UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

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FORM 10-K

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|(Mark One)                                                           |                                                                                                          
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|ý                                                                    | FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the fiscal year ended December 31, 2007                         
|OR                                                                  
|o                                                                    | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                 
|For the transition period
from                                    to

Commission File Number 000-51708

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REDPOINT BIO CORPORATION(Exact name of registrant as specified in its charter)

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|Delaware(State or other jurisdiction of
incorporation or organization)     |  | 22-3393959(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------------- |  | ----------------------------------------------
|7 Graphics Drive
Ewing, New Jersey(Address of principal executive offices) |  | 08628(Zip Code)                               

Registrant's
telephone number, including area code:(609) 637-9700

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Securities
registered pursuant to Section 12(b) of the Act: None.

Securities
registered pursuant to Section 12(g) of the Act:

Common Stock, $.0001 par value per share
(Title of Class)

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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. o Yes    ý No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. o Yes    ý No

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. ý Yes    o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ý

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. (Check one):

|Large accelerated filer o |  | Accelerated filer ý |  | Non-accelerated filer o (Do not check if a smaller reporting company) |  | Smaller reporting company o
|------------------------- |  | ------------------- |  | --------------------------------------------------------------------- |  | ---------------------------

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

The aggregate market value of the registrant's voting shares of common stock held by non-affiliates of the registrant on June 29, 2007, based
on $2.45 per share, the last reported sale price on the OTC Bulletin Board on that date, was approximately $123,237,838.

The
number of shares of common stock, $0.0001 par value, of the registrant outstanding as of March 10, 2008 was 79,440,870 shares.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference into the Annual Report on Form 10-K: Portions of the registrant's definitive Proxy
Statement for its 2008 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.



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TABLE OF CONTENTS

|                              |  | Item |  | Page                                                                                          
|----------------------------- |  | ---- |  | ----------------------------------------------------------------------------------------------
|PART I                        |  | 1.   |  | BUSINESS                                                                                      
|                              |  | 1A.  |  | RISK FACTORS                                                                                  
|                              |  | 1B.  |  | UNRESOLVED STAFF COMMENTS                                                                     
|                              |  | 2.   |  | PROPERTIES                                                                                    
|                              |  | 3.   |  | LEGAL PROCEEDINGS                                                                             
|                              |  | 4.   |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                           
|PART II                       |  | 5.   |  | MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES  
|                              |  | 6.   |  | SELECTED FINANCIAL DATA                                                                       
|                              |  | 7.   |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS         
|                              |  | 7A.  |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                    
|                              |  | 8.   |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                   
|                              |  | 9.   |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE          
|                              |  | 9A.  |  | CONTROLS AND PROCEDURES                                                                       
|                              |  | 9B.  |  | OTHER INFORMATION                                                                             
|PART III                      |  | 10.  |  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                        
|                              |  | 11.  |  | EXECUTIVE COMPENSATION                                                                        
|                              |  | 12.  |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|                              |  | 13.  |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                     
|                              |  | 14.  |  | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                        
|PART IV                       |  | 15.  |  | EXHIBITS, FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES                              
|SIGNATURES                    |  | 56  
|EXHIBIT INDEX                 |  | 57  
|INDEX TO FINANCIAL STATEMENTS |  | F-1 

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PART I

EXPLANATORY NOTE

On March 12, 2007, Redpoint Bio Corporation ("Redpoint") entered into the Agreement and Plan of Merger, dated as of March 12, 2007, by and among
Redpoint, on the one hand, and Robcor Properties, Inc., a Delaware corporation ("Robcor"), Robcor Acquisition Corp., a Delaware corporation and wholly-owned subsidiary of Robcor ("Merger Sub"),
Robcor, LLC, a Kentucky limited liability company and wholly-owned subsidiary of Robcor ("Robcor, LLC") and Halter Financial Investments, L.P., a Texas limited partnership, and
Michael Heitz, as stockholders of Robcor, on the other hand (the "Reverse Merger Agreement"). The transactions contemplated by the Reverse Merger Agreement (the "Closing") were consummated on
March 12, 2007 (the "Closing Date").

Pursuant
to the Reverse Merger Agreement, on the Closing Date, Merger Sub merged with and into Redpoint (the "Reverse Merger"), with Redpoint being the surviving corporation and becoming
a wholly-owned subsidiary of Robcor, and the outstanding shares of capital stock, convertible notes and certain warrants to purchase capital stock of Redpoint were converted into shares of common
stock of Robcor in accordance with the Delaware General Corporation Law (the "DGCL") on the terms and conditions as set forth in the Reverse Merger Agreement. On May 3, 2007,
Redpoint and Robcor entered into an Agreement and Plan of Merger in which Robcor, the former parent company of Redpoint after consummation of the Reverse Merger, merged with and into Redpoint. Such
merger, referred to herein as the Reincorporation Merger, was deemed effective on June 15, 2007.

In
this Annual Report on Form 10-K, unless the context specifically indicates otherwise:



ITEM 1.    BUSINESS

Overview

Redpoint Bio is a development-stage biotechnology company using advanced technology to discover and develop novel taste enhancers and aversive taste blockers for
the food and beverage and pharmaceutical industries. Our discovery programs capitalize on advances in taste science and our know-how to create new products. We believe these products, when
developed, may have the potential to make processed foods and beverages healthier and less costly, and enhance the acceptability, safety and efficacy of many types of pharmaceutical products. We have
developed an integrated discovery platform and identified prototype compounds for both enhancement of sweet and savory taste and blocking bitter taste. To leverage our technology in the food and
beverage markets, we have entered into research and development agreements with Givaudan, the world's leading company in the flavors and fragrances industry, and The Coca-Cola Company, the
world's largest beverage company, referred to herein as Coca-Cola. In addition, we plan to use our technology to discover aversive taste blockers, principally to develop a pipeline of
proprietary taste-modified pharmaceutical products. We may develop and market such products ourselves or partner with pharmaceutical companies who are seeking to extend the patent life or enhance the
performance of their products. We have identified several categories of products where patient acceptability or the potential for novel formulation options are currently limited due to the intense
bitter or other aversive taste of the active pharmaceutical ingredient. We plan to incorporate the proprietary bitter taste or aversive taste blockers found through

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our
discovery programs with drugs of proven safety and efficacy to create novel, valued-added formulations. We currently own or have exclusive licenses to 8 issued U.S. patents, 21 pending U.S. patent
applications, 3 issued foreign patents and 29 foreign patent applications. We have not yet developed any products that are commercially available.

Our
research and development efforts, both partnered and unpartnered, involve technology development and discovery programs aimed at the identification of novel compounds for taste
modification. We are working to identify a compound(s) that can be used to enhance the taste of both sweet and savory flavors in a wide variety of food and beverage applications. Additionally, we are
working to identify a compound(s) that could act as a universal bitter taste blocker for use both in our pharmaceutical product pipeline and for collaborative formulation development programs with
major pharmaceutical companies. We intend to design our compounds to be safe and effective in minute quantities, and to be able to incorporate them into food and pharmaceutical products through the
GRAS determination/notification process. Although the GRAS (Generally Recognized as Safe) process involves extensive testing to insure safety in use, the overall time required (estimated to be
12-18 months) and development costs incurred (estimated to be $1-2 million per compound) are modest compared to the size of the accessible markets. Moreover, a
single GRAS-determined taste enhancer can potentially be used in a wide range of food applications. In addition, a GRAS determination is heavily relied upon by the U.S. Food and Drug
Administration (FDA) to evaluate the safety and inclusion of flavor modifiers into pharmaceutical products. A single aversive taste blocker can potentially be used to create a multitude of new drug
formulations that in many cases may be patentable in their own right. New drug product or product variations will require FDA approval through the New Drug Application (NDA) process. We believe there
may be additional potential applications for our technology for the modification of aversive taste sensations in food products, as well as potential for discovering novel compounds for other
pharmaceutical applications.

Scientific Background

The five basic taste senses include sweet, savory, bitter, salt, and sour. Savory is also sometimes referred to as "umami". The sweet, savory, and salt tastes are
appetitive, while the bitter and sour tastes are aversive. The five basic tastes are sensed primarily by the taste buds on the tongue. Sequencing of the human genome has led to the identification of
the molecular receptors and signal transduction components responsible for the sense of taste. This in turn has allowed discovery strategies originally developed for new pharmaceutical discovery to be
applied to the identification of new taste modulators.

In
the case of the sweet, savory and bitter taste sensations, taste cells on the tongue initially sense tastants like sugars (sweet flavor), amino acids (savory or umami flavor), and
bitter substances (bitter flavor) through binding of the tastant molecules to specific receptors on the taste cell surface called G-Protein Coupled Receptors, or GPCRs. Generally,
it is thought that individual taste cells express specific GPCR receptors, and sense only one kind of tastant. Binding of the tastant to the GPCR activates a signaling cascade that
ultimately triggers a nerve signal that is sensed by the brain as taste.

The
signaling cascade downstream of GPCR activation provides several targets for discovery of modulators of the sweet, savory and bitter taste sensations. Redpoint Bio's discovery
programs have initially focused on finding potent and specific compounds that bind to the TRPM5 ion channel that is
involved in amplification of the GPCR-linked taste signals. We were motivated to follow this approach since biological studies showed that mice in which TRPM5 had been inactivated
or "knocked out" were unable to taste sweet, savory, or bitter tastants. This in turn suggested that enhancers of TRPM5 channel conductance could function as taste enhancers in sweet or savory taste
contexts, and as blockers could work as bitter blockers in bitter taste contexts.

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Robert
Margolskee, M.D., Ph.D., Chairman of our Scientific Advisory Board, is a pioneer in the elucidation of the role and identity of many of the molecular elements involved in taste.
Redpoint Bio is an exclusive licensee of key intellectual property developed in Dr. Margolskee's laboratory at Mount Sinai School of Medicine. Among the technologies transferred to Redpoint Bio
are animal models where specific genes involved in taste modulation have been deleted or "knocked out", providing important proof of concept of the key role of these signaling elements in taste and
defining them as clear targets for modulation by small molecules.

Food and Beverage Applications

Our taste enhancer program is focused on the discovery and development of a novel, GRAS-determinable compound(s) that will enable a significant
reduction in the quantity of sugar, savory flavors and salt required to flavor beverages and processed foods. Sugar and salt are the principal flavoring agents in most beverages and processed foods.
Excess consumption of sugar and salt are linked to health problems that are a major driver of increased healthcare costs. This motivates both government and consumer demand for healthier,
good-tasting products that do not contain excessive sugar and salt. We seek to identify taste enhancers that potentially reduce both food ingredient costs and lower the caloric and salt
content of many food and beverage products. One major potential application is the combination of our taste enhancer with reduced quantities of sugar or other nutritive sweeteners to lower the caloric
content of soft drinks. Additional opportunities exist in other applications such as prepared foods, dairy products, soups, gravies and confectionary products.

We
initiated our TRPM5 taste enhancer discovery program in 2005. Since then we have discovered and applied for patents on prototype lead series developed in model taste cell systems. In
taste model systems, our prototype compounds provided up to a 5-fold enhancement of a model taste signal generated via the TRPM5 channel. Our prototype compounds are chemically diverse and
highly specific enhancers for the TRPM5 channel, suggesting the feasibility of the discovery and development program. To leverage our technology in the food and beverage markets, in March 2007 we
entered into the Givaudan Agreement where we are collaborating exclusively with each other to discover and develop taste enhancer compounds and bitter blocker compounds that act primarily through the
modulation of the TRPM5 channel.

In
addition, in December 2007 we entered into the Coca-Cola Agreement to develop proprietary technology for use in non-alcoholic beverages. We also intend to
partner with other major ingredient suppliers, or food and beverage companies, to develop and commercialize taste enhancers that act through a variety of other newly discovered mechanisms of taste
sensation in exchange for technology access fees, research funding, product development milestones, and/or product royalties.

Novel Pharmaceutical Formulations

We are also focusing on identifying bitter blocking compounds for incorporation into novel drug formulations that could offer significant advantages over existing
products in terms of improved patient acceptability and compliance, as well as potential efficacy and safety benefits. We initiated our TRPM5 bitter blocker discovery program in 2004. Since then we
have discovered and applied for patents on prototype lead series developed in model taste cell systems. In taste model systems, our prototype compounds are able to block the signal generated through
the TRPM5 channel at concentrations of less than one part per million. Although our prototype compounds will require additional chemical optimization to create commercially viable products, our
prototype compounds are chemically diverse and highly specific blockers of the TRPM5 channel, suggesting the feasibility of the discovery and development program.

Taste
problems with medicines have traditionally been addressed by the addition of sugar and flavoring agents, a marginally effective approach that has limited important market
applications. The

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most
prevalent aversive taste in pharmaceutical products is bitterness. We have a novel biochemical approach to blocking the signaling pathway for bitter taste that enables the formulation of products
that cannot be made using conventional taste masking technology. We believe that the reformulation of off-patent prescription drugs with improved taste and/or a novel technology can
potentially generate significant sales with less risk, as compared with novel drugs, because the clinical efficacy of the active pharmaceutical ingredient, or API, is proven, and the safety profile of
the API is well understood.

We
have identified a number of product opportunities, which include new liquid formulations of prescription and over-the-counter, or OTC, pharmaceutical products
with improved taste that may offer better patient acceptability and compliance, and innovative products that generally could offer a new drug delivery route through absorption in the mouth. We plan to
develop and market these formulations ourselves and also form partnerships with major pharmaceutical companies. Specifically, we plan to collaborate with major pharmaceutical and OTC companies to
create new formulations, life cycle products or line extensions of patented, off-patent, prescription or OTC products in exchange for R&D support, licensing fees/milestones and/or product
royalties. We also plan to collaborate with pharmaceutical companies to address taste issues associated with new drugs in development.

Additional Applications of Taste Technology

Our initial programs focus on modulation of the TRPM5 ion channel, a key signaling element in taste sensation, in order to discover novel compounds that modulate
the taste of food, beverage, and pharmaceutical products. However, our technology base encompasses additional approaches to mitigating aversive taste sensations in food products or pharmaceutical
formulations, as well as potential mechanisms for discovering compounds that treat specific diseases.

One
application of our technology is in the development of low-sodium salt solutions. Towards this end, we developed Betrasalt®, a proprietary formulation of FEMA
GRAS materials and potassium chloride (KCl). Potassium chloride is a well-known substitute for sodium chloride (NaCl or common table salt), but is characterized by an accompanying bitter
and metallic taste. Our Betrasalt formulation mitigates the bitter and metallic taste of potassium chloride yet retains the functionality of sodium chloride. We own or have exclusive licenses to
issued and pending patents related to Betrasalt, and we are actively seeking potential partners interested in commercializing this technology.

We
recognize the attractiveness of "natural" compounds in many markets, particularly for food applications. We have developed a novel strategy for using the information obtained through
our discovery programs to find natural substances that may be effective as taste enhancers, thus meeting increased demand for "natural" ingredient statements on food products. This strategy may
provide additional opportunities for novel patented compounds and related intellectual property, while expanding the product range and market acceptability of Redpoint Bio taste enhancement products.
The use of "natural" ingredient statements for labeling and promotion of food products is regulated by the USDA and other governing bodies, and there is a risk that they may limit use of such terms.

We
have also initiated a program to discover and evaluate natural high-potency sweeteners (NHPS) for food and beverage applications. The use of natural
high-potency sweeteners (NHPS) in food and beverage products can confer significant commercial benefit in terms of consumer acceptance. NHPS have been in wide use in Asia and Western
specialty food markets for years, with many produced and sold as crude plant extracts. However such extracts present significant challenges for use in modern, scalable food and beverage production
(e.g. consistency, unwanted tastants/activities and lack of GRAS designation). We believe that the systematic application of modern biotechnology methods to identifying, isolating and then
analyzing the sweet components from a carefully chosen library of natural products can provide a pathway for the discovery and development of other new, GRAS-approvable natural sweeteners
with the potential for wide commercial acceptance.

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Market Opportunity

Healthier and Less Costly Food and Beverage Products

The basic appetitive flavors in foods include sweet, savory (umami) and salt. In many food and beverage products, sugar, high fructose syrup, or HFS, and other
flavorants represent a major and growing ingredient cost. Processed food and beverage producers are consequently motivated to explore new approaches that can reduce the quantities of
high-cost ingredients to lower overall cost of goods (COGS). One of the major drivers for the upward pressure on food and sweetener prices was created by the tremendous expansion in
biofuels, that is the conversion of agricultural resources from food to fuel production. In 2007, about 20% of the US corn crop was used for the production of biofuels, and estimates are that this
could rise to as much as 50% in the near term. Consequently, corn prices have risen almost 70% in the latter half of 2007, causing a rippling effect on the COGS of food and beverage products ranging
from tortillas to soft drinks. The impact is also being felt in beef, poultry and pork production as the cost of corn-based animal feed rises. While the economic and environmental benefits
of biofuels are still under debate, the drive for new energy sources coupled with supportive government policies suggest that the current trend of biofuels growth is likely to continue (sources:
Business Week, The Times (London), Technology Reviewpublished by MIT). We expect that these increases in food and beverage COGS will continue to drive interest in innovative technologies
that offer the potential for reducing the amount and cost of added flavorings across a wide range of products.

At
the same time, it is increasingly recognized that excess consumption of sugar and salt, the predominant flavoring ingredients in most processed foods and beverages, are major
contributors to disease. Indeed, both government and consumer groups have become increasingly alarmed at the increase in the rate of obesity in the population, and its related negative health
consequences. In recent reports The National Institute for Health Care Management Foundation reported that in the past two decades the number of US adults who are overweight has doubled, and for
children or adolescents the number has tripled, exceeding 17% of the population in 2003-2004. This epidemic crosses gender, geography, socioeconomic status and race lines, although
Hispanics, African Americans and Native Americans are disproportionately affected. Moreover, this phenomenon can be linked to certain chronic diseases including type-2 diabetes, high blood
pressure, cardiovascular disease and certain cancers. This provides additional impetus for the development of products that can deliver the taste impact of sugar, monosodium glutamate, or MSG, and
salt without the harmful effects of excess dietary calories or sodium.

Sugar Reduction

Nutritive sweeteners such as cane sugar, beet sugar, and HFS are among the most commonly used food ingredients. Production of all types of sweeteners, natural and
non-nutritive, topped $50.8 billion worldwide in 2003. In some of the largest food categories such as carbonated soft drinks and confectionary products, sugar or HFS are the major
ingredients and contributors to product cost of goods. The worldwide rise in consumption of sweet foods and beverages has been linked to many health problems, particularly obesity and diabetes.

Artificial
sweeteners provide one means to reduce caloric intake and cost, particularly in sweetened beverages like soft drinks, confectionary products, and dessert foods. A report
published by Global Industry Analysts shows the worldwide artificial sweetener market, currently at $3.5 billion, is likely to be stimulated by a worldwide effort to combat obesity. Although
there are several artificial sweeteners on the market, there is a continued desire to develop new products that can preserve the clean sweet taste and temporal profile of nutritive sweeteners
(e.g. sugar and HFS) while also reducing the caloric content.

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Currently
used non-nutritive, artificial sweeteners include saccharin, aspartame, sucralose and acesulfame potassium. Saccharin, aspartame or aspartame/acesulfame potassium
blends are the most widely used, while sucralose is experiencing the fastest growth. These sweeteners are also marketed under branded tabletop products such as Sweet 'N Low® (saccharin),
Equal®, Nutrasweet® or Canderel® (aspartame) and Splenda® (sucralose). Food and beverage companies commonly mix artificial sweeteners to achieve
specific taste profiles. Despite the wide use of artificial sweeteners, they are generally viewed to have inferior taste properties relative to caloric sweeteners like sugar and HFS. Specifically,
these include off-tastes (e.g. sweeteners like saccharin are bitter) and altered temporal characteristics of the sweet sensation. For example, the sweet taste of many artificial
sweeteners comes on more slowly and/or lingers longer than the sweet taste from sugar or HFS.

Both
sucralose and aspartame were approved as food additives through an FDA Food Additive Petition, or FAP. This process can take many years and is much more extensive than the GRAS
process that we contemplate for our products. There is some risk that government regulatory bodies will require that all sweeteners be approved through an FAP process due to the wide and unrestricted
use of artificially sweetened foods. However, we are basing our technical approach on a different mechanism than current artificial or natural sweeteners, and we believe that our novel sweet and
savory taste enhancer will be marketable through the GRAS process. However, there can be no assurance that our novel sweet and savory enhancer(s) will be marketable through the GRAS process.

Our
unique approach is to develop a GRAS-approvable "sweetness enhancer" that acts to amplify the sweet signal downstream of the sweet GPCR receptor. This is a new
approach to reducing the caloric content of sweetened food products, since virtually all of the currently marketed artificial sweeteners (e.g. sucralose, aspartame, saccharin) act by binding to
the sweet GPCR receptor. Our sweetness enhancer is designed to have no taste of its own, and to be used in very small amounts in concert with nutritive sweeteners. They act by amplifying the
sweetness intensity thereby reducing the amount of nutritive sweetener required while retaining all of their desirable temporal characteristics and "clean taste".

Savory Enhancement & Salt Reduction

The most commonly used savory enhancers in current use are MSG (monosodium glutamate), IMP (inosine monophosphate) and GMP (guanosine monophosphate). These are
"nature identical" natural products that are generally made through a combination of fermentation and partial chemical synthesis. IMP and GMP are relatively high-cost food ingredients, and
MSG has been identified with the development of symptoms like headache and flushing.

Common
salt (sodium chloride) is a very low cost ingredient that is used in relatively large quantities in many processed and snack food products. Consumers in the United States
typically consume over 4000 mgs of sodium per day, derived primarily from common salt added to food during processing or as a condiment. This level is well above the FDA-recommended
maximum consumption level of 2300 mgs per day. Excess dietary salt is thought to be a significant contributor to hypertension and associated cardiovascular disease that are linked to high morbidity
and increased healthcare costs.

The
markets for foods that incorporate large quantities of salt and savory flavors are large and highly diverse, totaling over $750 billion worldwide. Some of the largest segments
include soups (valued at $3.9 billion in the United States in 2003), and savory snacks ($46.1 billion worldwide in 2005). These markets are under increased pressure from consumer groups
and government regulatory agencies that are attempting to contain the increasing medical costs of an expanding aged population through a healthier diet.

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Most salt is consumed in processed foods in the context of savory taste systems. It is well established that there is strong synergy between salt and savory flavors in foods. We
anticipate that our taste enhancer will amplify taste from both sweet and savory tastants, and so produce a context-dependent taste enhancement effect. Consequently, we believe that our taste enhancer
has many potential applications in savory (umami) taste systems that can reduce the costs and liabilities associated with conventional savory flavors like MSG, IMP, and GMP, but also be effective in
creating tasteful products that contain reduced quantities of salt.

Improved Pharmaceutical Formulations

The worldwide pharmaceutical market, expected to top $735 billion in 2008 (source: IMS) faces slowing growth and a number of challenges over the next
decade. These include patent expirations of many of the best-selling drugs, increased consumer selectivity and the increasing price pressure owing to the expansion of managed care and
other cost-containment efforts in the United States and other countries. In addition, despite large increases in R&D spending, overall productivity of the major pharmaceutical companies
has fallen, resulting in a shortfall of blockbuster drugs required to sustain industry growth and profits.

Increasingly,
both major pharmaceuticals companies and generic drug companies have come to rely on the development of novel formulations of existing products with improved properties as
a way of extending the patent lifetime of prescription products, garnering market exclusivity and maximizing the return on investment associated with the support of large sales and marketing forces.
According to a report from the National Institute of Healthcare Management, during the 1990s approximately 65% of all drug approvals were for older medicines with new dosage strengths, new routes of
administration or new combinations of older drugs. This strategy has lower risk and is less expensive thande novodrug discovery, and is increasingly
being used by pharmaceutical companies to maintain sales of current drugs as the pipeline of new drugs has thinned.

Pediatric and Geriatric Formulations.A major class of products potentially benefiting from the availability of
taste-improved formulations include pediatric and geriatric formulations. There are diverse medicines that are formulated as liquids for infants, children, aged individuals, and special populations
because of the relative ease of ingestion of liquids versus pills. According to the U.S. Census Bureau, the older population is on the threshold of a boom, with a projected doubling from
35 million in 2000 to over 70 million in 2030, representing nearly 20 percent of the total U.S. population at the latter date. About 80% of seniors have one chronic health
condition, and 50% have at least two. Many of these
seniors are faced with an array of oral medicines that are taken on a regular basis, yet this same population also often has trouble swallowing pills. On the pediatric side, global sales of children's
medicines totaled $34.2 billion in 2004. Current taste masking technology using sugar and flavoring agents often does a poor job of masking the generally bitter taste of the active
pharmaceutical ingredient, leading to poor compliance in many pediatric products. Also, the large quantities of sugar used in many formulations are contraindicated in diabetics and patients with
dental caries.

Oral, Rapid Acting Formulations.Another major class of products potentially benefiting from the availability of taste
improved formulations include rapid acting formulations where the API is intended to be delivered through absorption in the mouth. The onset of efficacy of many drugs such as migraine medicines,
painkillers, anti-nausea, sedatives and antacids could be enhanced through formulations that entered the blood stream directly via absorption in the mouth. Such formulations include orally
disintegrating tablets and films, buccal strips, chewing gums and sublingual lozenges. However, owing to their bitter taste, many of these drugs are now formulated as pills that dissolve in the
stomach, leading to a much slower onset of action. Orally disintegrating tablets (ODTs) in particular have gained attention in recent years as a preferred alternative to conventional orals tablet and
capsule dosage forms, with more than a dozen companies offering platform technologies or products. Marketed

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products
using this dosage form recently topped $1.2 billion in US sales alone (source: Valeo Partners). ODTs offer potential advantages from both a clinical (compliance, ease of swallowing,
avoid first-pass metabolism, unit dose stability, faster onset) and marketing (product differentiation, line extension, marketing exclusivity, new patent protection) standpoint. However,
the broader use of ODTs has been significantly limited by the inability of existing taste-masking technologies to block the bitter taste of many API's (source: Pharmaceutical Technology Asia). We
believe that a successful bitter blocker program could facilitate broader application of ODT and other oral technologies, offering the potential for both partnership and internally developed product
opportunities.

Examples
of pharmaceutical markets where improved oral formulations incorporating our bitter blockers could be used include:



Key
market drivers for more palatable drug formulations include the following:



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Competition and Competing Technologies

We believe our taste technology approach is applicable to a wide range of food, beverage and pharmaceutical products representing many and diverse competitive
companies and approaches. The life sciences and other technology industries are characterized by rapid technological change, and the area of sensory or taste research is a rapidly evolving field. Our
future success will depend on our ability to maintain a competitive position with respect to technological advances. Technological developments by others may result in our taste enhancers or aversive
taste blockers and technologies, as well as our pharmaceutical formulations, becoming obsolete.

We
face substantial competition from companies pursuing the commercialization of products and services relevant to taste using various methods for the discovery of taste enhancers and
aversive taste blockers. These competitors include leading flavor companies, such as International Flavors & Fragrances Inc., Givaudan SA, Symrise and Firmenich. Among food
manufactures, at least Nestlé has an active program cloning and expressing receptors forin vitroscreening assays. In addition, Senomyx
is a public biotechnology company taking a biochemical approach to taste modulation in both foods and pharmaceutical products. Senomyx is principally focused in the area of taste enhancement for food
products and uses a high throughput screening technology and synthetic chemistry to discover novel flavor enhancers, which it licenses to end users in the food industry. Senomyx was initially focused
on sweetness and savory flavor enhancers, but is now also developing programs to discover bitter blockers for food and pharmaceutical products. Chemcom is another company that is developing a
biotechnology approach to finding novel taste enhancers. We currently compete and will continue to compete in the future with these companies in collaborating with and selling flavor products and
technologies to manufacturers of packaged food and beverage products.

We
also face substantial competition from a number of companies in the pharmaceutical formulations industry. Taste masking has a long history in the pharmaceutical industry. A
traditional method of taste masking for pharmaceutical products is to mix the active pharmaceutical ingredient with flavorings and sugar syrup to mask unpleasant taste. This approach is most commonly
used for pediatric liquid formulations, as well as many OTC cough-cold remedies. FlavorRx supplies flavors at drug store pharmacies that can be compounded by the pharmacist to make certain
liquid formulations
more palatable. In the pharmaceutical sector there are a number of drug delivery companies that have developed proprietary taste masking technologies that include both traditional and novel
pharmaceutics approaches. These competing technologies and companies include, but are not limited to, OraSolv® and DuraSolv® from CIMA Labs (a Cephalon company),
MicroCaps® and Liquitard® from Eurand, FlavorTech, Liquette and MicroMask from KV Pharmaceuticals, EnVel® from Catalent,
CEFORM from Biovail and WOWTab® from Astellas. Most of these more sophisticated approaches utilize some form of physical technique to sequester the active pharmaceutical ingredient away
from the taste receptors on the tongue. These include coating the drug, micro encapsulation, immobilization, use of cyclodextran carriers, or stabilization of the drug in a micellar or insoluble
phase, as a means of taste masking. These physical approaches to taste masking have several limitations:



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To
our knowledge, no drug delivery companies are using the knowledge of taste at the molecular level to develop programs to identify biochemical bitter blockers or other aversive taste
blockers. Biochemical bitter or other aversive taste blockers are expected to have a number of key advantages as summarized below:



Many
of the abovementioned companies have substantially greater capital resources, research and development resources and experience, manufacturing capabilities, regulatory expertise,
sales and marketing resources, established relationships with consumer products companies and production facilities than us.

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We
may in the future face competition from life sciences and other technology companies and other commercial enterprises. These entities engage as we do in biotechnology, biology or
chemistry and could apply this technology to the discovery and development of taste enhancers and aversive taste blockers and new formulations of pharmaceutical products. We cannot guarantee that
products developed as a result of our competitors' existing or future collaborations will not compete with our taste enhancers and aversive taste blockers and new pharmaceutical formulations.

Universities
and public and private research institutions are also potential competitors. While these organizations primarily have educational objectives, they may develop proprietary
technologies related to the sense of taste or secure patent protection that we may need for the development of our technologies and products. We may attempt to license these proprietary technologies,
but these licenses may not be available to us on acceptable terms, if at all.

Our
competitors, either alone or with their collaborative partners, may succeed in developing technologies or discovering taste enhancers and aversive taste blockers that are more
effective, safer, more affordable or more easily commercialized than ours, and our competitors may obtain intellectual property protection or commercialize products sooner than we do. Developments by
others may render our product candidates or our technologies obsolete. In addition, it is likely that any of our future product discovery and development collaborators would not be prohibited from
entering into research and development collaboration agreements with third parties in any product field. Our failure to compete effectively would have a significant adverse effect on our business,
financial condition and results of operations.

Regulatory Process

Regulatory Approval for New Food Flavors and Flavor Modifiers

We intend to utilize the GRAS determination process, as well as the NDA drug approval process to market our taste enhancers and pharmaceutical bitter blockers. In
the United States, novel flavoring compounds, flavor enhancers and taste modulators intended for use in foods or pharmaceutical products are regulated under provisions of the Federal Food, Drug, and
Cosmetic Act administered by the FDA. In situations where compounds to be introduced as flavorings into foods or pharmaceutical products are to be administered at low levels and in defined quantities,
safety review can first be obtained through the GRAS process, which can involve FEMA (Flavor and Extracts Manufacturers Association), other independent panels of experts, and/or FDA. Redpoint Bio
joined FEMA as a participating member in May 2005 and has experience with the GRAS determination process.

The
GRAS process was established by the 1958 Food Additive Amendments to the Federal Food, Drug, and Cosmetic Act. GRAS ingredients are those which have been found to be generally
recognized as safe by "experts qualified by scientific training and experience to evaluate the safety of substances directly or indirectly added to food" (21 CFR 570.30). These experts can be convened
by any source, including FDA, industry (individual or corporation), or a trade association such as FEMA. The FEMA GRAS Panel, which has existed since 1960, has recognized many ingredients as GRAS
(over 2000). This process is the predominant process used to determine the GRAS status of synthetic and natural compounds that modify taste and/or flavor in the United States.

The
GRAS 23 list, published by FEMA, contains approximately 3,000 materials, of which 1,804 are defined chemical compounds. Of the defined chemical compounds, eight are natural; 1,280
are "nature identical" (i.e., found in nature but manufactured in large quantities through industrial-scale chemical synthesis); and 516 are "artificial" (i.e., novel compounds created
through chemical synthesis). In the past five years, approximately 290 additional compounds have been determined as GRAS by the FEMA GRAS Panel.

In
the FEMA GRAS review program, an expert panel evaluates published literature, together with experimental toxicology, metabolism, and safety data and determines whether a compound is
generally

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recognized
as safe under the conditions and amounts of its intended use. The safety studies required for GRAS approval of a new chemical compound are extensive. GRAS safety studies typically involve
the following: pharmacological activity profiling, genotoxicity studies, in vivo reproductive toxicology, ADME (absorption, distribution, metabolism, excretion), acute toxicology, and
90-day chronic dosing, including metabolism and histopathology. We estimate that the required tests can be performed and reported in 12 to 18 months at an estimated cost of
$1-2 million.

A
FEMA GRAS determination process for new flavoring agents and taste modifiers confers some key advantages:



Our
regulatory strategy is validated by clearly defined approval pathways for which we believe there are sufficient market precedents for our potential products. While there is ample
historic precedent, there can be no assurance that regulatory requirements will remain stable and that the GRAS pathway will be available in its current or modified form.

Regulatory Approval for Taste-Modified Pharmaceutical Formulations

Our pharmaceutical strategy is to incorporate our taste enhancers and aversive taste blockers into proprietary formulations of medicines that potentially offer
improved acceptability and compliance, improved efficacy because of greater compliance, and may also potentially offer potential for use in broader patient populations or indications. In addition to
the regulatory requirements for our taste enhancers and aversive taste blockers, we will also require regulatory approvals of our pharmaceutical formulations.

We
intend to seek approval for our pharmaceutical formulations through the FDA 505(b)(2) approval process. In the 505(b)(2) process an applicant submits full reports of investigations of
safety and effectiveness, but at least some portion of the information submitted for approval comes from sources other than studies performed by the applicant. Drugs that may be approved via the
505(b)(2) process include drugs that have the same active ingredients as previously approved products, but now are formulated in a different delivery mechanism or other new dosage forms, or with
different indications.
The basis for the 505(b)(2) application is the prior availability of substantial safety and efficacy about the active ingredient.

We
believe our taste improved formulations would be differentiated on one or more of the following bases: improved taste, broader indications, better product convenience, acceptability
and compliance. Also, under the Federal Food, Drug, and Cosmetics Act and FDA regulations, new drug formulations may be granted exclusivity in the marketplace if: (i) new clinical data are
required for FDA approval; (ii) the drug is studied in pediatric populations; or (iii) it is submitted for approval as an orphan indication. New dosage forms may also be patentable.

Marketing and Sales

As a development stage company, we currently have no sales, marketing or distribution capabilities. In general, the Company will be dependent on our current and
future collaborators for the

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production,
marketing, sales and other aspects of the commercialization of our product candidates when such products are developed through collaborative discovery and development programs with major
food ingredient suppliers, food producers, or pharmaceutical companies. For some products, including liquid and innovative specialty drug formulations independently developed by Redpoint Bio, the
Company may build or contract a targeted marketing and sales capability.

Intellectual Property

We currently own or have exclusive licenses to 8 issued U.S. patents, 21 pending U.S. patent applications, 3 issued foreign patents and 29 foreign patent
applications. In addition, we have assembled significant expertise and know how in the biology, molecular biology, cell biology and chemistry of taste and taste modifiers. Redpoint Bio's founding
intellectual property portfolio was developed in the laboratory of Robert Margolskee, M.D., Ph.D., and licensed from the Mount Sinai School of Medicine. Dr. Margolskee is our scientific
founder, Chairman of our Scientific Advisory Board, and Professor of Neuroscience and Pharmacology at the Mount Sinai School of Medicine. In-licensed technology from
Dr. Margolskee's laboratory includes patents and applications for methods and compositions for discovering bitter blockers and blocking bitterness in foods and pharmaceuticals. In addition to
intellectual property in-licensed from the Margolskee laboratory at Mount Sinai, scientists at Redpoint Bio have extended the portfolio with several new patent applications. These include:



Our
primary intellectual property strategy is to obtain composition-of-matter patents on new tastant compounds that can be approved through the GRAS regulatory
processes and we have already filed patent applications on lead series for both the universal bitter blocker and sweetness enhancer, where we have developed compounds that are potent and specific in in vitromodel systems of taste perception.

In
addition to our taste modifiers, many pharmaceutical formulations created using our proprietary aversive taste blockers, and regulated through the FDA 505(b)(2) regulatory process,
are potentially patentable as novel formulations or drug delivery systems, for which a new, full-length patent term may be obtained. Moreover, the FDA 505 (b)(2) approval process itself
affords new label claims as well as product market exclusivity for a period of three years. For pediatric indications there is an additional period of exclusivity.

Our
scientific and management team has co-authored over 100 issued U.S. patents, covering various areas of drug discovery, and has a strong track record of successful
management of intellectual property covering both technology tools and new compositions of matter with pharmaceutical utility.

Collaborative and Licensing Arrangements

Current and Potential Food and Beverage Partnerships

To leverage our technology in the food and beverage markets we have partnered, and intend to continue to partner, with ingredient suppliers and food and beverage
companies, to develop and commercialize taste enhancers in exchange for technology access fees, research funding, product development milestones, and product royalties.

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In March 2007, we entered into a Joint Research and Development and License Agreement, which we refer to as the Givaudan Agreement, with Givaudan Schweiz AG, a
Swiss company, referred to herein as Givaudan, for the development and commercialization of compounds that enhance sweetness or savory sensation, as well as compounds that block or desensitize bitter
taste for use in the food and beverage industry. Under the terms of the agreement, Redpoint and Givaudan are collaborating exclusively with each other to discover and develop compounds that act
primarily through the modulation of the TRPM5 channel. In consideration of our agreement to conduct research and develop compounds and grant exclusive licenses and other rights, Givaudan paid us an
upfront technology fee in the amount of $1.3 million and agreed to provide research funding to us over the initial 3.5 year term of the agreement of up to $11.6 million. Givaudan
will also reimburse us for costs we incur in connection with obtaining certain regulatory approvals. Through December 31, 2007, including the upfront fee, we have received $3.1 million
in research and development funding. We are also eligible to receive milestone payments of up to $2.5 million upon the achievement of specified development and commercialization events as well
as royalty payments based on net sales of Givaudan products that contain flavor systems incorporating compounds developed under the collaboration.



In December 2007, we entered into a research agreement with The Coca-Cola Company, referred to herein as Coca-Cola, for the development of
certain technology for use in non-alcoholic beverages. In consideration of our agreement to conduct research for the development of certain technology and grant exclusive licenses and
other rights, Coca-Cola agreed to pay us $900,000 per year. In connection therewith, in February 2008, Coca-Cola made a non-refundable payment of $450,000, which
shall
be applied to the aforementioned costs for the initial six (6) months of the agreement. Coca-Cola will also reimburse us for certain related Clinical Research Organization (CRO)
costs that we incur. In addition, Coca-Cola also agreed to pay us a milestone payment of $200,000 upon the achievement of specified development events set forth in the Research Agreement.
The initial term of the Agreement is for 12 months, subject to extension upon mutual agreement of the parties. The Agreement may be terminated early by the parties upon their mutual agreement
or by Coca-Cola in its individual discretion after the initial six month period. For the initial six month period, we granted Coca-Cola an exclusive right to negotiate to
extend and expand the collaboration into a broader, multi-year research, development and commercialization program.

Potential Pharmaceutical Partnerships

In addition to developing our own pharmaceutical formulations, we plan to form partnerships with pharmaceutical companies to develop and market liquid and
innovative pharmaceutical formulations in exchange for technology access fees, research funding, product development milestones and product royalties. We have identified a broad selection of potential
products for development, including both liquid formulations and innovative formulations that we believe would be attractive licensing candidates. In general, our strategy involves the development of
a prototype formulation demonstrating the effectiveness of our technology by combining the target API with our GRAS-approved bitter or other aversive taste blocker. Some products could
incorporate third-party APIs that could constitute line extensions to be marketed to the API patent holder. Additional prototype products could be developed with either
soon-to-be or patent-expired APIs. These products could either be licensed to the original patent holder to create a line extension, or to a generics company wishing to market
a differentiated or branded generic product.

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We may also form long-term strategic partnerships with food flavor companies or major pharmaceutical and biotechnology companies to support product commercialization
activities, clinical trials, product manufacturing, marketing, or distribution.

Employees

As of December 31, 2007, we employed 29 persons on a full-time basis, of whom 23 were in research and development departments, and 6 of whom
were engaged in finance, business development and administration. Of these employees, 12 hold M.D., Ph.D. or other advanced degrees. We also retain outside consultants. We believe that while we have
been successful to date in attracting skilled and experienced scientific personnel, competition for such personnel continues to be intense and there can be no assurance that we will continue to be
able to attract and retain the professionals we will need to grow our business.

Our Executive Officers

The following table identifies our current executive officers and directors:

|Name                         |  | Age |  | Capacities in Which Served                       |  | In Current
Position Since
|---------------------------- |  | --- |  | ------------------------------------------------ |  | -------------------------
|F. Raymond Salemme, Ph.D.(1) |  | 62  |  | President, Chief Executive Officer and Director  |  | 2007                     
|Scott M. Horvitz(2)          |  | 49  |  | Chief Financial Officer, Treasurer and Secretary |  | 2007                     
|Robert W. Bryant, Ph.D.(3)   |  | 63  |  | Vice PresidentDiscovery Research                |  | 2007                     
|Scott A. Siegel, Ph.D.(4)    |  | 51  |  | Vice President of Corporate Development          |  | 2007                     
|Joseph Mollica, Ph.D.(5)     |  | 67  |  | Chairman of the Board                            |  | 2007                     
|Robert Chefitz(6)            |  | 48  |  | Director                                         |  | 2007                     
|Leif Kjaergaard, Ph.D.(7)    |  | 61  |  | Director                                         |  | 2007                     
|David Patchen(8)             |  | 54  |  | Director                                         |  | 2007                     
|Philip L. Smith, Ph.D.(9)    |  | 58  |  | Director                                         |  | 2007                     
|Allen Bloom, Ph.D.(10)       |  | 64  |  | Director                                         |  | 2007                     
|Irwin Scher, M.D.(11)        |  | 68  |  | Director                                         |  | 2007                     
|Richard P. Shanley, CPA(12)  |  | 60  |  | Director                                         |  | 2007                     

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None
of our executive officers is related to any other executive officer or to any of our Directors. Our executive officers are elected annually by the Board of Directors and serve until
their successors are duly elected and qualified.

Corporate History

Redpoint was incorporated in August 1995 under the name of Linguagen Corp., based on the pioneering work of its scientific founder Robert Margolskee, M.D., Ph.D.
Dr. Margolskee is Professor of Neuroscience and Pharmacology at the Mount Sinai School of Medicine. Dr. Margolskee's laboratory has made major discoveries in the molecular biology of
taste signaling pathways. We have obtained exclusive licenses to key technology patents, covering discoveries in his laboratory, from the Mount Sinai School of Medicine. Originally we were focused on
broadening the application of natural products such as nucleotides for food and pharmaceutical taste modification applications.

Since
November 2003, we successfully recruited a professional management and scientific team with extensive experience in biotechnology, pharmaceutical discovery and product development,
and refocused our research efforts on the discovery of proprietary compounds acting through novel biochemical mechanisms, either as enhancers acting for sweet and savory tastes, or as bitter blockers
for pharmaceutical applications.

Since
refocusing our efforts, we have made key advances in the discovery of prototype compounds for both sweet and savory taste enhancement and pharmaceutical product bitter blocking. We
have filed patent applications covering both aspects of our discovery technology and chemical compositions of matter for active compounds. In order to drive our discovery programs, we built an
integrated discovery platform incorporating many state-of-the art tools and capabilities pioneered in the pharmaceutical industry, including capabilities in molecular biology,
biochemistry, pharmacology, high throughput screening, electrophysiology, cheminformatics, and transgenic/operant animal models. We complement these capabilities with sensory testing and regulatory
affairs expertise, to complete a platform for the discovery and development of proprietary compounds for use in pharmaceutical, prescription, OTC, food and beverage products.

In
March 2007, we entered into the Agreement and Plan of Merger, dated as of March 12, 2007, by and among Redpoint, on the one hand, and Robcor, Merger Sub, Robcor, LLC,
and Halter Financial Investments, L.P. and Michael Heitz, as stockholders of Robcor, on the other hand. The transactions contemplated by the Reverse Merger Agreement were consummated on
March 12, 2007.

Pursuant
to the Reverse Merger Agreement, on the Closing Date, Merger Sub merged with and into Redpoint, with Redpoint being the surviving corporation and becoming a wholly-owned
subsidiary of Robcor, and the outstanding shares of capital stock, convertible notes and certain warrants to purchase capital stock of Redpoint were converted into shares of common stock of Robcor in
accordance with the Delaware General Corporation Law on the terms and conditions as set forth in the Reverse Merger Agreement. On May 3, 2007, Redpoint and Robcor entered into an Agreement and
Plan of Merger in which Robcor, the former parent company of Redpoint after consummation of

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the
Reverse Merger, merged with and into Redpoint. Such merger, referred to herein as the Reincorporation Merger, was deemed effective on June 15, 2007.

Redpoint
was deemed to have been the accounting acquirer in the Reverse Merger. Accordingly, the financial statements of the Company presented reflect the historical results of Redpoint
prior to the Reverse Merger, and of the combined entities following the Reverse Merger, and do not include the historical financial results of Robcor prior to the consummation of the Reverse Merger.
For analysis of the accounting treatment of the Reverse Merger and the Reincorporation Merger as well as our business, please see the accompanying financial statements.

Our
principal executive offices are located at 7 Graphics Drive, Ewing, New Jersey, 08628. Our telephone number is (609) 637-9700. Our website address is
www.redpointbio.com. The information contained on our website is not incorporated by reference into, and does not form any part of, this annual report.

Available Information

We make available the following public filings with the Securities and Exchange Commission, or the SEC, free of charge through our Web site at www.redpointbio.com
as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC:



In
addition, we make available our code of conduct free of charge through our web site. We intend to disclose any amendments to, or waivers from, our code of conduct that are required to
be publicly disclosed pursuant to rules of the SEC and NASDAQ by filing such amendment or waiver with the SEC and posting it on our web site.

No
information on our internet web site is incorporated by reference into this Annual Report on Form 10-K or any other public filing made by us with the SEC.

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ITEM 1A.    RISK FACTORS

You should carefully consider the following risks and all of the other information set forth in this Annual Report before deciding to
invest in shares of our common stock. The risks described below are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our
business operations. If any of the following risks actually occurs, our business, financial condition or results of operations would likely suffer. In such case, the market price of our common stock
would likely decline due to the occurrence of any of these risks, and you may lose all or part of your investment.

Risks Related To Our Business and Our Industry

Redpoint is a development-stage company. We have incurred losses since inception and expect to incur additional net losses for at least
the next several years.

Since
our inception we have incurred significant losses and negative cash flows from operations. As of December 31, 2007, we had an accumulated deficit of $33.0 million,
and anticipate incurring additional losses for at least the next several years. We expect to spend significant resources over the next several years to enhance our technologies and to fund research
and development of our pipeline of potential products. We have not generated significant revenues in any particular year since our inception. To date, substantially all of our revenue has been derived
from corporate collaborations, license agreements, and government grants. In order to achieve profitability, we must develop products and technologies that can be commercialized by us or through
future collaborations. Our ability to generate revenues and become profitable will depend on our ability, alone or with potential collaborators, to timely, efficiently and successfully complete the
development of our product candidates, which may include conducting pre-clinical and clinical tests, obtaining necessary regulatory approvals, and manufacturing and marketing our product
candidates. There can be no assurance that any such events will occur or that we will ever become profitable. Even if we do achieve profitability, we cannot predict the level of such profitability. If
we sustain losses over an extended period of time, we may be unable to continue our business.

We will need substantial additional funding to develop our products and for our future operations. If we are unable to obtain the funds necessary to do so, we may
be required to delay, scale back or eliminate our product development or may be unable to continue our business.

The
development of our product candidates will require a commitment of substantial funds to conduct the costly and time-consuming research, which may include
pre-clinical and clinical testing, necessary to obtain regulatory approvals and bring our products to market. We believe our current capital resources will satisfy our operating plan
through December 2009. Our future requirements will depend on many factors, including:



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There
can be no assurance that we will not need additional capital sooner than currently anticipated.

We
will need to raise substantial additional capital to fund our future operations. We cannot be certain that additional financing will be available on acceptable terms, or at all. In
recent years, it has been difficult for companies to raise capital due to a variety of factors, which may or may not continue. To the extent we raise additional capital through the sale of equity
securities, the ownership position of our existing stockholders could be substantially diluted. If additional funds are raised through the issuance of preferred stock or debt securities, these
securities are likely to have rights, preferences and privileges senior to our common stock. Fluctuating interest rates could also increase the costs of any debt financing we may obtain.

Failure
to successfully address ongoing liquidity requirements will have a material adverse effect on our business. If we are unable to obtain additional capital on acceptable terms when
needed, we may be required to take actions that harm our business and our ability to achieve cash flow in the future, including possibly the surrender of our rights to some technologies or product
opportunities, delaying our clinical trials or curtailing or ceasing operations.

We are an early stage company and currently have no products available for sale, license or use. Our product candidates require additional research, development,
testing, expert reviews and/or and regulatory approvals before marketing. We may be unable to develop, obtain regulatory approval or market any of our product candidates. If our product candidates are
delayed or fail, our financial condition will be negatively affected, and we may have to curtail or cease our operations.

We
are in the early stage of product development and we are dependent on new discoveries. We currently do not sell or license any products to third parties and do not expect to have any
products commercially available for several years, if at all. You must evaluate us in light of the uncertainties and complexities affecting an early stage biotechnology company. Our product candidates
require additional research and development, pre-clinical testing, clinical testing (for our pharmaceutical products) and regulatory review and/or approvals clearances before marketing.
There are many reasons that our product candidates may fail or not advance to commercialization, including the possibility that:



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In
addition, we may not succeed in developing taste enhancers and aversive taste blockers with the appropriate attributes required for use in successful commercial products. Successful
taste enhancers
and aversive taste blockers require, among other things, appropriate biological activity, including the correct taste enhancer and aversive taste blocker properties for the product application, an
acceptable safety profile, including lack of toxicity or allergenicity, and appropriate physical or chemical properties, including relative levels of stability, volatility and resistance to heat.
Successful taste enhancers and aversive taste blockers must also be cost-efficient. We may not be able to develop taste enhancers and aversive taste blockers that meet these criteria.

If
our product candidates are delayed or we fail to successfully develop and commercialize our product candidates, our financial condition may be negatively affected, and we may have to
curtail or cease our operations.

We may not successfully establish and maintain collaborative and licensing arrangements, which could adversely affect our ability to develop and commercialize our
product candidates.

A
key element of our food and beverage strategy is to commercialize our taste enhancers through product discovery and development collaborations with major ingredient suppliers and/or
end users, such as the Givaudan Agreement and the Coca-Cola Agreement. Our pharmaceutical strategy includes developing our own taste-improved drug formulations as well as establishing
collaborations and licensing agreements with major pharmaceutical, over-the-counter and generic companies. We may not be able to maintain or expand these licenses and
collaborations or establish additional licensing and collaboration arrangements necessary to develop and commercialize our product candidates. Each of our collaboration agreements, such as the
Givaudan Agreement and the Coca-Cola Agreement, provide each of our collaborators with the ability to terminate its agreement with us prior to the expiration of the term as set forth in
the agreements. Even if we are able to maintain or establish licensing or collaboration arrangements, these arrangements may not be on favorable terms and may contain provisions that will restrict our
ability to develop, test and market our product candidates. Any failure to maintain or establish licensing or collaboration arrangements on favorable terms could adversely affect our business
prospects, financial condition or ability to develop and commercialize our product candidates.

We
expect to rely at least in part on third party collaborators to perform a number of activities relating to the development and commercialization of our product candidates, including
the manufacturing of product materials, the design and conduct of clinical trials for our pharmaceutical formulations, and potentially the obtaining of regulatory approvals and marketing and
distribution of any successfully developed products. Our collaborative partners may also have or acquire rights to control aspects of our product development and clinical programs. As a result, we may
not be able to conduct these programs in the manner or on the time schedule we currently contemplate. In addition, if any of these collaborative partners withdraw support for our programs or product
candidates or otherwise impair their development, our business could be negatively affected. To the extent we undertake any of these activities internally, our expenses may increase.

In
addition, our success depends on the performance of our collaborators of their responsibilities under these arrangements. Some potential collaborators may not perform their
obligations in a timely fashion
or in a manner satisfactory to us. Because such agreements may be exclusive, we may not be able to enter into a collaboration agreement with any other company covering the same product field during
the applicable collaborative period. In addition, our collaborators' competitors may not wish to do business with us at all due to our relationship with our collaborators. If we are unable to enter
into additional product discovery and development collaborations, our ability to sustain or expand our business will be significantly diminished.

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If we or our collaborators are unable to obtain and maintain the GRAS determination or regulatory approval required before any taste enhancers or aversive taste
blockers can be incorporated into products that are sold, we would be unable to commercialize our taste enhancers and aversive taste blockers and our business would be adversely
affected.

In
the United States, the development, sale and incorporation of our taste enhancers and aversive taste blockers into products are subject to regulation by the FDA, and in some
instances, other government bodies. Obtaining and maintaining a GRAS determination or regulatory approval is typically costly and can take many years.

Depending
on the amount or intended use of a particular taste enhancer or aversive taste blocker added to a product and the number of product categories in which the flavor or flavor
enhancer will be incorporated, specific testing, safety assessment protocols, and regulatory processes must be satisfied before we or our collaborators can commercially market and sell products
containing any taste enhancers and aversive taste blockers that we may discover. A key element of our strategy is to develop flavors and flavor enhancers that will be evaluated by the FEMA (Flavor and
Extracts Manufacturers Association) GRAS Panel, which we expect will take 18 to 24 months and which is less expensive than the alternative of filing a food additive petition with the FDA, which
can take eight years or more. The FEMA GRAS review process may take longer than 24 months and cost more than we currently anticipate if additional safety studies are requested by the FEMA GRAS
Panel or are necessary to explain unexpected safety study findings. There is a risk that one or more of our product candidates may not qualify for a FEMA GRAS determination. This may occur for a
variety of reasons, including the taste enhancer's or aversive taste blocker's intended use, the amount of the taste enhancer or aversive taste blocker intended to be added to packaged foods and
beverages, the number of product categories in which the taste enhancers or aversive taste blockers will be incorporated, whether the taste enhancer imparts sweetness, the safety profile of the taste
enhancers or aversive taste blockers and the FEMA GRAS Panel's interpretation of the safety data. Even if we obtain a GRAS determination with respect to a taste enhancer or aversive taste blocker, the
FDA has the ability to challenge such determination, which could materially adversely affect our ability to market products on schedule or at all. In the event that a particular taste enhancer or
aversive taste blocker does not qualify for a FEMA GRAS determination, we may be required to pursue a lengthy FDA approval process to reach the U.S. market, or dedicate our development efforts to
alternative compounds, which would further delay commercialization. In addition, laws, regulations or FDA practice governing the regulatory approval process, the availability of the GRAS determination
process or the manufacture or
labeling of such products, may change in a manner that could adversely affect our ability to commercialize products on schedule or at all.

Sales
of our taste enhancers and aversive taste blockers outside of the United States will be subject to foreign regulatory requirements. In most cases, whether or not a GRAS
determination or FDA approval has been obtained, approval of a product by the comparable regulatory authorities of foreign countries must still be obtained prior to manufacturing or marketing the
product in those countries. A GRAS determination or FDA approval in the United States or in any other jurisdiction does not ensure approval in other jurisdictions because the requirements from
jurisdiction to jurisdiction may vary widely. Obtaining foreign approvals could result in significant delays, difficulties and costs for us and require additional safety studies and additional
expenses. If we fail to comply with these regulatory requirements or to obtain and maintain required approvals, our ability to generate revenue will be diminished.

We
and our collaborators may not be successful in overcoming these regulatory hurdles, which could result in product launch delays, unanticipated expenses, termination of collaborations,
and flavors and flavor enhancers not being approved for incorporation into consumer products. These consequences would have a material adverse effect on our business financial condition and results of
operations.

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Even if we or our collaborators receive a GRAS determination or regulatory approval and incorporate our taste enhancers or aversive taste blockers into products,
those products may never be commercially successful.

Even
if we discover and develop taste enhancers and aversive taste blockers that obtain the necessary GRAS determination or regulatory approval, our success depends to a significant
degree upon the commercial success of packaged food and beverage products and pharmaceutical products incorporating those taste enhancers or aversive taste blockers. If these products fail to achieve
or subsequently maintain market acceptance or commercial viability, our business would be significantly harmed because our royalty revenue is dependent upon consumer sales of these products. In
addition we could be unable to maintain our existing collaborations or attract new product discovery and development collaborators. Many factors may affect the market acceptance and commercial success
of any potential products incorporating taste enhancers or aversive taste blockers that we may discover, including:



We may experience delays in clinical trials and regulatory approval relating to our products that could adversely affect our financial results and our commercial
prospects for our pharmaceutical products.

Our
pharmaceutical strategy is to incorporate our taste enhancers and aversive taste blockers into proprietary formulations of medicines that potentially offer improved acceptability and
compliance, thus enhancing efficacy and possibly providing broader indications or patient populations. In addition to the regulatory or other requirements for our taste enhancers and aversive taste
blockers, we will also require regulatory approvals of our pharmaceutical formulations. In such case, we may be required to conduct clinical trials to demonstrate safety and efficacy of the new
formulation. For product candidates that advance to clinical testing, we cannot be certain that we or a collaborator will successfully complete the clinical trials necessary to receive regulatory
product approvals. This process is lengthy and expensive.

We
intend to seek approval for our pharmaceutical formulations through the FDA 505(b)(2) approval process. If we are unable to approve our pharmaceutical formulations through the
505(b)(2) process, we may be required to pursue the more expensive and time consuming 505(b)(1) approval process. Section 505(b) of the Federal Food, Drug, and Cosmetic Act describes two types
of NDA applications that an applicant may submit for approval of innovator medicines. The first type of NDA, described under section 505(b)(1), consists of a full report of investigations of
safety and effectiveness conducted by or for the applicant or for which the applicant has the right of reference for the information. The second type of NDA, described under section 505(b)(2),
consists of a full report of investigations of safety and effectiveness where at least some portion of the information submitted for approval comes from sources other than studies performed or
sponsored by the applicant. Drugs that may be approved via the 505(b)(2) process include drugs that have the same active ingredients as previously approved products, but now are formulated in a
different delivery mechanism or other new dosage forms or with different indications. The basis for the 505(b)(2) application is that there already is a certain amount of information that is known
about the active ingredient. As such, repeating all the clinical studies required for a 505(b)(1) application would be significantly more expensive and time consuming than the 505(b)(2) process.

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To
obtain regulatory approvals, we must, among other requirements, complete clinical trials showing that our products are safe and effective for a particular indication. Under the
505(b)(2) approval process, although we may not have performed some of the studies ourselves, we must submit clinical and non-clinical data to demonstrate the medication is safe and
effective. We also must be able to provide data and information, including bioavailability or comparative bioavailability studies, to establish sufficiently the appropriateness of relying on material
without the right of reference.

We
do not know when clinical trials for our products will commence or whether we will complete any of our clinical trials on schedule or at all. There can be no assurance that clinical
trials will in fact demonstrate that our products are safe or effective.

Additionally,
we may not be able to find acceptable patients or may experience delays in enrolling patients for our clinical trials. The FDA or we may suspend our clinical trials at any
time if either believes that we are exposing the subjects participating in the trials to unacceptable health risks. The FDA or institutional review boards and/or institutional biosafety committees at
the medical institutions and healthcare facilities where we seek to sponsor clinical trials may not permit a trial to proceed or may suspend any trial indefinitely if they find deficiencies in the
conduct of the trials.

Product
development costs to us and our potential collaborators will increase if we have delays in testing or approvals or if we need to perform more or larger clinical trials than
planned. We expect to continue to rely on third party clinical investigators at medical institutions and healthcare facilities to conduct our clinical trials, and, as a result, we may face additional
delaying factors outside our control. Significant delays may adversely affect our financial results and the commercial prospects for our product candidates and delay our ability to become profitable.

If our pharmaceutical product candidates do not successfully complete the clinical trial process, we will not be able to market them. Even successful clinical
trials may not result in a marketable product and may not be entirely indicative of a product's safety or efficacy.

Many
factors, known and unknown, can adversely affect clinical trials and the ability to evaluate a product's efficacy. During the course of treatment, patients can die or suffer other
adverse events for reasons that may or may not be related to the proposed product being tested. Even if unrelated to our product, certain events can nevertheless adversely impact our clinical trials.
As a result, our ability to ultimately develop and market the products and obtain revenues would suffer.

Even
promising results in pre-clinical studies and initial clinical trials do not ensure successful results in later clinical trials, which test broader human use of our
products. Many companies in our industry have suffered significant setbacks in advanced clinical trials, despite promising results in earlier trials. Even successful clinical trials may not result in
a marketable product or be indicative of the efficacy or safety of a product. Many factors or variables could affect the results of clinical trials and cause them to appear more promising than they
may otherwise be. Product candidates that successfully complete clinical trials could ultimately be found to be unsafe or ineffective.

In
addition, our ability to complete clinical trials depends on many factors, including obtaining adequate clinical supplies and having a sufficient rate of patient recruitment. For
example, patient recruitment is a function of many factors, including:



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Even if patients are successfully recruited, we cannot be sure that they will complete the treatment process. Delays in patient enrollment or treatment in clinical trials may result in
increased costs, program delays or both.

With
respect to markets in other countries, we or a partner will also be subject to regulatory requirements governing clinical trials in those countries. Even if we complete clinical
trials, we may not be able to submit a marketing application. If we submit an application, the regulatory authorities may not review or approve it in a timely manner, if at all.

Because we cannot predict whether or when we will obtain regulatory approval to commercialize our pharmaceutical product candidates, we cannot predict the timing
of any future revenue from these product candidates.

We
cannot commercialize any of our pharmaceutical product candidates to generate revenue until the appropriate regulatory authorities have reviewed and approved the applications for our
product candidates. We cannot assure you that the regulatory agencies will complete their review processes in a timely manner or that we will obtain regulatory approval for any product candidate we or
our potential collaborators develop. Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity and novelty of the product and requires the expenditure
of substantial resources. Regulatory approval processes outside the United States include all or many of the risks associated with the FDA approval process and potentially others as well. In addition,
we may experience delays or rejections based upon additional government regulation from future legislation or administrative action or changes in FDA policy, or the policies of other relevant
governmental or nongovernmental entities during the period of product development, pre-clinical and clinical trials and FDA regulatory review.

We will rely on third parties to manufacture taste enhancers, aversive taste blockers and pharmaceutical product candidates. There can be no guarantee that we can
obtain sufficient and acceptable quantities of our taste enhancers or aversive taste blockers or pharmaceutical product candidates on acceptable terms, which may delay or impair our ability to
develop, test and market such products.

Our
business strategy relies on third parties to manufacture and produce our taste enhancers and aversive taste blockers and pharmaceutical product candidates in accordance with good
manufacturing practices established by the FDA, or similar regulations in other countries. Our taste enhancers and
aversive taste blockers and pharmaceutical product candidates may be in competition with other products for access to these facilities and may be subject to delays in manufacture if third parties give
other products greater priority than our product candidates. These third parties also may not deliver sufficient quantities of our taste enhancers and aversive taste blockers and pharmaceutical
product candidates, manufacture our taste enhancers and aversive taste blockers and pharmaceutical product candidates in accordance with specifications, or comply with applicable government
regulations. Additionally, if the manufactured products fail to perform as specified, our business and reputation could be severely impacted.

We
expect to enter into manufacturing agreements for the production of product materials. If any manufacturing agreement is terminated or any third party collaborator experiences a
significant problem that could result in a delay or interruption in the supply of product materials to us, there are very few contract manufacturers who currently have the capability to produce our
taste enhancers and aversive taste blockers and pharmaceutical product candidates on acceptable terms, or on a timely and cost-effective basis. There can be no assurance that manufacturers
on whom we will depend will be able to successfully produce our taste enhancers and aversive taste blockers and pharmaceutical product candidates on acceptable terms, or on a timely or
cost-effective basis. There can also be no assurance that manufacturers will be able to manufacture our products in accordance with our product specifications, or will meet FDA or other
requirements. We must have sufficient and acceptable quantities of our product materials to conduct our clinical trials and to market our product candidates,

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if
and when such products have been approved by the FDA for marketing. If we are unable to obtain sufficient and acceptable quantities of our product material, we may be required to delay the clinical
testing and marketing of our products.

If we do not comply with applicable regulatory requirements in the manufacture and distribution of our product candidates, we may incur penalties that may inhibit
our ability to commercialize our products and adversely affect our revenue.

Our
failure or the failure of our potential collaborators or third party manufacturers to comply with applicable FDA or other regulatory requirements including manufacturing, quality
control, labeling, safety surveillance, promoting and reporting may result in criminal prosecution, civil penalties, recall or seizure of our products, total or partial suspension of production or an
injunction, as well as other regulatory action against our product candidates or us. Discovery of previously unknown problems with a product, supplier, manufacturer or facility may result in
restrictions on the sale of our products, including a withdrawal of such products from the market. The occurrence of any of these events would negatively impact our business and results of operations.

If we are unable to create and maintain sales, marketing and distribution capabilities or enter into agreements with third parties to perform those functions, we
will not be able to commercialize our product candidates.

We
currently have no sales, marketing or distribution capabilities. Therefore, to commercialize our product candidates, if and when such products have been approved and are ready for
marketing, we expect to collaborate with third parties to perform these functions. We have no experience in developing, training or managing a sales force and will incur substantial additional
expenses if we decide to market any of our future products directly. Developing a marketing and sales force is also time consuming and could delay launch of our future products. In addition, we will
compete with many companies that currently have extensive and well-funded marketing and sales operations. Our marketing and sales efforts may be unable to compete successfully against
these companies.

Many potential competitors, including those who have greater resources and experience than we do, may develop products or technologies that make ours obsolete or
noncompetitive.

We
believe our taste technology approach is applicable to a wide range of food, beverage and pharmaceutical products representing many and diverse competitive companies and approaches.
The life sciences and other technology industries are characterized by rapid technological change, and the area of sensory or taste research is a rapidly evolving field. Our future success will depend
on our ability to maintain a competitive position with respect to technological advances. Technological developments by others may result in our taste enhancers or aversive taste blockers and
technologies, as well as our pharmaceutical formulations, becoming obsolete.

We
face substantial competition from companies pursuing the commercialization of products and services relevant to taste using various methods for the discovery of taste enhancers and
aversive taste blockers. These competitors include leading flavor companies, such as International Flavors & Fragrances Inc., Givaudan SA, Symrise and Firmenich. Among food
manufacturers, at least Nestlé has an active program cloning and expressing receptors for in vitro screening assays. In addition, Senomyx, Inc. is a public biotechnology company
taking a biochemical approach to taste modulation, both in foods and pharmaceutical products. Senomyx is principally focused in the area of taste enhancement for food products and uses high throughput
screening technology and synthetic and natural products chemistry to discover novel flavor enhancers, which it licenses to end users in the food industry. Senomyx was initially focused on sweetness,
savory and salty flavor enhancers, but is now also developing programs to discover bitter blockers for food and pharmaceutical products. Chemcom is another company that is developing a biotechnology
approach to finding novel taste enhancers. We currently compete and will continue to compete in the future with these companies in collaborating

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with
and selling flavor products and technologies to manufacturers of packaged food and beverage products.

We
also face substantial competition from a number of companies in the pharmaceutical formulations industry. Taste masking has a long history in the pharmaceutical industry. A
traditional method of taste masking for pharmaceutical products is to mix the active pharmaceutical ingredient with flavorings and sugar syrup to mask unpleasant taste. This approach is most commonly
used for pediatric liquid formulations as well as many over-the-counter cough-cold
remedies. FlavorRx supplies flavors at drug store pharmacies that can be compounded by the pharmacist to make certain liquid formulations more palatable. In the pharmaceutical sector there are a
number of drug delivery companies that have developed proprietary taste masking technologies that include both traditional and novel pharmaceutical approaches. These competing technologies and
companies include but are not limited to OraSolv® and DuraSolv® from CIMA Labs (a Cephalon company), MicroCaps® and Liquitard® from Eurand,
FlavorTech, Liquette and MicroMask from KV Pharmaceuticals, EnVel® from Catalent, CEFORM from Biovail and WOWTab® from Astellas.
Virtually all of these approaches including OralSolv, DuraSolv, MicroCap, Liquitard, CEFORM, EnVel and the technology used in Zydis products utilize a physical approach to sequester the active drug
substance away from the taste receptors on the tongue. These include coating the drug, micro encapsulation, immobilization, use of cyclodextran carriers, or stabilization of the drug in a micellar or
insoluble phase, as the principle means of taste masking.

Many
of these companies have substantially greater capital resources, research and development resources and experience, manufacturing capabilities, regulatory expertise, sales and
marketing resources, established relationships with consumer products companies and production facilities.

We
may in the future face competition from life sciences and other technology companies and other commercial enterprises. These entities engage as we do in biotechnology, biology or
chemistry and could apply this technology to the discovery and development of taste enhancers and aversive taste blockers and new formulations of pharmaceutical products. We cannot guarantee that
products developed as a result of our competitors' existing or future collaborations will not compete with our taste enhancers and aversive taste blockers and new pharmaceutical formulations.

Universities
and public and private research institutions are also potential competitors. While these organizations primarily have educational objectives, they may develop proprietary
technologies related to the sense of taste or secure patent protection that we may need for the development of our technologies and products. We may attempt to license these proprietary technologies,
but these licenses may not be available to us on acceptable terms, if at all.

Our
competitors, either alone or with their collaborative partners, may succeed in developing technologies or discovering taste enhancers and aversive taste blockers that are more
effective, safer, more affordable or more easily commercialized than ours, and our competitors may obtain intellectual property protection or commercialize products sooner than we do. Developments by
others may render our product candidates or our technologies obsolete. In addition, our current product discovery and development collaborators are not prohibited from entering into research and
development collaboration agreements with third parties in any product field. Our failure to compete effectively would have a significant adverse effect on our business, financial condition and
results of operations.

If we are unable to attract and retain key personnel and advisors, it may adversely affect our ability to obtain financing, pursue collaborations or develop our
product candidates.

We
are highly dependent on F. Raymond Salemme, Ph.D., our Chief Executive Officer and President, as well as other executive and scientific officers, including Scott Horvitz, Chief
Financial Officer, Scott Siegel, Ph.D., Vice President, Corporate Development and Robert Bryant, Ph.D., Vice President, Discovery Research.

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Our
future success depends on our ability to attract, retain and motivate highly qualified management and scientific, development and commercial personnel and advisors. To pursue our
business strategy, we will need to hire or otherwise engage qualified personnel and managers, including personnel with expertise in discovery, development, clinical trials, government regulation,
manufacturing, marketing and sales. Competition for qualified personnel is intense among companies, academic institutions and other organizations. If we are unable to attract and retain key personnel
and advisors, it may negatively affect our ability to successfully develop, test and commercialize our product candidates.

We use hazardous and biological materials in our business. Any claims relating to improper handling, storage or disposal of these materials could be time
consuming and costly.

Our
products and processes will involve the controlled storage, use and disposal of certain hazardous and biological materials and waste products. We and our suppliers and other
collaborators are subject to federal, state and local regulations governing the use, manufacture, storage, handling and disposal of materials and waste products. Even if we and these suppliers and
collaborators comply with the standards prescribed by law and regulation, the risk of accidental contamination or injury from hazardous materials cannot be completely eliminated. In the event of an
accident, we could be held liable for any damages that result, and any liability could exceed the limits or fall outside the coverage of any insurance we may obtain and exceed our financial resources.
We may not be able to maintain insurance on acceptable terms, or at all. We may incur significant costs to comply with current or future environmental laws and regulations.

We may be sued for product liability, which could adversely affect our business.

Because
our business strategy involves the development and sale by either us or our collaborators of commercial products incorporating our taste enhancers or aversive taste blockers, we
may be sued for product liability. We may be held liable if any product we develop and commercialize, or any product our collaborators commercialize that incorporates any of our taste enhancers or
aversive taste blockers, causes injury or is found otherwise unsuitable during product testing, manufacturing, marketing, sale or consumer use. In addition, the safety studies we must perform and the
FEMA GRAS determination we must obtain prior to incorporating our taste enhancers and aversive taste blockers into a commercial
product, and the regulatory approvals required to commercialize our pharmaceutical products, will not protect us from any such liability.

If
we and our collaborators commence sale of commercial products we will need to obtain product liability insurance, and this insurance may be prohibitively expensive, or may not fully
cover our potential liabilities. Inability to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims could prevent or inhibit the
commercialization of products developed by us or our product discovery and development collaborators. We may be obligated to indemnify our product discovery and development collaborators for product
liability or other losses they incur as a result of our taste enhancers and aversive taste blockers. Any indemnification we receive from such collaborators for product liability that does not arise
from our taste enhancers or aversive taste blockers may not be sufficient to satisfy our liability to injured parties. If we are sued for any injury caused by our taste enhancers or aversive taste
blockers or products incorporating our taste enhancers or aversive taste blockers or any other products we develop, our liability could exceed our total assets.

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Risks Related To Intellectual Property

If our product candidates are not effectively protected by valid, issued patents or if we are not otherwise able to protect our
proprietary information and technologies, it could harm our business.

The
success of our operations will depend in part on our ability and that of our licensors to:



In
the event we are not able to protect our intellectual property and proprietary information, our business will be materially harmed.

We may not have adequate protection for our unpatented proprietary information, which could adversely affect our competitive position.

In
addition to patents, we will substantially rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain our
competitive position. However, others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose our
technology. To protect our trade secrets, we may enter into confidentiality agreements with employees, consultants and potential collaborators. However, these agreements may not provide meaningful
protection of our trade secrets or adequate remedies in the event of unauthorized use or disclosure of such information. Likewise, our trade secrets or know-how may become known through
other means or be independently discovered by our competitors. Any of these events could hinder us from developing or commercializing our product candidates.

Our ability to compete in the ingredient, food and beverage market and the pharmaceutical market may decline if we do not adequately protect our proprietary
technologies.

Because
of the substantial length of time and expense associated with the development of new products, we, along with the rest of the ingredient, food and beverage industry and
pharmaceutical industry, place considerable importance on obtaining and maintaining patent protection for new technologies, products and processes. Our success depends in part on our ability to obtain
and maintain intellectual property that protects our technologies, taste enhancers or aversive taste blockers and our pharmaceutical products. Patent positions may be highly uncertain and may involve
complex legal and factual questions, including the ability to establish patentability of sequences relating to taste receptors, proteins, chemical synthesis techniques, compounds and methods for using
them to modulate taste for which we seek patent protection. No consistent standard regarding the allowance or enforceability of claims in many of our pending patent applications has emerged to date.
As a result, we cannot predict the breadth of claims that will ultimately be allowed in our patent applications, if any, including those we have in-licensed or the extent to which we may
enforce these claims against our competitors. The

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degree
of future protection for our proprietary rights is therefore highly uncertain and we cannot assure you that:



In
addition, patent law outside the United States is uncertain and in many countries intellectual property laws are undergoing review and revision. The laws of some countries do not
protect intellectual property rights to the same extent as domestic laws. It may be necessary or useful for us to participate in opposition proceedings to determine the validity of our competitors'
patents or to defend the validity of any of our or our licensor's future patents, which could result in substantial costs and would divert our efforts and attention from other aspects of our business.

Technologies
licensed to us by others, or in-licensed technologies, are important to our business. In particular, we depend on certain technologies relating to taste biology
licensed from the Mount Sinai School of Medicine. In addition, we may in the future acquire rights to additional technologies by licensing such rights from existing licensors or from third parties.
Such in-licenses may be costly. Also, we generally do not control the patent prosecution, maintenance or enforcement of in-licensed technologies. Accordingly, we are unable to
exercise the same degree of control over this intellectual property as we do over our internally developed technologies. Moreover, some of our academic institution licensors, collaborators and
scientific advisors have rights to publish data and information to which we have rights. If we cannot maintain the confidentiality of our technologies and other confidential information in connection
with our collaborations, our ability to protect our proprietary information or obtain patent protection in the future may be impaired, which could have a significant adverse effect on our business,
financial condition and results of operations.

Many of the patent applications we and our licensors have filed have not yet been substantively examined and may not result in patents being
issued.

Many
of the patent applications filed by us and our licensors were filed recently with the United States Patent and Trademark Office and most have not been substantively examined and may
not result in patents being issued. It is difficult to predict whether any of our or our licensors' applications will ultimately be found to be patentable or, if so, to predict the scope of any
allowed claims. In addition, the disclosure in our or our licensors' patent applications, particularly in respect of the utility of our claimed inventions, may not be sufficient to meet the statutory
requirements for patentability in all

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cases.
As a result, it is difficult to predict whether any of our or our licensors' applications will be allowed, or, if so, to predict the scope of any allowed claims or the enforceability of the
patents. Even if enforceable, others may be able to design around any patents or develop similar technologies that are not within the scope of such patents. Our and our licensors' patent applications
may not issue as patents that will provide us with any protection or competitive advantage.

Disputes concerning the infringement or misappropriation of our proprietary rights or the proprietary rights of others could be time consuming and extremely
costly and could delay our research and development efforts.

Our
commercial success, if any, will be significantly harmed if we infringe the patent rights of third parties or if we breach any license or other agreements that we have entered into
with regard to our technology or business.

We
are aware of other companies and academic institutions that have been performing research in the areas of taste modulation and taste enhancers and aversive taste blockers. In
particular, other companies and academic institutions have announced that they have conducted taste-receptor research and have published data on taste receptor sequence information and taste receptors
or filed patent applications or obtained patent protection on taste modulation or taste receptors and their uses. To the extent any of these companies or academic institutions currently have, or
obtain in the future, broad patent claims, such patents could block our ability to use various aspects of our discovery and development process and might prevent us from developing or commercializing
newly discovered taste enhancers and aversive taste blockers or otherwise conducting our business. In addition, it is possible that some of the taste enhancers or aversive taste blockers that are
discovered using our technology may not be patentable or may be covered by intellectual property of third parties.

With
respect to third-party patent rights in the area of the TRPM5 receptor specifically, we are aware of pending U.S. and foreign patent applications by competitors and others that have
claims directed to the TRPM5 receptor and/or methods of using the TRPM5 receptor to identify novel taste modulating compounds. Although these patent applications are currently undergoing examination
by the U.S. Patent and Trademark Office, and it is possible that they will not be granted or will not be granted with the current claims, it is also possible that patents will be granted on these
applications with claims that are relevant to our current or future commercialization plans. To the extent we determine that we need a license to these or other patents relating to the TRPM5 receptor
and are unable to obtain such licenses on commercially reasonable terms or at all, we may be restricted in our ability to commercialize our own TRPM5 technologies.

We
are not currently a party to any litigation, interference, opposition, protest, reexamination or any other potentially adverse governmental, ex parte or inter-party proceeding with
regard to our patent or trademark positions. However, the life sciences and other technology industries are characterized by extensive litigation regarding patents and other intellectual property
rights. Many life sciences and other technology companies have employed intellectual property litigation as a way to gain a competitive advantage. If we become involved in litigation, interference
proceedings, oppositions, reexaminations, protests or other potentially adverse intellectual property proceedings as a result of alleged infringement by us of the rights of others or as a result of
priority of invention disputes with third parties, we might have to spend significant amounts of money, time and effort defending our position and we may not be successful. In addition, any claims
relating to the infringement of third-party proprietary rights or proprietary determinations, even if not meritorious, could result in costly litigation, lengthy governmental proceedings, divert
management's attention and resources, or require us to enter into royalty or license agreements that are not advantageous to us.

Should
any person have filed patent applications or obtained patents in the United States that claim inventions also claimed by us, we may have to participate in an interference
proceeding declared by the relevant patent regulatory agency to determine priority of invention and, thus, the right to a patent for these inventions in the United States. Such a proceeding could
result in substantial cost to us

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even
if the outcome is favorable. Even if successful on priority grounds, an interference action may result in loss of claims based on patentability grounds raised in the interference action.
Litigation, interference proceedings or other proceedings could divert management's time and efforts. Even unsuccessful claims could result in significant legal fees and other expenses, diversion of
management's time and disruption in our business. Uncertainties resulting from initiation and continuation of any patent proceeding or related litigation could harm our ability to compete and could
have a significant adverse effect on our business, financial condition and results of operations.

An
adverse ruling arising out of any intellectual property dispute, including an adverse decision as to the priority of our inventions, could undercut or invalidate our intellectual
property position. An adverse ruling could also subject us to significant liability for damages, including possible treble damages, prevent us from using technologies or developing products, or
require us to negotiate licenses to disputed rights from third parties. Although patent and intellectual property disputes in the technology area are often settled through licensing or similar
arrangements, costs associated with these arrangements may be substantial and could include license fees and ongoing royalties. Furthermore, necessary licenses may not be available to us on
satisfactory terms, if at all. Failure to obtain a license in such a case could have a significant adverse effect on our business, financial condition and results of operations.

Risks Related to Our Fluctuating Operating Results, Possible Acquisitions and Management of Growth

We expect that our results of operations will fluctuate from period to period, and this fluctuation could cause our stock price to
decline, causing investor losses.

Our
operating results have fluctuated in the past and are likely to vary significantly in the future based upon a number of factors, many of which we have little or no control over. We
operate in a highly dynamic industry and future results could be subject to significant fluctuations. These fluctuations could cause us to fail to meet or exceed financial expectations of securities
analysts or investors, which could cause our stock price to decline rapidly and significantly. Revenue and expenses in future periods may be greater or less than revenue and expenses in the
immediately preceding period or in the comparable period of the prior year. Therefore, period-to-period comparisons of our operating results are not necessarily a good
indication of our future performance. Some of the factors that could cause our operating results to fluctuate include:



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If we acquire products, technologies or other businesses, we will incur a variety of costs, may have integration difficulties and may experience numerous other
risks that could adversely affect our business.

To
remain competitive, we may decide to acquire additional businesses, products and technologies. We currently have no commitments or agreements with respect to, and are not actively
seeking, any material acquisitions. We have limited experience in identifying acquisition targets, successfully acquiring them and integrating them into our current infrastructure. We may not be able
to successfully integrate any businesses, products, technologies or personnel that we might acquire in the future without a significant expenditure of operating, financial and management resources, if
at all. In addition, future acquisitions could require significant capital infusions and could involve many risks, including, but not limited to, the following:



Any
of the foregoing risks could have a significant adverse effect on our business, financial condition and results of operations.

To the extent we enter markets outside of the United States, our business will be subject to political, economic, legal and social risks in those markets, which
could adversely affect our business.

There
are significant regulatory and legal barriers in markets outside the United States that we must overcome to the extent we enter or attempt to enter markets in countries other than
the United States. We will be subject to the burden of complying with a wide variety of national and local laws, including multiple and possibly overlapping and conflicting laws. We also may
experience difficulties adapting to new cultures, business customs and legal systems. Any sales and operations outside the United States would be subject to political, economic and social
uncertainties including, among others:



Any
changes related to these and other factors could adversely affect our business to the extent we enter markets outside the United States.

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We may encounter difficulties managing our growth, which could adversely affect our business.

Our
strategy includes entering into and working on simultaneous taste enhancer and aversive taste blocker discovery and development programs across multiple markets that include both the
food and beverage industry and the pharmaceutical industry. We expect to continue to grow to meet our strategic objectives. If our growth continues, it will continue to place a strain on us, our
management and our resources. Our ability to effectively manage our operations, growth and various projects requires us to continue to improve our operational, financial and management controls,
reporting systems and procedures and to attract and retain sufficient numbers of talented employees. We may not be able to successfully implement these tasks on a larger scale and, accordingly, we may
not achieve our research, development and commercialization goals. If we fail to improve our operational, financial and management information systems, or fail to effectively monitor or manage our new
and future employees or our growth, our business would suffer significantly. In addition, no assurance can be made that we will be able to secure adequate facilities to house our staff, conduct our
research or achieve our business objectives.

Risks Related to our Common Stock; Liquidity Risks

The sale of a significant number of our shares of common stock in the public market could depress the market price of common
stock.

The
sale of a significant number of shares of our common stock in the public market could harm the market price of our common stock. As additional shares of common stock have become
available for resale in the public market pursuant to the registration statement and releases of lock-up agreements, the market supply of shares of common stock has increased, which could
decrease its market price. The number of shares that may be sold into the marketplace pursuant to the registration statement is significant. We believe that such sales may severely depress the market
price of our common stock. In addition, some or all of the shares of common stock may be offered from time to time in the open market pursuant to Rule 144 (or pursuant to an additional
registration statement, if one is effective), and these sales may also have a depressive effect on the market for the shares of common stock. In general, a person who is deemed to be an affiliate who
has held shares for a period of six months may, upon filing of a notification on Form 144 with the SEC, sell into the market common stock in an amount up to the greater of 1% of the outstanding
shares or the average weekly number of shares sold in the last four weeks before such sale. Such sales may be repeated once each three months. A non-affiliate holding restricted shares may
sell such shares without
restrictions after they have been held six months, subject only to the current public information requirement. After an additional six months have lapsed, a non-affiliate may sell such
shares without any restrictions.

The price of our common stock is expected to be volatile.

The
market price of our common stock, and the market prices for securities of biotechnology companies in general, are expected to be highly volatile. The following factors, in addition
to other risk factors described in this Annual Report on Form 10-K, and the potentially low volume of trades in our common stock, may have a significant impact on the market price
of our common stock, some of which are beyond our control:



36

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The
stock market in general has recently experienced relatively large price and volume fluctuations. In particular, market prices of securities of biotechnology companies have
experienced fluctuations that often have been unrelated or disproportionate to the operating results of these companies. Continued market fluctuations could result in extreme volatility in the price
of our common stock, which could cause a decline in the value of our common stock. Investors should also be aware that price volatility may be worse if the trading volume of our common stock is low.

We do not expect to pay cash dividends in the foreseeable future.

We
currently intend to retain any future earnings to finance the growth and development of our business; therefore, we do not expect to pay any cash dividends in the foreseeable future.
Any future dividends will depend on our earnings, if any, and our financial requirements.

Because Redpoint became a public company as a result of the Reverse Merger and Reincorporation Merger and not through a traditional underwritten initial public
offering of securities, the Company may not attract the attention of major brokerage firms. Additionally, as a public company, we incur substantial expenses.

As
a result of the Reverse Merger and Reincorporation Merger, Redpoint became a publicly-traded company and, accordingly, will be subject to the information and reporting requirements of
the United States securities laws. The costs to public companies of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited
reports to stockholders have caused the Company's expenses to be higher than they would be if it were a privately-held company. In addition, the Company will incur substantial expenses in
connection with the preparation of the registration statement and related documents with respect to the registration of the common stock issued in the Private Placement and the Reverse Merger.
Security analysts of major brokerage firms may not provide coverage of the Company. No assurance can be given that brokerage firms will want to conduct any secondary offerings on behalf of the Company
in the future.

We have discretion on how we use any proceeds we receive from the exercise of warrants and options.

Our
management has broad discretion on how to use and spend any proceeds we receive as a result of our security holders exercising their warrants and options. Our stockholders may not
agree with our decision on how to use such proceeds. If we fail to spend the proceeds effectively, our business and financial condition could be harmed and we may need to seek additional financing
sooner than expected.

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It is not anticipated that there will be an active public market for shares of our common stock in the near term and stockholders may have to hold their shares of
common stock for an indefinite period of time. Stockholders may be unable to resell a large number of their shares of common stock within a short time frame or at or above their purchase
price.

To
have purchased shares of our common stock and warrants to purchase common stock in the Private Placement, an investor must have represented that it was acquiring such shares and
warrants for investment and not with a view to distribution or resale, that the investor understood that neither the
common stock nor the warrants are readily transferable and, in any event, that it must bear the economic risk of an investment in the common stock for an indefinite period of time.

If we do not comply with registration rights granted to certain holders of our restricted securities, we may be required to pay damages to such
holders.

We
filed a "resale" registration statement with the SEC covering all shares of common stock issued in connection with the Private Placement, including shares of common stock into which
any warrants are exercisable, within 60 days after the final closing of the Private Placement. Such registration statement has been declared effective by the SEC. We will use our best efforts
to have such "resale" registration statement maintain its effectiveness until such time as all securities registered under the registration statement have been sold or are otherwise able to be sold
under Rule 144 of the Securities Act without regard to volume limitations, whichever is earlier. We cannot assure you that we will be able to obtain or maintain such effective registration
statement.

Our common stock may be considered "a penny stock" and may be difficult to sell.

The
SEC has adopted regulations that generally define "penny stock" to be an equity security that has a market or exercise price of less than $5 per share, subject to specific
exemptions. Initially, the market price of our common stock is likely to be less than $5 per share and therefore may be designated a "penny stock" under SEC rules. This designation requires any broker
or dealer selling our common stock to disclose certain information about the transaction, obtain a written agreement from the investor and determine that the investment in our common stock by the
investor is a reasonably suitable investment for such investor. These rules may restrict the ability of brokers or dealers to sell our common stock and, as a result, may affect the ability of
investors to sell their shares. In addition, unless and until our common stock is listed for trading on the American Stock Exchange or NASDAQ Capital Market or similar market, investors may experience
a lack of buyers to purchase such stock or a lack of market makers to support the stock price. Resale restrictions on transferring "penny stocks" are sometimes imposed by some states, which may make
transactions in our stock more difficult and may reduce the value of your investment.

Substantial future issuances of our common stock could depress our stock price.

The
market price for our common stock could decline, perhaps significantly, as a result of issuances of a large number of shares of our common stock in the public market or even the
perception that such issuances could occur. Under our Registration Rights Agreement, certain holders of our outstanding shares of our common stock and other securities have demand and
Form S-3 registration rights. Sales of a substantial number of these shares of common stock, or the perception that holders of a large number of shares intend to sell their shares,
could depress the market price of our common stock. The existence of such registration rights could also make it more difficult for us to raise funds through future offerings of our equity securities.

Our stockholders may experience additional dilution upon the exercise of warrants or options.

As
of the final closing of the Private Placement, we issued warrants to investors to acquire approximately 10.2 million shares of common stock and warrants to the placement agents
to acquire approximately 3.6 million shares of common stock in the Private Placement. In addition, there are

38

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17.2 million
shares of common stock underlying options that have been or may be granted pursuant to the Redpoint Bio Corporation 2007 Omnibus Equity Compensation Plan. If these warrants are
exercised or converted, or if the options are exercised, you may experience dilution in the net tangible book value of our common stock.

Directors and officers of the Company have a high concentration of our common stock ownership.

Based
on the aggregate number of shares of our common stock that are outstanding as of December 31, 2007, our officers and directors beneficially own approximately 36.6% of our
outstanding common stock. Such a high level of ownership by such persons may have a significant effect in delaying, deferring or preventing any potential change in control of the Company.
Additionally, as a result of their high level of ownership, our officers and directors might be able to strongly influence the actions of the Company's board of directors, and the outcome of actions
brought to our stockholders for approval. Such a high level of ownership may adversely affect the voting and other rights of our stockholders.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 2.    PROPERTIES

Lease Agreement for Office and Laboratory Space in Ewing, New Jersey

On November 28, 2005, we entered into a lease agreement with BMR-7 Graphics Drive LLC to lease office and laboratory space at 7 Graphics
Drive in Ewing, New Jersey. The leased premises include approximately 18,000 square feet of office and laboratory space, and the annual base rent is $818,032, subject to annual increases of
approximately 1%. Under the lease agreement, we will also have to pay certain operating expenses associated with the leased premises. The term of the lease is ten years and commenced on May 7,
2007. We began to occupy the space at 7 Graphics Drive on May 21, 2007.

Lease Agreement for Office and Laboratory Space in Cranbury, New Jersey

On October 9, 2002, we entered into a lease agreement with Eastpark at 8A to lease office and laboratory space and equipment at 2005 Eastpark Boulevard,
Cranbury, New Jersey. The leased premises included 5,100 square feet of office and laboratory space, and the annual rent was $163,200. The term of the lease was five years and initially was due to
expire in December 2007. In May 2007, we vacated this premises in order to move into our new property at 7 Graphics Drive in Ewing, New Jersey. On October 16, 2007 we entered into an agreement
to terminate the lease by paying the equivalent of one months rent.

Lease Agreement for Office and Laboratory Space in Philadelphia, Pennsylvania

On September 30, 2005, we entered into an agreement with Albert Einstein Healthcare Network, or AEHN, to use AEHN's laboratory space located at 5501 Old
York Road, Philadelphia, Pennsylvania. As amended, the agreement provides for approximately 1,406 square feet of office and laboratory space, and a base rent for the remaining nine months of
approximately $25,927. The term of the agreement has been extended until September 30, 2008. The lease may be amended in writing by mutual agreement.

ITEM 3.    LEGAL PROCEEDINGS

From time to time, the Company may become involved in various investigations, claims and legal proceedings that arise in the ordinary course of the Company's
business. These matters may relate to

39

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intellectual
property, employment, tax, regulation, contract or other matters. The resolution of these matters as they arise will be subject to various uncertainties. As of the date of this Annual
Report on Form 10-K, Redpoint Bio is not a party to any material pending legal proceeding.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5.    MARKET FOR OUR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES

Our common stock trades on the OTC Bulletin Board under the symbol "RPBC".

The
following table describes the per share range of high and low sale prices for shares of our common stock, as listed for quotation on the OTC Bulletin Board, for the periods
indicated. Please note that this information reflects inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.

|2007:                                   |  |   |      |  |   |     
|--------------------------------------- |  | - | ---- |  | - | ----
|Fourth quarter, ended December 31, 2007 |  | $ | 0.84 |  | $ | 0.55
|Third quarter, ended September 30, 2007 |  |   | 2.45 |  |   | 0.66
|Second quarter, ended June 30, 2007     |  |   | 3.00 |  |   | 2.00
|First quarter, ended March 31, 2007     |  |   | 4.20 |  |   | 1.60
|2006:                                   |  |   |      |  |   |     
|Fourth quarter, ended December 31, 2006 |  | $ | 4.00 |  | $ | 3.00
|Third quarter, ended September 30, 2006 |  |   | 1.80 |  |   | 1.80
|Second quarter, ended June 30, 2006     |  |   | 3.00 |  |   | 1.01
|First quarter, ended March 31, 2006     |  |   | 2.60 |  |   | 1.70

As
stated earlier in the Explanatory Note, Redpoint consummated the Reverse Merger in March 2007 and the Reincorporation Merger in June 2007. Prior to such transactions, the common stock
of our predecessor registrant, Robcor, was traded on the OTC Bulletin Board (trading began in October 2006) under the symbol "RBCR" and was traded with little or no volume at a trading price at or
around $3.50 to $4.00 from October 2006 until the consummation of the Reincorporation Merger. After the completion of the Reverse Merger and the Reincorporation Merger, our stock price began trading
under the symbol "RPBC". We believe that given the lack of liquidity in the trading of our common stock prior to July 20, 2007 (the declaration of effectiveness of our Registration Statement on
Form S-1 registering the shares of common stock and the shares of common stock issuable upon exercise of the warrants issued in the private placement in connection with the Reverse
Merger) that trading in shares of our common stock began to reflect the stock price comparable to the $0.81 purchase price of one unit in the private placement, which consisted of one share of common
stock together with 0.25 warrants, at or around July 20, 2007.

As
of December 31, 2007, the closing price for our common stock was $0.72. As of March 10, 2008, there were approximately 351 holders of record of our common stock. Our
independent stock transfer agent is American Stock Transfer & Trust Company, located at 59 Maiden Lane, New York, New York 10038. Their telephone number is (800) 937-5449.

Dividend Policy

We have not declared or paid any cash dividends on common stock since our inception, and our Board of Directors currently intends to retain all earnings for use
in the business for the foreseeable

40

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future.
Any future payment of dividends will depend upon our results of operations, financial condition, cash requirements, and other factors deemed relevant by our Board of Directors. We are under no
contractual obligations or restrictions to declare or pay dividends to our stockholders.

Equity Compensation Plan Information

The following table provides information as of December 31, 2007 with respect to the shares of our common stock that may be issued under our existing
equity compensation plan. Prior to the Reverse Merger, Original Redpoint maintained the Linguagen Corp. 2003 Stock Incentive Plan, which we refer to as the "2003 Stock Plan." In connection with the
adoption of the Amended and Restated 2007 Equity Compensation Plan, which we refer to as the "2007 Plan," the 2003 Stock Plan merged with and into the 2007 Plan and no additional grants may be made
under the 2003 Stock Plan. Outstanding grants under the 2003 Stock Plan continue in effect in accordance with their terms as in effect before March 12, 2007 (subject to such amendments as the
Compensation Committee determines, consistent with the 2003 Stock Plan, as applicable).

|Plan Category                                                            |  | Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights |  | Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights |      | Number of Securities
Available for Future
Issuance Under Equity
Compensation Plans
|------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- | ---- | ----------------------------------------------------------------------------------
|Equity compensation plans that have been approved by security holders(1) |  | 9,603,961                                                                                   |  | $                                                                           | 0.49 |                                                                                   
|Equity compensation plans not approved by security holders               |  |                                                                                            |  |                                                                             |      |                                                                                   
|                                                                         |  |                                                                                             |  |                                                                             |      |                                                                                   
|Total                                                                    |  | 9,603,961                                                                                   |  |                                                                             |      |                                                                                   
|                                                                         |  |                                                                                             |  |                                                                             |      |                                                                                   

---

Recent Sales of Unregistered Securities

We did not sell any unregistered equity securities during the fourth quarter of 2007.

Issuer Purchases of Equity Securities

We did not repurchase any shares of our equity securities during the fourth quarter of 2007.

Performance Graph

The following graph compares the cumulative total stockholder return on our common stock with the cumulative total return on the NASDAQ Composite Index, NASDAQ
Biotechnology Index and the AMEX Biotechnology Index for the period beginning October 31, 2006 and ending on the last day of our last completed fiscal year. The stock performance shown on the
graph below is not indicative of future price performance.

41

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COMPARISON OF CUMULATIVE TOTAL RETURN(1)(2)(3)    Among Redpoint, the NASDAQ Composite Index, the NASDAQ Biotechnology Index and  the AMEX Biotechnology Index

Comparison of 2 Year Cumulative Total Return  Assumes Initial Investment of $100  December 2007

GRAPHIC

|Company / Index            |  | Base
Period
10/06 |  | 12/06  |  | 3/07   |  | 6/07   |  | 9/07   |  | 12/07 
|-------------------------- |  | ----------------- |  | ------ |  | ------ |  | ------ |  | ------ |  | ------
|REDPOINT BIO CORPORATION   |  | 100               |  | 114.29 |  | 75.71  |  | 70.00  |  | 20.57  |  | 20.57 
|NASDAQ COMPOSITE INDEX     |  | 100               |  | 102.22 |  | 102.67 |  | 110.58 |  | 114.98 |  | 116.40
|NASDAQ BIOTECHNOLOGY INDEX |  | 100               |  | 97.97  |  | 95.34  |  | 98.50  |  | 104.85 |  | 102.47
|AMEX BIOTECHNOLOGY INDEX   |  | 100               |  | 98.70  |  | 99.98  |  | 101.72 |  | 107.50 |  | 102.90

---

42

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ITEM 6.    SELECTED FINANCIAL DATA

The following table sets forth our selected historical financial data as of the dates and for the periods indicated. Our selected financial data set forth below
as of December 31, 2006 and 2007 and for each of the years in the three-year period ended December 31, 2007, and for the period August 16, 1995 (inception) to
December 31, 2007, has been derived from our audited financial statements included elsewhere herein. Our selected financial data should be read in conjunction with the Financial Statements and
the Notes and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" which are included elsewhere in this Annual Report on Form 10-K.

|                                                    |                            | Years Ended December 31, |        | August 16, 1995
(Inception) to
December 31,
2007 |       
|--------------------------------------------------- | -------------------------- | ------------------------ | ------ | ------------------------------------------------ | ------
|
|
|Statements of Operations Data:                      |                            |                          |        |                                                  |       
|Research and grant revenue                          |                            | $                        | 454    |                                                  | $     
|                                                    |                            |                          |        |                                                  |       
|Operating expenses:                                 |                            |                          |        |                                                  |       
|                                                    | Research and development   |                          |        | 1,125                                            |       
|                                                    | General and administrative |                          |        | 1,176                                            |       
|                                                    |                            |                          |        |                                                  |       
|                                                    |                            | Total operating expenses |        |                                                  | 2,301 
|                                                    |                            |                          |        |                                                  |       
|                                                    |                            | Operating loss           |        |                                                  | (1,847
|Interest income                                     |                            |                          | 5      |                                                  |       
|Interest expense                                    |                            |                          | (519   | )                                                |       
|                                                    |                            |                          |        |                                                  |       
|                                                    |                            | Loss before income taxes |        |                                                  | (2,361
|Income tax benefit                                  |                            |                          |       |                                                  |       
|                                                    |                            |                          |        |                                                  |       
|Net loss                                            |                            |                          | (2,361 | )                                                |       
|                                                    |                            |                          |        |                                                  |       
|Accretion of redeemable convertible preferred stock |                            |                          |       |                                                  |       
|                                                    |                            |                          |        |                                                  |       
|Net loss applicable to common stockholders          |                            | $                        | (2,361 | )                                                | $     
|                                                    |                            |                          |        |                                                  |       
|Basic and diluted net loss per common share         |                            | $                        | (0.79  | )                                                | $     
|                                                    |                            |                          |        |                                                  |       
|Weighted average number of shares outstanding       |                            |                          | 2,997  |                                                  |       
|                                                    |                            |                          |        |                                                  |       

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|
|

As of December 31,2003

2004

2005

2006

2007(in thousands)Balance Sheet Data:Cash, cash equivalents and marketable securities

$
1,718

$
6,197

$
2,558

$
974

$
22,701Working capital


784


5,103


1,523


(4,880
)

20,810Total assets


2,020


7,006


3,930


2,552


24,823Long-term debt, net of current portion








1,209


635


188Deficit accumulated during the development stage


(3,297
)

(8,770
)

(14,284
)

(22,295
)

(32,996
)Total stockholders' equity (deficit)


(3,297
)

(8,544
)

(14,010
)

(20,726
)

21,539


ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

The statements contained in this Annual Report on Form 10-K that are not historical facts are forward-looking statements (within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of
forward-looking terminology such as "believes", "expects", "may", "will", "should" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may
be included in various filings made by us with the SEC, or press releases or oral statements made by or with the approval of one of our authorized executive officers. These forward-looking statements,
such as statements regarding anticipated future revenues or operating margins, contract percentage completions, capital expenditures, and other statements regarding matters that are not historical
facts, involve predictions. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. There are a number
of important factors that could cause our results to differ materially from those indicated by such forward-looking statements. These factors include those set forth in the section entitled
"Item 1A. Risk Factors".

Overview

Redpoint is a development stage biotechnology company leveraging recent discoveries in the molecular biology of taste to discover and develop novel taste
modulators for the food, beverage and pharmaceutical industries. Our food and beverage program is focused on identifying novel flavors that improve the taste of existing ingredients and enable the
development of better-tasting and more
healthful foods and beverages. Our pharmaceutical program uses a biochemical approach aimed at suppressing the bitterness of medicines, which has the potential to expand the range of formulation
options and increase patient compliance. We use our technology to discover and develop products for partners and for our own pipeline.

Since
its inception in 1995, Redpoint has incurred losses and negative cash flows from operations, and such losses have continued subsequent to December 31, 2007. As of
December 31, 2007, Redpoint had an accumulated deficit of $33.0 million and anticipates incurring additional losses for at least the next several years. We expect to spend significant
resources over the next several years to enhance our technologies and to fund research and development of our pipeline of potential products.

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Through
December 31, 2007, our revenue has come solely from corporate collaborations, license agreements, and government grants. In order to achieve profitability, we must
continue to develop products and technologies that can be commercialized by us or through existing and future collaborations.

On
March 12, 2007, we completed the first closing of our private placement of shares of common stock and warrants to purchase shares of common stock raising approximately
$17.2 million of net proceeds. On April 6, 2007, we completed the final closing of the private placement raising an additional $11.4 million of net proceeds, bringing the total
private placement net proceeds to $28.6 million.

In
March 2007, we entered into a Joint Research and Development and License Agreement with Givaudan Schweiz AG for the development and commercialization of compounds that enhance
sweetness or savory sensation, as well as compounds that block or desensitize bitter taste for use in the food and beverage industry. Under the terms of the agreement, Redpoint and Givaudan are
collaborating exclusively with each other to discover and develop compounds that act primarily through the modulation of the TRPM5 channel. In consideration of our agreement to conduct research and
develop compounds and grant exclusive licenses and other rights, Givaudan paid us an upfront technology fee of $1.3 million and agreed to provide research funding to us over the initial
3.5 year term of the agreement of up to $11.6 million. Givaudan will also reimburse us for costs we incur in connection with obtaining certain regulatory approvals. Through
December 31, 2007, including the upfront fee, we have received $3.1 million in research and development funding. We are also eligible to receive milestone payments of up to
$2.5 million upon the achievement of specified development and commercialization events as well as royalty payments based on net sales of Givaudan products that contain flavor systems
incorporating compounds developed under the collaboration.

In
December 2007, we entered into a research agreement with Coca-Cola for the development of certain technology for use in non-alcoholic beverages. In
consideration
of our agreement to conduct research for the development of certain technology and grant exclusive licenses and other rights to Coca-Cola pursuant to the terms and conditions of the
agreement, Coca-Cola agreed to pay us $900,000 per year. In connection therewith, in February 2008, Coca-Cola made a non-refundable payment in the amount of
$450,000, which shall be applied to the aforementioned costs for the initial six months of the agreement. Coca-Cola will also reimburse us for certain related CRO costs that we incur. In
addition, Coca-Cola also agreed to pay us a milestone payment of $200,000 upon the achievement of specified development events set forth in the Research Agreement. The initial term of the
agreement is for 12 months, subject to extension upon mutual agreement of the parties. The agreement may be terminated early by the parties upon their mutual agreement or by
Coca-Cola in its individual discretion after the initial six month period. For the initial six month period, we granted Coca-Cola an exclusive right to negotiate to extend and
expand the collaboration into a broader, multi-year research, development and commercialization program.

Our
discovery programs capitalize on advances in taste science and our know-how to create new products. We believe these products may have the potential to make processed
foods and beverages healthier and enhance the acceptability, safety and efficacy of many types of pharmaceutical products. We have developed an integrated discovery platform and identified prototype
compounds for both enhancement of sweet and savory taste and blocking bitter taste. To leverage our technology in the food and beverage markets, we have entered into research and development
agreements with Givaudan, the world's leading company in the flavors and fragrances industry, and Coca-Cola, the world's largest beverage company. In addition, we plan to use our
technology to discover aversive taste blockers, principally to develop a pipeline of proprietary taste-modified pharmaceutical products. We may develop such products ourselves or partner with
pharmaceutical companies who are seeking to extend the patent life or enhance the performance of their products. We have identified several categories of products where patient acceptability, or the
potential for novel formulation options, are

45

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currently
limited due to the intense bitter or other aversive taste of the active pharmaceutical ingredient (API). We plan to incorporate the proprietary bitter taste or aversive taste blockers found
through our discovery programs with drugs of proven safety and efficacy to create novel, valued-added formulations. We have not yet developed any products that are commercially available.

Our
research and development efforts, both partnered and unpartnered, involve both technology development and discovery programs aimed at the identification of novel compounds for taste
modification. We are working to identify a compound(s) that can be used to enhance the taste of both sweet and savory flavors in a wide variety of food and beverage applications. Additionally, we are
working to identify a compound(s) that could act as a universal bitter taste blocker for use both in our pharmaceutical product pipeline and for collaborative formulation development programs with
major pharmaceutical companies. We intend to design our compounds to be safe and effective in minute quantities, and to be able to incorporate them into food and pharmaceutical products through the
GRAS (Generally Recognized as Safe) determination/notification process. Although the GRAS process involves extensive testing to insure safety in use, the overall time required (estimated to be
12-18 months) and development costs incurred (estimated to be $1-2 million per compound) are modest compared to the size of the accessible markets. Moreover, a
single GRAS-determined taste enhancer can potentially be used in a wide
range of food applications. In addition, a GRAS determination is heavily relied upon by the Food and Drug Administration (FDA) to evaluate the safety and inclusion of flavor modifiers into
pharmaceutical products. A single aversive taste blocker can potentially be used to create a multitude of new drug formulations that in many cases may be patentable in their own right. New drug
product or product variations will require FDA approval through the new drug approval, or NDA, process. We believe there may be additional potential applications for our technology for the
modification of aversive taste sensations in food products, as well as potential for discovering novel compounds for other pharmaceutical applications.

Revenue

To date, our revenue has come solely from corporate collaborations, licensing agreements and government grants. Since our inception, we have undertaken research
projects for which we were the recipient of several Small Business Innovative Research, or SBIR, Awards. The SBIR Awards were sponsored by the National Institutes of Health. The last SBIR related
research project was completed in 2004.

To
leverage our technology in the food and beverage markets, in March 2007, we entered into the Givaudan Agreement where we are collaborating exclusively with each other to discover and
develop Enhancer Compounds and Bitter Blocker Compounds that act primarily through the modulation of the TRPM5 channel. Also, in December 2007, we entered into a research agreement with
Coca-Cola for the development of certain technology for use in non-alcoholic beverages. We may also partner with other major ingredient suppliers, or food and beverage
companies, to develop and commercialize taste enhancers that act through a variety of other newly discovered mechanisms of taste sensation in exchange for technology access fees, research funding,
product development milestones, and product royalties.

In
addition to developing our own pharmaceutical formulations, we plan to form agreements with pharmaceutical companies to develop and market liquid and innovative pharmaceutical
formulations in exchange for technology access fees, research funding, product development milestones and product royalties. We have identified a broad selection of potential products for development,
including both liquid formulations and innovative formulations that we believe would be attractive licensing candidates. In general, our strategy involves the development of a prototype formulation
demonstrating the effectiveness of our technology by combining the target API with our GRAS-approved bitter or other aversive taste blocker. Some products could incorporate third-party
APIs that could constitute line extensions to be marketed to the API patent holder. Additional prototype products could be developed

46

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with
either soon-to-be or patent-expired APIs. These products could either be licensed to the original patent holder to create a line extension, or to a generics company
wishing to market a differentiated or branded generic product.

Any
failure to maintain or establish licensing or collaboration arrangements on favorable terms could adversely affect our business prospects, financial condition or ability to develop
and commercialize our product candidates.

Research and Development

Our research and development expenses consist primarily of internal costs associated with our bitter blocker and taste enhancer research programs as well as
amounts paid to third parties to conduct research on our behalf. Our internal research and development costs are comprised of salaries and related benefits, facilities and depreciation on laboratory
equipment, compound acquisition costs and research supplies. We charge research and development costs to operations as incurred. We anticipate that research and development expenses will continue to
increase as we advance our research and development programs.

General and Administrative

Our general and administrative expenses consist primarily of salaries and related benefit expenses for business development, financial, legal and other
administrative functions. In addition, we incur external costs for professional fees for legal, patent and accounting services. We expect that our general and administrative expenses, both internal
and external, will increase as we are now a public company.

Results of Operations



Research and Grant Revenue.For the year ended December 31, 2007, we recorded revenue of $2.2 million, which
included $2.1 million from our Givaudan Agreement, which began on March 27, 2007, for the development and commercialization of compounds that enhance sweetness or savory sensation as
well
as compounds that block or desensitize bitter taste for use in the food and beverage industry. The revenues from Givaudan include $0.3 million attributable to the upfront fee which is being
recognized as revenue over the initial 3.5 year term of the agreement and $1.8 million of research funding. The remaining $0.1 million of revenue was from various other contracts
with food and pharmaceutical companies, including the commencement of our Coca-Cola Agreement, which began on December 13, 2007, for the development of certain technology for use in
non-alcoholic beverages. During the year ended December 31, 2006, we did not generate any research and grant revenue, as we focused our efforts on advancing our technologies and did
not enter into any discovery collaborations.

Research and Development Expenses.Our research and development expenses were $7.3 million for the year ended
December 31, 2007 compared to $3.6 million for the year ended December 31, 2006. The increase was primarily attributable to a $1.6 million non-cash charge in
connection with the issuance of approximately 2.0 million shares of our common stock related to anti-dilution protection for Dr. Margolskee, the Company's founder.
Dr. Margolskee's anti-dilution protection terminated upon completion of the final closing of the Private Placement on April 6, 2007. In addition, we experienced increased
costs associated with our investment in our bitter blocker and taste enhancer research programs as well as amounts paid to third parties to conduct research on our behalf. In particular, our
facilities costs increased as a result of our move to our new location in Ewing, New Jersey, effective in May 2007. Our new, state-of-the-art facility in Ewing, New
Jersey is enabling us to move ahead with the continued expansion of our research and development operations. In addition, salaries and related benefits, depreciation on laboratory equipment and R&D
supplies costs increased. In addition, during

47

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the
year ended December 31, 2007 we recognized non-cash R&D related compensation expense of approximately $0.1 million pursuant to SFAS 123R and a nominal amount
during the year ended December 31, 2006.

General and Administrative Expenses.Our general and administrative expenses were $4.5 million for the year ended
December 31, 2007 compared to $2.8 million for the year ended December 31, 2006. The increase of $1.7 million was related to costs associated with Redpoint becoming a
public company, such as increases in accounting, legal and investor relations fees, as well as expenses associated with patent filings and our move to our new facility. During the year ended
December 31, 2007 we also incurred an expense of approximately $0.1 million as a result of the write-off of the remaining lease obligation on our prior facility which we no
longer occupy. Approximately $0.2 million of the increase was related to executive severance in connection with a separation agreement that we entered into with a former officer during the year
ended December 31, 2007. In addition, during the year ended December 31, 2007, we recognized non-cash G&A related compensation expense of approximately $0.5 million
pursuant to SFAS 123R and a nominal amount during the year ended December 31, 2006.

Interest Income.Interest income was $0.8 million for the year ended December 31, 2007 compared to $53,000 for
the year ended December 31, 2006. The significant increase was due to interest earned on
our cash, cash equivalents and marketable securities that resulted from proceeds from our private placement in March 2007.

Interest Expense.Interest expense was $1.7 million for the year ended December 31, 2007 compared to
$0.9 million for the year ended December 31, 2006. In May, June and October 2006, we entered into a convertible debt financing agreement with certain of our investors, which provided for
$4.1 million in funding. In addition to the issuance of 5% secured promissory notes, our investors received warrants to purchase additional shares of our stock. We allocated the proceeds from
the financing between the notes and the warrants based on their relative fair values. The fair value of the warrants was recorded against the carrying value of the notes as an original issue discount
(OID) which was being amortized as interest expense over a one-year period from the original issuance date of the notes. During the year ended December 31, 2007 and
December 31, 2006, we recognized a non-cash charge to interest expense of $0.3 million and $0.6 million, respectively, for the amortization of the OID, which was fully
expensed upon the completion of the first closing of our private placement when the promissory notes were converted to common stock. Furthermore, in accordance with Emerging Issues Task Force (EITF)
No. 00-27,Application of Issue No. 98-5 to Certain Convertible Instruments, and EITF No. 98-5, Accounting for Convertible Securities with Beneficial Conversion
Features or Contingently Adjustable Ratios, after considering the allocation of the
proceeds to the promissory notes, the Company determined that the promissory notes contained a contingent beneficial conversion feature (Contingent BCF). The Contingent BCF existed at the date of the
issuance of the promissory notes due to the fact that the original carrying value of promissory notes, after allocation of the proceeds, would be less than the purchase price of the new series of
stock paid by investors in the new series. In accordance with EITF No. 98-5, the Contingent BCF of $1.2 million was recognized as additional non-cash interest
expense when the promissory notes were converted into shares of common stock.

During
2005, we borrowed $2.0 million to finance the purchase of laboratory and office equipment at interest rates ranging between 9.4% and 10.4%. Interest expense on these
borrowings was $0.1 million for each of the years ended December 31, 2007 and 2006.

Income Tax Benefit.During 2006, we sold $5.8 million of our New Jersey State operating loss carryforwards resulting
in the recognition of an income tax benefit of $0.5 million. Due to the Company's history of losses, we have not recognized the benefit of any of our other net operating loss carryforwards.

48

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Research and Grant Revenue.During the year ended December 31, 2006, we did not generate any research and grant
revenue, as we focused our efforts on advancing our technologies and did not enter into any discovery collaborations. In prior years, we had entered into several research license agreements with
companies in the food ingredient and pharmaceutical industries. Under these agreements, we conducted research and development in the field of flavor discovery and modification. During the year ended
December 31, 2005, we recognized $0.4 million of revenue from these agreements, of which $0.3 million of payments were received in 2004 and recognized as revenue in 2005 when we
completed our performance obligations under the agreements.

Research and Development Expenses.Our research and development expenses were $3.6 million for the year ended
December 31, 2006 compared to $2.9 million for the year ended December 31, 2005. During 2006, we continued to increase our research efforts covering our bitter blocker and taste
enhancer programs. The increase was primarily related to new personnel, scientific instrumentation, scientific supplies and costs associated with the outsourcing of our chemistry efforts to synthesize
new compounds to be analyzed in our screening programs.

General and Administrative Expenses.Our general and administrative expenses were $2.8 million for the year ended
December 31, 2006 compared to $2.1 million for the year ended December 31, 2005. The increase of $0.7 million was primarily related to increased management and personnel
expenses due to new management hires and increased investments in business development required to support our research and development efforts.

Interest Expense.Interest expense increased to $0.9 million for the year ended December 31, 2006 from
$0.1 million for the year ended December 31, 2005. In May 2006, we entered into a convertible debt financing agreement with certain of our investors which provided for
$3.9 million in funding. In addition to the issuance of 5% secured promissory notes, our investors received warrants to purchase additional shares of our stock. We allocated the proceeds from
the financing between the notes and the warrants based on their relative fair values. The fair value of the warrants has been recorded against the carrying value of the notes as an original issue
discount (OID) which is being amortized as interest expense over
a one-year period from the original issuance date of the notes. During 2006, we recognized a noncash charge to interest expense of $0.6 million for the amortization of the OID.
During 2005, we borrowed $2.0 million to finance the purchase of laboratory and office equipment at interest rates ranging between 9.4% and 10.4%. Interest expense on these borrowings was
$0.1 million and $0.1 million in 2006 and 2005, respectively.

Income Tax Benefit.During 2006 and 2005, we sold $5.8 million and $3.1 million of our New Jersey State
operating loss carryforwards resulting in the recognition of an income tax benefit of $0.5 million and $0.3 million, respectively. Due to the Company's history of losses, we have not
recognized the benefit of any of our other net operating loss carryforwards.

Liquidity and Capital Resources

At December 31, 2007, we had cash, cash equivalents and marketable securities of $22.7 million and working capital of $20.8 million. Since
inception, we have used $21.0 million of cash to fund our operating activities and $2.7 million for capital expenditures. Through December 31, 2007, we have funded substantially
all of our operations and capital expenditures through private placements of equity and convertible debt securities totaling $45.8 million, cash received from corporate collaborations totaling
$5.6 million, government grants totaling $1.8 million, and capital equipment financing totaling $2.1 million.

On
March 12, 2007, we completed the first closing of our Private Placement of shares of common stock and warrants to purchase shares of common stock raising approximately
$17.2 million of net

49

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proceeds.
On April 6, 2007 we completed the final closing of our Private Placement raising an additional $11.4 million of net proceeds, bringing the total private placement net proceeds
to $28.6 million. On March 27, 2007, we entered into the Givaudan Agreement for the development and commercialization of compounds that enhance sweetness or savory sensation as well as
compounds that block or desensitize bitter taste for use in the food and beverage industry. Pursuant to the Givaudan Agreement, Givaudan agreed to pay us an upfront technology fee of
$1.3 million and provide research funding to us over the initial 3.5 year term of the Givaudan Agreement of up to $11.6 million. On December 13, 2007, we entered into a
research agreement with Coca-Cola for the development of certain technology for use in non-alcoholic beverages. Pursuant to the Coca-Cola Agreement,
Coca-Cola agreed to provide research funding of $900,000 over the initial one year term. We believe that our current capital resources and the funding we are receiving from Givaudan and
Coca-Cola, should be sufficient to meet our operating and capital requirements at least through December 2009.

We
expect that substantially all of our revenue for the foreseeable future will come from corporate collaborations, license agreements and interest earned on the proceeds from our sales
of securities.
During 2008, we expect to recognize $3.7 million as revenue from the Givaudan and Coca-Cola Agreements, which will include $0.4 million of the upfront technology fee that we
received from Givaudan and which is being recognized as revenue over the related performance period and $3.3 million pursuant to research funding. We are subject to those risks associated with
any biotechnology company that has substantial expenditures for research and development. There can be no assurance that our research and development projects will be successful, that products
developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In addition, we operate in an environment of rapid technological change and we are
largely dependent on the services of our employees and consultants. For us to fund our operations and to commercially develop our products, additional equity and/or debt financing will be required.
There is no assurance that such financing will be available to us as needed.

Summary of Contractual Obligations

The following table summarizes our obligations to make future payments under our current contractual obligations as of December 31, 2007:

|                 |  | Payments Due by Period
|---------------- |  | ----------------------
|
|Operating leases |  | $                     
|Long-term debt   |  |                       
|License payments |  |                       
|                 |  |                       
|                 |  | $                     
|                 |  |                       

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance
with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets,
liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and reported amount of revenue and expenses during the reporting period. On an ongoing basis,
we evaluate our judgments and estimates, including those related to revenue recognition, long-lived assets, accrued liabilities, share-based payments and income taxes. We base our judgment
and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

50

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While
our significant accounting policies are described in more detail in Note 3 to our financial statements, we believe the following accounting policies to be critical to the
judgments and estimates used in the preparation of our financial statements:



Revenue from corporate collaborations and licensing agreements consist of up-front fees, research and development funding, and milestone payments.
Nonrefundable up-front fees are deferred and recognized as revenue over the related performance period. We estimate the performance period based on the specific terms of each collaborative
agreement, but the actual performance may vary. We adjust the performance periods based on available facts and circumstances. Revenue from research and development agreements and government grants is
recognized pursuant to the related agreements as work is performed and related costs are incurred.
Revenue resulting from the achievement of substantive milestone events as defined in the agreements is recognized when the milestone is achieved.



We follow Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004),Share-Based Payment(SFAS 123R), under which we recognize compensation cost for awards to employees and non-employee board members based on the grant-date fair value of stock-based awards
over the period during which an award holder is required to provide service in exchange for the award. No compensation is recognized for awards for which the award holder does not tender the requisite
service. At December 31, 2007, total unrecognized compensation expense related to non-vested stock options granted prior to that date was $2.1 million, which is expected to
be recognized over a weighted average period of 3.3 years.

Prior
to 2006, we applied the intrinsic-value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25,Accounting for
Stock Issued to Employees,and related interpretations, to account for fixed-plan stock options granted to employees and directors. Under APB Opinion No. 25,
we did not record compensation expense for stock options since the current fair value of the underlying stock equaled the exercise price of the options.

In
estimating the fair value of stock options, we use the Black-Scholes option-pricing model which requires us to make estimates about certain inputs regarding the volatility of our
common stock and the expected term of our options. Until there is significant public trading activity in our common stock, we will use the average historical volatility of a group of pubic company
peers. In addition, we have used the "simplified" method as described in SEC Staff Accounting Bulletin No. 107 to determine the expected life of our options.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our carrying values of cash and cash equivalents, marketable securities, accounts receivable, accounts payable, accrued expenses and debt are a reasonable
approximation of their fair value. The estimated fair values of financial instruments have been determined by us using available market information and appropriate valuation methodologies.

We
have not entered into and do not expect to enter into, financial instruments for trading or hedging purposes. We do not currently anticipate entering into interest rate swaps and/or
similar instruments. We have no material currency exchange risk exposure as of December 31, 2007. Our primary market risk exposure with regard to financial instruments is to changes in interest
rates, which would impact interest income earned on such instruments. A one percent change (100 basis points) in interest rates on our investments would have impacted interest income by approximately
$0.1 million for the year ended December 31, 2007.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. A list of the
financial statements filed herewith is found at "Item 15. Exhibits, Financial Statements and Financial Statement Schedules".

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of December 31, 2007. In
designing and evaluating our disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance
of achieving their objectives and management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our
chief executive officer and chief financial officer concluded that, as of December 31, 2007, our disclosure controls and procedures were (1) effective in that they were designed to
ensure that material information relating to us is made known and accumulated and communicated to management, including our chief executive officer and chief financial officer, by others within the
Company, as appropriate to allow timely decisions regarding required disclosures, and (2) effective in that they provide that information required to be disclosed by us in our reports that we
file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

No
changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal
quarter ended December 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management's Responsibility for Financial Statements

Our management is responsible for the integrity and objectivity of all information presented in this annual report. The financial statements were prepared in
conformity with accounting principles generally accepted in the United States of America and include amounts based on management's best estimates and judgments. Management believes the financial
statements fairly reflect the form and substance of transactions and that the financial statements fairly represent the Company's financial position and results of operations.

The
Audit Committee of the Board of Directors meets regularly with the Company's independent registered public accounting firm and representatives of management to review accounting,
financial reporting, internal control and audit matters, as well as the nature and extent of the audit effort. The Audit Committee is responsible for the engagement of the independent registered
public accounting firm. The independent registered public accounting firm has free access to the Audit Committee.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f)

52

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promulgated
under the Exchange Act and is a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our board of directors,
management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and procedures that:



Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our
management assessed the effectiveness of the company's internal control over financial reporting as of December 31, 2007. In making this assessment, the company's management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) inInternal ControlIntegrated
Framework.

Based
on its evaluation, our management has concluded that, as of December 31, 2007, our internal control over financial reporting was effective. The effectiveness of our internal
control over financial reporting as of December 31, 2007 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report below.

Report of Independent Registered Public Accounting Firm

The
Board of Directors and Stockholders
Redpoint Bio Corporation:

We
have audited Redpoint Bio Corporation's internal control over financial reporting as of December 31, 2007, based on criteria established inInternal
ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Redpoint Bio Corporation's management is
responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on Redpoint Bio Corporation's internal control over financial reporting based on our
audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

53

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A
company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for
external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, Redpoint Bio Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria
established inInternal ControlIntegrated Frameworkissued by the COSO.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the balance sheets of Redpoint Bio Corporation as of
December 31, 2006 and 2007, and the related statements of operations, redeemable convertible preferred stock and stockholders' equity (deficit), and cash flows for each of the years in the
three-year period ended December 31, 2007 and for the period from August 16, 1995 (inception) to December 31, 2007, and our report dated March 14, 2008
expressed an unqualified opinion on those financial statements.

/s/  KPMG LLP

Philadelphia,
Pennsylvania

March 14,
2008

ITEM 9B.    OTHER INFORMATION

None.

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information relating to our directors and nominees for election as directors under the heading "Election of Directors" in our definitive proxy statement for
the 2008 Annual Meeting of Stockholders is incorporated herein by reference to such proxy statement. The information relating to our executive officers in response to this item is contained in part
under the caption "Our Executive Officers" in Part I of this Annual Report on Form 10-K and the remainder is incorporated herein by reference to our definitive proxy
statement for the 2008 Annual Meeting of Stockholders.

We
have adopted a written code of conduct that applies to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer,
or persons performing similar functions. We make available our code of conduct free of charge through our web site which is located at www.redpointbio.com. We intend to disclose any amendments to, or
waivers from, our code of conduct that are required to be publicly disclosed pursuant
to rules of the SEC and NASDAQ by filing such amendment or waiver with the SEC and by posting it on our web site.

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ITEM 11.    EXECUTIVE COMPENSATION

The discussion under the heading "Executive Compensation" in our definitive proxy statement for the 2008 Annual Meeting of Stockholders is incorporated herein by
reference to such proxy statement.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The discussion under the heading "Security Ownership of Certain Beneficial Owners and Management" in our definitive proxy statement for the 2008 Annual Meeting of
Stockholders is incorporated herein by reference to such proxy statement.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The discussion under the heading "Certain Relationships and Related Transactions and Director Independence" in our definitive proxy statement for the 2008 Annual
Meeting of Stockholders is incorporated herein by reference to such proxy statement.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

The discussion under the heading "Independent Auditors Fees and Other Matters" in our definitive proxy statement for the 2008 Annual Meeting of Stockholders is
incorporated herein by reference to such proxy statement.

PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

|(a) |  | (1) |  | Financial Statements.                                              
|--- |  | --- |  | -------------------------------------------------------------------
|    |  |     |  | Reference is made to the Index to Financial Statements on Page F-1.
|    |  | (2) |  | Financial Statement Schedule.                                      
|    |  |     |  | Not applicable.                                                    
|    |  | (3) |  | Exhibits.                                                          
|    |  |     |  | Reference is made to the Index to Exhibits on Page 57.             

55

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SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) 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 this 14th day of March, 2008.

| |  | REDPOINT BIO CORPORATION
| |  | ------------------------
| |  | By:                     
| |  |                         

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.

|Signature                               |  | Title                                                                                         |  | Date          
|--------------------------------------- |  | --------------------------------------------------------------------------------------------- |  | --------------
|                                        |  |                                                                                               |  |               
|/s/F. RAYMOND SALEMMEF. Raymond Salemme |  | President, Chief Executive Officer and Director (Principal Executive Officer)                 |  | March 14, 2008
|/s/SCOTT HORVITZScott
Horvitz           |  | Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer) |  | March 14, 2008
|/s/JOSEPH MOLLICAJoseph
Mollica         |  | Chairman of the Board                                                                         |  | March 14, 2008
|/s/ALLEN BLOOMAllen
Bloom               |  | Director                                                                                      |  | March 14, 2008
|/s/ROBERT CHEFITZRobert
Chefitz         |  | Director                                                                                      |  | March 14, 2008
|/s/LEIF KJAERGAARDLeif
Kjaergaard       |  | Director                                                                                      |  | March 14, 2008
|/s/DAVID PATCHENDavid
Patchen           |  | Director                                                                                      |  | March 14, 2008
|/s/IRWIN SCHERIrwin
Scher               |  | Director                                                                                      |  | March 14, 2008
|/s/RICHARD SHANLEYRichard
Shanley       |  | Director                                                                                      |  | March 14, 2008
|/s/PHILIP L. SMITHPhilip L.
Smith       |  | Director                                                                                      |  | March 14, 2008

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EXHIBIT INDEX

|2.1  |  | Agreement and Plan of Merger, dated May 3, 2007, between Robcor Properties, Inc. and Redpoint Bio Corporation (Incorporated by reference to Exhibit A of the Registrant's Schedule 14C filed with the Commission on May 3,
2007).                                                                                                                         
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Third Amended and Restated Certificate of Incorporation of Redpoint Bio Corporation (Incorporated by reference to Exhibit 3.1 of the Registrant's Amendment No. 1 to the Registration Statement on Form S-1 (Registration
No. 333-143507) filed on July 2, 2007).                                                                                         
|3.2  |  | Amended and Restated Bylaws of Redpoint Bio Corporation (Incorporated by reference to Exhibit C of the Registrant's Schedule 14C filed with the Commission on May 3, 2007).                                                                                                                                                                               
|4.1  |  | Form of Warrant issued by the Company to investors in the private placement on March 12, 2007 and April 6, 2007 (Incorporated by reference to Exhibit 4.1 of the Registrant's Current Report on Form 8-K filed with the Commission on
March 16, 2007).                                                                                                    
|4.2  |  | Placement Agent Warrant issued by the Company to each of National Securities Corporation and Brean Murray, Carret & Co., LLC (Incorporated by reference to Exhibit 4.2 of the Registrant's Current Report on Form 8-K filed
with the Commission on March 12, 2007).                                                                                       
|4.3  |  | Form of common stock Certificate (Incorporated by reference to Exhibit 4.3 of the Registrant's Amendment No. 1 to the Registration Statement on Form S-1 (Registration No. 333-143507) filed on July 2, 2007).                                                                                                                                            
|10.1 |  | Agreement and Plan of Merger, dated as of March 12, 2007, by and among Redpoint Bio Corporation, on the one hand, and Robcor Properties, Inc., Robcor Acquisition Corp., Robcor LLC, Halter Financial Investments, L.P. and Michael
Heitz (Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on March 13, 2007).
|10.2 |  | Form of Subscription Agreement, dated March 12, 2007 and April 6, 2007, by and between Redpoint Bio Corporation and the signatories thereto (Incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K
filed with the Commission on April 9, 2007).                                                                        
|10.3 |  | Form of Lockup Agreement by officers, directors, and certain stockholders (Incorporated by reference to Exhibit 10.14 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16, 2007).                                                                                                                                        
|10.4 |  | Lease Agreement, dated December 9, 2002, by and between Eastpark at 8A and Linguagen Corp. (Incorporated by reference to Exhibit 10.4 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16,
2007).                                                                                                                        
|10.5 |  | Lease Agreement, dated as of September 30, 2005, between Albert Einstein Healthcare Network and Linguagen Corp. (Incorporated by reference to Exhibit 10.5 of the Registrant's Current Report on Form 8-K filed with the Commission on
March 16, 2007).                                                                                                   
|10.6 |  | Amendment to Lease Agreement between Albert Einstein Healthcare Network and Linguagen Corp., effective as of June 1, 2006, by and between Albert Einstein Healthcare Network and Linguagen Corp. (Incorporated by reference to
Exhibit 10.6 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16, 2007).                  
|10.7 |  | Amendment No. 2 to Lease Agreement between Albert Einstein Healthcare Network and Linguagen Corp., dated as of August 4, 2006, by and between Albert Einstein Healthcare Network and Linguagen Corp. (Incorporated by reference to
Exhibit 10.7 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16, 2007).              

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|10.8  |  | Amendment No. 3 to Lease Agreement between Albert Einstein Healthcare Network and Linguagen Corp., dated as of January 2, 2007, by and between Redpoint Bio Corporation and Albert Einstein Healthcare Network (Incorporated by reference
to Exhibit 10.8 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16, 2007). 
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.9  |  | Lease Agreement, dated as of November 28, 2005, by and between BMR-7 Graphics Drive LLC and Linguagen Corp. (Incorporated by reference to Exhibit 10.9 of the Registrant's Current Report on Form 8-K filed with the Commission
on March 16, 2007).                                                                                                    
|10.10 |  | First Amendment to Lease Agreement, dated as of October 25, 2005, by and between BMR-7 Graphics Drive LLC and Linguagen Corp. (Incorporated by reference to Exhibit 10.10 of the Registrant's Current Report on Form 8-K filed
with the Commission on March 16, 2007).                                                                                 
|10.11 |  | Acknowledgement of Term Commencement Date and Term Expiration Date, dated May 7, 2007, by and between Redpoint Bio Corporation and BMR-7 Graphics Drive LLC (Incorporated by reference to Exhibit 10.11 of the Registrant's Amendment
No. 1 to the Registration Statement on Form S-1 (Registration No. 333-143507) filed on July 2, 2007).            
|10.12 |  | Employment Agreement, dated May 25, 2004, between Linguagen Corp. and Dr. Raymond F. Salemme (Incorporated by reference to Exhibit 10.11 of the Registrant's Current Report on Form 8-K filed with the Commission on
March 16, 2007).**                                                                                                                
|10.13 |  | Employment Agreement, dated December 28, 2005, between Linguagen Corp. and Dr. Susan Welsh (Incorporated by reference to Exhibit 10.12 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16,
2007).**                                                                                                                  
|10.14 |  | Employment Agreement, dated June 28, 2004, between Linguagen Corp. and Scott Horvitz (Incorporated by reference to Exhibit 10.13 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16,
2007).**                                                                                                                        
|10.15 |  | Master Security Agreement, dated as of February 16, 2005, by and between Oxford Finance Corporation and Linguagen Corp. (Incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 8-K filed with the Commission
on March 16, 2007).                                                                                        
|10.16 |  | 2007 Omnibus Equity Compensation Plan (Incorporated by reference to Exhibit 10.15 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16, 2007).**                                                                                                                                                                       
|10.17 |  | Registration Rights Agreement, dated March 12, 2007, by and among Robcor, National Holdings Corporation, Brean Murray, Carret & Co., LLC and the parties set forth on the signature page and Exhibit A thereto (Incorporated
by reference to Exhibit 10.16 of the Registrant's Current Report on Form 8-K filed with the Commission on March 16, 2007).
|10.18 |  | Registration Rights Agreement, dated March 12, 2007, by and among Robcor and certain existing stockholders of Redpoint (Incorporated by reference to Exhibit 10.17 of the Registrant's Current Report on Form 8-K filed with the Commission
on March 16, 2007).                                                                                        
|10.19 |  | Placement Agency Agreement, dated December 4, 2006, by and among Redpoint, National Securities Corporation and Brean Murray, Carret & Co., LLC (Incorporated by reference to Exhibit 10.18 of the Registrant's Current Report
on Form 8-K filed with the Commission on March 16, 2007).                                                                
|10.20 |  | Amendment No. 1 to the Placement Agency Agreement, dated March 6, 2007, by and among Redpoint, National Securities Corporation and Brean Murray, Carret & Co., LLC (Incorporated by reference to Exhibit 10.19 of the
Registrant's Current Report on Form 8-K filed with the Commission on March 16, 2007).                                            

58

---



|10.21 |  | Advisory Agreement, dated March 8, 2007, by and between Halter Financial Group, L.P., and Redpoint Bio Corporation (Incorporated by reference to Exhibit 10.20 of the Registrant's Current Report on Form 8-K filed with the
Commission on March 16, 2007).                                                                                                             
|----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.22 |  | Separation Agreement and General Release, dated as of April 25, 2007, by and between Redpoint Bio Corporation and Susan Welsh (Incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on April 26, 2007).**                                                                                                 
|10.23 |  | Joint Research and Development and License Agreement, dated March 27, 2007, by and between Givaudan Schweiz AG and Redpoint Bio Corporation (Incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q
filed with the Commission on May 15, 2007).                                                                                   
|10.24 |  | Amended and Restated License Agreement, effective as of April 2, 2003, between Mount Sinai School of Medicine of New York University and Linguagen Corp. (Incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on
Form 8-K filed with the Commission on March 16, 2007).                                                                        
|10.25 |  | First Amendment to Amended and Restated License Agreement, dated as of November 10, 2003, between Mount Sinai School of Medicine of New York University and Linguagen Corp. (Incorporated by reference to Exhibit 10.2 of the Registrant's
Current Report on Form 8-K filed with the Commission on March 16, 2007).                                                     
|10.26 |  | Side Letter, dated July 11, 2007, to Placement Agency Agreement, dated December 4, 2006, as amended, by and between National Securities Corporation and Brean Murray, Carret & Co., LLC (Incorporated by reference to
Exhibit 10.26 of the Registrant's Amendment No. 3 to the Registration Statement on Form S-1 (Registration No. 333-143507) filed on July 18, 2007).
|10.27 |  | Employment Agreement dated September 10, 2007, by and between Redpoint Bio Corporation and Scott Siegel, Ph.D. (Incorporated by reference to Exhibit 10.1 of the Company's Current Repot on Form 8-K filed on October 1,
2007).**                                                                                                                                       
|10.28 |  | Research Agreement, dated December 13, 2007, by and between the Coca-Cola Company and Redpoint Bio Corporation. *                                                                                                                                                                                                                                                     
|21.1  |  | List of Subsidiaries.*                                                                                                                                                                                                                                                                                                                                                  
|23.1  |  | Consent of KPMG LLP.*                                                                                                                                                                                                                                                                                                                                                   
|24.1  |  | Power of Attorney (included as part of signature page).                                                                                                                                                                                                                                                                                                                 
|31.1  |  | Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer).*                                                                                                                                                                                                
|31.2  |  | Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer).*                                                                                                                                                                                            
|32.1  |  | Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer).*                                                                                                                                                                                                                                                                                            
|32.2  |  | Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer).*                                                                                                                                                                                                                                                                                            

---

59

---





REDPOINT BIO CORPORATION  (A Development-Stage Enterprise)    Index to Financial Statements

|                                                                                        |  | Page
|--------------------------------------------------------------------------------------- |  | ----
|Report of Independent Registered Public Accounting Firm                                 |  | F-2 
|Balance Sheets                                                                          |  | F-3 
|Statements of Operations                                                                |  | F-4 
|Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) |  | F-5 
|Statements of Cash Flows                                                                |  | F-7 
|Notes to Financial Statements                                                           |  | F-8 

F-1

---





Report of Independent Registered Public Accounting Firm

The
Board of Directors and Stockholders
Redpoint Bio Corporation

We
have audited the accompanying balance sheets of Redpoint Bio Corporation (a development-stage enterprise) (the "Company") as of December 31, 2006 and 2007, and the related
statements of operations, redeemable convertible preferred stock and stockholders' equity (deficit), and cash flows for each of the years in the three-year period ended December 31,
2007 and for the period from August 16, 1995 (inception) to December 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Redpoint Bio Corporation as of December 31, 2006 and
2007, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2007 and for the period from August 16, 1995
(inception) to December 31, 2007, in conformity with U.S. generally accepted accounting principles.

We
also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Redpoint Bio Corporation's internal control over financial
reporting as of December 31, 2007, based on criteria established inInternal ControlIntegrated Frameworkissued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 14, 2008 expressed an unqualified opinion on the effectiveness of the Company's internal control over
financial reporting.

/s/
KPMG LLP

Philadelphia,
Pennsylvania
March 14, 2008

F-2

---





REDPOINT BIO CORPORATION  (A Development-Stage Enterprise)    Balance Sheets

|                                                          |                                                                                                                                                                                         | December 31                                          |        
|--------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | -------
|
|Assets                                                    |                                                                                                                                                                                         |                                                      |        
|Current assets:                                           |                                                                                                                                                                                         |                                                      |        
|                                                          | Cash and cash equivalents                                                                                                                                                               |                                                      | $      
|                                                          | Marketable securities                                                                                                                                                                   |                                                      |        
|                                                          | Accounts receivable                                                                                                                                                                     |                                                      |        
|                                                          | Prepaid expenses and other current assets                                                                                                                                               |                                                      |        
|                                                          |                                                                                                                                                                                         |                                                      |        
|                                                          |                                                                                                                                                                                         | Total current assets                                 |        
|Property and equipment, net                               |                                                                                                                                                                                         |                                                      | 840,435
|Deferred financing costs                                  |                                                                                                                                                                                         |                                                      | 308,456
|Other assets                                              |                                                                                                                                                                                         |                                                      | 355,816
|                                                          |                                                                                                                                                                                         |                                                      |        
|                                                          |                                                                                                                                                                                         | Total assets                                         |        
|                                                          |                                                                                                                                                                                         |                                                      |        
|Liabilities and Stockholders' Equity (Deficit)            |                                                                                                                                                                                         |                                                      |        
|Current liabilities:                                      |                                                                                                                                                                                         |                                                      |        
|                                                          | Convertible notes payable                                                                                                                                                               |                                                      | $      
|                                                          | Current portion of long-term debt                                                                                                                                                       |                                                      |        
|                                                          | Accounts payable                                                                                                                                                                        |                                                      |        
|                                                          | Accrued expenses                                                                                                                                                                        |                                                      |        
|                                                          | Accrued compensation                                                                                                                                                                    |                                                      |        
|                                                          | Deferred revenue                                                                                                                                                                        |                                                      |        
|                                                          |                                                                                                                                                                                         |                                                      |        
|                                                          |                                                                                                                                                                                         | Total current liabilities                            |        
|Long-term debt                                            |                                                                                                                                                                                         |                                                      | 635,344
|Deferred revenue                                          |                                                                                                                                                                                         |                                                      |       
|                                                          |                                                                                                                                                                                         |                                                      |        
|                                                          |                                                                                                                                                                                         | Total liabilities                                    |        
|                                                          |                                                                                                                                                                                         |                                                      |        
|Commitments (Note 13)                                     |                                                                                                                                                                                         |                                                      |        
|Redeemable convertible preferred stock, $0.0001 par value |                                                                                                                                                                                         |                                                      |        
|                                                          | Series A convertible preferred stock; issued and outstanding 6,444,835 shares (liquidation value of $16,350,586 at December 31, 2006)                                                   |                                                      |        
|                                                          | Junior preferred stock; issued and outstanding 236,987 shares (liquidation value of $622,787 at December 31, 2006)                                                                      |                                                      |        
|                                                          |                                                                                                                                                                                         |                                                      |        
|Stockholders' equity (deficit):                           |                                                                                                                                                                                         |                                                      |        
|                                                          | Preferred Stock; 10,000,000 shares authorized, $0.0001 par value, none issued                                                                                                           |                                                      |        
|                                                          | Common stock; authorized 150,000,000 shares; $0.0001 par value, issued and outstanding 4,439,345 at December 31, 2006 and issued and outstanding 79,223,987 shares at December 31, 2007 |                                                      |        
|                                                          | Additional paid-in capital                                                                                                                                                              |                                                      |        
|                                                          | Deficit accumulated during the development stage                                                                                                                                        |                                                      |        
|                                                          | Accumulated other comprehensive income                                                                                                                                                  |                                                      |        
|                                                          |                                                                                                                                                                                         |                                                      |        
|                                                          |                                                                                                                                                                                         | Total stockholders' equity (deficit)                 |        
|                                                          |                                                                                                                                                                                         |                                                      |        
|                                                          |                                                                                                                                                                                         | Total liabilities and stockholders' equity (deficit) |        
|                                                          |                                                                                                                                                                                         |                                                      |        

See
accompanying notes to financial statements.

F-3

---





REDPOINT BIO CORPORATION  (A Development-Stage Enterprise)    Statements of Operations

|                                                    |                            | Years ended December 31, |            |           |           
|--------------------------------------------------- | -------------------------- | ------------------------ | ---------- | --------- | ----------
|
|
|Research and grant revenue                          |                            | $                        | 410,000    |           | $         
|                                                    |                            |                          |            |           |           
|Operating expenses:                                 |                            |                          |            |           |           
|                                                    | Research and development   |                          |            | 2,898,826 |           
|                                                    | General and administrative |                          |            | 2,126,422 |           
|                                                    |                            |                          |            |           |           
|                                                    |                            | Total operating expenses |            |           | 5,025,248 
|                                                    |                            |                          |            |           |           
|                                                    |                            | Operating loss           |            |           | (4,615,248
|Interest income                                     |                            |                          | 94,113     |           |           
|Interest expense                                    |                            |                          | (99,594    | )         |           
|                                                    |                            |                          |            |           |           
|                                                    |                            | Loss before income taxes |            |           | (4,620,729
|Income tax benefit                                  |                            |                          | 253,403    |           |           
|                                                    |                            |                          |            |           |           
|Net loss                                            |                            |                          | (4,367,326 | )         |           
|                                                    |                            |                          |            |           |           
|Accretion of redeemable convertible preferred stock |                            |                          | (1,147,404 | )         |           
|                                                    |                            |                          |            |           |           
|Net loss applicable to common stockholders          |                            | $                        | (5,514,730 | )         | $         
|                                                    |                            |                          |            |           |           
|Basic and diluted net loss per common share         |                            | $                        | (1.25      | )         | $         
|                                                    |                            |                          |            |           |           
|Weighted average number of shares outstanding       |                            |                          | 4,402,868  |           |           
|                                                    |                            |                          |            |           |           

See
accompanying notes to financial statements.

F-4

---





REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)
Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)
Period from August 16, 1995 (inception) to December 31, 2007

|                                                             |  |           |  |   |           |  |         |  |   |         | Stockholders' Equity (Deficit) | 
|------------------------------------------------------------ |  | --------- |  | - | --------- |  | ------- |  | - | ------- | ------------------------------ | 
|
|
|
|
|
|Inception, August 16, 1995                                   |  |          |  | $ |          |  |        |  | $ |        |                                | 
|Issuance of common stock for services                        |  |          |  |   |          |  |        |  |   |        |                                | 
|Net loss                                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 1995                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|Net loss                                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance December 31, 1996                                    |  |          |  |   |          |  |        |  |   |        |                                | 
|Net loss                                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 1997                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|Net loss                                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 1998                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|Net loss                                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 1999                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|Issuance of common stock                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|Issuance of common stock for dilution provisions             |  |          |  |   |          |  |        |  |   |        |                                | 
|Net income                                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 2000                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|Common stock reacquired and retired                          |  |          |  |   |          |  |        |  |   |        |                                | 
|Issuance of common stock                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|Issuance of common stock for dilution provisions             |  |          |  |   |          |  |        |  |   |        |                                | 
|Common stock reacquired and retired                          |  |          |  |   |          |  |        |  |   |        |                                | 
|Net income                                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 2001                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|Issuance of common stock for services                        |  |          |  |   |          |  |        |  |   |        |                                | 
|Net loss                                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 2002                                   |  |          |  |   |          |  |        |  |   |        |                                | 
|Sale of Series A Preferred stock net of $257,240 if expenses |  | 1,285,714 |  |   | 2,442,759 |  |        |  |   |        |                                | 
|Conversion of principal portion of notes payable             |  | 623,963   |  |   | 1,310,320 |  |        |  |   |        |                                | 
|Conversion of accrued interest on notes payable              |  |          |  |   |          |  | 236,987 |  |   | 497,673 |                                | 
|Accretion of Series A Preferred to redemption value          |  |          |  |   | 48,826    |  |        |  |   |        |                                | 
|Issuance of common stock for dilution provisions             |  |          |  |   |          |  |        |  |   |        |                                | 
|Issuance of common stock options for services                |  |          |  |   |          |  |        |  |   |        |                                | 
|Proceeds from stockholder note                               |  |          |  |   |          |  |        |  |   |        |                                | 
|Common stock reacquired and retired                          |  |          |  |   |          |  |        |  |   |        |                                | 
|Net loss                                                     |  |          |  |   |          |  |        |  |   |        |                                | 
|                                                             |  |           |  |   |           |  |         |  |   |         |                                | 
|Balance, December 31, 2003                                   |  | 1,909,677 |  |   | 3,801,905 |  | 236,987 |  |   | 497,673 |                                | 

See accompanying notes to financial statements.

F-5

---





REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)
Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)
Period from August 16, 1995 (inception) to December 31, 2007

|                                                               |                                          |            |   |   |             |   |          |   |   |          |   | Stockholders' Equity (Deficit) | 
|-------------------------------------------------------------- | ---------------------------------------- | ---------- | - | - | ----------- | - | -------- | - | - | -------- | - | ------------------------------ | 
|
|
|
|
|
|Sale of Series A Preferred stock net of $83,144 if expenses    |                                          | 4,535,158  |   |   | 9,440,688   |   |         |   |   |         |   |                                | 
|Accretion of Series A Preferred to redemption value            |                                          |           |   |   | 669,228     |   |         |   |   |         |   |                                | 
|Issuance of common stock for dilution provisions               |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Issuance of common stock options for services                  |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Net loss                                                       |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|                                                               |                                          |            |   |   |             |   |          |   |   |          |   |                                | 
|Balance, December 31, 2004                                     |                                          | 6,444,835  |   |   | 13,911,821  |   | 236,987  |   |   | 497,673  |   |                                | 
|Accretion of Series A Preferred to redemption value            |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Issuance of common stock for dilution provisions               |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Issuance of common stock                                       |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Issuance of warrants and stock options for services            |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Net loss                                                       |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|                                                               |                                          |            |   |   |             |   |          |   |   |          |   |                                | 
|Balance, December 31, 2005                                     |                                          | 6,444,835  |   |   | 15,059,225  |   | 236,987  |   |   | 497,673  |   |                                | 
|Accretion of Series A Preferred to redemption value            |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Issuance of warrants to purchase preferred stock               |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Proceeds from warrants                                         |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Stock-based compensation                                       |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Common stock reacquired and retired                            |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Net loss                                                       |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|                                                               |                                          |            |   |   |             |   |          |   |   |          |   |                                | 
|Balance, December 31, 2006                                     |                                          | 6,444,835  |   |   | 16,217,778  |   | 236,987  |   |   | 497,673  |   |                                | 
|Accretion of Series A Preferred to redemption value            |                                          |           |   |   | 224,846     |   |         |   |   |         |   |                                | 
|Conversion of preferred stock                                  |                                          | (6,444,835 | ) |   | (16,442,624 | ) | (236,987 | ) |   | (497,673 | ) |                                | 
|Conversion of convertible notes payable and warrants           |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Sale of common stock, net of issuance costs of $4,406,015      |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Issuance of common stock for dilution provisions               |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Issuance of common stock upon exercise of options and warrants |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Stock-based compensation                                       |                                          |           |   |   |            |   |         |   |   |         |   |                                | 
|Comprehensive loss:                                            |                                          |            |   |   |             |   |          |   |   |          |   |                                | 
|                                                               | Net loss                                 |            |  |   |             |  |          |  |   |          |  |                                | 
|                                                               | Unrealized gain on marketable securities |            |  |   |             |  |          |  |   |          |  |                                | 
|                                                               |                                          |            |   |   |             |   |          |   |   |          |   |                                | 
|Total comprehensive loss                                       |                                          |            |   |   |             |   |          |   |   |          |   |                                | 
|                                                               |                                          |            |   |   |             |   |          |   |   |          |   |                                | 
|Balance, December 31, 2007                                     |                                          |           |   | $ |            |   |         |   | $ |         |   |                                | 
|                                                               |                                          |            |   |   |             |   |          |   |   |          |   |                                | 

See accompanying notes to financial statements.

F-6

---





REDPOINT BIO CORPORATION  (A Development-Stage Enterprise)    Statements of Cash Flows

|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            | August 16,
1995
(Inception) to
December 31,
2007 |          
|-------------------------------------------- | --------------------------------------------------------------------------- | --------------------------------------------------------------------------- | ----------------------------------------- | ---------------------------------------------------- | --------- | --------- | ---------- | ------------------------------------------------ | ---------
|
|
|Cash flows from operating activities:        |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             | Net loss                                                                    |                                                                             | $                                         | (4,367,326                                           | )         | $         | (6,852,139 | )                                                | $        
|                                             | Adjustments to reconcile net loss to net cash used in operating activities: |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             |                                                                             | Depreciation                                                                |                                           |                                                      | 301,465   |           |            | 408,004                                          |          
|                                             |                                                                             | Amortization of discounts and premiums on
    marketable securities         |                                           |                                                      |          |           |            |                                                 |          
|                                             |                                                                             | Options, warrants and stock issued for
    services and dilution provisions |                                           |                                                      | 9,292     |           |            | 50,801                                           |          
|                                             |                                                                             | Beneficial conversion feature                                               |                                           |                                                      |          |           |            |                                                 |          
|                                             |                                                                             | Amortization of discount on convertible
    notes                           |                                           |                                                      |          |           |            | 597,903                                          |          
|                                             |                                                                             | Amortization of deferred financing costs                                    |                                           |                                                      |          |           |            | 97,158                                           |          
|                                             |                                                                             | Debt inducement charge                                                      |                                           |                                                      |          |           |            |                                                 |          
|                                             |                                                                             | Interest expense on convertible notes                                       |                                           |                                                      |          |           |            |                                                 |          
|                                             |                                                                             | Changes in assets and liabilities:                                          |                                           |                                                      |           |           |            |                                                  |          
|                                             |                                                                             |                                                                             | Accounts receivable                       |                                                      |           |          |            |                                                  |         
|                                             |                                                                             |                                                                             | Prepaid expenses and other assets         |                                                      |           | (86,350   | )          |                                                  | (491,505 
|                                             |                                                                             |                                                                             | Accounts payable                          |                                                      |           | (24,725   | )          |                                                  | 555,209  
|                                             |                                                                             |                                                                             | Accrued expenses and accrued compensation |                                                      |           | (76,238   | )          |                                                  | 677,061  
|                                             |                                                                             |                                                                             | Amounts due to related parties            |                                                      |           | (33,333   | )          |                                                  |         
|                                             |                                                                             |                                                                             | Deferred revenue                          |                                                      |           | (310,000  | )          |                                                  |         
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             |                                                                             |                                                                             |                                           | Net cash used in operating activities                |           |           | (4,587,215 | )                                                |          
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|Cash flows from investing activities:        |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             | Purchases of marketable securities                                          |                                                                             |                                           |                                                     |           |           |           |                                                  |          
|                                             | Maturity of marketable securities                                           |                                                                             |                                           |                                                     |           |           |           |                                                  |          
|                                             | Purchases of property and equipment                                         |                                                                             |                                           | (752,521                                             | )         |           | (69,264    | )                                                |          
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             |                                                                             |                                                                             |                                           | Net cash used in investing activities                |           |           | (752,521   | )                                                |          
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|Cash flows from financing activities:        |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             | Proceeds from issuance of long-term debt                                    |                                                                             |                                           | 2,001,810                                            |           |           |           |                                                  |          
|                                             | Net proceeds from convertible notes                                         |                                                                             |                                           |                                                     |           |           | 3,943,491  |                                                  |          
|                                             | Repayments of debt                                                          |                                                                             |                                           | (276,684                                             | )         |           | (515,650   | )                                                |          
|                                             | Net proceeds from issuance of preferred stock                               |                                                                             |                                           |                                                     |           |           |           |                                                  |          
|                                             | Net proceeds from issuance of common stock
    and warrants                 |                                                                             |                                           | 13,440                                               |           |           | 23,750     |                                                  |          
|                                             | Proceeds from exercise of common stock
    options and warrants             |                                                                             |                                           |                                                     |           |           |           |                                                  |          
|                                             | Common stock reacquired                                                     |                                                                             |                                           | (38,334                                              | )         |           | (8,121     | )                                                |          
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             |                                                                             |                                                                             |                                           | Net cash provided by financing activities            |           |           | 1,700,232  |                                                  |          
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             |                                                                             |                                                                             |                                           | Net (decrease) increase in cash and cash equivalents |           |           | (3,639,504 | )                                                |          
|Cash and cash equivalents, beginning of year |                                                                             |                                                                             | 6,197,184                                 |                                                      |           | 2,557,680 |            |                                                  | 974,378  
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|Cash and cash equivalents, end of year       |                                                                             | $                                                                           | 2,557,680                                 |                                                      | $         | 974,378   |            | $                                                | 5,789,997
|                                             |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|Supplemental cash flow disclosures:          |                                                                             |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             | Noncash investing and financing activities:                                 |                                                                             |                                           |                                                      |           |           |            |                                                  |          
|                                             |                                                                             | Increase in property and equipment included in accounts payable             |                                           | $                                                    |          |           | $          |                                                 |          
|                                             |                                                                             | Conversion of notes payable and accrued interest to preferred stock         |                                           |                                                      |          |           |            |                                                 |          
|                                             |                                                                             | Conversion of notes payable and accrued interest to common stock            |                                           |                                                      |          |           |            |                                                 |          
|                                             |                                                                             | Conversion of preferred and junior preferred stock to common stock          |                                           |                                                      |          |           |            |                                                 |          
|                                             |                                                                             | Accretion of preferred stock                                                |                                           |                                                      | 1,147,404 |           |            | 1,158,553                                        |          
|                                             |                                                                             | Warrants issued in connection with notes payable                            |                                           |                                                      | 30,074    |           |            | 1,228,568                                        |          
|                                             | Cash paid for interest                                                      |                                                                             |                                           | 82,026                                               |           |           | 142,693    |                                                  |          

See accompanying notes to financial statements.

F-7

---





REDPOINT BIO CORPORATION  (A Development-Stage Enterprise)        Notes to Financial Statements

(1) Description of the Business

Redpoint Bio Corporation ("Redpoint" or the "Company") is leveraging recent discoveries in the molecular biology of taste to discover and develop novel taste
modulators for the food, beverage and pharmaceutical industries. The Company's food and beverage program is focused on identifying novel flavors that improve the taste of existing ingredients and
enable the development of better-tasting and more healthful foods and beverages. The pharmaceutical program uses a biochemical approach aimed at suppressing the bitterness of medicines, which has the
potential to expand the range of formulation
options and increase patient compliance. The Company uses its technology to discover and develop products for partners and for its own pipeline.

Since
its inception in 1995, the Company has incurred losses and negative cash flows from operations, and such losses have continued subsequent to December 31, 2007. As of
December 31, 2007, the Company had an accumulated deficit of $33,000,000 and anticipates incurring additional losses for at least the next several years. The Company expects to spend
significant resources over the next several years to enhance its technologies and to fund research and development of its pipeline of potential products. Through December 31, 2007,
substantially all of the Company's revenue has been derived from corporate collaborations, license agreements, and government grants. In order to achieve profitability, the Company must continue to
develop products and technologies that can be commercialized by the Company or through existing and future collaborations.

The
Company is subject to those risks associated with any biotechnology company that has substantial expenditures for research and development. There can be no assurance that the
Company's research and development projects will be successful, that products developed will obtain necessary regulatory approval, or that any approved product will be commercially viable. In
addition, the Company operates in an environment of rapid technological change and is largely dependent on the services of its employees and consultants. For the Company to fund its operations and to
commercially develop its products, additional equity and/or debt financing will be required. There is no assurance that such financing will be available to the Company as needed.

(2) Reverse Triangular Merger, Financing, Reincorporation Merger



Robcor Properties, Inc., a Florida corporation ("Robcor"), and its newly-formed subsidiary, Robcor Acquisition Corp., a Delaware corporation ("Merger Sub")
entered into an Agreement and Plan of Merger (the "Merger Agreement"), dated as of March 12, 2007, by and among, Redpoint, formerly a privately-held Delaware corporation, on the one
hand, and Robcor, Merger Sub,
Robcor LLC, a Kentucky limited liability company and wholly-owned subsidiary of Robcor ("Robcor LLC") and Halter Financial Investments, L.P., a Texas limited partnership
("Halter"), and Michael Heitz ("Heitz"), as stockholders of Robcor, on the other hand. Pursuant to the Merger Agreement, Merger Sub, which Robcor had incorporated in the state of Delaware for the
purpose of completing the transaction, merged into Redpoint (the "Reverse Merger") on March 12, 2007 (the "Closing" or the "Closing Date") with Redpoint continuing as the surviving entity in
the Reverse Merger. As a result of the Reverse Merger, Redpoint became a wholly-owned subsidiary of Robcor. In connection with the Reverse Merger, each share of capital stock of Redpoint was converted
into 2.7820 shares of common stock of Robcor and all of Redpoint's convertible promissory notes were converted into shares of common stock of Robcor.

F-8

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(2) Reverse Triangular Merger, Financing, Reincorporation Merger (Continued)

Redpoint
was deemed to have been the accounting acquirer in the Reverse Merger. Accordingly, the financial statements of the Company presented reflect the historical results of Redpoint
prior to the Reverse Merger, and of the combined entities following the Reverse Merger, and do not include the historical financial results of Robcor prior to the consummation of the Reverse Merger.
In connection with the Reverse Merger, Redpoint issued 1,391,000 shares of common stock to Robcor shareholders which have been treated as issuance costs in connection with the Private Placement.



Concurrently with the completion of the Reverse Merger, Robcor received $17.2 million in net proceeds from the initial closing of a private placement of
approximately 24.7 million shares of common stock at a price of $0.81 per share, and warrants to purchase approximately 6.2 million shares of Robcor common stock at an exercise price of
$1.35 per share (the "Private Placement"). The initial closing of the Private Placement occurred on March 12, 2007, concurrently with the completion of the Reverse Merger.

In
connection with the Private Placement, Redpoint engaged two placement agents which were issued five-year warrants to buy approximately 2.0 million shares of Robcor
common stock equal to 10% of the number of shares of common stock sold in the Private Placement at an exercise price of $0.97 per share; provided, however, no warrants were issued to the placement
agents with respect to shares and warrants sold to existing Redpoint stockholders.

On
April 6, 2007, Robcor sold an additional 16.1 million shares of common stock and warrants to purchase 4.0 million shares of common stock which resulted in net
proceeds of approximately
$11.3 million. In connection with the April closing, warrants to purchase an additional 1.6 million shares of common stock were issued to the placement agents.



On June 15, 2007, Robcor was merged with and into Redpoint, its wholly-owned subsidiary, with Redpoint being the surviving corporation pursuant to the
Agreement and Plan of Merger dated May 3, 2007. As a result of the merger, the Company's state of incorporation changed from Florida to Delaware.

In
connection with the reincorporation merger, the authorized number of shares of common stock was decreased from 1,000,000,000 shares of common stock, no par value per share, to
150,000,000 shares of common stock, $0.0001 par value per share, and the authorized number of shares of preferred stock was decreased from 20,000,000 shares of preferred stock, no par value per share,
to 10,000,000 shares of preferred stock, $0.0001 par value per share. The Company's share data and capital stock have been retrospectively adjusted for all periods presented to reflect the
reincorporation merger.

In
addition, the maximum number of shares of common stock reserved for issuance under the Company's 2007 Omnibus Equity Compensation Plan was increased from 13,511,562 to 17,644,267
shares.

F-9

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(3) Summary of Significant Accounting Policies

(a) Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from such estimates.

(b) Cash and Cash Equivalents

The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents.

(c) Marketable Securities

Marketable securities include investments in corporate commercial paper and debt securities having original maturities of greater than three months and a
remaining maturity of less than 24 months. These marketable securities are treated for financial reporting purposes as available-for-sale and as such are reported at
their fair market values. Unrealized gains and losses are recorded as a separate component of stockholders' equity. Any realized gains and losses are recorded in the results of operations.

(d) Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash equivalents and marketable securities. The Company has
established guidelines relating to diversification and maturities that allows the Company to manage risk.

(e) Revenue Recognition

Revenue from corporate collaborations and licensing agreements consists of up-front fees, research and development funding, and milestone payments.



Non-refundable upfront fees are recognized as revenue when we have a contractual right to receive such payment, the contract price is fixed or
determinable, the collection of the resulting receivable is reasonably assured, and we have no further performance obligations under the license agreement.

Multiple
element arrangements are analyzed to determine whether the deliverables, which often include a license and performance obligations, such as research and development services,
can be separated or whether they must be accounted for as a single unit of accounting in accordance with Emerging Issues Task Force (EITF) Issue No. 00-21,
Accounting for Revenue Arrangements with Multiple Deliverables. If the fair value of the undelivered performance obligations can be determined, such obligations would then be
accounted for separately as performed. However, if the elements are considered to either (i) not have stand-alone value or (ii) have standalone value but the fair value of any of the
undelivered performance obligations cannot be determined, the arrangement would then be

F-10

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(3) Summary of Significant Accounting Policies (Continued)

accounted
for as a single unit of accounting and all of the payments are recognized as revenue over the estimated period of when the performance obligations are performed. Whenever we determine that
an arrangement should be accounted for as a single unit of accounting, we must determine the period over which the performance obligations will be performed and revenue will be recognized. Significant
management judgment is required in determining the period over which we are expected to complete our performance obligations under an arrangement.



Our collaboration agreements may also contain substantive milestone payments that are recognized upon achievement of the milestone only if all of the following
conditions are met:



Determination
as to whether a payment meets the aforementioned conditions involves management's judgment. If any of these conditions are not met, the resulting payment would not be
considered a substantive milestone, and therefore the resulting payment would be considered part of the consideration for the single unit of accounting and be recognized as revenue as such performance
obligations are performed.



Reimbursement of research and development costs is recognized as revenue provided the provisions of EITF Issue No. 99-19, Reporting Revenue Gross as a
Principal Versus Net as an Agent, are met, the amounts are fixed and determinable, and collection of the related receivable
is reasonably assured.

(f) Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives. The Company uses a life of
four to five years for laboratory equipment, three to seven years for office equipment and furniture, and the lesser of the useful life or the remaining life of the underlying facility lease for
leasehold improvements. Expenditures for repairs and maintenance are charged to expense as incurred, while major renewals and betterments are capitalized. Upon disposition of assets, the cost and
related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the Statements of Operations.

F-11

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(3) Summary of Significant Accounting Policies (Continued)

(g) Research and Development

Research and development costs are charged to expense as incurred. These expenses include internal research and development as well as research conducted on
behalf of the Company by third parties, including sponsored university-based research agreements and clinical study vendors. Costs incurred in obtaining technology licenses are charged immediately to
research and development expense if the licensed technology has not reached technological feasibility and has no alternative future uses.

(h) Impairment of Long-Lived Assets

In accordance with Statement of Financial Accounting Standards (SFAS) No. 144,Accounting for the Impairment or Disposal of
Long-Lived Assets, long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized in the amount by which the
carrying amount of the asset exceeds the fair value of the asset. The Company has not recorded any impairment charges pursuant to SFAS No. 144.

(i) Income Taxes

Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(j) Stock-Based Compensation

Effective January 1, 2006, the Company adopted SFAS No. 123 (revised 2004),Share-Based Payment(SFAS 123R) using the prospective method of adoption. Under SFAS 123R, the Company recognizes compensation cost for awards to employees and nonemployee board members based on the
grant-date fair value of stock-based awards over the period during which an award holder is required to provide service in exchange for the award. No compensation cost is recognized for
awards for which the award holder does not render the requisite service.

Prior
to 2006, the Company applied the intrinsic-value-based method of accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related
interpretations, to account for its fixed-plan stock options granted to employees and
directors. Under APB Opinion No. 25, the Company did not record compensation expense for its stock options since the current fair value of the underlying stock equaled the exercise price of the
options.

F-12

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(3) Summary of Significant Accounting Policies (Continued)

The
fair value of stock options is determined using the Black Scholes option-pricing model and is recognized as expense over the requisite service period using the
straight-line method.

To
satisfy the exercise of options, the Company plans to issue new shares rather than purchase shares on the open market.

(k) Net Loss per Common Share

Basic net loss per common share is computed in accordance with SFAS No. 128,Earnings per Share, by
dividing the net loss allocable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per common share is computed by dividing
net loss allocable to common stockholders by the sum of the weighted-average number of common shares outstanding for the period and the number of additional shares that would have been outstanding if
dilutive potential common shares had been issued. Potential common shares are excluded from the calculation of diluted net loss per common share if the effect on net loss per share is antidilutive. In
all periods presented, our diluted net loss per common share is equal to basic net loss per common share because giving effect in the computation of diluted net loss per common share to the exercise
of outstanding options and warrants and the conversion of convertible preferred stock (see notes 10 and 11) would have been antidilutive.

(l) Fair Value of Financial Instruments

The fair value of our financial instruments is the amount for which the instrument could be exchanged in a current transaction between willing parties. As of
December 31, 2007, the carrying values of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses, and accrued compensation
equaled or approximated their respective fair values because of the short duration of these instruments. In addition, we believe the carrying value of our debt instruments, which do not have readily
ascertainable market values, approximate their fair values, given that the interest rates on outstanding borrowings approximate market rates.

(m) Recent Accounting Pronouncements

In June 2007, the Financial Accounting Standards Board (FASB) issued EITF 07-03,Accounting for Nonrefundable Advance
Payments for Goods or Services to Be Used in Future Research and Development Activities(EITF 07-03). EITF 07-03 specifies that
nonrefundable advance payments for future research and development activities should be deferred and capitalized and should be recognized as an expense as the related goods are delivered or the
related services are performed. If, subsequent to an advance payment, an entity no longer expects the goods to be delivered or services to be rendered, the capitalized advance payment should be
charged to expense. EITF 07-03 is effective for fiscal years beginning after December 15, 2007. As the guidance in EITF 07-03 is consistent with our
existing policy, we do not believe EITF 07-03 will have any impact on our financial statements or related disclosures.

In
February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial LiabilitiesIncluding an amendment of
FASB Statement No. 115(SFAS No. 159), which allows companies to choose, at specific election dates, to measure eligible financial assets and liabilities at fair

F-13

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(3) Summary of Significant Accounting Policies (Continued)

value
that are not otherwise required to be measured at fair value. If a company elects the fair value option for an eligible item, changes in that item's fair value in subsequent reporting periods
must be recognized in current earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We are currently evaluating the impact of SFAS No. 159 on our
financial statements and related disclosures.

In
September 2006, the FASB issued SFAS No. 157,Fair Value Measurements(SFAS No. 157), which is applicable for fiscal
years beginning after November 15, 2007. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands
disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements, the FASB having previously concluded in
those accounting pronouncements that fair value is the relevant measurement attribute. Although SFAS No. 157 does not require any new fair value measurements, its application may, for some
entities, change current practices related to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. We are currently
evaluating the impact of the adoption of SFAS No. 157 on our financial statements and related disclosures.

(4) Research and Collaboration Agreements

Since inception, the Company has undertaken research projects for which it was the recipient of several Small Business Innovative Research (SBIR) Awards. The SBIR
Awards were sponsored by the National Institutes of Health. In connection with these SBIR projects, the Company recognized $1,796,324 of revenue. The last research project was completed in 2004.

Givaudan.In March 2007, the Company entered into a Joint Research and Development and License Agreement (the "Givaudan
Agreement") with Givaudan Schweiz AG, a Swiss company ("Givaudan") for the development and commercialization of compounds that enhance sweetness or savory sensation, as well as compounds that block or
desensitize bitter taste for use in the food and beverage industry. Under the terms of the Givaudan Agreement, Redpoint received an upfront payment of $1,300,000 and
will receive research funding over the initial 3.5 year term of the Givaudan Agreement, of up to $11,600,000. Redpoint is also eligible to receive reimbursement for costs incurred in connection
with obtaining certain regulatory approvals. Redpoint will also be eligible to receive milestone payments of up to $2,500,000 upon the achievement of specified development and commercialization events
as well as royalty payments based on net sales of Givaudan products that contain flavor systems incorporating compounds developed under the collaboration. The upfront payment of
$1,300,000 million is being recognized as revenue on a straight-line basis over the initial term of the Givaudan Agreement. During 2007, the Company recognized $279,000 of revenue
attributable to the amortization of the upfront fee and $1,841,000 of revenue from research funding.

Coca-Cola.In December 2007, the Company entered into a research agreement (the "Coca-Cola
Agreement") with The Coca-Cola Company ("Coca-Cola") for the development of certain technology for use in non-alcoholic beverages. Under the terms of the
Coca-Cola Agreement, Redpoint will receive up to $900,000 per year for research funding. In February 2008, Coca-Cola made a non-refundable payment of $450,000 for
the initial six months of the agreement. Coca-Cola will also reimburse the Company for certain related clinical research organization (CRO) costs that the Company incurs. Redpoint is also
eligible to receive a milestone payment of $200,000 upon the

F-14

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(4) Research and Collaboration Agreements (Continued)

achievement
of specified development events set forth in the Coca-Cola Agreement. The initial term of the Coca-Cola Agreement is for 12 months, subject to extension upon
mutual agreement of the parties. The Coca-Cola Agreement may be terminated early by the parties upon their mutual agreement or by Coca-Cola in its individual discretion after
the initial six month period. For the initial six month period, the Company granted Coca-Cola an exclusive right to negotiate to extend and expand the collaboration into a broader,
multi-year research, development and commercialization program. During 2007, the Company recognized $20,000 of revenue from research funding.

(5) Marketable Securities

The following is a summary of available-for-sale securities at December 31, 2007:

Amortized Cost

Unrealized Gain

Fair ValueCorporate debt securities

$
13,885,003

$
38,655

$
13,923,658Asset-backed securities


2,984,699


3,056


2,987,755Total

$
16,869,702

$
41,711

$
16,911,413


At
December 31, 2007, all available-for-sale securities mature within one year. Amortization of discounts and premiums related to marketable securities
resulted in income of $194,729 recorded for the year ended December 31, 2007.

(6) Property and Equipment

Property and equipment consisted of the following:

December 312006

2007Laboratory equipment

$
1,720,209

$
2,478,595Office equipment and furniture


96,942


265,491Leasehold improvements


3,265


18,1451,820,416


2,762,231Less accumulated depreciation


(979,981
)

(1,466,288
)$
840,435

$
1,295,943


Depreciation
expense was $301,465, $408,004, $492,679, and $1,509,001 for the years ended December 31, 2005, 2006, 2007 and period from August 16, 1995 (inception) through
December 31, 2007, respectively.

F-15

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(7) Accrued Expenses

Accrued expenses consisted of the following:

December 312006

2007Professional fees

$
237,200

$
383,366Accrued franchise tax





50,183Accrued interest


91,188


Other


23,262


80,470$
351,650

$
514,019


(8) Debt

(a) Master Security Agreement

In February 2005, the Company entered into a Master Security Agreement (the Agreement) with a finance company that provided for borrowings up to $3,200,000,
subject to certain conditions, through December 2005. During 2005, the Company borrowed $2,001,810 under the Agreement in order to finance the purchase of laboratory and office equipment. Amounts
borrowed are evidenced with promissory notes and are repayable in equal monthly payments, over 36 to 48 months, and are
collateralized by the purchased equipment. The notes bear interest at rates varying between 9.4% and 10.4%. As of December 31, 2007, the principal amount due on the notes was repayable as
follows:

2008

$
447,7672009


187,576635,343Less current portion


(447,767
)$
187,576


In
connection with the borrowings under the Agreement, the Company issued the finance company warrants to purchase 53,039 shares of the Company's common stock at an exercise price of
$0.75 per share. The estimated fair value of the warrants of $30,074, determined using the Black-Scholes option-pricing model, was accounted for as deferred financing costs and is being amortized to
interest expense over the remaining term of the notes.

Interest
expense on notes payable recorded during the years ended December 31, 2005, 2006 and 2007 was $4,163, $7,519 and $7,519, respectively.

(b) Convertible Notes Payable

During 2003 and 2002, the Company sold 12% Secured Convertible Notes (the Convertible Notes), resulting in aggregate proceeds of $700,000 and $610,320,
respectively. The Convertible Notes were due on the earlier of April 21, 2004 or the consummation of a qualified financing, as defined. In connection with the Company's Series A
financing in November 2003 (note 10), the total principal amount of $1,310,320 and accrued interest of $136,075 were converted into 623,963 shares of Series A and 236,987 shares of
Junior Preferred stock (Junior Preferred). The Company recorded interest expense of

F-16

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(8) Debt (Continued)

$361,598,
which represents a debt inducement charge based on the excess of the Junior Preferred fair value over the accrued interest converted.

In
May, June and October 2006, the Company entered into a convertible debt financing agreement with certain of its existing investors which provided for $4,116,774 in funding. The
Company issued 5% secured promissory notes (the Promissory Notes) with principal amounts totaling $4,093,021 and warrants to purchase shares of a new series of preferred stock that may be designated
in the future in a Qualified Financing, as defined in such Promissory Notes. The Promissory Notes were due on the earliest to occur of: (i) demand by holders of a majority of the outstanding
principal at any time after the one year anniversary of the initial May closing; (ii) a Liquidation Event, as defined; and (iii) the two-year anniversary of the initial May
closing. In conjunction with the Reverse Merger, the Promissory Notes and accrued interest were converted into 5,223,522 shares of common stock and warrants were exercised resulting in the issuance of
2,033,175 shares of common stock

In
connection with the issuance of the Promissory Notes, the Company incurred $149,533 of debt issuance costs which were capitalized and were being amortized as interest expense over the
one year anniversary of the initial May issuance date of the Promissory Notes. During the years ended December 31, 2006 and 2007, interest expense was $89,639 and $29,126 respectively, related
to amortization of the debt issuance costs.

In
accordance with APB Opinion No. 14,Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, the Company
allocated the proceeds from the financing between the Promissory Notes and warrants based on their relative estimated fair values of $4,093,021 and $1,228,565, respectively. The relative fair value of
the warrants was recorded against the carrying value of the Promissory Notes as an original issue discount (OID) which was being amortized as interest expense over the one year anniversary of the
initial May issuance date of the Promissory Notes until the closing of the Reverse Merger. During the years ended December 31, 2006 and 2007, the Company recognized a noncash charge to interest
expense of $597,903 and $302,032, respectively for the amortization of the OID.

A
reconciliation of the face amount of the Promissory Notes and the carrying value as of December 31, 2006 was as follows:

Original value of Promissory Notes

$
4,093,021Less OID


(1,228,565
)Carrying value on date of issuance


2,864,456Amortization of OID treated as interest expense


597,903Carrying value of Promissory Notes at December 31, 2006

$
3,462,359


In
accordance with Emerging Issues Task Force (EITF) No. 00-27,Application of Issue No. 98-5 to Certain Convertible
Instruments, and EITF No. 98-5,Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable
Ratios, after considering the allocation of the proceeds to the Promissory Notes, the Company determined that the Promissory Notes contained a contingent beneficial conversion
feature (Contingent BCF). The Contingent BCF existed at the date of the issuance of the Promissory Notes due to the fact that the original carrying value of Promissory Notes,

F-17

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(8) Debt (Continued)

after
allocation of the proceeds, would be less than the purchase price of the new series of preferred stock paid by investors in the new series. In accordance with EITF No. 98-5,
during the year ended December 31, 2007, the Contingent BCF of $1,228,565 was recognized as additional interest expense when the Promissory Notes were converted into shares of common stock.

(9) Related-Party Transactions

During 2004, the Company received payments of $150,000 in connection with a research agreement with a company that is a stockholder of the Company. These payments
were recognized as revenue in 2005.

In
January 2003, the Company entered into a stock redemption agreement with a former officer requiring the Company to make aggregate payments of $275,000 for the repurchase of 678,263
shares of common stock, which specified that the former officer was to retain a 3% ownership interest in the Company upon the closing of the Series A financing, subject to certain dilution
protections and certain conditions, as defined. As of December 31, 2005, the amount due to the former officer was repaid.

The
Company has licensed the rights to certain patents and pending patents in the area of taste receptors and taste inhibitors from a research institution that is a stockholder of the
Company. The license agreement, as amended, required a payment of $130,000. In addition, the Company is required to pay royalties on future sales, if any, of certain products covered by the license
agreement. Commencing in July 2004, the Company is obligated to pay a minimum annual fee, creditable against royalties, of $25,000 to the licensor through the expiration of the
last-to-expire patent. The Company estimates the term of the license agreement to be through December 2019.

In
September 2003, the Company entered into a two-year consulting agreement with a former officer that provided for a yearly consulting fee of $50,000. During 2004, the
Company determined that the consulting services were no longer required and, accordingly, recorded the remaining contractual obligation as a liability. The balance was repaid in equal monthly
installments through August 2005.

(10) Redeemable Convertible Preferred Stock

During 2003, the Company sold an aggregate of 1,285,714 shares of Series A at $2.10 per share, for gross proceeds of $2,700,000. During 2004, the Company
sold an aggregate of 4,535,158 shares of Series A at $2.10 per share for gross proceeds of $9,523,832.

In
connection with the conversion of the principal portion of the Convertible Notes in 2003 (note 8), the Company issued 623,963 shares of Series A. The Company also issued
236,987 shares of Junior Preferred in connection with the conversion of the accrued interest on the Convertible Notes in 2003 (note 8).

Dividends
on each outstanding share of Series A and Junior Preferred accrue and are compounded annually, and are cumulative at the annual rate of 8%. Dividends are payable only
when and if declared by the board of directors.

Each
share of Preferred Stock was convertible at any time at the option of the holder into the number of shares of common stock obtained by dividing the original issue price (subject to
certain

F-18

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(10) Redeemable Convertible Preferred Stock (Continued)

adjustments),
plus accrued and unpaid dividends, by the conversion price, as defined. The Preferred Stock was mandatorily convertible in the event of an initial public offering, as defined.

Holders
of Preferred Stock were entitled to a liquidation preference in an amount equal to $2.10 per share, plus any accumulated unpaid dividends, in the event of a liquidation,
dissolution, or winding-up of the Company, or in the event the Company merged with or was acquired by another entity.

At
any time on or after October 31, 2008, the holders of a majority of the Preferred Stock could have required the Company to redeem the Preferred Stock at the applicable
redemption price. In the case of the Series A, the redemption price was equal to the greater of (i) the original issue price plus any accumulated unpaid dividends, or (ii) the
fair value of the shares of common stock then issuable upon conversion of such shares of Series A. In the case of the Junior Preferred, the redemption price was equal to the original issue
price of $2.10 per share.

The
Company incurred aggregate issuance costs of $340,384 in connection with the sale of Series A, which reduced the initial carrying value of the Series A. The carrying
value of the Series A was being accreted to its redemption value through October 31, 2008. The accretion of issuance costs during the years ended December 31, 2005, 2006 and 2007
was $67,268, $75,821 and $7,244, respectively.

In
connection with the Reverse Merger, the Series A and Junior Preferred converted into 22,774,963 shares of common stock.

(11) Stockholders' Equity

(a) Common Stock

The Company was party to a number of agreements that provided for dilution protection to certain investors. During 2005, the Company issued 2,790 shares of common
stock, which was triggered by the issuance of certain warrants. In connection with the Reverse Merger and closing of the Private Placement, the Company issued approximately 2.0 million shares
of common stock to a founder and shareholder of the Company pursuant to certain antidilution protection. During 2007, the Company recorded a charge of $1.6 million to research and development
expenses related to the issuance of such shares of common stock, which represented the fair value of those shares.

In
March 2005, the Company sold 89,024 shares of common stock to a director of the Company at a purchase price of $0.15 per share, which was the fair value. The shares were subject to
repurchase at the Company's option at the original purchase price in the event that the director's relationship with the Company terminated. The number of shares subject to repurchase decreased by
2.0833% per month until March 2009. In October 2006, the director resigned and the Company repurchased 53,784 shares at $0.15 per share.

F-19

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(11) Stockholders' Equity (Continued)

(b) Warrants

As of December 31, 2007, the following warrants to purchase Common Stock were outstanding:

Number of shares

Exercise price

Expiration53,039

$
0.75

December 20126,182,287

$
1.35

March 20104,015,059

$
1.35

April 20103,574,906

$
0.97

April 201213,825,291


During
2007, warrants to purchase 138,446 shares of common stock were exercised at $0.15 per share.

(c) Registration Rights

On June 5, 2007, the Company filed a "resale" registration statement with the SEC covering all shares of common stock issued in the Private Placement and
in connection with the Reverse Merger, including shares of common stock into which certain warrants are exercisable. Such registration statement was declared effective on July 20, 2007. The
Company will use its best efforts to maintain its effectiveness until such time as all securities registered under the registration statement have been sold or are otherwise able to be sold under
Rule 144 of the Securities Act without regard to volume limitations, whichever is earlier.

If
the Company fails to maintain the effectiveness of the "resale" registration statement, a 1% penalty will be assessed for each monthly period that the registration statement is not
effective, capped at 12%. The penalty will be payable monthly in either cash or additional shares of common stock, as determined by the Company. The Company follows FASB Staff Position No.
EITF 00-19-2,Accounting for Registration Payment Arrangements(EITF 00-19-2), which
specifies that registration payment arrangements should play no part in determining the initial classification of, and subsequent accounting for, securities to which the payments relate. Contingent
obligations in a registration payment arrangement are separately analyzed under SFAS No. 5,Accounting for Contingencies,and FASB Interpretation
No. 14,Reasonable Estimation of the Amount of a Loss. If we determine a penalty payment is probable and can be reasonably estimated, a liability
will be recorded. As of December 31, 2007, we concluded the likelihood of having to make any payments under the arrangements was remote, and therefore did not record any related liability.

(12) Stock Options Plans

In November 2003, the Company adopted the 2003 Stock Incentive Plan, as amended (the 2003 Plan), that authorized the Company to grant up to 6,523,790 shares of
common stock to eligible employees, directors, and consultants of the Company in the form of restricted stock and stock options. The amount and terms of grants are determined by the board of
directors. The term of the options could have been up to 10 years, and options were exercisable in cash or as otherwise determined by the board of directors. Generally, options vest 25% upon
the first anniversary of the date of grant and ratably each month thereafter through the fourth anniversary of the date of grant.

F-20

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(12) Stock Options Plans (Continued)

On
March 12, 2007, the Company adopted the Redpoint Bio Corporation 2007 Omnibus Equity Compensation Plan ("2007 Plan"), which provided for the issuance of up to 13,511,562 shares
of common stock, subject to adjustment in certain circumstances. In connection with the adoption of the 2007 Plan, the 2003 Plan merged with and into the 2007 Plan and no additional grants may be made
thereafter under the 2003 Plan. Outstanding grants under the 2003 Plan will continue in effect in accordance with their terms as in effect before March 12, 2007 and the shares with respect to
outstanding grants under the 2003 Plan will be issued or transferred under the 2007 Plan. The 2007 Plan is now the Company's only plan in effect.

On
April 20, 2007, the Company approved an amendment to the 2007 Plan, which increased the maximum number of shares of common stock reserved for issuance under the 2007 Plan by an
additional 4,132,705 shares from 13,511,562 to 17,644,267 shares of common stock. As of December 31, 2007, 7,588,200 shares were reserved for future issuances under the 2007 Plan.

The
following is a summary of stock option activity under the Plan through December 31, 2007:

|                                 |           | Number of
shares |            | Weighted-average
exercise price |      | Weighted-average
remaining contractual term |           | Intrinsic
Value
|-------------------------------- | --------- | ---------------- | ---------- | ------------------------------- | ---- | ------------------------------------------- | --------- | ---------------
|Outstanding at December 31, 2004 |           | 4,068,781        |            | $                               | 0.15 |                                             |           |                
|                                 | Granted   |                  | 609,258    |                                 |      | 0.15                                        |           |                
|                                 | Forfeited |                  | (75,114    | )                               |      | 0.15                                        |           |                
|                                 |           |                  |            |                                 |      |                                             |           |                
|Outstanding at December 31, 2005 |           | 4,602,925        |            |                                 | 0.15 |                                             |           |                
|                                 | Granted   |                  | 952,835    |                                 |      | 0.20                                        |           |                
|                                 | Forfeited |                  | (129,711   | )                               |      | 0.15                                        |           |                
|                                 |           |                  |            |                                 |      |                                             |           |                
|Outstanding at December 31, 2006 |           | 5,426,049        |            |                                 | 0.16 |                                             |           |                
|                                 | Granted   |                  | 5,782,016  |                                 |      | 0.79                                        |           |                
|                                 | Forfeited |                  | (1,187,238 | )                               |      | 0.61                                        |           |                
|                                 | Exercised |                  | (416,866   | )                               |      | 0.15                                        |           |                
|                                 |           |                  |            |                                 |      |                                             |           |                
|Outstanding at December 31, 2007 |           | 9,603,961        |            | $                               | 0.49 |                                             | 8.1 years |                
|                                 |           |                  |            |                                 |      |                                             |           |                
|Exercisable at December 31, 2007 |           | 3,982,839        |            | $                               | 0.15 |                                             | 6.7 years |                
|                                 |           |                  |            |                                 |      |                                             |           |                

The
total intrinsic value of stock options exercised during the year ended December 31, 2007 was $240,380.

All
options granted to date have exercise prices equal to the fair value of the underlying common stock on the date of grant. Prior to the effectiveness of the registration statement on
Form S-1, which occurred on July 20, 2007, all options were granted with an exercise price equal to the estimated fair value of the underlying common stock as determined by
the board of directors. Subsequent to that date, all options have been granted with an exercise price equal to the most recent trading price of the Company's common stock. As of December 31,
2007, there were 7,588,200 shares of common stock available for grant under the 2007 Plan. The Company received proceeds of $62,530 for option exercises in 2007.

F-21

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(12) Stock Options Plans (Continued)

The per-share weighted average fair value of the options granted during the years ended December 31, 2006 and 2007 is estimated at $0.34 and
$0.52 on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

December 312006

2007Expected dividend yield



Expected volatility

73
%
68
%Risk-free interest rate

4.37
%
4.45
%Expected life of options

6 years

6 years


The
expected term assumption is based on the use of the simplified method. The expected volatility of share options was calculated based on a historical volatility analysis of public
company peers that were similar to the Company for a term equivalent to the expected term of the option. The risk-free rate of the option is based on the zero-coupon U.S.
Treasury yield at the date of grant for a term equivalent to the expected term of the option.

The
Company recognized $17,644 and $489,845 of stock-based compensation expense pursuant to SFAS 123R for the years ended December 31, 2006 and 2007 respectively. As of
December 31, 2007, there was $2,089,679 of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted average period of
3.3 years.

During
2006 and 2005, the Company granted options to purchase 166,920 and 166,920 shares, respectively, of common stock to non-employee consultants. The grants issued during 2006 and
2005 vest over three years. The Company recorded $102,223, $33,158 and $4,708 of stock-based compensation expense during the years ended December 31, 2007, 2006 and 2005, respectively, which
represents the estimated fair value of the options based on the Black-Scholes option-pricing model.

(13) Commitments

(a) Leases

The Company leases office and laboratory space and equipment under operating leases expiring through 2017. Rent expense under these operating leases was $197,000,
$221,000 and $792,000 for the years ended December 31, 2005, 2006 and 2007, respectively.

Future
minimum lease payments as of December 31, 2007 are as follows:

Year Ending December 31,

Amount2008

$
845,4202009


827,7012010


833,6522011


839,7232012


845,915Thereafter


3,739,488$
7,931,899


F-22

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(13) Commitments (Continued)

In
October 2006, the Company paid a $250,000 deposit for its new facility which has been recorded in other assets on the accompanying balance sheet.

(b) Employment-Related Agreements

The Company has entered into employment agreements with certain key executives, providing for base salaries plus performance incentive bonuses. In March 2007, the
Company entered into a separation agreement with a former officer that required the Company to make an aggregate payment of $169,900, which was repaid in bimonthly installments through September 2007.

(14) Income Taxes

As of December 31, 2007, the Company had approximately $23,426,000 and $14,745,000 of federal and state net operating loss carryforwards, respectively, and
approximately $691,000 and $503,000 of federal and state research and development credit carryforwards, respectively, available to offset future federal and state taxable income. The federal net
operating loss carryforward will expire beginning in 2022, and the state net operating loss carryforwards will expire beginning in 2008. The federal research and development credit carryforward will
expire beginning in 2020, and the state research and development carryforward will expire beginning in 2018.

The
following table summarizes the components of the deferred tax assets and liabilities as of:

December 312006

2007Net operating losses

$
6,684,000

$
9,107,000Research and development credit


723,000


1,023,000Other temporary differences


354,000


860,000Gross deferred tax assets


7,761,000


10,990,000Valuation allowance


(7,674,000
)

(10,948,000
)Total assets


87,000


42,000Fixed assets


(87,000
)

(42,000
)Total liabilities


(87,000
)

(42,000
)Net deferred tax assets

$


$



In
assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences representing net future deductible
amounts become deductible. Due to the Company's history of losses, the deferred tax assets are fully offset by a valuation allowance at December 31, 2006 and 2007. The valuation allowance in
2007 increased by $3,274,000 over 2006 related primarily to additional net operating losses incurred by the Company.

Under
the Tax Reform Act of 1986, the utilization of a corporation's net operating loss and tax credit carryforwards is limited following a greater than 50% change in ownership during a
three-year period. Any unused annual limitation may be carried forward to future years for the balance of the net

F-23

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(14) Income Taxes (Continued)

operating
loss and tax credit carryforward period. Prior equity financings may significantly limit our ability to utilize net operating loss and tax credit carryforwards against future taxable income
under Sections 382 and 383.

During
2005 and 2006, the Company sold $3,128,427 and $5,776,876 of New Jersey State operating loss carryforwards resulting in the recognition of a benefit of $253,403 and $465,803,
respectively.

In
July 2006, the FASB issued FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxes (FIN 48), which is
applicable for fiscal years beginning after December 15, 2006. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in
accordance with SFAS No. 109,Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and measurement attribute for
financial statement recognition and measurement of a tax position reported or expected to be reported on a tax return. FIN 48 also provides guidance on the recognition, classification, interest
and penalties, accounting in interim periods, disclosure, and transition. We adopted the provisions of FIN 48 on January 1, 2007. Upon adoption of FIN 48 and through
December 31, 2007, we determined that we had no liability for uncertain income taxes as prescribed by FIN 48. Our policy is to recognize potential accrued interest and penalties related
to the liability for uncertain tax benefits, if applicable, in income tax expense. Net operating loss and credit carryforwards since inception remain open to examination by taxing authorities, and
will continue to remain open for a period of time post utilization. The adoption of FIN 48 did not have an impact on the Company's results of operations and financial position.

(15) 401(k) Plan

The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual
basis, limited by the maximum amounts allowable under federal tax regulations. During the year ended December 31, 2007, the Company began making matching contributions in the amount of 50% of
employee contributions up to
6%. The Company, in its discretion, may also make certain contributions to the plan. For the year ended December 31, 2007, the Company contributed $57,000 as matching contributions.

(16) Quarterly Results (unaudited)

The following tables summarize the quarterly results of operations for each of the quarters in 2006 and 2007. These quarterly results are unaudited, but in the
opinion of management, have been prepared on the same basis as our audited financial information and include all adjustments (consisting

F-24

---



REDPOINT BIO CORPORATION
(A Development-Stage Enterprise)

Notes to Financial Statements (Continued)

(16) Quarterly Results (unaudited) (Continued)

only
of normal recurring adjustments) necessary for fair presentation of the information set forth herein.

|                                             |  | 2007 Results |           
|-------------------------------------------- |  | ------------ | ----------
|
|
|Revenues                                     |  | $            | 40,851    
|Net loss applicable to common stockholders   |  |              | (5,272,315
|Basic and diluted net loss per common share* |  | $            | (0.30     

|
|

|                                             |  | 2006 Results |           
|-------------------------------------------- |  | ------------ | ----------
|
|
|Revenues                                     |  | $            |          
|Net loss applicable to common stockholders   |  |              | (1,925,778
|Basic and diluted net loss per common share* |  | $            | (0.43     

---

F-25

---



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