decreased $334 as compared to the same period in the prior year due primarily to the impairment of a note receivable in the previous year. Interest expense for the three month period ended March 31, 2013 has increased $32, as compared to the same period in the prior year.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

Item 4. CONTROLS AND PROCEDURES

The Company, under the supervision and with the participation of its management, including the Chief Executive Officer and the Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended as of the end of the period covered by this Report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. There were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s  internal control over financial reporting. 

PART II - OTHER INFORMATION

Item 6. EXHIBITS

(a) Exhibits

(1) Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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