**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

| (Mark                  One)                                                                                                                                                                 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                        |   |
| þ                                                                                                                                                                                      | QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                  ACT OF                  1934 |
|                                                                                                                                                                                        |   |
| For                  the quarterly period ended March 31, 2008 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 001-32954 **CLEVELAND                  BIOLABS, INC.**(Exact                  name of registrant as specified in its                  charter) |

| **DELAWARE**                                                                                                                                                                                                                                                                             |   | **20-0077155**                                      |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|
| (State                or other jurisdiction of incorporation or organization)                                                                                                                                                                                                            |   | (I.R.S.                Employer Identification No.) |
|                                                                                                                                                                                                                                                                                     |   |                                                |
| **73                High Street, Buffalo,****New                York**** **                                                                                                                                                                                                         |   | **14203**                                           |
| (Address                of principal executive offices)                                                                                                                                                                                                                                  |   | (Zip                Code)                           |
|                                                                                                                                                                                                                                                                                     |
| (Registrant’s                telephone number, including area code)** ****(716)                849-6810** _______________________________________________(Former                name, former address and former fiscal year,if                changed since last report) |

** **

| Large                accelerated filer  ̈                | Accelerated                filer  ̈          |
|-------------------------------------------------------------------|-------------------------------------------------------|
| Non-accelerated                filer  ̈                  | Smaller                reporting company þ  |

----

| TABLE                  OF CONTENTS              |                                                                                                                                                 |   |   |
|-------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                            |                                                                                                                                                 |   |   |   |
|                                            |                                                                                                                                                 |   |   | PAGE |
| PART                  I - FINANCIAL INFORMATION |                                                                                                                                                 |   |
|                                            |                                                                                                                                                 |   |   |   |
| ITEM                  1:                        | Financial                  Statements                                                                                                                |   |   |
|                                            |                                                                                                                                                 |   |   |   |
|                                            | Balance                  Sheets as of March 31, 2008 and December 31, 2007                                                                           |   | 3-4    |
|                                            |                                                                                                                                                 |   |   |
|                                            | Statements                  of Operations For Three Months Ended March 31, 2008 and                  2007                                            |   | 5      |
|                                            |                                                                                                                                                 |   |   |
|                                            | Statements                  of Cash Flows For Three Months Ended March 31, 2008 and                  2007                                            |   | 6      |
|                                            |                                                                                                                                                 |   |   |
|                                            | Statement                  of Stockholders' Equity from January 1, 2007 to December 31, 2007                  and to                  March 31, 2008 |   | 7      |
|                                            |                                                                                                                                                 |   |   |
|                                            | Notes                  to Financial Statements                                                                                                       |   | 10     |
|                                            |                                                                                                                                                 |   |   |
| ITEM                  2:                        | Management's                  Discussion and Analysis of Financial Condition and Results of                  Operations                              |   | 21     |
|                                            |                                                                                                                                                 |   |   |
| ITEM                  3:                        | Quantitative                  and Qualitative Disclosures About Market Risk                                                                          |   | 35     |
|                                            |                                                                                                                                                 |   |   |
| ITEM                  4:                        | Controls                  and Procedures                                                                                                             |   | 35     |
|                                            |                                                                                                                                                 |   |   |   |
| PART                  II - OTHER INFORMATION    |                                                                                                                                                 |   |
|                                            |                                                                                                                                                 |   |   |   |
| ITEM                  1:                        | Legal                  Proceedings                                                                                                                   |   | 36     |
|                                            |                                                                                                                                                 |   |   |   |
| ITEM                  2:                        | Unregistered                  Sales of Equity Securities and Use of Proceeds                                                                         |   | 36     |
|                                            |                                                                                                                                                 |   |   |   |
| ITEM                  3:                        | Defaults                  Upon Senior Securities                                                                                                     |   | 36     |
|                                            |                                                                                                                                                 |   |   |   |
| ITEM                  4:                        | Submission                  of Matters to a Vote of Securities Holders                                                                               | 36     |
|                                            |                                                                                                                                                 |   |   |   |
| ITEM                  5:                        | Other                  Information                                                                                                                   |   | 36     |
|                                            |                                                                                                                                                 |   |   |   |
| ITEM                  6:                        | Exhibits                                                                                                                                             |   | 36     |
|                                            |                                                                                                                                                 |   |   |   |
| Signatures                                      |                                                                                                                                                 |   | 37     |

----

| CLEVELAND                  BIOLABS, INC. |
|------------------------------------------|
|                                     |
| BALANCE                  SHEETS          |

| March                  31, 2008 (unaudited) and December 31,                  2007 |
|------------------------------------------------------------------------------------|

|                                           |   | March                  31 |       | December                  31 |   |
|------------------------------------------------|--------|---------------------------|------------|------------------------------|--------|
|                                           |   | 2008                      |       | 2007                         |   |
| ASSETS                                         |   | (unaudited)               |       |                         |   |
|                                           |   |                      |       |                         |   |
| CURRENT                  ASSETS                |   |                      |       |                         |   |
| Cash                  and equivalents          |   | $                         | 9,102,383  |                         | $      | 14,212,189 |   |
| Short-term                  investments        |   |                      | 1,000,000  |                         |   | 1,000,000 |   |
| Accounts                  receivable:          |   |                      |       |                         |   |   |   |
| Trade                                          |   |                      | 527,476    |                         |   | 163,402 |   |
| Interest                                       |   |                      | 42,634     |                         |   | 50,042 |   |
| Other                  prepaid expenses        |   |                      | 440,020    |                         |   | 325,626 |   |
| Total                  current assets          |   |                      | 11,112,513 |                         |   | 15,751,259 |   |
|                                           |   |                      |       |                         |   |   |   |
| EQUIPMENT                                      |   |                      |       |                         |   |   |   |
| Computer                  equipment            |   |                      | 263,344    |                         |   | 258,089 |   |
| Lab                  equipment                 |   |                      | 1,016,331  |                         |   | 966,517 |   |
| Furniture                                      |   |                      | 274,904    |                         |   | 274,903 |   |
|                                           |   |                      | 1,554,579  |                         |   | 1,499,509 |   |
| Less                  accumulated depreciation |   |                      | 390,298    |                         |   | 313,489 |   |
|                                           |   |                      | 1,164,281  |                         |   | 1,186,020 |   |
|                                           |   |                      |       |                         |   |   |   |
| OTHER                  ASSETS                  |   |                      |       |                         |   |   |   |
| Intellectual                  property         |   |                      | 609,846    |                         |   | 459,102 |   |
| Deposits                                       |   |                      | 26,327     |                         |   | 25,445 |   |
|                                           |   |                      | 636,173    |                         |   | 484,547 |   |
|                                           |   |                      |       |                         |   |   |   |
| TOTAL                  ASSETS                  |   | $                         | 12,912,967 |                         | $      | 17,421,826 |   |

----

| CLEVELAND                  BIOLABS, INC.                                           |
|------------------------------------------------------------------------------------|
|                                                                               |
| BALANCE                  SHEETS                                                    |
|                                                                               |
| March                  31, 2008 (unaudited) and December 31,                  2007 |

|                                                                                                                                                                                        |   |                      |        |                         |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|-------------|------------------------------|--------|
|                                                                                                                                                                                        |   | March                  31 |        | December                  31 |   |
|                                                                                                                                                                                        |   | 2008                      |        | 2007                         |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                                                                                                                                       |   | (unaudited)               |        |                         |   |
|                                                                                                                                                                                        |   |                      |        |                         |   |
| CURRENT                  LIABILITIES                                                                                                                                                        |   |                      |        |                         |   |
| Accounts                  payable                                                                                                                                                           |   | $                         | 1,266,391   |                         | $      | 710,729 |   |
| Milestone                  payable                                                                                                                                                          |   |                      | 50,000      |                         |   | - |   |
| Deferred                  revenue                                                                                                                                                           |   |                      | 1,579,860   |                         |   | 1,670,610 |   |
| Dividends                  payable                                                                                                                                                          |   |                      | 51,462      |                         |   | 396,469 |   |
| Accrued                  expenses                                                                                                                                                           |   |                      | 249,236     |                         |   | 449,774 |   |
| Total                  current liabilities                                                                                                                                                  |   |                      | 3,196,949   |                         |   | 3,227,582 |   |
|                                                                                                                                                                                        |   |                      |        |                         |   |   |   |
| STOCKHOLDERS'                  EQUITY                                                                                                                                                       |   |                      |        |                         |   |   |   |
| Series                      B convertible preferred stock, $.005 par value Authorized -                      10,000,000 shares at March 31, 2008 and December 31,                      2007 |   |                      |        |                         |   |   |   |
| Issued                    and outstanding 3,524,687 and 3,870,267 shares at March 31, 2008                    and December 31, 2007, respectively                                           |   |                      | 17,623      |                         |   | 19,351 |   |
| Additional                  paid-in capital                                                                                                                                                 |   |                      | 22,208,269  |                         |   | 24,383,695 |   |
| Common                      stock, $.005 par value Authorized - 40,000,000 shares at March 31,                      2008 and December 31, 2007                                              |   |                      |        |                         |   |   |   |
| Issued                    and outstanding 13,355,657 and 12,899,241shares at March 31, 2008                    and December 31, 2007, respectively                                          |   |                      | 66,778      |                         |   | 64,496 |   |
| Additional                  paid-in capital                                                                                                                                                 |   |                      | 32,747,897  |                         |   | 30,764,914 |   |
| Accumulated                  other comprehensive income (loss)                                                                                                                              |   |                      | -           |                         |   | - |   |
| Accumulated                  deficit                                                                                                                                                        |   |                      | (45,324,549 | )                            |   | (41,038,212 | ) |
| Total                  stockholders' equity                                                                                                                                                 |   |                      | 9,716,018   |                         |   | 14,194,244 |   |
|                                                                                                                                                                                        |   |                      |        |                         |   |   |   |
|                                                                                                                                                                                        |   |                      |        |                         |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                 |   | $                         | 12,912,967  |                         | $      | 17,421,826 |   |

----

| CLEVELAND                  BIOLABS, INC.                                 |
|--------------------------------------------------------------------------|
|                                                                     |
|                                                                     |
| STATEMENT                  OF OPERATIONS                                 |
|                                                                     |
| Three                  Months Ending March 31, 2008 and 2007 (unaudited) |
|                                                                     |

|                                                                                                                              |   | Three                  Months Ended |       |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|------------|
|                                                                                                                              |   |                                |       |   |   |
|                                                                                                                              |   | March                  31           |       | March                  31 |   |
|                                                                                                                              |   | 2008                                |       | 2007 |   |
|                                                                                                                              |   | (unaudited)                         |       | (unaudited) |   |
| REVENUES                                                                                                                          |   |                                |       |   |   |
| Grant                  and contract                                                                                               |   | $                                   | 556,324    |   | $ | 271,445 |   |
| Service                                                                                                                           |   |                                | 120,000    |   |   | 50,000 |   |
|                                                                                                                              |   |                                | 676,324    |   |   | 321,445 |   |
|                                                                                                                              |   |                                |       |   |   |   |   |
| OPERATING                  EXPENSES                                                                                               |   |                                |       |   |   |   |   |
| Research                  and development                                                                                         |   |                                | 3,551,386  |   |   | 3,528,600 |   |
| Selling,                  general and administrative                                                                              |   |                                | 1,193,114  |   |   | 994,319 |   |
| Total                  operating expenses                                                                                         |   |                                | 4,744,500  |   |   | 4,522,919 |   |
|                                                                                                                              |   |                                |       |   |   |   |   |
| LOSS                  FROM OPERATIONS                                                                                             |   |                                | (4,068,176 | ) |   | (4,201,474 | ) |
|                                                                                                                              |   |                                |       |   |   |   |   |
| OTHER                  INCOME                                                                                                     |   |                                |       |   |   |   |   |
| Interest                  income                                                                                                  |   |                                | 145,127    |   |   | 96,429 |   |
| Sublease                  revenue                                                                                                 |   |                                | 2,656      |   |   | - |   |
| Gain                  on disposal of fixed assets                                                                                 |   |                                | 1,394      |   |   | - |   |
| Gain                  on investment                                                                                               |   |                                | 3,292      |   |   | - |   |
| Total                  other income                                                                                               |   |                                | 152,469    |   |   | 96,429 |   |
|                                                                                                                              |   |                                |       |   |   |   |   |
| OTHER                  EXPENSE                                                                                                    |   |                                |       |   |   |   |   |
| Corporate                  relocation                                                                                             |   |                                | 54,344     |   |   | - |   |
| Interest                  expense                                                                                                 |   |                                | -          |   |   | 1,088 |   |
| Total                  other expense                                                                                              |   |                                | 54,344     |   |   | 1,088 |   |
|                                                                                                                              |   |                                |       |   |   |   |   |
| NET                  LOSS                                                                                                         |   | $                                   | (3,970,051 | ) | $ | (4,106,133 | ) |
|                                                                                                                              |   |                                |       |   |   |   |   |
| DIVIDENDS                  ON CONVERTIBLE PREFERRED STOCK                                                                         |   |                                | (316,286   | ) |   | - |   |
|                                                                                                                              |   |                                |       |   |   |   |   |
| NET                  LOSS AVAILABLE TO COMMON SHAREHOLDERS                                                                        |   | $                                   | (4,286,337 | ) | $ | (4,106,133 | ) |
|                                                                                                                              |   |                                |       |   |   |   |   |
| NET                    LOSS AVAILABLE TO COMMON SHAREHOLDERS PER SHARE OF COMMON STOCK -                    BASIC AND DILUTED     |   | $                                   | (0.33      | ) | $ | (0.35 | ) |
|                                                                                                                              |   |                                |       |   |   |   |   |
| WEIGHTED                    AVERAGE NUMBER OF SHARES USED IN CALCULATING NET LOSS PER SHARE,                    BASIC AND DILUTED |   |                                | 13,143,686 |   |   | 11,854,027 |   |

----

| CLEVELAND                  BIOLABS, INC.                                                         |
|--------------------------------------------------------------------------------------------------|
|                                                                                             |
| STATEMENTS                  OF CASH FLOWS                                                        |
|                                                                                             |
| For                  the Three Months Ended March 31, 2008 and 2007                  (unaudited) |
|                                                                                             |

|                                                                                                                 |   | March                  31 |       | March                  31 |   |
|----------------------------------------------------------------------------------------------------------------------|--------|---------------------------|------------|---------------------------|--------|
|                                                                                                                 |   | 2008                      |       | 2007                      |   |
|                                                                                                                 |   | (unaudited)               |       | (unaudited)               |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES                                                                |   |                      |       |                      |   |
| Net                  loss                                                                                            |   | $                         | (3,970,051 | )                         | $      | (4,106,133 | ) |
| Adjustments                    to reconcile net loss to net cash used by operating                    activities:    |   |                      |       |                      |   |   |   |
| Depreciation                                                                                                         |   |                      | 76,809     |                      |   | 27,666 |   |
| Noncash                  salaries and consulting expense                                                             |   |                      | (192,626   | )                         |   | 375,301 |   |
| Changes                  in operating assets and liabilities:                                                        |   |                      |       |                      |   |   |   |
| Accounts                  receivable - trade                                                                         |   |                      | (364,074   | )                         |   | (54,298 | ) |
| Accounts                  receivable - interest                                                                      |   |                      | 7,407      |                      |   | (10,605 | ) |
| Other                  prepaid expenses                                                                              |   |                      | (114,394   | )                         |   | (78,293 | ) |
| Deposits                                                                                                             |   |                      | (881       | )                         |   | - |   |
| Accounts                  payable                                                                                    |   |                      | 555,663    |                      |   | 467,030 |   |
| Deferred                  revenue                                                                                    |   |                      | (90,749    | )                         |   | - |   |
| Accrued                  expenses                                                                                    |   |                      | (200,539   | )                         |   | 98,866 |   |
| Milestone                  payments                                                                                  |   |                      | 50,000     |                      |   | 250,000 |   |
| Total                  adjustments                                                                                   |   |                      | (273,384   | )                         |   | 1,075,667 |   |
| Net                    cash (used in) provided by operating activities                                               |   |                      | (4,243,435 | )                         |   | (3,030,466 | ) |
|                                                                                                                 |   |                      |       |                      |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES                                                                |   |                      |       |                      |   |   |   |
| Sale                  of short-term investments                                                                      |   |                      | -          |                      |   | 1,300,000 |   |
| Purchase                  of short-term investments                                                                  |   |                      | -          |                      |   | (17,999,965 | ) |
| Issuance                  of notes receivable                                                                        |   |                      | -          |                      |   | (250,000 | ) |
| Purchase                  of equipment                                                                               |   |                      | (55,070    | )                         |   | (11,640 | ) |
| Costs                  of patents pending                                                                            |   |                      | (150,743   | )                         |   | (93,193 | ) |
| Net                  cash (used in) provided by investing activities                                                 |   |                      | (205,813   | )                         |   | (17,054,798 | ) |
|                                                                                                                 |   |                      |       |                      |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES                                                                |   |                      |       |                      |   |   |   |
| Issuance                  of preferred stock                                                                         |   |                      | -          |                      |   | 30,020,984 |   |
| Financing                  costs                                                                                     |   |                      | -          |                      |   | (1,148,106 | ) |
| Dividends                                                                                                            |   |                      | (661,295   | )                         |   | - |   |
| Issuance                  of common stock                                                                            |   |                      | -          |                      |   | 118,410 |   |
| Exercise                  of stock options                                                                           |   |                      | 737        |                      |   | - |   |
| Net                  cash (used in) provided by financing activities                                                 |   |                      | (660,558   | )                         |   | 28,991,288 |   |
|                                                                                                                 |   |                      |       |                      |   |   |   |
| INCREASE                  (DECREASE) IN CASH AND EQUIVALENTS                                                         |   |                      | (5,109,806 | )                         |   | 8,906,024 |   |
|                                                                                                                 |   |                      |       |                      |   |   |   |
| CASH                  AND EQUIVALENTS AT BEGINNING OF PERIOD                                                         |   |                      | 14,212,189 |                      |   | 3,061,993 |   |
|                                                                                                                 |   |                      |       |                      |   |   |   |
| CASH                  AND EQUIVALENTS AT END OF PERIOD                                                               |   | $                         | 9,102,383  |                      | $      | 11,968,017 |   |
|                                                                                                                 |   |                      |       |                      |   |   |   |
|                                                                                                                 |   |                      |       |                      |   |   |   |
|                                                                                                                 |   |                      |       |                      |   |   |   |
| Supplemental                  disclosures of cash flow information:                                                  |   |                      |       |                      |   |   |   |
| Cash                  paid during the period for interest                                                            |   | $                         | -          |                      | $      | - |   |
| Cash                  paid during the year for income taxes                                                          |   | $                         | -          |                      |   |   |   |
|                                                                                                                 |   |                      |       |                      |   |   |   |
| Supplemental                  schedule of noncash financing activities:                                              |   |                      |       |                      |   |   |   |
| Issuance                  of stock options to employees, consultants, and independent board                  members |   | $                         | 728,077    |                      | $      | 375,301 |   |
| Conversion                  of preferred stock to common stock                                                       |   | $                         | 2,177,154  |                      | $      | - |   |
| Expense                  recapture of expense for options expensed in 2007 but issued in                  2008       |   | $                         | (1,459,425 | )                         | $      | - |   |
| Issuance                  of shares to consultants and employees                                                     |   | $                         | 521,000    |                      | $      | - |   |
| Accrual                  of preferred stock dividends                                                                |   | $                         | 316,287    |                      | $      | - |   |
| Amortization                  of restricted shares issued to employees                                               |   | $                         | 17,722     |                      | $      | - |   |

----

| CLEVELAND                      BIOLABS, INC.                                   |
|--------------------------------------------------------------------------------|
|                                                                           |
| STATEMENTS                      OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE LOSS |
|                                                                           |
| Period                      From January 1, 2007 to December 31, 2007 and to   |
| March                      31, 2008 (unaudited)                                |

|                                                                                                                                                                                                                 |   | Stockholders'                  Equity |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|
|                                                                                                                                                                                                                 |   |  Common                  Stock   |       |
|                                                                                                                                                                                                                 |   |                                  |       |   |   | Additional |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   | Paid-in |   |
|                                                                                                                                                                                                                 |   | Shares                                |       | Amount |   | Capital |   |
| Balance                  at January 1, 2007                                                                                                                                                                          |   |                                  | 11,826,389 |   | $ | 59,132 |   | $ | 18,314,097 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Issuance                  of options                                                                                                                                                                                 |   |                                  | -          |   |   | - |   |   | 3,401,499 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Options                  to be issued in 2008                                                                                                                                                                        |   |                                  | -          |   |   | - |   |   | 2,687,355 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Issuance                  of shares - Series B financing                                                                                                                                                             |   |                                  | -          |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Fees                  associated with Series B Preferred offering                                                                                                                                                    |   |                                  | -          |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Issuance                  of restricted shares                                                                                                                                                                       |   |                                  | 190,000    |   |   | 950 |   |   | 1,699,500 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Exercise                  of options                                                                                                                                                                                 |   |                                  | 126,046    |   |   | 630 |   |   | 110,650 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Exercise                  of warrants                                                                                                                                                                                |   |                                  | 48,063     |   |   | 240 |   |   | 90,275 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Conversion                  of Series B Preferred Shares to Common                                                                                                                                                   |   |                                  | 708,743    |   |   | 3,544 |   |   | 4,461,537 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Dividends                  on Series B Preferred shares                                                                                                                                                              |   |                                  | -          |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Net                  Loss                                                                                                                                                                                            |   |                                  | -          |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Other                  comprehensive income                                                                                                                                                                          |   |                                  |       |   |   |   |   |   |   |   |
| Unrealized                    gains (losses) on short term investments Changes                    in unrealized holding gains (losses) arising during                    period                                      |   |                                  | -          |   |   | - |   |   | - |   |
| Less                    reclassification adjustment for (gains) losses included                    in net loss                                                                                                       |   |                                  | -          |   |   | - |   |   | - |   |
| Comprehensive                  loss                                                                                                                                                                                  |   |                                  |       |   |   |   |   |   |   |   |
| Balance                  at December 31, 2007                                                                                                                                                                        |   |                                  | 12,899,241 |   | $ | 64,496 |   | $ | 30,764,914 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Issuance                  of options                                                                                                                                                                                 |   |                                  | -          |   |   | - |   |   | 728,077 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Partial                    recapture of expense for options expensed in 2007 but issued in                    2008                                                                                                   |   |                                  | -          |   |   | - |   |   | (1,459,425 | ) |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Issuance                  of restricted shares                                                                                                                                                                       |   |                                  | 105,000    |   |   | 525 |   |   | 520,475 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Amortization                  of restricted shares                                                                                                                                                                   |   |                                  | -          |   |   | - |   |   | 17,722 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Exercise                  of options                                                                                                                                                                                 |   |                                  | 5,836      |   |   | 29 |   |   | 708 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Conversion                  of Series B Preferred Shares to Common                                                                                                                                                   |   |                                  | 345,580    |   |   | 1,728 |   |   | 2,175,426 |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Dividends                  on Series B Preferred shares                                                                                                                                                              |   |                                  | -          |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Net                  Loss                                                                                                                                                                                            |   |                                  | -          |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                 |   |                                  |       |   |   |   |   |   |   |   |
| Other                  comprehensive income Unrealized gains (losses) on short term                  investmentsChanges                  in unrealized holding gains (losses) arising                  during period |   |                                  | -          |   |   | - |   |   | - |   |
| Less                  reclassification adjustment for (gains) lossesincluded                  in net loss                                                                                                            |   |                                  | -          |   |   | - |   |   | - |   |
| Comprehensive                  loss                                                                                                                                                                                  |   |                                  |       |   |   |   |   |   |   |   |
| Balance                  at March 31, 2008                                                                                                                                                                           |   |                                  | 13,355,657 |   | $ | 66,778 |   | $ | 32,747,897 |   |

----

| CLEVELAND                  BIOLABS, INC.                                   |
|----------------------------------------------------------------------------|
|                                                                       |
| STATEMENTS                  OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE LOSS |
|                                                                       |
| Period                  From January 1, 2007 to December 31, 2007 and to   |
| March                  31, 2008 (unaudited)                                |

|                                                                                                                |   | Stockholders'                  Equity     |      |
|---------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|-----------|
|                                                                                                                |   |   Preferred                  Stock                  |      |
|                                                                                                                |   |                                                          |      |    |   |  Additional |   |
|                                                                                                                |   |                                                          |      |    |   |  Paid-in |   |
|                                                                                                                |   | Shares                                                        |      |  Amount |   |  Capital |   |
| Balance                  at January 1, 2007                                                                         |   |                                                          | -         |   | $ | - |   | $ | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Issuance                  of options                                                                                |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Options                  to be issued in 2008                                                                       |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Issuance                  of shares - Series B financing                                                            |   |                                                          | 4,579,010 |   |   | 22,895 |   |   | 32,030,175 |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Fees                  associated with Series B Preferred offering                                                   |   |                                                          | -         |   |   | - |   |   | (3,184,943 | ) |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Issuance                  of restricted shares                                                                      |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Exercise                  of options                                                                                |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Exercise                  of warrants                                                                               |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Conversion                  of Series B Preferred Shares to Common                                                  |   |                                                          | (708,743  | ) |   | (3,544 | ) |   | (4,461,537 | ) |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Dividends                  on Series B Preferred shares                                                             |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Net                  Loss                                                                                           |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Other                  comprehensive income                                                                         |   |                                                          |      |   |   |   |   |   |   |   |
| Unrealized                  gains (losses) on short term investments                                           |   |                                                          |      |   |   |   |   |   |   |   |
| Changes                    in unrealized holding gains (losses) arising during                    period            |   |                                                          | -         |   |   | - |   |   | - |   |
| Less                    reclassification adjustment for (gains) losses included                    in net loss      |   |                                                          | -         |   |   | - |   |   | - |   |
| Comprehensive                  loss                                                                                 |   |                                                          |      |   |   |   |   |   |   |   |
| Balance                  at December 31, 2007                                                                       |   |                                                          | 3,870,267 |   | $ | 19,351 |   | $ | 24,383,695 |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Issuance                  of options                                                                                |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Partial                  recapture of expense for options expensed in 2007 but issued in                  2008      |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Issuance                  of restricted shares                                                                      |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Amortization                  of restricted shares                                                                  |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Exercise                  of options                                                                                |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Conversion                  of Series B Preferred Shares to Common                                                  |   |                                                          | (345,580  | ) |   | (1,728 | ) |   | (2,175,426 | ) |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Dividends                  on Series B Preferred shares                                                             |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Net                  Loss                                                                                           |   |                                                          | -         |   |   | - |   |   | - |   |
|                                                                                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Other                  comprehensive income                                                                         |   |                                                          |      |   |   |   |   |   |   |   |
| Unrealized                  gains (losses) on short term investments                                                |   |                                                          |      |   |   |   |   |   |   |   |
| Changes                  in unrealized holding gains (losses) arising during period                                 |   |                                                          | -         |   |   | - |   |   | - |   |
| Less                    reclassification adjustment for (gains) losses included                    in net loss |   |                                                          | -         |   |   | - |   |   | - |   |
|  Comprehensive                  loss                                                                           |   |                                                          |      |   |   |   |   |   |   |   |
| Balance                  at March 31, 2008                                                                          |   |                                                          | 3,524,687 |   | $ | 17,623 |   | $ | 22,208,269 |   |

----

| CLEVELAND                  BIOLABS, INC.                                                                         |   |                                  |    |        |   |        |   |          |        |
|------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|-------------|--------|-------------|--------|---------------|-------------|
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |
| STATEMENTS                  OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE LOSS                                       |   |                                  |    |        |   |        |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |
| Period                  From January 1, 2007 to December 31, 2007 and to                                         |   |                                  |    |        |   |        |   |          |        |
| March                  31, 2008 (unaudited)                                                                      |   |                                  |    |        |   |        |   |          |        |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |
|                                                                                                             |   | Stockholders'                  Equity |    |        |   |        |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |
|                                                                                                             |   | Other                                 |    |        |   |        |   | Comprehensive |        |
|                                                                                                             |   | Comprehensive                         |    | Accumulated |   |        |   | Income        |        |
|                                                                                                             |   | Income/(Loss)                         |    | Deficit     |   | Total       |   | (Loss)        |        |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |
| Balance                  at January 1, 2007                                                                      |   | $                                     | (4,165  | )           | $      | (12,775,910 | )      | $             | 5,593,154   |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Issuance                  of options                                                                             |   |                                  | -       |        |   | -           |   |          | 3,401,499   |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Options                  to be issued in 2008                                                                    |   |                                  | -       |        |   | -           |   |          | 2,687,355   |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Issuance                  of shares - Series B financing                                                         |   |                                  | -       |        |   | -           |   |          | 32,053,070  |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Fees                  associated with Series B Preferred offering                                                |   |                                  | -       |        |   | -           |   |          | (3,184,943  | ) |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Issuance                  of restricted shares                                                                   |   |                                  | -       |        |   | -           |   |          | 1,700,450   |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Exercise                  of options                                                                             |   |                                  | -       |        |   | -           |   |          | 111,280     |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Exercise                  of warrants                                                                            |   |                                  | -       |        |   | -           |   |          | 90,515      |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Conversion                  of Series B Preferred Shares to Common                                               |   |                                  | -       |        |   | -           |   |          | -           |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Dividends                  on Series B Preferred shares                                                          |   |                                  | -       |        |   | (1,265,800  | )      |          | (1,265,800  | ) |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Net                  Loss                                                                                        |   |                                  | -       |        |   | (26,996,502 | )      |          | (26,996,502 | ) |   | (26,996,502 | ) |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Other                  comprehensive income                                                                      |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Unrealized                  gains (losses) on short term investments                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Changes                  in unrealized holding gains (losses) arising                    during period           |   |                                  |  - |        |   | -           |   |          | -           |   | $ | - |   |
| Less                    reclassification adjustment for (gains) losses included                    in net loss   |   |                                  | 4,165   |        |   | -           |   |          | 4,165       |   | $ | 4,165 |   |
| Comprehensive                  loss                                                                              |   |                                  |    |        |   |        |   |          |        |   | $ | (26,992,337 | ) |
| Balance                  at December 31, 2007                                                                    |   | $                                     | -       |        | $      | (41,038,212 | )      | $             | 14,194,244  |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Issuance                  of options                                                                             |   |                                  | -       |        |   | -           |   |          | 728,077     |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Partial                  recapture of expense for options expensed in 2007 but                    issued in 2008 |   |                                  | -       |        |   | -           |   |          | (1,459,425  | ) |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Issuance                  of restricted shares                                                                   |   |                                  | -       |        |   | -           |   |          | 521,000     |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Amortization                  of restricted shares                                                               |   |                                  | -       |        |   | -           |   |          | 17,722      |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Exercise                  of options                                                                             |   |                                  | -       |        |   | -           |   |          | 737         |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Conversion                  of Series B Preferred Shares to Common                                               |   |                                  | -       |        |   | -           |   |          | -           |   |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Dividends                  on Series B Preferred shares                                                          |   |                                  | -       |        |   | (316,286    | )      |          | (316,286    | ) |   |   |   |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Net                  Loss                                                                                        |   |                                  | -       |        |   | (3,970,051  | )      |          | (3,970,051  | ) |   | (3,970,051 | ) |
|                                                                                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Other                  comprehensive income                                                                      |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Unrealized                  gains (losses) on short term investments                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| Changes                    in unrealized holding gains (losses) arising                    during person         |   |                                  | -       |        |   | -           |   |          | -           |   | $ | - |   |
| Less                  reclassification adjustment for (gains) losses                                             |   |                                  |    |        |   |        |   |          |        |   |   |   |   |
| included                  in net loss                                                                            |   |                                  | -       |        |   | -           |   |          | -           |   | $ | - |   |
| Comprehensive                  loss                                                                              |   |                                  |    |        |   |        |   |          |        |   | $ | (3,970,051 | ) |
| Balance                  at March 31, 2008                                                                       |   | $                                     | -       |        | $      | (45,324,549 | )      | $             | 9,716,018   |   |   |   |   |

----

**CLEVELAND      BIOLABS, INC.**

**NOTES      TO FINANCIAL STATEMENTS**

**Note      1. Organization**

**Note      2. Summary of Significant Accounting Policies**

| A. | Basis                of Presentation - The information at March 31, 2008 and March 31,                2007,                and for the three-months ended March 31, 2008 and March 31, 2007,                is                unaudited. In the opinion of management, these financial statements                include all adjustments, consisting of normal recurring adjustments,                necessary for a fair presentation of the results for the interim                periods                presented. Interim results are not necessarily indicative of results                for a                full year. These financial statements should be read in conjunction                with                CBLI’s audited financial statements for the year ended December 31, 2007,                which were contained in the Company’s Annual Report on Form 10-K filed                with the U.S. Securities and Exchange                Commission. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| B. | Cash                and Equivalents - The Company considers highly liquid investments                with a                maturity date of three months or less to be cash equivalents. In                addition,                the Company maintains cash and equivalents at financial institutions,                which may exceed federally insured amounts at times and which may,                at                times, significantly exceed balance sheet amounts due to outstanding                checks. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| C. | Marketable                Securities and Short Term Investments - The Company considers investments                with a maturity date of more than three months to be short-term                investments and has classified these securities as available-for-sale.                Such investments are carried at fair value, with unrealized gains                and                losses included as accumulated other comprehensive income (loss)                in                stockholders' equity. The cost of available-for-sale securities sold                is                determined based on the specific identification                method. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| D. | Accounts                Receivable - The Company extends unsecured credit to customers under                normal trade agreements, which generally require payment within 30                days.                Management estimates an allowance for doubtful accounts which is                based                upon management's review of delinquent accounts and an assessment                of the                Company's historical evidence of collections. There is no allowance                for                doubtful accounts as of March 31, 2008 and December 31,                2007. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| E. | Equipment                - Equipment is stated at cost and depreciated over the estimated                useful                lives of the assets (generally five years) using the straight-line                method.                Leasehold improvements are depreciated on the straight-line method                over                the shorter of the lease term or the estimated useful lives of the                assets.                Expenditures for maintenance and repairs are charged to expense as                incurred. Major expenditures for renewals and betterments are capitalized                and depreciated. Depreciation expense was $76,809, and $27,666 for                the                three-months ended March 31, 2008 and 2007, respectively. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| F. | Impairment                of Long-Lived Assets - In accordance with Statements of Financial                Accounting Standards, or SFAS, No. 144, Accounting for the Impairment                or                Disposal of Long-Lived Assets, long-lived assets to be held and used,                including equipment and intangible assets subject to depreciation                and                amortization, are reviewed for impairment whenever events or changes                in                circumstances indicate that the carrying amounts of the assets or                related                asset group may not be recoverable. Determination of recoverability                is                based on an estimate of discounted future cash flows resulting from                the                use of the asset and its eventual disposition. In the event that                such cash                flows are not expected to be sufficient to recover the carrying amount                of                the asset or asset group, the carrying amount of the asset is written                down                to its estimated net realizable                value. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| G. | Intellectual                Property - The Company capitalizes the costs associated with the                preparation, filing, and maintenance of certain intellectual property                rights. Capitalized intellectual property is reviewed annually for                impairment. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| H. | Line                of Credit - The Company has a working capital line of credit that                is fully                secured by short-term investments. This fully-secured, working capital                line of credit carries an interest rate of prime minus 1%, a borrowing                limit of $1,000,000, and expires on September 25, 2008. At March                31, 2008                and December 31, 2007, there were no outstanding borrowings under                this                credit facility. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| I. | Fair                Value of Financial Instruments - Financial instruments, including                cash and                equivalents, accounts receivable, notes receivable, accounts payable                and                accrued liabilities, are carried at net realizable value. The carrying                amounts of the convertible notes payable approximate their respective                fair                values as they bear terms that are comparable to those available                under                current market conditions. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| J. | Use                of Estimates - The preparation of financial statements in conformity                with                accounting principles generally accepted in the U.S. 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. The Company bases                its                estimates on historical experience and on various other assumptions                that                the Company believes to be reasonable under these circumstances.                Actual                results could differ from those                estimates. |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| K. | Revenue                Recognition - The Company recognizes revenue in accordance with Staff                Accounting Bulletin No. 104, “Revenue Recognition”, or SAB 104, and                Statement of Financial Accounting Standards No. 116, or SFAS 116.                Revenue                sources consist of government grants, government contracts and commercial                development contracts. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| L. | Deferred                  Revenue - Deferred revenue results when payment is received in                  advance of                  revenue being earned. The Company makes a determination as to whether                  the                  revenue has been earned by applying a percentage-of-completion                  analysis to                  compute the need to recognize deferred revenue. The percentage                  of                  completion method is based upon (1) the total income projected                  for the                  project at the time of completion and (2) the expenses incurred                  to date.                  The percentage-of-completion can be measured using the proportion                  of costs                  incurred versus the total estimated cost to complete the                  contract. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| M. | Research                and Development - Research and development expenses consist primarily                of                costs associated with salaries and related expenses for personnel,                costs                of materials used in R&D, costs of facilities and costs incurred in                connection with third-party collaboration efforts. Expenditures relating                to research and development are expensed as                incurred. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| N. | 2006                Equity Incentive Plan - On May 26, 2006, the Company's Board of Directors                adopted the 2006 Equity Incentive Plan (“Plan”) to attract and retain                persons eligible to participate in the Plan, motivate participants                to                achieve long-term Company goals, and further align participants'                interests                with those of the Company's other stockholders. The Plan expires                on May                26, 2016 and the aggregate number of shares of stock which may be                delivered under the Plan shall not exceed 2,000,000 shares. On February                14, 2007, these 2,000,000 shares were registered with the SEC by                filing a                Form S-8 registration statement. For the three-months ended March                31,                2008, there were 719,948 options and 120,000 shares granted under                the                Plan, and as of March 31, 2008 there were 1,424,948 stock options                and                310,000 shares granted under the Plan leaving 265,052 shares of stock                to                be awarded under the Plan.                A                proposed amendment and restatement of the Plan, which among other                things,                reserved an additional 2,000,000 shares, was submitted to the stockholders                for approval at the 2008 Annual                Meeting. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| O. | Stock-Based                Compensation - The FASB issued SFAS No. 123(R) (revised December                2004),                Share Based Payment, which is a revision of SFAS No. 123 Accounting                for                Stock-Based Compensation. SFAS 123(R) requires all share-based payments                to                employees, including grants of employee stock options, to be recognized                in                the statement of operations based on their fair values. The Company                values                employee stock based compensation under the provisions of SFAS 123(R)                and                related interpretations. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                     |   | 2008                  YTD |                       | 2007   |   |
|------------------------------------------|--------|---------------------------|----------------------------|--------|--------|
|                                     |   |                      |                       |   |   |   |   |
| Risk-free                  interest rate |   |                      | 2.61-3.58                  | %      |   | 3.38-5.11 | % |
| Expected                  dividend yield |   |                      | 0                          | %      |   | 0 | % |
| Expected                  life           |   |                      | 5-6                  years |   |   | 2.74-6                  years |   |
| Expected                  volatility     |   |                      | 53.44-80.25                | %      |   | 71.86-76.29 | % |

----

|                                            |   |   |      | Weighted                   |   | Weighted                         |   |
|-------------------------------------------------|--------|--------|-----------|----------------------------|--------|----------------------------------|--------|
|                                            |   |   |      | Average                    |   | Average                          |   |
|                                            |   |   |      | Exercise                   |   | Remaining                        |   |
|                                            |   |   |      | Price                  per |   | Contractual                      |   |
|                                            |   | Shares |      | Share                      |   | Term                  (in Years) |   |
|                                            |   |   |      |                       |   |                             |   |   |   |   |
| Outstanding,                  December 31, 2007 |   |   | 1,011,740 |                       | $      | 7.29                             |   |   |   |   |
| Granted                                         |   |   | 719,948   |                       | $      | 4.89                             |   |   |   |   |
| Exercised                                       |   |   | 11,099    |                       | $      | 1.87                             |   |   |   |   |
| Forfeited,                  Canceled            |   |   | 0         |                       |   | n/a                              |   |   |   |   |
| Outstanding,                  March 31, 2008    |   |   | 1,720,589 |                       | $      | 6.32                             |   |   | 9.09 |   |
| Exercisable,                  March 31, 2008    |   |   | 1,256,747 |                       | $      | 5.75                             |   |   | 9.13 |   |

|                                            |   |         |    | Weighted                   |   | Weighted                         |   |
|-------------------------------------------------|--------|--------------|---------|----------------------------|--------|----------------------------------|--------|
|                                            |   |         |    | Average                    |   | Average                          |   |
|                                            |   |         |    | Exercise                   |   | Remaining                        |   |
|                                            |   |         |    | Price                  per |   | Contractual                      |   |
|                                            |   |  Shares |    | Share                      |   | Term                  (in Years) |   |
|                                            |   |         |    |                       |   |                             |   |   |   |   |
| Outstanding,                  December 31, 2006 |   |         | 483,490 |                       | $      | 2.17                             |   |   |   |   |
| Granted                                         |   |         | 119,500 |                       | $      | 9.09                             |   |   |   |   |
| Exercised                                       |   |         | 20,000  |                       | $      | 2.50                             |   |   |   |   |
| Forfeited,                  Canceled            |   |         | 0       |                       |   | n/a                              |   |   |   |   |
| Outstanding,                  March 31, 2007    |   |         | 582,990 |                       | $      | 3.58                             |   |   | 8.81 |   |
| Exercisable,                  March 31, 2007    |   |         | 301,120 |                       | $      | 3.57                             |   |   | 8.81 |   |

| P. | Net                Loss Per Share - Basic and diluted net loss per share has been computed                using the weighted-average number of shares of common stock outstanding                during the period. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                           |   | Quarter                  Ended  |       |  Quarter                  Ended  |   |
|----------------------------------------------------------------|--------|---------------------------------|------------|---------------------------------------|--------|
|                                                           |   | March                  31, 2008 |       |  March                  31, 2007 |   |
|                                                           |   |                            |       |                                  |   |   |   |
| Net                  loss available to common stockholders     |   | $                               | (4,286,337 | )                                     | $      | (4,106,133 | ) |
| Net                  loss per share, basic and diluted         |   | $                               | (0.33      | )                                     | $      | (0.35 | ) |
| Weighted-average                  shares used in computing net |   |                            | 13,143,686 |                                  |   | 11,854,027 |   |
| loss                  per share, basic and diluted             |   |                            |       |                                  |   |   |   |

----

*warrants*

*options*

| Q. | Concentrations                of Risk - Grant and contract revenue was comprised wholly from grants                and                contracts issued by the federal government and accounted for 82.3%                and                84.4% of total revenue for the three-months ended March 31, 2008                and 2007,                respectively. Although the Company anticipates ongoing federal grant                and                contract revenue, there is no guarantee that this revenue stream                will                continue in the future. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| R. | Foreign                Currency Exchange Rate Risk - The Company has entered into a manufacturing                agreement to produce one of its drug compounds and into an agreement                for                assay development and validation with foreign third parties and is                required to make payments in the foreign currency. As a result, the                Company's financial results could be affected by changes in foreign                currency exchange rates. Currently, the Company's exposure primarily                exists with the Euro and the Great British Pound, or GBP. As of March                31,                2008, the Company is obligated to make payments under the agreements                of                74,350 Euros and 144,323 GBP. The Company has established means to                purchase forward contracts to hedge against this risk. As of March                31,                2008, the Company has no commitments for Euros or GBP. |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| S. | Comprehensive                Income/(Loss) - The Company applies Statement of Financial Accounting                Standards (SFAS) No. 130, “Reporting Comprehensive Income.” SFAS No. 130                requires disclosure of all components of comprehensive income on                an annual                and interim basis. Comprehensive income is defined as the change                in equity                of a business enterprise during a period from transactions and other                events and circumstances from non-owner sources. |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Note      3. Stock Transactions**

----

----

----

**Note      4. Commitments and Contingencies**

----

|   |   |   |                                      | Operating |   |
|--------|--------|--------|-------------------------------------------|-----------|--------|
|   |   |   |                                      | Leases    |   |
|   |   |   |                                      |      |   |   |   |
| 2008   |   |   | Remaining                  Three Quarters |      | $      | 249,539 |   |
| 2009   |   |   |                                      |      |   | 349,782 |   |
| 2010   |   |   |                                      |      |   | 343,657 |   |
| 2011   |   |   |                                      |      |   | 311,803 |   |
| 2012   |   |   |                                      |      |   | 144,375 |   |
|   |   |   |                                      |      | $      | 1,399,156 |   |

|                                            |   |   |      | Weighted                  Average         |   |
|-------------------------------------------------|--------|--------|-----------|-------------------------------------------|--------|
|                                            |   | Shares |      | Exercise                  Price Per Share |   |
|                                            |   |   |      |                                      |   |   |   |
| Outstanding,                  December 31, 2007 |   |   | 1,011,740 |                                      | $      | 7.29 |   |
| Granted                                         |   |   | 719,948   |                                      | $      | 4.89 |   |
| Exercised                                       |   |   | 11,099    |                                      | $      | 1.87 |   |
| Forfeited,                  Canceled            |   |   | 0         |                                      |   | n/a |   |
| Outstanding,                  March 31, 2008    |   |   | 1,720,589 |                                      | $      | 6.32 |   |

|                                            |   |   |    | Weighted                  Average         |   |
|-------------------------------------------------|--------|--------|---------|-------------------------------------------|--------|
|                                            |   | Shares |    | Exercise                  Price Per Share |   |
|                                            |   |   |    |                                      |   |   |   |
| Outstanding,                  December 31, 2006 |   |   | 483,490 |                                      | $      | 2.17 |   |
| Granted                                         |   |   | 119,500 |                                      | $      | 9.09 |   |
| Exercised                                       |   |   | 20,000  |                                      | $      | 2.50 |   |
| Forfeited,                  Canceled            |   |   | 0       |                                      |   | n/a |   |
| Outstanding,                  March 31, 2007    |   |   | 582,990 |                                      | $      | 3.58 |   |

----

|                                            |   |     |      | Weighted                  Average         |   |
|-------------------------------------------------|--------|----------|-----------|-------------------------------------------|--------|
|                                            |   | Warrants |      | Exercise                  Price Per Share |   |
|                                            |   |     |      |                                      |   |   |   |
| Outstanding,                  December 31, 2007 |   |     | 3,453,268 |                                      | $      | 8.86 |   |
| Granted                                         |   |     | 0         |                                      |   | n/a |   |
| Exercised                                       |   |     | 0         |                                      |   | n/a |   |
| Forfeited,                  Canceled            |   |     | 0         |                                      |   | n/a |   |
| Outstanding,                  March 31, 2008    |   |     | 3,453,268 |                                      | $      | 8.86 |   |

|                                            |   |     |      | Weighted                  Average         |   |
|-------------------------------------------------|--------|----------|-----------|-------------------------------------------|--------|
|                                            |   | Warrants |      | Exercise                  Price Per Share |   |
|                                            |   |     |      |                                      |   |   |   |
| Outstanding,                  December 31, 2006 |   |     | 814,424   |                                      | $      | 3.36 |   |
| Granted                                         |   |     | 2,632,602 |                                      | $      | 10.42 |   |
| Exercised                                       |   |     | 44,205    |                                      | $      | 2.00 |   |
| Forfeited,                  Canceled            |   |     | -         |                                      |   | n/a |   |
| Outstanding,                  March 31, 2007    |   |     | 3,402,821 |                                      | $      | 8.84 |   |

**Note      5. Subsequent Events**

----

**Item      2: Management's Discussion and Analysis of Financial Condition and Results      of      Operations**

*This      management's discussion and analysis of financial condition and results of      operations and other portions of this filing contain forward-looking information      that involves risks and uncertainties. Our actual results could differ      materially from those anticipated by the forward-looking information. Factors      that may cause such differences include, but are not limited to, availability      and cost of financial resources, results of our *
*research      and development, or R&D*
*,*
*      efforts and clinical trials, product demand, market acceptance and other factors      discussed in the Company's other SEC filings under the heading “Risk      Factors*
*.*
*”*
*      This management's discussion and analysis of financial condition and results      of      operations should be read in conjunction with our financial statements and      the      related notes included elsewhere in this filing and in our Annual Report on      Form      10-K for the year ended December 31, 2007.*

**OVERVIEW**

***Technology***

| ·   | Protectans                - modified factors of microbes and tumors that protect cells from                apoptosis, and which therefore have a broad spectrum of potential                applications. The potential applications include both non-medical                applications such as protection from exposure to radiation, whether                as a                result of military or terrorist action or as a result of a nuclear                accident, as well as medical applications such as reducing cancer                treatment toxicities. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Curaxins                - small molecules designed to kill tumor cells by simultaneously                targeting                two regulators of apoptosis. Initial test results indicate that curaxins                can be effective against a number of malignancies, including renal                cell                carcinoma, or RCC (a highly fatal form of kidney cancer), soft-tissue                sarcoma, and hormone-refractory prostate                cancer. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**STRATEGIES      AND OBJECTIVES **

| ·   | *Aggressively                working towards the commercialization of Protectan                CBLB502*.                Our most advanced drug candidate, Protectan CBLB502, offers the potential                to protect normal tissues against exposure to radiation. Because                of the                potential military and defense implications of such a drug, the normally                lengthy FDA approval process for these non-medical applications is                substantially abbreviated resulting in a large cost savings to us.                We                anticipate having a developed drug submitted for FDA approval for                these                non-medical applications within 18-30 months. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Leveraging                our relationship with leading research and clinical development                institutions.*                The Cleveland Clinic Foundation, one of the top research medical                facilities in the world, is one of our co-founders. In addition to                providing us with drug leads and technologies, the Cleveland Clinic                will                share valuable expertise with us as clinical trials are performed                on our                drug candidates. In January 2007, we entered into a strategic research                partnership with Roswell Park Cancer Institute, or RPCI, in Buffalo,                New                York. This partnership will enhance the speed and efficiency of our                clinical research and provide us with access to the state-of-the-art                clinical development facilities of a globally recognized cancer research                center. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Utilizing                governmental initiatives to target our markets**and                help fund our programs**.*                Our focus on drug candidates such as Protectan CBLB502, which has                applications that have been deemed useful for military and defense                purposes, provides us with a built-in market for our drug                candidates,                as well as an additional resource for funding.                This enables us to invest less in costly retail and marketing resources.                In an effort to improve our responsiveness to military and defense                needs,                we have established a collaborative relationship with the Armed Forces                Radiobiology Research Institute. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Utilizing                other strategic relationships.*                We have collaborative relationships with other leading organizations                that                enhance our drug development and marketing efforts. For example,                one of                our founders, with whom we maintain a strategic partnership, is ChemBridge                Corporation. Known for its medicinal chemistry expertise and synthetic                capabilities, ChemBridge provides valuable resources to our drug                development research. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PRODUCTS      IN DEVELOPMENT**

**Protectans**

***Protectan      CBLB502***

*Salmonella      typhimurium *
** **

*Non-medical*
* *
*Applications      *

----

*Medical      Applications*

----

***Protectan      CBLB612***

**Curaxins**

----

**Curaxin      CBLC102**

**Other      Curaxins**

**FINANCIAL      OVERVIEW**

----

** **

** **

**Critical      Accounting Policies and the Use of Estimates**

----

***Revenue      Recognition***

***R&D      Expenses***

***Intellectual      Property Related Costs***

----

***Stock-based      Compensation***

**Impact      of Recently Issued Accounting Pronouncements**

----

**Results      of Operations**

|                                           |   | **Quarter**           |       |  **Quarter**           |   |  **Year                  Ended**   |   |  **Year                  Ended**   |        |
|------------------------------------------------|--------|-----------------------|------------|-----------------------------|--------|-----------------------------------------|--------|-----------------------------------------|-------------|
|                                           |   | **Ended**             |       |  **Ended**             |   |  **December                  31,** |   |  **December                  31,** |        |
|                                           |   | **31-Mar-08**         |       |  **31-Mar-07**         |   |  **2007**                          |   |  **2006**                          |        |
|                                           |   |  **(unaudited)** |       |   **(unaudited)** |   |                               |   |                               |        |
|                                           |   |                  |       |                        |   |                                    |   |                                    |        |   |   |   |   |
| Revenues                                       |   | $                     | 676,324    |                        | $      | 321,445                                 |   | $                                       | 2,018,558   |   | $ | 1,708,214 |   |
| Operating                  expenses            |   |                  | 4,744,500  |                        |   | 4,522,919                               |   |                                    | 27,960,590  |   |   | 9,126,315 |   |
| Other                  expense (income)        |   |                  | 47,002     |                        |   | -                                       |   |                                    | 2,058,236   |   |   | - |   |
|                                           |   |                  |       |                        |   |                                    |   |                                    |        |   |   |   |   |
| Net                  interest expense (income) |   |                  | (145,127   | )                           |   | (95,341                                 | )      |                                    | (1,003,766  | ) |   | (195,457 | ) |
|                                           |   |                  |       |                        |   |                                    |   |                                    |        |   |   |   |   |
| Net                  income (loss)             |   | $                     | (3,970,051 | )                           | $      | (4,106,133                              | )      | $                                       | (26,996,502 | ) | $ | (7,222,644 | ) |

**Three      Months Ended March 31, 2008 Compared to Three Months Ended March 31,      2007**

***Revenue***

|                               |   |        |                                          |       |   |                           |   | **Revenue**                    |            |  **Revenue**                    |   | **Revenue** |   |
|------------------------------------|--------|-------------|-----------------------------------------------|------------|--------|--------------------------------|--------|--------------------------------|-----------------|--------------------------------------|--------|-------------|--------|
|                               |   |        |                                          |       |   |                           |   | **2008**                       |            |  **2007**                       |   | **2007**    |   |
|                               |   |        |                                          |       |   | **Period                  of** |   | **(thru**                      |            |  **(thru**                      |   |        |   |
| **Agency**                         |   | **Program** |                                          | **Amount** |   | **Performance**                |   | **March                  31)** |            |  **March                  31)** |   |        |   |
|                               |   |        |                                          |       |   |                           |   | **(unaudited)**                |            |  **(unaudited)**                |   |        |   |
|                               |   |        |                                          |       |   |                           |   |                           |            |                                 |   |        |   |   |   |   |   |   |   |
| **DoD**                            |   |        | DTRA                  Contract                |       | $      | 1,263,836                      |   |                           | 03/2007-02/2009 |                                 | $      | 323,826     |   | $ | - |   | $ | 466,322 |   |
| **NY                  State/RPCI** |   |        | Sponsored                  Research Agreement |       | $      | 3,000,000                      |   |                           | 03/2007-02/2012 |                                 | $      | 90,749      |   | $ | - |   | $ | 329,390 |   |
| **NIH**                            |   |        | Phase                  II NIH SBIR program    |       | $      | 750,000                        |   |                           | 07/2006-06/2008 |                                 | $      | 77,971      |   | $ | $140,593 |   | $ | 459,621 |   |
| **NIH**                            |   |        | NCI                  Contract                 |       | $      | 750,000                        |   |                           | 09/2006-08/2008 |                                 | $      | 63,778      |   | $ | 130,852 |   | $ | 440,028 |   |
| **NASA**                           |   |        | Phase                  I NASA STTR program    |       | $      | 100,000                        |   |                           | 01/2006-01/2007 |                                 | $      | -           |   | $ | - |   | $ | 33,197 |   |
| Totals                             |   |        |                                          |       |   |                           |   |                           |            |                                 | $      | 556,324     |   | $ | 271,445 |   | $ | 1,728,558 |   |

----

***Operating      Expenses***

**Year      Ended December 31, 2007 Compared to Year Ended December 31,      2006**

***Revenue***

----

***Operating      Expenses***

**Liquidity      and Capital Resources**

----

| File                  IND application for Protectan CBLB502 (completed February                  2008)           | $      | 50,000    |
|------------------------------------------------------------------------------------------------------------------|--------|-----------|
|                                                                                                             |   |      |
| Complete                  Phase I studies for Protectan CBLB502                                                  | $      | 100,000   |
|                                                                                                             |   |      |
| File                  NDA application for Protectan CBLB502                                                      | $      | 350,000   |
|                                                                                                             |   |      |
| Receive                  regulatory approval to sell Protectan CBLB502                                           | $      | 1,000,000 |
|                                                                                                             |   |      |
| File                  IND application for Curaxin CBLC102 (completed May 2006)                                   | $      | 50,000    |
|                                                                                                             |   |      |
| Commence                  Phase II clinical trials for Curaxin CBLC102 (completed January                  2007) | $      | 250,000   |
|                                                                                                             |   |      |
| Commence                  Phase III clinical trials for Curaxin CBLC102                                          | $      | 700,000   |
|                                                                                                             |   |      |
| File                  NDA application for Curaxin CBLC102                                                        | $      | 1,500,000 |
|                                                                                                             |   |      |
| Receive                  regulatory approval to sell Curaxin CBLC102                                             | $      | 4,000,000 |

----

***Impact      of Inflation***

***Impact      of Exchange Rate Fluctuations***

***Off-Balance      Sheet Arrangements***

----

**Item      3: **
**Quantitative      and Qualitative Disclosures About Market Risk**

**Item      4: **
**Controls      and Procedures**

**Effectiveness      of Disclosure**

**Changes      in Internal Control over Financial Reporting**

----

**PART      II **
**-      **
**O**
**ther      Information**

**Item      1. Legal Proceedings**

**Item      2. Unregistered Sales of Equity Securities and Use of      Proceeds**

**Item      3. Defaults Upon Senior Securities**

**Item      4. Submission of Matters to a Vote of Security Holders**

**Item      5. Other Information**

**Item      6. Exhibits**

| **Exhibit****Number** |   | **Description                of Document**                                                                                                                               |
|-----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |   |                                                                                                                                                                     |
| 31.1                  |   | Certification                of Michael Fonstein, Chief Executive Officer, pursuant to Section                302 of                the Sarbanes Oxley Act of 2002.      |
|                  |   |                                                                                                                                                                     |
| 31.2                  |   | Certification                of John A. Marhofer, Jr., Chief Financial Officer, pursuant to Section                302                of the Sarbanes Oxley Act of 2002. |
|                  |   |                                                                                                                                                                     |
| 32.1                  |   | Certification                Pursuant To 18 U.S.C. Section 1350                                                                                                          |

----

**Signatures**

|   |   |   |
|--------|--------|--------|

|                               |                                                                                                                   |                                     |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------|------------------------------------------|
|                               | CLEVELAND                BIOLABS, INC.                                                                                 |
|                          |                                                                                                              |                                |
| Dated:                May 14, 2008 | By:                                                                                                                    | /s/                MICHAEL FONSTEIN.     |
|                               | Michael FonsteinChief                Executive Officer (Principal                Executive Officer)     |
|                               |                                                                                                                   |
|                          |                                                                                                              |                                |
| Dated:                May 14, 2008 | By:                                                                                                                    | /s/                JOHN A. MARHOFER, JR. |
|                               | John                A. Marhofer, Jr.Chief                Financial Officer(Principal                Financial Officer) |