UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                            FORM 10-K
 (Mark One)

[X]  ANNUAL  REPORT  PURSUANT  TO SECTION  13  OR  15(d)  OF  THE
     SECURITIES EXCHANGE ACT OF 1934

           For the fiscal year ended December 31, 2008

                               or

[ ]  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 0-15888


                      IGENE Biotechnology, Inc.
   _________________________________________________________
    (Exact Name of Registrant as Specified in Its Charter)

            Maryland                        52-1230461
___________________________________	   ____________________________
(State or other jurisdiction 		     (I.R.S. Employer
 of incorporation or  organization)	      Identification No.)


9110 Red Branch Road, Columbia, Maryland 			    21045
______________________________________________		_____________
(Address of principal executive offices 			 (Zip Code)

                           (410) 997-2599
        ___________________________________________________
       (Registrant's telephone number, including area code)


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

  Title of Each Class       Name of Each Exchange on Which Registered
  ___________________       _________________________________________
          None                                None

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

             Common Stock (par value $.01 per share)
             _______________________________________
                        (Title of class)

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

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

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

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

      Indicate  by check mark whether the registrant is  a  large
accelerated  filer,  an accelerated filer, or  a  non-accelerated
filer,  or a smaller reporting company.  See definition of "large
accelerated  filer," "accelerated filer" and  "smaller  reporting
company" in Rule 12b-2 of the Exchange Act.  (Check One):

   Large Accelerated Filer [ ]      Accelerated Filer [ ]

   Non-Accelerated Filer   [ ]      Smaller reporting company [X]

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

     State  the  aggregate market value of the  voting  and  non-
voting common equity held by non-affiliates computed by reference
to  the  price at which the common equity was last sold,  or  the
average bid and asked price of such common equity, as of the last
business day of the registrant's most recently completed year end
$4,014,363 as of March 30, 2009.
_______________________________

     Indicate  the number of shares outstanding of  each  of  the
issuer's  classes  of common stock, as of the latest  practicable
date.    As of March 24, 2009 there were 1,518,503,841 shares  of
         ________________________________________________________
the issuer's common stock outstanding.
______________________________________

<PAGE>

CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR PROVISIONS"  OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995:

EXCEPT  FOR  HISTORICAL  FACTS, ALL  MATTERS  DISCUSSED  IN  THIS
REPORT, WHICH ARE FORWARD-LOOKING, INVOLVE A HIGH DEGREE OF  RISK
AND  UNCERTAINTY.  CERTAIN STATEMENTS IN THIS  REPORT  SET  FORTH
MANAGEMENT'S   INTENTIONS,   PLANS,  BELIEFS,   EXPECTATIONS   OR
PREDICTIONS  OF THE FUTURE BASED ON CURRENT FACTS  AND  ANALYSES.
WHEN   WE   USE  THE  WORDS  "BELIEVE,"  "EXPECT,"  "ANTICIPATE,"
"ESTIMATE," "TARGET," "INTEND" OR SIMILAR EXPRESSIONS, WE  INTEND
TO  IDENTIFY  FORWARD-LOOKING STATEMENTS.  YOU SHOULD  NOT  PLACE
UNDUE  RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH  SPEAK
ONLY  AS  OF THE DATE OF THIS REPORT.  ACTUAL RESULTS MAY  DIFFER
MATERIALLY  FROM  THOSE INDICATED IN SUCH STATEMENTS,  DUE  TO  A
VARIETY  OF FACTORS, RISKS AND UNCERTAINTIES INCLUDING,  BUT  NOT
LIMITED TO, COMPETITIVE PRESSURES FROM OTHER COMPANIES AND WITHIN
THE  BIOTECH  INDUSTRY,  ECONOMIC  CONDITIONS  IN  THE  COMPANY'S
PRIMARY  MARKETS,  EXCHANGE  RATE FLUCTUATIONS,  REDUCED  PRODUCT
DEMAND,  INCREASED  COMPETITION, INABILITY  TO  PRODUCE  REQUIRED
CAPACITY, UNAVAILABILITY OF FINANCING, GOVERNMENT ACTION, WEATHER
CONDITIONS  AND OTHER UNCERTAINTIES, INCLUDING THOSE DETAILED  IN
"RISK  FACTORS"  THAT  ARE INCLUDED FROM  TIME  TO  TIME  IN  THE
COMPANY'S SECURITIES AND EXCHANGE COMMISSION FILINGS.  IF ONE  OR
MORE  OF  THESE  RISKS OR UNCERTAINTIES MATERIALIZE,  OR  IF  THE
UNDERLYING  ASSUMPTIONS PROVE INCORRECT, OUR ACTUAL  RESULTS  MAY
DIFFER MATERIALLY FROM THOSE EXPECTED OR PROJECTED.  WE ASSUME NO
OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS IN  ORDER  TO
REFLECT  ANY EVENT OR CIRCUMSTANCE THAT MAY ARISE AFTER THE  DATE
OF  THIS REPORT, OTHER THAN AS MAY BE REQUIRED BY APPLICABLE  LAW
OR REGULATION.

                             PART I
ITEM 1.   BUSINESS

General

     IGENE  Biotechnology, Inc. ("Igene" or  the  "Company")  was
incorporated  in the State of Maryland on October  27,  1981,  to
develop,  produce  and  market value-added specialty  biochemical
products.   Igene  is  a  supplier  of  natural  astaxanthin,  an
essential nutrient in different feed applications and a source of
pigment  for  coloring  farmed salmon species.   Igene's  natural
astaxanthin  product is marketed as AstaXin(R) and is  made  from
yeast,  and  used  as  a source of pigment  for  coloring  farmed
salmonids.   Igene is also venturing to supply astaxanthin  as  a
nutraceutical  ingredient.   Igene is  focused  on  research  and
development  in  the areas of fermentation technology,  nutrition
and  health  and  the  marketing  of  products  and  applications
worldwide.

     Igene  has  devoted  its  resources to  the  development  of
proprietary  processes  to  convert  selected  agricultural   raw
materials  or  feedstocks  into  commercially  useful  and   cost
effective  products for the food, feed, flavor  and  agrochemical
industries.   In  developing these processes and products,  Igene
has relied on the expertise and skills of its in-house scientific
staff and, for special projects, various consultants.

     In  2000,  Igene formed a wholly-owned subsidiary in  Chile,
Igene  Chile  Comercial, Ltda.  The subsidiary has  a  sales  and
customer  service office in Puerto Varas, Chile,  and  a  product
warehouse in Puerto Montt, Chile.

     In  an  effort to develop a dependable source of production,
on March 19, 2003, Tate & Lyle PLC ("Tate") and Igene announced a
50:50  joint  venture  to produce AstaXin(R)  for the aquaculture
industry,  which we refer to as the "Joint Venture."   Production
utilized Tate's fermentation capability together with the  unique
technology  developed  by Igene. Part of Tate's  existing  citric
acid  facility located in Selby, England, was modified to include
the   production   of   this  product.   Tate's   investment   of
approximately $24,600,000 included certain of its facility assets
that  were  used in citric acid production.  Igene's contribution
to the Joint Venture, including its intellectual property and its
subsidiary  in  Chile, was valued by the parties as approximately
equal  to Tate's contribution.  For accounting purposes,  Igene's
contribution was valued at zero.

                              -3-

     On  October  31,  2007,  Igene  and  Tate  entered  into   a
Separation  Agreement  pursuant to which the  Joint  Venture  was
terminated.  As part of the Separation Agreement, Igene  sold  to
Tate  its 50% interest in the Joint Venture and the Joint Venture
sold  to  Igene its intellectual property, inventory and  certain
assets and lab equipment utilized by the Joint Venture as well as
Igene's subsidiary in Chile.   The purchase price paid by Tate to
Igene  for its 50% interest in the Joint Venture was 50%  of  the
Joint Venture's net working capital.  The purchase price paid  by
Igene  for the inventory was an amount equal to 50% of the  Joint
Venture's   net  working  capital,  the  assumption  of   various
liabilities  and the current market price of the inventory,  less
specified amounts.  In addition, Igene agreed to pay to  Tate  an
amount  equal to 5% of Igene's gross revenues from  the  sale  of
astaxanthin  up to a maximum of $5,000,000.  Tate  agreed  for  a
period of five years not to engage in the astaxanthin business.

     On  January  8,  2009, Igene entered into an agreement  with
Archer-Daniels-Midland  Company ("ADM")  pursuant  to  which  the
Company  and  ADM  formed  a  joint venture  (the  "ADM  JV")  to
manufacture   and   sell  astaxanthin  and  derivative   products
throughout  the world.  Each of the Company and  ADM  has  a  50%
ownership interest in the ADM JV and has equal representation  on
the Board of Managers of the ADM JV.

Government Regulation

     The  manufacturing  and marketing of most  of  the  products
Igene  has developed are, and will likely continue to be, subject
to  regulation  by various governmental agencies  in  the  United
States,  including the Food and Drug Administration ("FDA"),  the
Department  of Agriculture ("USDA"), the Environmental Protection
Agency  ("EPA"),  and  comparable agencies  in  other  countries.
Igene,  as a matter of policy, requires that its products conform
to  current  Good  Manufacturing Practices ("GMPs")  (as  defined
under  the Federal Food, Drug and Cosmetic Act and the rules  and
regulations thereunder) and Igene believes all of its products so
conform.  The extent of any adverse governmental regulation  that
might  arise  from  future administrative or legislative  action,
including rules and regulations pertaining to the process of GRAS
(Generally Recognized as Safe) affirmations, cannot be predicted.

     In  a  notice published in the Federal Register on  July  6,
2000,  the  FDA  announced the amendment of  its  color  additive
regulations to provide for the safe use of Phaffia yeast, such as
that in Igene's  product, AstaXin(R),  as  a  color  additive  in
aquaculture feeds.  This ruling, which became effective August 8,
2000, allows Igene to market AstaXin(R) for aquaculture feeds and
fish  produced  in,  or imported into, the United  States.   This
ruling is available to the public in the Federal Register.  Igene
has  also  previously  obtained approval for  AstaXin(R) from the
Canadian  Food  Inspection Agency ("CFIA").   Additional  foreign
approval  applications  for AstaXin(R) have  been granted in  the
European Union.

     In  July 2000, Igene also obtained clearance from the FDA to
market  AstaXin(R)  as  a human dietary supplement in the  United
States.     Scientific   literature   indicates   that    natural
astaxanthin,  such  as  that  in Igene's product, AstaXin(R), may
offer   health  benefits  for  humans  due  to  its   antioxidant
properties.  The  FDA  notification  and  Igene's submissions are
available to the public from the FDA.  Comparable agencies in the
European  Union  and  other  foreign  countries  may  have  their
own   additional  registration   procedures.     No    additional
applications for approval of  AstaXin(R)  as  a human nutritional
supplement  have  yet  been submitted.

     Igene  has not incurred and does not anticipate any material
environmental compliance costs.

Research and Development

     As  of  December 31, 2008, Igene had expended  approximately
$18,919,000  on research and development since its  inception  on
October  27,  1981.   The  costs  listed  below  for  2007   were
reimbursed by the Joint Venture through October 31, 2007.   Sales
of  astaxanthin (through Igene and the Joint Venture) resulted in
revenues  of $57,000,000 as of December 31, 2008, $39,500,000  of
which were realized through the Joint Venture.   From November 1,
2007,  through December 31, 2008, $9,931,000 of this revenue  was
recorded  on  the books of Igene.  Igene will continue  to  incur
research and development costs in connection with improvements in
its  existing processes and products, but it does not  anticipate
development of new processes and products in 2009.

      Research and development expenditures for each of the  last
two years are as follows:

     2008   $ 1,655,908
     2007   $   983,610


                              -4-

     Igene's research and development activities have resulted in
the development of  processes to produce the  product  AstaXin(R)
hereinafter discussed.

Commercial Products

     AstaXin(R)

     AstaXin(R) is  Igene's  registered  trademark  for its dried
yeast product made from  a proprietary strain of yeast  developed
by Igene.    AstaXin(R)  is  a  natural source of astaxanthin,  a
pigment which imparts the characteristic red color  to  the flesh
of salmon, trout, prawns and certain  other  types  of  fish  and
shellfish.   In  the  ocean, salmon and trout obtain  astaxanthin
from  krill  and other planktonic crustaceans in their  diet.   A
krill  and  crustacean diet would be prohibitively expensive  for
farm-raised salmonids.  Without the addition of astaxanthin,  the
flesh  of  such  fish is a pale, off-white color, which  is  less
appealing  to  consumers  expecting the  characteristic  "salmon-
colored"  fish.  Fish feeding trials in Europe, Asia,  and  North
and South America have demonstrated the efficacy of AstaXin(R) in
pigmenting fish.  Igene derived revenue during 2008 from sales of
AstaXin(R),  the majority of which were to fish producers  in the
aquaculture  industry  in the European Union,  Japan,  Chile  and
Canada,  and marketing  efforts for AstaXin(R) are  intended  for
Norway.   Marketing efforts are through Igene personnel  to  both
farmers and feed manufacturers.

     Based  on  estimates of worldwide production of farm  raised
salmon,  Igene  believes the market for astaxanthin  as  a  color
additive  in salmon feed exceeds $200,000,000 per year worldwide,
which   would   require  approximately  10,000  metric  tons   of
AstaXin(R) to  serve 100% of the market. A single competitor, who
produces  a  chemically  synthesized  product, presently controls
more than  80% of  the  world market for astaxanthin as a pigment
for aquaculture.

     During   2001,  Igene  began  investigating  other  possible
commercial  uses of astaxanthin, including its application  as  a
human  nutritional  supplement.   Igene  has  formulated  natural
astaxanthin as a  super-antioxidant, AstaXin(R),  for  the  North
American dietary supplement market.  Antioxidants are one of  the
largest  product categories in the health and nutrition industry.
Attempts to pursue this business have only been minimal.

Patents and Trademarks

     It  is  Igene's policy to protect its intellectual  property
rights by a variety of means, including applying for patents  and
trademarks  in  the United States and in other countries.   Igene
also  relies  upon  trade  secrets and improvements,  un-patented
proprietary  know-how and continuing technological innovation  to
develop  and  maintain  its competitive  position.  Igene  places
restrictions in its agreements with third parties with respect to
the  use  and  disclosure  of any of its proprietary  technology.
Igene  also  has  internal  nondisclosure  safeguards,  including
confidentiality agreements with employees and consultants.

     All  patents and trademarks are carefully reviewed and those
with  no  foreseeable commercial value are abandoned to eliminate
costly  maintenance fees.  Patents and trademarks  on  technology
and products with recognized commercial value, and which Igene is
currently  maintaining,  including  those  for  AstaXin(R),  have
various remaining lives ranging from 1 to 22 years.

Competition

     Competitors in the biotechnology field in the United  States
and   elsewhere   are  numerous  and  include   major   chemical,
pharmaceutical  and  food  companies,  as  well  as   specialized
biotechnology companies.  Competition can be expected to increase
as  small  biotechnology companies continue to  be  purchased  by
major  multinational  corporations  with  substantial  resources.
Competition is also expected to increase with the introduction of
more   diverse   products  developed  by   biotechnology   firms,
increasing  research cooperation among academic institutions  and
large  corporations, and continued government funding of research
and  development activities in the biotechnology field,  both  in
the   United  States  and  overseas.   Unlike  the  majority   of
biotechnology   companies,   which   are   developing    products
principally  for the pharmaceutical industry, Igene  has  focused
its own activities on the development of proprietary products for
use in aquaculture and nutritional supplement industries.  In the
future, however, competitors may offer products, that, by  reason
of   price,  or  efficacy,  or  more  substantial  resources  for
technology  advances,  may be superior  to  Igene's  existing  or
future products.

                              -5-

     A  single  large pharmaceutical company presently  dominates
the  market  for  astaxanthin pigment for  aquaculture  in  which
Igene's  product,  AstaXin(R),  is  presently  marketed and sold.
Igene  believes  that AstaXin(R), which is made from yeast,  will
compete  with  this  dominant producer, and other producers whose
products  are   chemically  synthesized,  based  on  its  use  of
natural ingredients.  As consumers and producers of  fish  become
more  aware  of other alternatives, Igene believes that they will
desire natural ingredients, such as those in AstaXin(R).

     Several  companies  are  also known  to  be  developing  and
marketing  other  natural astaxanthin products.   Some  of  these
companies'  products are made from algae, while others  are  made
from yeast.  Igene  believes that AstaXin(R)  will  compete  with
other  companies' astaxanthin products which are made from algae,
due to  Igene's  higher  production capacity and lower production
costs, but can  provide  no  assurances in  that  regard.   Igene
also  believes   that   AstaXin(R)   will   compete   with  other
companies' astaxanthin products  which are also  made  from yeast
due  to Igene's  proprietary process to disrupt yeast cell walls,
which,  as   studies  have  shown,  makes AstaXin(R) more readily
absorbed  by fish.

     Igene  is  also  beginning to explore the  possible  use  of
AstaXin(R) as  a  human nutritional supplement.   This  market is
attractive  because of potentially higher profit  margins.  Other
companies   are  known  to  also  be  developing  and   marketing
astaxanthin products for the human nutritional supplement market.
Igene  cannot  yet predict how competitive it would  be  in  this
market.

     On  January  8,  2009, Igene entered into an agreement  with
Archer-Daniels-Midland  Company ("ADM")  pursuant  to  which  the
Company  and  ADM  formed  a  joint venture  (the  "ADM  JV")  to
manufacture   and   sell  astaxanthin  and  derivative   products
throughout  the world.  Each of the Company and  ADM  has  a  50%
ownership interest in the ADM JV and has equal representation  on
the  Board  of Managers of the ADM JV.  It is hoped that  Igene's
technology joined with ADM manufacturing will improve their joint
position in the market.

Sources and Availability of Raw Materials

     Raw materials used in the manufacture of AstaXin(R)  consist
principally of agricultural commodities widely available in world
markets  from  many suppliers, which may be used interchangeably.
We  do  not anticipate material price fluctuations or changes  in
availability in these raw materials in the near future,  but  can
provide no assurances in that regard.

Employees

     At  December  31,  2008, Igene had 18  full-time  employees.
Five  full-time employees are in administration and/or marketing,
while  the remainder are engaged in research, process development
and  support of manufacturing activities.  Fifteen employees  are
based  in  the  U.S.  and three are based in  Chile.  Igene  also
utilizes various consultants on an as-needed or short-term basis.

     None  of Igene's employees are represented by a labor  union
and  Igene has experienced no work stoppages.  Igene believes its
relations with its employees are satisfactory.

ITEM 1A.  RISK FACTORS

     Igene is a smaller reporting company as defined by Rule 12b-
2  of  the  Securities  Exchange Act of  1934,  as  amended  (the
"Exchange  Act")  and is not required to provide the  information
required under this item.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

     Not applicable.

ITEM 2.   PROPERTIES

     Igene leases approximately 8,500 square feet of space in the
Oakland  Ridge Industrial Park located at 9110 Red  Branch  Road,
Columbia,  Maryland.   Igene occupies the  space  under  a  lease
extension expiring on January 31, 2011.  The approximate  current
annual  rental expense is $125,000.  Approximately  2,000  square
feet  of  this  space  is used for executive  and  administrative
offices  and approximately 2,500 square feet is used for research
and  development activities. The remaining 4,000 square  feet  of
space  is  used for Igene's intermediate-stage or scale-up  pilot
plant facility.

                               -6-

     Igene  leases approximately 220 square feet of office  space
in Puerto Varas, Chile to conduct marketing and technical support
activities  by  its  full-time technical  representatives.   This
lease  renews annually in December of each year unless terminated
by prior notice. Igene also leases warehouse space on a month-to-
month basis as needed for product storage in Chile.

     Igene  currently  owns  or leases sufficient  equipment  and
facilities for its research operations and all of this  equipment
is  in  satisfactory condition and is adequately insured.   There
are  no  current  plans for improvement of  this  property.    If
demand for Igene's product continues to increase, Igene plans  to
lease additional warehouse space as needed in Chile.

ITEM 3.   LEGAL PROCEEDINGS

     There  are  no material pending legal proceedings  to  which
Igene  is  a  party  or  to which any of Igene's  properties  are
subject;  nor  are  there  material  proceedings  known   to   be
contemplated  by  any  governmental  authority;  nor  are   there
material proceedings known to Igene, pending or contemplated,  in
which  any  of  Igene's directors, officers,  affiliates  or  any
principal  security  holders, or any  associate  of  any  of  the
foregoing, is a party or has an interest adverse to us.

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

     Igene's  Annual Meeting of Stockholders was held on November
3, 2008.   At the Annual Meeting, the five nominees for director,
all of  whom  were then-current directors up for reelection, were
reelected  as  the  directors  for a one year term.  The election
results are as follows:

<TABLE>
<CAPTION>
                                  Votes          Against or     Votes        Non-
                                  For            Withheld       Abstained    Votes
                                  ___________    __________     _________    _____
     <S>                          <C>            <C>            <C>          <C>
     Election of Directors
          Stephen F. Hiu          97,356,890     52,630         ---           ---
          Thomas L. Kempner       97,376,890     32,660         ---           ---
          Michael G. Kimelman     97,384,811     24,709         ---           ---
          Sidney R. Knafel        97,376,890     32,630         ---           ---
          Patrick F. Monahan      97,376,890     32,630         ---           ---

</TABLE>

     An  amendment  to  Igene's  Articles  of  Incorporation  was
approved to increase the number of authorized  shares  of  common
stock  from  750,000,000  to 3,000,000,000.  The election results
are as follows:

<TABLE>
<CAPTION>
                                  Votes          Against or     Votes        Non-
                                  For            Withheld       Abstained    Votes
                                  ___________    __________     _________    _____
                                  <S>            <C>            <C>          <C>

                                  96,199,547     1,207,472      2,590         ---

</TABLE>

     An amendment to the Company's  2001 Stock Incentive Plan was
approved to increase the number of shares available for incentive
awards from 55,000,000 to 300,000,000.   The election results are
as follows:

<TABLE>
<CAPTION>
                                  Votes          Against or     Votes        Non-
                                  For            Withheld       Abstained    Votes
                                  ___________    __________     _________    _____
                                  <S>            <C>            <C>          <C>
                                  74,523,367     1,342,161      2,500        ---

</TABLE>

                                 -7-

                               PART II


ITEM 5.   MARKET   FOR   REGISTRANT'S  COMMON   EQUITY,   RELATED
          STOCKHOLDER  MATTERS  AND ISSUER  PURCHASES  OF  EQUITY
          SECURITIES

Common Stock

     Commencing  on or about June 12, 1989, Igene's common  stock
began quotation on the over-the-counter market on a limited basis
and  is  quoted  on Pink Sheets.  The following table  shows,  by
calendar  quarter,  the range of representative  bid  prices  for
Igene's common stock for 2008 and 2007.

<TABLE>
<CAPTION>

          Calendar Quarter                 High         Low
          ________________                 _________   _________
          <S>                              <C>         <C>
 2008:    First Quarter                    $  .0180    $  .0130
          Second Quarter                   $  .0150    $  .0060
          Third Quarter                    $  .0130    $  .0060
          Fourth Quarter                   $  .0120    $  .0020

 2007:    First Quarter                    $  .0250    $  .0200
          Second Quarter                   $  .0500    $  .0200
          Third Quarter                    $  .0350    $  .0200
          Fourth Quarter                   $  .0230    $  .0100

</TABLE>

     Igene  obtained the above information through  Pink  Sheets,
LLC, a national quotation bureau.  Such quotations reflect inter-
dealer  prices, without retail mark-up, mark-down, or commission,
and  may not represent actual transactions.  The above quotations
do not reflect the "asking price" quotations of the stock.

     The  approximate number of record holders of Igene's  common
stock  as of March 31, 2009, was 250.  As of March 31, 2009,  the
high  bid and low offer prices for the common stock, as shown  on
Pink Sheets were $.015 and $.010, respectively.

Dividend Policy

     When  and  if  funds are legally available for such  payment
under  statutory  restrictions, Igene may pay  annual  cumulative
dividends  on the preferred stock of $.64 per share on an  annual
basis.   During 1988, Igene declared and paid a cash dividend  of
$.16  per share on its preferred stock.  In December 1988,  Igene
suspended payment of the quarterly dividend of $.16 per share  of
preferred  stock.   No  dividends on preferred  stock  have  been
declared or paid since 1988.  Any resumption of dividend payments
on  preferred stock would require significant improvement in cash
flow.  Preferred stock dividends are payable when and if declared
by Igene's board.  Unpaid dividends accumulate for future payment
or addition to the liquidation preference and redemption price of
the preferred stock.  As of December 31, 2008, total dividends in
arrears  on  Igene's preferred stock equaled $144,305 (or  $12.96
per  share) on Igene's Series A Preferred Stock and are  included
in the carrying value of the Series A Preferred Stock.

     Dividends  on common stock are currently prohibited  because
of  the preferential rights of holders of preferred stock.  Igene
has  paid  no cash dividends on its common stock in the past  and
does  not  intend to declare or pay any dividends on  its  common
stock in the foreseeable future.

8% Notes

     Pursuant to the terms of an Indenture dated as of March  31,
1998,  as  amended (the "Indenture") between Igene  and  American
Stock Transfer & Trust Company, as Trustee (the "Trustee"), Igene
issued  and  sold  $5,000,000 of its 8% notes (the  "8%  Notes").
Concurrently  with  the issuance of the 8% Notes,  Igene  issued,
pursuant to a Warrant Agreement by and between Igene and American
Stock Transfer & Trust Company (the "Warrant Agent") dated as  of
March  31, 1998, as amended (the "Warrant Agreement"), 50,000,000

                            -8-

warrants  to purchase shares of Igene common stock for  $.10  per
share  expiring March 31, 2008.  The warrant purchase price under
the  Warrant  Agreement was reduced to $.075 per share,  and  the
maturity date of the 8% Notes was extended to March 31, 2006,  by
an  amendment dated March 18, 2003, and approved by the requisite
number of holders of the securities.

     On March 28, 2006, Igene and American Stock Transfer & Trust
Company,  in  its capacity as Trustee and Warrant Agent,  entered
into   a  Second  Amendment  to  Indenture,  Securities,  Warrant
Agreement  and  Warrant Certificates that extended  the  maturity
date  of  the 8% Notes to March 31, 2009, and reduced the warrant
price under the Warrant Agreement from $.075 to $.056 per share.

     On  October  23, 2008, Igene and American Stock  Transfer  &
Trust  Company,  in  its capacity as Trustee and  Warrant  Agent,
entered  into a Third Amendment to Indenture, Securities, Warrant
Agreement  and  Warrant Certificates that extended  the  maturity
date  of  the 8% Notes to March 31, 2019. The warrants under  the
Warrant Agreement expired as of March 31, 2008.

     On December 3, 2008, Igene completed an offering to exchange
145,600 of our shares of common stock, par value $.01 per  share,
for  each $1,000 principal amount of the 8% Notes outstanding and
accrued  interest  thereon.  As of that date,  $4,759,767  of  8%
notes   principal  were  outstanding,  with  $4,064,450   accrued
interest  thereon.  Of these notes, $4,436,515 of notes principal
with $3,788,419 of interest were exchanged for 645,956,606 shares
of  Igene  common  stock at a price of $.005  per  share.   As  a
result,  an  addition to additional paid in capital of $4,995,151
was  recorded on the retirement, pursuant to APB 26  for  related
party debt forgiveness.

Securities Authorized for Issuance Under Equity Incentive Plans

<TABLE>
<CAPTION>

  Equity Compensation Plan Information as of December 31, 2008

                                                                                number of securities
                                                                                remaining available for
                                                                                future issuance under
                             Number of securities to    Weighted-average        equity compensation
                             be issued upon exercise    exercise price of       plans (excluding
                             of outstanding options,    outstanding options,    securities reflected in
  Plan category              warrants and rights        warrants and rights     column (a))
  ______________________     _______________________    ____________________    _______________________
                                       (a)                      (b)                      (c)

  <S>                        <C>                        <C>                     <C>
  Equity compensation
  plans approved by               40,605,000                   $.060                 256,627,334
  security holders<F1>

  Equity compensation
  plans not approved by                  ---                     ---                         ---
                             _______________________    ____________________    ________________________

       TOTAL                      40,605,000                   $.060                 256,627,334
                             _______________________    ____________________    ________________________
<FN>
<FN1>  Includes   Igene's  2001  Stock  Incentive  Plan,   which
       succeeded Igene's 1997 Stock Option Plan, which succeeded
       Igene's 1986 Stock Option Plan.
</FN>
</TABLE>

                                 -9-

Sales of Unregistered Securities

     On  November 28, 2008, Igene commenced offerings to exchange
shares  of  its common stock for its publicly and privately  held
debt.    On  December 3, 2008, a total of 645,956,606  shares  of
Igene   common   stock   were   exchanged   for   $4,436,515   in
aggregate principal amount of Igene's publicly held 8% notes  and
$3,788,419   in   related   accrued  interest.    An   additional
762,210,163 shares of Igene common stock were issued in  exchange
for $5,618,090 in aggregate principal amount of Igene's privately
held  notes  and debentures, $3,073,015 of related interest,  and
126,729,316 associated warrants, summarized as follows:

  o  On  December  18, 66,371,244  shares of Igene's common stock
     were  issued  in  consideration  of  $762,000  in  aggregate
     principal amount of 5% convertible debentures and $67,641 of
     related accrued interest.

  o  On  December  18, 528,578,590 shares of Igene's common stock
     were  issued  in  consideration  of  $3,814,212 in aggregate
     principal amount of 8% convertible debentures, $2,204,106 of
     related accrued interest and associated warrants to purchase
     66,427,650 shares of common stock.

  o  On  December  18, 147,451,719 shares of Igene's common stock
     were  issued  in  consideration  of  $1,041,878 in aggregate
     principal  amount  of  variable  rate  notes and $801,269 of
     related accrued interest.   In addition, related warrants to
     purchase  60,301,666  shares  of common stock were exchanged
     for 19,808,610 shares of Igene's common stock.

     On  October  15, 2007, Mr. Monahan, Igene's Vice  President,
Secretary  and  Director of Manufacturing, was  issued  1,000,000
shares  of Igene's common stock, valued at $21,000, in connection
with his employment with, and services to, Igene.  The shares  of
common   stock  were  issued  pursuant  to  the  exemption   from
registration  provided under Section 4(2) of the Securities  Act,
as Mr. Monahan is an executive officer of the Company.

ITEM 6.   SELECTED FINANCIAL DATA

     Igene is a smaller reporting company as defined by Rule 12b-
2  of  the  Exchange  Act  and is not  required  to  provide  the
information required under this item.

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

      Certain  statements in this report set  forth  management's
intentions,  plans, beliefs, expectations or predictions  of  the
future  based on current facts and analyses.  Actual results  may
differ materially from those indicated in such statements, due to
a  variety of factors including competitive pressures from  other
companies and within the biotech industry, economic conditions in
Igene's  primary  markets,  exchange rate  fluctuations,  reduced
product   demand,   increased  competition,   unavailability   of
production  capacity,  unavailability  of  financing,  government
action,  weather  conditions and other  uncertainties,  including
those  detailed in "Risk Factors" that are included from time  to
time  in  Igene's Securities and Exchange Commission (the  "SEC")
filings.

Results of Operations

     On  March  19,  2003,  Igene entered into  a  Joint  Venture
Agreement  with  Tate  &  Lyle  Fermentation  Products  Ltd.,   a
subsidiary  of Tate & Lyle PLC ("Tate") pursuant to  which  Igene
and Tate agreed to form a joint venture (the "Joint Venture")  to
manufacture, market and sell astaxanthin and derivative  products
throughout  the world for all uses other than as a  nutraceutical
or  otherwise  for  direct human consumption.   Tate  contributed
$24,600,000 to the Joint Venture, which included certain  of  its
facility assets previously used in citric acid production,  while
Igene transferred to the Joint Venture its technology relating to
the  production  of astaxanthin and assets related  thereto.  The
initial value of Igene's investment in the Joint Venture had been
recorded  at  an  amount  equal to  the  book  value  of  Igene's
consideration  contributed at the creation of the Joint  Venture.
As  the cost of Igene's technology and intellectual property  had
been  previously expensed and had a carrying amount of zero,  the
investment  in the Joint Venture had been recorded  with  a  book
value  of  $316,869, which represents the unamortized  production
costs contributed to the Joint Venture.  In addition, Igene  also
contributed  $6,000 to the capital of the Joint  Venture.   Sales
and  cost  of  sales  activity  were  recorded  as  part  of  the
operations of the unconsolidated venture.

                               -10-

     On  October  31,  2007,  Igene  and  Tate  entered  into   a
Separation   Agreement  pursuant  to  which  the  Joint   Venture
Agreement  was terminated.  As part of the Separation  Agreement,
Igene sold to Tate its 50% interest in the Joint Venture and  the
Joint  Venture sold to Igene its intellectual property, inventory
and  certain  assets  and lab equipment  utilized  by  the  Joint
Venture  as well as the Chilean sales subsidiary.   The  purchase
price  paid by Tate to Igene for its 50% interest was 50% of  the
Joint Venture's net working capital.  The purchase price paid  by
Igene  for the inventory was an amount equal to 50% of the  Joint
Venture's   net  working  capital,  the  assumption  of   various
liabilities  and the current market price of the inventory,  less
specified amounts.  In addition, Igene agreed to pay to  Tate  an
amount  equal to 5% of Igene's gross revenues from  the  sale  of
astaxanthin  up to a maximum of $5,000,000.  Tate  agreed  for  a
period of five years not to engage in the astaxanthin business.

      As a result of the Joint Venture, the production, sales and
marketing of astaxanthin through October 2007 took place  through
the  unconsolidated Joint Venture.  From inception on  March  18,
2003 through the Joint Venture's final reporting on September 30,
2007,  Igene's  portion  of  the Joint  Venture's  net  loss  was
$21,826,251.   The  loss was a result of a 50%  interest  in  the
following,  aggregating  $43,652,502:   (i)  gross  profit   from
inception  was  a  negative $21,304,462 on sales of  $38,380,752,
less  manufacturing cost of $59,685,214, (ii) selling and general
and  administrative expenses were $16,542,813, and (iii) interest
expense was $5,805,227.

      Because  Igene accounted for its investment  in  the  Joint
Venture   under  the  equity  method  of  accounting,  it   would
ordinarily recognize a loss representing its 50% equity  interest
in  the loss of the Joint Venture.  However, losses in the  Joint
Venture  were recognized only to the extent of the Investment  In
and  Advances  to the Joint Venture.  Losses in  excess  of  this
amount   were   suspended  from  recognition  in  the   financial
statements.

      At  September  30,  2007, prior to the recognition  of  its
portion  of  the  Joint Venture loss, Igene's investment  in  the
Joint  Venture consisted of $322,869 and its net advances to  the
Joint  Venture amounted to $1,007,888, for a total of $1,330,757.
Through  December  31, 2006, Igene recognized $1,491,981  of  the
$15,922,400 loss, which existed as part of the Joint Venture.  In
the  first six months of 2007, the balances of the funds  due  to
Igene  were  reduced by a net repayment of $258,628, representing
the  June  30, 2007 balance of $1,233,353.  For the three  months
ended  September  30,  2007, Igene recognized  a  loss  from  the
advance  for that period of $97,404.  This advance decreased  the
additional  suspended loss of $1,293,769 for  the  quarter.   The
cumulative  suspended loss at September 30, 2007 was  $20,495,494
and it was sold as part of the termination of the Joint Venture.

      On  January  8, 2009, Igene entered into an agreement  with
Archer-Daniels-Midland  Company ("ADM")  pursuant  to  which  the
Company  and  ADM  formed  a  joint venture  (the  "ADM  JV")  to
manufacture   and   sell  astaxanthin  and  derivative   products
throughout  the world.  Each of the Company and  ADM  has  a  50%
ownership interest in the ADM JV and has equal representation  on
the Board of Managers of the ADM JV.

Sales and other revenue

     As  part of the Joint Venture Agreement with Tate, all sales
of AstaXin(R) prior to October 31, 2007, were recognized  through
the  Joint Venture.  Therefore, Igene recorded no sales  in  2007
prior to October 31, 2007.  During November and December of 2007,
Igene  recorded sales of $2,286,730.  For the year ended December
31,  2008,  Igene recorded sales of $7,644,477.  Sales  had  been
limited  in  past years due to insufficient production  quantity.
On  January  8,  2009, Igene entered into an agreement  with  ADM
pursuant  to which the Company and ADM formed a joint venture  to
manufacture and sell astaxanthin.  Management believes that  this
venture  should  provide  sufficient production  to  meet  future
needs, though there can be no assurance in this matter.

Cost of sales and gross profit

     As  with  sales revenue, beginning July 2003 through October
31,  2007, cost of sales and gross profit were recognized through
the Joint Venture.  Therefore, Igene recorded no cost of sales or
gross  profit in 2007 prior to October 31, 2007.  During November
and December of 2007, Igene recorded cost of sales of $1,681,632.
This  resulted in a gross profit for the period of  $605,098,  or
26%.   For the year ended December 31, 2008, Igene recorded  cost
of  sales of $6,395,062.  This resulted in a gross profit for the
period of $1,249,415, or 19%.  The increase in gross profit  over
the  activity in the Joint Venture with Tate is due mainly to the
discount in which the product was purchased at the conclusion  of
the Joint Venture.  With the termination of the Joint Venture, on
January  8,  2009,  Igene  entered into  an  agreement  with  ADM
pursuant  to which the Company and ADM formed a joint venture  to

                              -11-

manufacture and sell astaxanthin.  Management believes that  this
venture  should provide production to meet future  needs,  though
there can be no assurance in this matter.

Expenses reimbursement by Joint Venture

     As  part  of  the Joint Venture Agreement with  Tate,  costs
incurred   by   Igene   related  to  production,   research   and
development,  as  well  as  those related  to  the  marketing  of
AstaXin(R), and most of the general and administrative  expenses,
were  considered  costs of the Joint Venture and  therefore  were
reimbursed by the Joint Venture.  We do not expect to receive any
further reimbursements following the October 2007 termination  of
the Joint Venture.  Therefore, all expenses incurred by Igene are
expected  to  be  funded by cash flows from  operations,  to  the
extent  available for such purposes.  During 2007, prior  to  the
termination of the Joint Venture, costs reimbursed by  the  Joint
Venture totaled $1,576,701.  The reimbursement covered $49,216 of
marketing  costs, $861,108 of research and development costs  and
$666,377  of  general and administrative costs.   On  January  8,
2009,  Igene entered into an agreement with ADM pursuant to which
the  Company  and  ADM formed a joint venture to manufacture  and
sell  astaxanthin.  Management believes that this venture  should
provide  cash  flow  from  operations, though  there  can  be  no
assurance in this matter.

Marketing and selling expenses

     Marketing  and selling expenses for 2008 were  $731,094,  an
increase  of  $572,990, or 382%, from the marketing  and  selling
expenses of $158,104 for 2007.  As a result of the termination of
the  Joint  Venture with Tate, Igene has reassumed the  marketing
and  selling of salable product with a corresponding increase  in
selling  expenses.   Prior  to October 2007,  all  marketing  and
selling  expenses incurred by Igene as part of the Joint  Venture
had  been  reimbursed by the Joint Venture.  After October  2007,
these  expenses  are  expected to be funded by  cash  flows  from
operations, to the extent available for such purposes.  Prior  to
the  termination  of the Joint Venture, costs reimbursed  by  the
Joint  Venture for marketing costs totaled $49,216  during  2007.
On  January  8,  2009, Igene entered into an agreement  with  ADM
pursuant  to which the Company and ADM formed a joint venture  to
manufacture and sell astaxanthin.  With the creation of  the  new
joint  venture, Igene will continue some of the marketing of  the
product  while ADM and the joint venture will assume  certain  of
the marketing responsibilities.  As a result, it is expected that
the  portion  of  the  responsibilities  that  are  assumed  will
decrease this figure in 2009.

Research, development and pilot plant expenses

     Research, development and pilot plant expenses for 2008  and
2007  were  $1,655,908 and $983,610, respectively, reflecting  an
increase  of $672,298 or 69%.  Cost increases from 2007  to  2008
are partially a result of costs related to the development of the
joint  venture with ADM and are also related to costs to  support
increasing  the  efficiency of the manufacturing process  through
experimentation in Igene's pilot plant, undertaken in an  attempt
to   develop   higher  yielding  strains  of  yeast   and   other
improvements in  Igene's AstaXin(R) technology.  Igene is  hoping
this  combination will lead to a reduced cost for salable product
marketed   by   Igene  when  production  resumes.   However,   no
assurances  can be made in that regard.  Prior to  October  2007,
research  and  development expenses incurred by  Igene  had  been
reimbursed  by  the  Joint Venture.  After  October  2007,  these
expenses are expected to be funded by cash flows from operations,
to  the  extent  available  for  such  purposes.   Prior  to  the
termination of the Joint Venture, costs reimbursed by  the  Joint
Venture  related  to  research and development  totaled  $861,108
during 2007.

General and administrative expenses

     General  and  administrative expenses for 2008 increased  by
$77,738, or 13%, from 2007 (to $1,050,703 from $972,965).   These
costs  are expected to remain consistent.  Prior to October 2007,
all  general  and  administrative expenses  incurred  related  to
research  and  sales of product by Igene as  part  of  the  Joint
Venture, had been reimbursed by the Joint Venture.  After October
2007, these expenses are funded by cash flows from operations, to
the extent available for such purposes.  Prior to the termination
of  the  Joint  Venture, costs reimbursed by  the  Joint  Venture
related  to general and administrative expenses totaled  $666,377
during 2007.

Interest expense (net of interest income)

     Interest  expense  for  2008 and  2007  was  $2,028,460  and
$2,160,638  respectively, a decrease of  $132,178  or  6%.   This
interest  expense  (net  of  interest  income)  was  composed  of
interest  on  Igene's long term financing from its directors  and

                              -12-

other  stockholders  and  interest on  Igene's  subordinated  and
convertible  debentures, as well as amortization of  discount  on
Igene's   notes  and  debentures  of  $1,294,680  for  2008   and
$1,406,780  for 2007.  The expense recorded for 2007 was  reduced
by interest income of $50,581.

Additional paid in capital adjustment from termination of debt

     On  November 28, 2008, Igene commenced offerings to exchange
shares  of  its common stock for its publicly and privately  held
debt.    On  December 3, 2008, a total of 645,956,606  shares  of
Igene   common   stock   were   exchanged   for   $4,436,515   in
aggregate principal amount of Igene's publicly held 8% notes  and
$3,788,419   in   related   accrued  interest.    An   additional
762,210,163 shares of Igene common stock were issued in  exchange
for $5,618,090 in aggregate principal amount of Igene's privately
held  notes  and debentures, $3,073,015 of related interest,  and
126,729,316 associated warrants, summarized as follows:

  o  On  December  18,  66,371,244 shares of Igene's common stock
     were  issued  in  consideration  of  $762,000  in  aggregate
     principal amount of 5% convertible debentures and $67,641 of
     related accrued interest.

  o  On  December  18, 528,578,590 shares of Igene's common stock
     were  issued  in  consideration  of  $3,814,212 in aggregate
     principal amount of 8% convertible debentures, $2,204,106 of
     related accrued interest and associated warrants to purchase
     66,427,650 shares of common stock.

  o  On  December  18, 147,451,719 shares of Igene's common stock
     were  issued  in  consideration  of  $1,041,878 in aggregate
     principal  amount  of  variable  rate  notes and $801,269 of
     related  accrued interest.  In addition, related warrants to
     purchase  60,301,666  shares  of common stock were exchanged
     for 19,808,610 shares of Igene's common stock.

     As  this  was  a  transaction  with  a  related party, Igene
recorded  additional  paid  in  capital  as  a  result  of    the
termination  of  this  private  debt in the amount of $3,654,595.
This plus the gain on the public  notes of $4,995,151 resulted in
a  total  of  $8,649,746  in  connection  with the exchanges, the
combined  was  recorded  as  an  addition  to  additional paid in
capital, pursuant to APB 26 for related party debt forgiveness.

Gain on Disposal

     During  2007,  Igene sold equipment it had determined  would
not  be  of  use  in  future operations and recorded  a  gain  on
disposal of $5,692. This is a onetime occurrence.

Net loss and basic and diluted net loss per common share

     As  a  result of the foregoing results of operations,  Igene
reported  a  net loss of $3,990,937 for 2008 and a  net  loss  of
$1,899,073  for 2007.  This resulted in a net loss  of  $.02  per
basic  and  diluted  common share for 2008 based  on  a  weighted
average  of common stock outstanding of 187,037,119.   For  2007,
this resulted in a net loss of $.02 per basic common share, based
on a weighted average of common stock outstanding of 109,679,538.
As  of  December  31, 2008 and 2007, potentially dilutive  shares
totaled  52,283,696 and 378,227,265, respectively, and  were  not
considered  in the computation as the result of the loss  as  the
effect would be anti-dilutive.

Financial Position

      During  2008 and 2007, the following also affected  Igene's
financial position:

    o During 2008, decreases in accounts receivable of $1,673,117
      and  decreases  in  inventory of $5,661,257 were sources of
      cash.  This  allowed  for  decreases in accounts payable of
      $4,326,565.

    o During  2007,  increases  in  accounts  payable and accrued
      expenses  of  $3,569,050,  and  a  decrease in inventory of
      $1,814,157 were sources of cash. This allowed for increases
      in accounts receivable of $3,698,884.

     Since December 1988, as part of an overall effort to contain
costs  and  conserve working capital, Igene suspended payment  of
the quarterly dividend on its preferred stock.  Resumption of the
dividend  will  require significant improvements  in  cash  flow.
Unpaid  dividends cumulate for future payment or addition to  the

                              -13-

liquidation  preference  or redemption  value  of  the  preferred
stock.   As  of December 31, 2008, total dividends in arrears  on
Igene's Series A preferred stock equaled $144,297 (or $12.96  per
share)  and  are included in the carrying value of the  preferred
stock.

Liquidity and Capital Resources

     Historically,  Igene  has been funded  primarily  by  equity
contributions and loans from directors and stockholders.   As  of
December  31, 2008, Igene had working capital of $2,106,548,  and
cash and cash equivalents of $1,488,011.

     Cash  provided by operating activities in 2008 was  $705,610
as  compared to cash provided of $1,310,465 in 2007, a  reduction
of  cash  provided of $604,855, due mainly to increased  cost  of
operations.

     Cash  used  by investing activities in 2008 was $226,166  as
compared  to $362,901 used by investing activities in  2007.  The
higher  figure  in 2007 is due mainly to the funds invested  into
the JV not required during 2008.

     Cash provided by financing activities was $57,000 in 2007.

     Over  the  next twelve months, Igene believes it  will  need
additional working capital.  Part of this funding is expected  to
be received from sales of AstaXin(R).  On January 8, 2009,  Igene
entered  into an agreement with ADM pursuant to which the Company
and   ADM  formed  a  joint  venture  to  manufacture  and   sell
astaxanthin.   Management  believes  that  this  venture   should
provide  cash  flow from operations.  However, there  can  be  no
assurance that projected cash from sales, or additional  funding,
will be sufficient for Igene to fund its continued operations.

     Igene  does  not  believe that inflation had  a  significant
impact on its operations during 2008 and 2007.

Off-Balance Sheet Arrangements

     Igene  has  no  off-balance  sheet  arrangements  that   are
reasonably  likely  to  have a current or future  effect  on  its
financial position, revenues, results of operations, liquidity or
capital expenditures.

Critical Accounting Policies

      The  preparation of our financial statements in  conformity
with  accounting  principles generally  accepted  in  the  United
States   (or  "GAAP")  requires  management  to  make  judgments,
assumptions and estimates that affect the amounts reported in our
financial  statements  and accompanying  notes.   Actual  results
could differ materially from those estimates.  The following  are
critical accounting policies important to our financial condition
and  results of operations presented in the financial  statements
and  require management to make judgments and estimates that  are
inherently uncertain:

      The  inventories are stated at the lower of cost or market.
Cost  is  determined  using  a weighted-average  approach,  which
approximates the first-in first-out method.  If the cost  of  the
inventories  exceeds their expected market value, provisions  are
recorded  for  the  difference between the cost  and  the  market
value.  Inventories consist of currently marketed products.

      Revenue  from  product sales are recognized when  there  is
persuasive  evidence  that an arrangement  exists,  delivery  has
occurred, the price is fixed and determinable, and collectability
is  reasonably assured.  Allowances are established for estimated
uncollectible amounts, product returns and discounts.

     The  Joint Venture was accounted for under the equity method
of accounting as Igene had a 50% ownership interest.

     Igene did not recognize the loss of the Joint Venture beyond
the  investment and advances to the Joint Venture.   This  excess
loss was sold as part of the termination of the Joint Venture.

                               -14-

ITEM 7A.  QUANTITATIVE  AND  QUALITATIVE DISCLOSURES ABOUT MARKET
          RISK

     Igene is a smaller reporting company as defined by Rule 12b-
2  of  the  Exchange  Act  and is not  required  to  provide  the
information required under this item.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The  consolidated financial statements follow  Part  III  of
this  Annual  Report on Form 10-K and are hereby incorporated  by
reference.

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

     As  of  January  11,  2008, Igene dismissed  J.H.  Cohn  LLP
("Cohn") as its independent registered public accounting firm  as
approved by the Audit Committee of the Board of Directors.  Igene
had  appointed Cohn as its registered public accounting  firm  in
May  2007 after Igene's then-current registered public accounting
firm  combined  its business with Cohn and thereafter  no  longer
existed as a separate accounting firm.

     The   audit  report  issued  by  Cohn  on  the  consolidated
financial  statements  of Igene as of and  for  the  years  ended
December  31,  2006 and 2005, included in Igene's amended  annual
report  on  Form  10-KSB/A filed on December 21,  2007,  did  not
contain  an adverse opinion or a disclaimer of opinion,  and  was
not  qualified  or modified, as to uncertainty,  audit  scope  or
accounting principles, except as follows:

       Cohn's  report  contains  an  explanatory  paragraph.
       The  paragraph states that the Company  has  suffered
       recurring losses from operations since inception  and
       has   a   working  capital  deficiency  that   raises
       substantial doubt about its ability to continue as  a
       going    concern.     The   consolidated    financial
       statements do not include any adjustments that  might
       result from the outcome of that uncertainty.

     During  the years ended December 31, 2006 and 2005  and  the
interim  period  through  January 11, 2008,  the  date  of  their
dismissal,  there  have been no disagreements between  Igene  and
Cohn  on  any  matter  of  accounting  principles  or  practices,
financial  statement disclosure, or auditing scope or  procedure,
which disagreements, if not resolved to the satisfaction of Cohn,
would  have  caused Cohn to make reference to the subject  matter
thereof   in   its  report  on  Igene's  consolidated   financial
statements for such periods other than as described below.

     There   was  a  disagreement  related  to  Igene's   initial
accounting  for warrants issued in connection with  certain  debt
that  arose in connection with Cohn's review of Igene's quarterly
report  on Form 10-QSB for the quarterly  period ended  June  30,
2007.   The  accounting treatment was discussed  with  the  Audit
Committee  of  the  Board  of  Directors  and  resolved  to   the
satisfaction of Cohn.  As a result, Igene restated the  financial
statements included in its annual report on Form 10-KSB  for  the
year  ended December 31, 2006, and the Form 10-QSB for the  three
months  ended  March  31,  2007.  Igene has  authorized  Cohn  to
respond  fully to the inquiries of Igene's new registered  public
accounting  firm, M&K CPAS, PLLC ("M&K") if any,  concerning  the
matter.

     During  the years ended December 31, 2006 and 2005  and  the
interim  period  through January 11, 2008, Cohn  did  not  advise
Igene  of  any  reportable  event  under  Item  304(a)(1)(v)   of
Regulation  S-K other than as follows:  In connection with  their
audit  of Igene's consolidated financial statements for the years
ended December 31, 2006 and 2005, Cohn advised Igene's management
and  the Audit Committee of the Board of Directors of Igene  that
Igene  did not have the internal controls necessary for the  non-
routine  recording of warrants issued in connection with  certain
of our debt obligations.

     Igene appointed M&K as its new independent registered public
accounting firm effective as of January 15, 2008.  The  selection
of  M&K  was  approved by the Audit Committee  of  the  Board  of
Directors of Igene on January 15, 2008.

                                -15-


ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
________________________________________________

     We carried out an evaluation, under the supervision and with
the  participation  of  our management, including  our  principal
executive  officer  and  principal  financial  officer,  of   the
effectiveness  of  our  disclosure controls  and  procedures  (as
defined   in  Rules  13a-15(e)  and  15d-15(e)  of  the  Exchange
Act.  Based upon that evaluation, our principal executive officer
and principal financial officer concluded that, as of the end  of
the  period  covered in this report, our disclosure controls  and
procedures were not effective to ensure that information required
to  be  disclosed  in  reports filed under the  Exchange  Act  is
recorded, processed, summarized and reported within the  required
time   periods  and  is  accumulated  and  communicated  to   our
management,   including  our  principal  executive  officer   and
principal  financial  officer, as  appropriate  to  allow  timely
decisions regarding required disclosure.

     Our  management,  including our principal executive  officer
and  principal  financial  officer,  does  not  expect  that  our
disclosure controls and procedures or our internal controls  will
prevent all error or fraud.  A control system, no matter how well
conceived   and  operated,  can  provide  only  reasonable,   not
absolute, assurance that the objectives of the control system are
met.   Further, the design of a control system must  reflect  the
fact  that  there  are resource constraints and the  benefits  of
controls must be considered relative to their costs.  Due to  the
inherent  limitations in all control systems,  no  evaluation  of
controls  can provide absolute assurance that all control  issues
and  instances of fraud, if any, have been detected.  To  address
the  material  weaknesses, we performed additional  analysis  and
other  post-closing  procedures  in  an  effort  to  ensure   our
consolidated financial statements included in this annual  report
have   been   prepared  in  accordance  with  GAAP.  Accordingly,
management  believes  that the financial statements  included  in
this report fairly present in all material respects our financial
condition,  results of operations and cash flows for the  periods
presented.

Management's Report on Internal Control Over Financial Reporting
________________________________________________________________

     Our   management   is  responsible  for   establishing   and
maintaining adequate internal control over financial reporting as
defined in Rule 13a-15(f) under the Exchange Act.  Our management
assessed the effectiveness of our internal control over financial
reporting as of December 31, 2008. In making this assessment, our
management  used  the  criteria set forth  by  the  Committee  of
Sponsoring  Organizations of the Treadway Commission ("COSO")  in
Internal Control-Integrated Framework.  A material weakness is  a
deficiency, or a combination of deficiencies, in internal control
over  financial  reporting,  such  that  there  is  a  reasonable
possibility that a material misstatement of the company's  annual
or interim financial statements will not be prevented or detected
on  a  timely basis.  Our management has identified the following
material weaknesses.

 1.  As  of  December  31,  2008, we did not  maintain  effective
     controls  over  the control environment.   Specifically,  we
     have not formally adopted a written code of business conduct
     and  ethics  that governs the Company's employees,  officers
     and  directors.   Additionally, we have  not  developed  and
     effectively  communicated  to our employees  our  accounting
     policies  and procedures.  This has resulted in inconsistent
     practices.   Further,  the  Board  of  Directors  does   not
     currently  have  any  independent members  and  no  director
     qualifies as an independent audit committee financial expert
     as  defined in Item 407(d)(5)(ii) of Regulation S-K.   Since
     these  entity level programs have a pervasive effect  across
     the  organization,  management  has  determined  that  these
     circumstances constitute a material weakness.

 2.  As  of  December  31,  2008, we did not  maintain  effective
     controls over financial statement disclosure.  Specifically,
     controls  were not designed and in place to ensure that  all
     disclosures  required  were  originally  addressed  in   our
     financial   statements.     Accordingly,   management    has
     determined  that  this  control  deficiency  constitutes   a
     material weakness.

 3.  As  of  December  31,  2008, we did not  maintain  effective
     controls  over equity transactions.  Specifically,  controls
     were  not  designed  and  in place  to  ensure  that  equity
     transactions    were   properly   reflected.    Accordingly,
     management  has  determined  that  this  control  deficiency
     constitutes a material weakness.

     Because   of  these  material  weaknesses,  management   has
concluded  that  the Company did not maintain effective  internal
control  over financial reporting as of December 31, 2008,  based
on  the  criteria  established  in  "Internal  Control-Integrated
Framework" issued by the COSO.

                               -16-

Changes in Internal Control Over Financial Reporting
____________________________________________________

No  change  in  the  Company's internal  control  over  financial
reporting  occurred during the quarter ended December  31,  2008,
that  materially affected, or is reasonably likely to  materially
affect,  the Company's internal control over financial reporting.
This annual report does not include an attestation report of  the
Company's  registered public accounting firm  regarding  internal
control  over financial reporting.  Management's report  was  not
subject  to  attestation  by  the  Company's  registered   public
accounting firm pursuant to temporary rules of the Securities and
Exchange  Commission  that permit the  Company  to  provide  only
management's report in this annual report.

ITEM 9B.  OTHER INFORMATION

Pursuant to the terms of an Indenture dated as of March 31, 1998,
as  amended  (the "Indenture") between the Company  and  American
Stock  Transfer & Trust Company, as Trustee (the "Trustee"),  the
Company  issued  and sold $5,000,000 of its  8%  notes  (the  "8%
Notes").   Concurrently with the issuance of the  8%  Notes,  the
Company  issued, pursuant to a Warrant Agreement by  and  between
Registrant  and  American  Stock Transfer  &  Trust  Company,  as
warrant  agent (the "Warrant Agent") dated as of March 31,  1998,
as  amended  (the  "Warrant Agreement"), 50,000,000  warrants  to
purchase shares of the Company's common stock for $.10 per share.
The  warrant  purchase  price under  the  Warrant  Agreement  was
reduced to $.075 per share, and the maturity date of the 8% Notes
extended to March 31, 2006, by an amendment to the Indenture  and
Warrant  Agreement  dated  March 18, 2003  and  approved  by  the
requisite  number  of  holders of  the  8%  Notes.   The  warrant
purchase  price  was further reduced to $.56 per share,  and  the
maturity  date of the 8% Notes as further extended to  March  31,
2009 by a second amendment to the Indenture and Warrant Agreement
dated  March  28,  2006 and approved by the requisite  number  of
holders of the 8% Notes.

On  October  23,  2008, the Company, Trustee  and  Warrant  Agent
entered  into a Third Amendment to Indenture, Securities, Warrant
Agreement  and Warrant Certificates (the "Third Amendment")  that
extended the maturity date of the 8% Notes to March 31, 2019.

The  Third  Amendment  was approved by more  than  two-thirds  in
principal amount of the holders of 8% Notes effective November 4,
2008,  in  accordance with Section 6.07 and Section 9.02  of  the
Indenture.

The  description  of  the  Third  Amendment  is  qualified in its
entirety  by reference to the full text of such amendment, a copy
of  which  is  filed  as  Exhibit  4.5 hereto and is incorporated
herein by reference.

                               -17-
PART III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

    Igene's directors are elected annually by the stockholders of
Igene.   The  directors, executive officers and key employees  of
Igene as of December 31, 2008 are as follows:

<TABLE>
<CAPTION>

Name                           Age    Position with Igene
_______________________        ___    _______________________________
<S>                            <C>    <C>
Michael G. Kimelman            70     Chairman of the Board of
                                      Directors<F1>

Thomas L. Kempner              81     Vice Chairman of
                                      the Board of Directors<F2>

Stephen F. Hiu                 52     Director, President, Chief
                                      Technical Officer,
                                      and Director of Research and
                                      Development

Patrick F. Monahan             58     Director, Vice President,
                                      Secretary, and Director
                                      of Manufacturing

Sidney R. Knafel               78     Director<F2>

Edward J. Weisberger           44     Chief Financial Officer

<FN>
<FN1>  Member of the Audit Committee of the Board of Directors
<FN2>  Member of the Compensation Committee of the Board of Directors
</FN>
</TABLE>

Each  of our directors was elected for a one-year term at Igene's
most  recent  annual  meeting, held on  November  3,  2008.   Our
officers  serve at the discretion of the Board of  Directors  and
until their respective successors are elected and qualified.

MICHAEL  G.  KIMELMAN has served as a director of  Igene  and  as
Chairman  of the Board of Directors since 1991.  At the time  and
through  the present, Mr. Kimelman has been a founder and  member
of  Kimelman  &  Baird, LLC, an investment  advisory  firm.   Mr.
Kimelman also serves on the board and the executive committee  of
the Hambletonian Society.

THOMAS L. KEMPNER is Vice Chairman of the Board of Directors  and
has  been a director of the Company since its inception in  1981.
He  also  has been Chairman and Chief Executive Officer  of  Loeb
Partners  Corporation,  investment bankers,  New  York,  and  its
predecessors since 1978.  Mr. Kempner is currently a director  of
CCC Information Services Group, Inc., Dyax Corporation, Fuel Cell
Energy,  Inc.,  Insight Communications Co., Inc.,  Intermagnetics
General  Corp.  and Intersections, Inc.  He is  also  a  director
emeritus of Northwest Airlines, Inc.

STEPHEN F. HIU has served as Chief Technical Officer since  2002,
and  has  served as President and Treasurer of the Company  since
1999.   Mr. Hiu has served as a director since 1990 and has  been
the  Company's  Director of Research and Development  since  1989
and,  prior  thereto, was Senior Scientist since  he  joined  the
Company  in 1985.  Mr. Hiu was a post-doctoral Research Associate
at  the  Virginia  Polytechnic Institute  and  State  University,
Blacksburg, Virginia, from January 1984 until December 1985.  Dr.
Hiu  holds  a  Ph.D.  degree in microbiology  from  Oregon  State
University  and  a  B.S. degree in biological sciences  from  the
University of California, Irvine.

PATRICK  F.  MONAHAN has served as Vice President of the  Company
since 2002, and as Director of Manufacturing and as a director of
the Company since 1991.  Mr. Monahan has also served as Secretary
of the Company since September 1998 and has managed the Company's
fermentation pilot plant since 1982.  He received an A.A.  degree
in  biology from Allegheny Community College and a B.S. degree in
biology  with a minor in Chemistry from Frostburg State  College,
Frostburg, Maryland.

                              -18-

SIDNEY  R.  KNAFEL has served as a director of the Company  since
1982.   He  has  also  been Managing Partner  of  SRK  Management
Company,  a private investment company located in New York  City,
since  1981 and has served as Chairman of Insight Communications,
Inc.  since  1985.  Mr. Knafel is also currently  a  director  of
General American Investors Company, Inc., and of Virtual Scopics,
Inc., as well as a number of private companies.

EDWARD J. WEISBERGER has served as Chief Financial Officer of the
Company since 2001.  He is a CPA with multiple years of financial
experience  in the public and private sectors with  both  smaller
and Fortune 100 companies.

Section 16(a) Beneficial Ownership Reporting Compliance

     Based solely on a review of the Section 16(a) reports  filed
with  the  SEC and written representations  provided to Igene  by
its  officers and directors, and holders of more than ten percent
of  any class Igene's registered securities, Igene believes  that
during  fiscal year 2008, (i) one delinquent Form 4 was filed  by
Stephen   Hiu  resulting  in  two  transactions  being   untimely
reported,  (ii) three delinquent Form 4s were filed by Thomas  L.
Kempner  resulting  in 18 transactions being  untimely  reported,
(iii)  two  delinquent  Form 4s were filed  by  Michael  Kimelman
resulting in 11 transactions being untimely reported and (iv) one
delinquent Form 4 was filed by Patrick Monahan resulting  in  two
transactions being untimely reported.

Code of Ethics

	Due to the  size of Igene and its current operations, Igene
has not adopted a code of ethics for its principal executive  and
financial officers. Igene's board of directors will revisit  this
issue  in the future to determine if adoption of a code of ethics
is  appropriate.  In the meantime, Igene's management intends  to
promote  honest and ethical conduct, full and fair disclosure  in
its   reports   to  the  SEC,  and  compliance  with   applicable
governmental laws and regulations.

Corporate Governance

      The  Audit Committee of the Board of Directors is comprised
of  one  member: Michael G. Kimelman.  Mr. Kimelman is  an  audit
committee  financial expert as defined in Item  407(d)(5)(ii)  of
Regulation S-K.  Under the Nasdaq Marketplace Rules, in  addition
to  satisfying the independent director requirements  under  Rule
4200  of  such rules, audit committee members must also meet  the
criteria for independence set forth in Rule 10A-3(b)(1) under the
Exchange  Act  (subject to the exemptions provided in  Rule  10A-
3(c)):  they must not accept any consulting, advisory,  or  other
compensatory  fee from the company other than for board  service,
and  they  must not be an affiliated person of the company.   Mr.
Kimelman  is not considered independent under the audit committee
standards of the Nasdaq Marketplace Rules.

ITEM 11.    EXECUTIVE COMPENSATION

     The  following tables show the compensation paid or  accrued
by  Igene  to  each  of the three officers (the "named  executive
officers").

<TABLE>
<CAPTION>

Summary Compensation Table

Name and
Principal Position   Year    Salary($)<F1>   Stock Awards ($)   ($)<F2>        Total
__________________   _____   ______________   ________________   _____________   ____________
<S>                  <C>     <C>              <C>                <C>             <C>
Stephen Hiu          2008    $   163,575      $          0       $     11,189    $   174,764
President            2007        153,886                 0              6,396        160,282
                     2006        142,580                 0              6,575        149,155

Patrick Monahan      2008        140,773                 0             10,225        150,998
Vice President,      2007        137,914            10,000 <F3>         5,968        153,882
Secretary and        2006        129,965                 0              5,838        135,803
Director of
Manufacturing

Edward Weisberger    2008        145,973                 0              9,473        155,446
Chief Financial      2007        132,793                 0              5,712        138,505
Officer              2006        125,817                 0              5,750        131,567

<FN>
<FN1> Gross salary of the named executive officers listed.

<FN2> Includes  annual  taxable compensation for health  insurance
      premium and employer match of 401(k).

<FN3> Includes issuance of 1,000,000 shares of Igene common  stock
      at  $.01  per  share value based on current stock  price  in
      addition to restriction and blockage discounts.
</FN>
</TABLE>

     There are no employment agreements or arrangements, written or
unwritten, for any of the executive officers.

Outstanding Equity Awards at Fiscal Year-End

     The  following  table sets forth information concerning  the
outstanding equity awards of each of the named executive officers
as  of December 31, 2008.  All options reflected on the table are
fully vested.

<TABLE>
<CAPTION>
                       Number of Securities
                       Underlying
                       Unexercised Options    Option Exercise    Option Expiration
Name                   (#) Exercisable        Price ($/Share)    Date
____________________   ____________________   ________________   _________________
<S>                    <C>                    <C>                <C>
Stephen Hiu                 2,000,000               .05            01/19/2010
                               45,000               .065           01/02/2011
                            4,800,000               .025           08/13/2012
                            5,000,000               .10            06/25/2014

Patrick Monahan             1,317,500               .05            01/19/2010
                            2,900,000               .025           08/13/2012
                            2,000,000               .10            06/25/2014

Edward Weisberger           2,500,000               .05            12/01/2011
                              500,000               .10            06/25/2014
                            1,500,000               .027           12/09/2015

</TABLE>

Retirement Plans

      Effective February 1, 2004, Igene discontinued use  of  the
Simple    Retirement   Plan   and   began   use   of   a   401(k)
savings/retirement plan, or 401(k) Plan. The 401(k) Plan  permits
Igene's  eligible employees to defer annual compensation, subject
to  limitations  imposed  by  the  Internal  Revenue  Code.   All
employees that have been employed for six months are eligible for

                             -20-

the  plan.   The plan permits elective contributions  by  Igene's
eligible  employees based under the Internal Revenue Code,  which
are  immediately vested and non-forfeitable upon contribution  to
the  401(k)  Plan.   Effective January 1,  2004,  Igene  made  an
elective  contribution, subject to limitations,  of  4%  of  each
eligible  employee's compensation for each year.  For  2008  that
amount  was increased to 5%.  Igene's contributions to  the  plan
for  2008 and 2007 were $42,657 and $28,392, respectively,  which
is expensed in the statement of operations.

Life Insurance Plans

     Igene provides life insurance benefits to its employees that
in  the  event of an employee's death would pay to the employee's
beneficiary  two  times  the  employee's  annual  salary,  up  to
$150,000.

Severance Benefit

      In cases where a termination of employment is initiated  by
Igene   for   economic   reasons  (e.g.   reduction   in   force,
reorganization  or  position elimination), it is  Igene's  policy
that  the  terminated employee will receive one week of severance
at  base  pay  for each year of service, up to a  maximum  of  12
weeks.

Compensation of Directors

    None of Igene's directors were compensated for their services
during   fiscal   2008.   Directors  Hiu  and  Monahan   received
compensation  in  their  capacities  as  officers  of  Igene,  as
reported in the Summary Compensation Table above.

Stock Option Plans

     Igene currently maintains one stock incentive plan.  Igene's
2001  Stock  Incentive Plan (the "Plan") succeeded  Igene's  1997
Stock  Option  Plan, which succeeded Igene's  1986  Stock  Option
Plan,  as amended.  The Plan was approved by Igene's stockholders
on  June  12, 2001, and authorized for issuance restricted  stock
and  options to purchase up to 55,000,000 shares of common stock.
The   number  of  shares  authorized  for  incentive  awards  was
increased on November 3, 2008, to 300,000,000.

     The  purpose  of  the  Plan  is  to  further  the  long-term
stability  and  financial  success of  Igene  by  attracting  and
retaining  employees and consultants through the  use  of  stock-
based  incentives,  and to provide non-employee  members  of  the
Board  of  Directors with an additional incentive to promote  the
success of Igene.  It is believed that ownership of Igene  common
stock  will stimulate the efforts of those employees, consultants
and  non-employee  directors upon whose  judgment  and  interests
Igene  is  and  will  be largely dependent  upon  the  successful
conduct  of  its  business.  It is also believed  that  incentive
awards granted to employees under this Plan will strengthen their
desire  to  remain  employed  with Igene  and  will  further  the
identification of employees' interests with those of Igene.

     Options  are exercisable at such rates and times as  may  be
fixed by the committee.  Options also become exercisable in  full
upon  (i)  the holder's retirement on or after his 65th birthday,
(ii)  the disability or death of the holder, or (iii) under other
circumstances  as  determined  by  the  compensation   committee.
Options  generally terminate on the tenth business day  following
cessation  of  service  as an employee, director,  consultant  or
independent contractor.

     Options  may be exercised by payment in full of  the  option
price  in  cash  or  by check, or by delivery of previously-owned
shares  of common stock having a total fair market value  on  the
date  of  exercise equal to the option price, or  by  such  other
methods as permitted by the committee.

     The  Plan contains anti-dilution provisions in the event  of
certain corporate transactions.

     The  Board  of Directors may at any time withdraw  from,  or
amend,   the  Plan  and  any  options  not  heretofore   granted.
Stockholder  approval is required to (i) increase the  number  of
shares  issuable  under the Plans, (ii) increase  the  number  of
options  which  may be granted to any individual during  a  year,
(iii)  or  change  the class of persons to whom  options  may  be
granted.  No options shall be granted under the Plan after  April
30, 2011.

                              -21-


     Options  to  acquire 43,372,666 shares of common stock  have
been  granted  under the Plan and 40,605,000  options  are  still
outstanding under the Plan as of December 31, 2008.   No  options
or restricted awards were granted during 2008 or 2007.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The  following table sets forth information as  of  February
18,  2009,  with  respect to beneficial ownership  of  shares  of
Igene's  outstanding  common stock by (i) each  person  known  to
Igene  to own or beneficially own more than five percent  of  its
common stock or preferred stock, (ii) each director of Igene, and
(iii)  each  named executive officer, and (iv) all directors  and
executive  officers as a group.  On March 24,  2009,  there  were
1,518,503,841  shares  of  common stock issued  and  outstanding.
Shares  of  common stock subject to options or warrants currently
exercisable or exercisable within 60 days of February  18,  2009,
are  deemed  outstanding for computing the  share  ownership  and
percentage  of the person holding such options and warrants,  but
are  not deemed outstanding for computing the percentage  of  any
other  person.   Unless  otherwise noted, each  beneficial  owner
listed  on  the table below has sole voting and investment  power
with  respect to his or her shares beneficially owned.  No shares
of  preferred stock are beneficially owned by the persons  listed
below.

<TABLE>
<CAPTION>
                                              Common Stock
                                    ________________________________
                                       Number of
Name and Address                       Shares           Percent (%)
_______________________________     _______________   ______________

Directors and officers
______________________
<S>                                 <C>               <C>
Stephen F. Hiu                        13,721,633<F1>       0.87
  9110 Red Branch Road
  Columbia, MD  21045

Thomas L. Kempner                    543,901,561<F2>      34.63
  61 Broadway
  New York, NY  10006

Michael G. Kimelman                  146,982,204<F3>       9.36
  100 Park Avenue
  New York, NY  10017

Sidney R. Knafel                     532,711,201<F4>      33.91
  810 Seventh Avenue
  New York, NY  10019

Patrick F. Monahan                     8,993,033<F5>       0.57
  9110 Red Branch Road
  Columbia, MD  21045

Edward J. Weisberger                   4,570,000<F6>       0.29
  9110 Red Branch Road
  Columbia, MD  21045

All Directors and Officers         1,250,879,632<F7>      79.63
  as a Group (6 persons)

Others
_______

Sheila Baird                         111,559,750<F8>       7.10
  100 Park Avenue
  New York, NY  10017

<FN>
<FN1>  Includes 1,876,633 shares held directly or indirectly by Dr.
  Hiu and 11,845,000 shares  issuable upon exercise of options held
  by Dr. Hiu that are currently exercisable.


<FN2>   Includes 268,895,202 shares held directly or indirectly  by
  Mr.  Kempner.   Also  includes (i) 263,800,317 shares held  by  a
  trust under which Mr. Kempner is one of two trustees and the sole
  beneficiary and (ii) 11,206,042 shares held by trusts under which
  Mr.  Kempner  is  one  of  two   trustees   and  is  a  one-third
  beneficiary.  Mr. Kempner shares voting and investment power with
  respect to the shares listed in (i)-(ii) above.

<FN3>   Includes 121,982,204 shares held directly or indirectly  by
  Mr. Kimelman, 14,000,000 shares issuable upon exercise of options
  that  are  currently  exercisable, and 11,000,000 shares issuable
  upon exercise of warrants that are currently exercisable.

<FN4>   Includes 532,711,201 shares held directly or indirectly  by
  Mr. Knafel.

<FN5>  Includes 2,775,533 shares held directly or indirectly by Mr.
  Monahan  and  6,217,500  shares  issuable upon  the  exercise  of
  options held by Mr. Monahan that are currently exercisable.

<FN6>   Includes 70,000 shares held directly by Mr. Weisberger  and
  4,500,000  shares  issuable  upon  exercise of options  that  are
  currently exercisable.

<FN7>   Includes  1,203,317,132 shares of common stock,  36,562,500
  shares  issuable  upon  exercise  of options that  are  currently
  exercisable, and 11,000,000 shares  issuable upon the exercise of
  warrants that are currently exercisable.

<FN8>   Includes 111,559,750 shares held directly or indirectly  by
  Ms. Baird.

</FN>
</TABLE>

Equity Incentive Plans

     The  information  set  forth  under  the  caption "Securities
Authorized for Issuance Under Equity Incentive  Plans"  under Item
5 of this Annual Report on Form 10-K  is  hereby  incorporated  by
reference.

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

Certain Relationships and Related Transactions

     On  November 28, 2008, Igene commenced offerings to exchange
shares  of  its common stock for its publicly and privately  held
debt.   Much  of  Igene's indebtedness was held  by  current  and
former  directors.  The related party transactions in  connection
with the exchange offerings are described below:

  o  As  a  result  of  this  transaction,  33,185,622  shares of
     Igene's  common  stock were issued to each of Thomas Kempner
     and Sidney Knafel, directors of the Company, in exchange for
     the  5%  convertible  debenture  in  the principal amount of
     $381,000 and $33,820  in  related  interest, held by each of
     them.

  o  As  a  result  of  this  transaction, 152,729,546 shares  of
     Igene's  common  stock were issued to each of Thomas Kempner
     and Sidney Knafel, directors of the Company, in exchange for
     the  8%  convertible  debenture  in  the principal amount of
     $1,107,106  and  $655,170  in related interest and warrants,
     held by each of them.

  o  As  a  result  of  this  transaction,  279,625,624 shares of
     Igene's  common  stock  was  issued  to  Thomas  Kempner and
     276,004,622  shares  of  Igene's  common stock was issued to
     Sidney Knafel,  directors  of  the  Company, in exchange for
     their 8% notes and  accrued interest.

  o  As  a  result  of  this  transaction, 51,070,264  shares  of
     Igene's  common  stock  was  issued  to  Thomas  Kempner and
     43,324,547  shares  of  Igene's  common  stock was issued to
     Sidney Knafel, directors  of  the  Company,  in exchange for
     their variable rate demand notes and accrued interest.


      In order to provide the Company with working capital as the
inventory received from the termination of the joint venture with
Tate  &  Lyle PLC  is sold and the receivables are collected,  on
December  12,  2007,  the Company issued and  sold  an  aggregate

                              -23-

principal  amount of $300,000 in 8.5% secured notes, $150,000  to
each  of  Thomas  Kempner  and Sidney Knafel.   These  notes  are
secured  by the accounts receivable of the Company.  As of  March
12,  2009  these notes have accrued $31,875 of interest,  and  no
payments have been made.

      On  October  15,  2007,  Mr. Monahan,  the  Company's  Vice
President,  Secretary and Director of Manufacturing,  was  issued
1,000,000  shares  of  the  Company's  common  stock,  valued  at
$21,000, in connection with his employment with, and services to,
the Company.  The shares of common stock were issued pursuant  to
the  exemption from registration provided under Section  4(2)  of
the Securities Act of 1933, as amended.

      In  order to provide the Company with sufficient  funds  to
settle  the litigation with the holders of the convertible  notes
issued  by the Company in 2001, on February 15, 2007, the Company
issued and sold an aggregate principal amount of $762,000  in  5%
convertible  debentures, $381,000 to each of Thomas  Kempner  and
Sidney  Knafel,  directors of the Company.  These debentures  are
convertible into shares of the Company's common stock at $.02 per
share  based on the offer made to the original debenture  holders
as the market price of the Company's common shares as of February
2007.   As  reported  above, these debentures  in  the  aggregate
principal  amount of $762,000, and the related  interest  in  the
aggregate  amount  of  $67,641, were  converted  into  66,371,244
shares  of  Igene's common stock in connection with the  exchange
offerings.

Director Independence

     Since  Igene  is not a listed company, it has determined  to
apply  rule  4200(a)(15)  of  the  Nasdaq  Marketplace  Rules  to
determine  independence of its directors.  Based  on  such  rule,
Igene has determined that none of its directors are deemed to  be
independent and that, accordingly, its sole member of  its  audit
committee, Michael G. Kimelman, is not independent.

                              -24-

ITEM 14.   PRINCIPAL ACCOUNTING FEES AND SERVICES

                  REGISTERED PUBLIC ACCOUNTANTS

     The  accounting firm of M&K CPAS, PLLC ("M&K")  audited  the
financial  statements of the Company for the  fiscal  year  2008.
M&K  was  appointed  as the Company's new independent  registered
public  accounting  firm effective as of  January  15,  2008  and
served  as the Company's registered public accountants  to  audit
the  financial  statements  for 2007.   J.H.  Cohn  LLP  ("Cohn")
originally  served  as  the auditor in 2007  and  served  as  the
Company's  registered public accountants to  audit  the  restated
financial statements in 2006.  Berenson LLP originally served  as
the auditor in 2006; however, in May 2007, J.H. Cohn LLP acquired
Berenson  LLP in a transaction that was structured  as  an  asset
sale.  Each of J.H. Cohn LLP and M&K has advised the Company that
neither  the accounting firm nor any of its members or associates
has  any direct financial interest in or any connection with  the
Company other than as independent public auditors.

                     AUDIT FEES AND SERVICES

    The following table shows the aggregate fees paid or accrued
by the Company for the audit and other services provided by M&K
for fiscal years 2008 and 2007:

<TABLE>
<CAPTION>

                                     FY 2008                FY 2007
                                     ________               ________
       <S>                           <C>                    <C>
               Audit Fees            $ 45,000               $ 47,500
       Audit-Related Fees                   0                      0
                 Tax Fees               1,500                  1,500
           All Other Fees                   0                      0
                                     ________               ________

                    TOTAL            $ 46,500               $ 49,000

</TABLE>

    Audit services provided by M&K for fiscal years 2008 and 2007
consisted  of the audit of the consolidated financial  statements
and  quarterly  reviews  of  financial  statements.   "Tax  Fees"
include  charges primarily related to tax return preparation  and
tax consulting services.  Audit fees for 2007 include $7,500 paid
to Cohn for audit services.

      In  2003,  the SEC adopted a rule pursuant to the Sarbanes-
Oxley Act of 2002 that, except with respect to certain de minimis
services  discussed below, requires audit committee  pre-approval
of  audit  and  non-audit  services  provided  by  the  Company's
independent  auditors.   The  audit committee  reviews  and  pre-
approves audit and non-audit services of the independent auditors
in  conformity with the requirements of Sarbanes-Oxley.   All  of
the  2008 and 2007 services described above were pre-approved  by
the audit committee pursuant to this SEC rule.


                             -25-

ITEM 15.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES

     Exhibits filed herewith or incorporated by reference herein
are set forth in the following table prepared in accordance with
Item 601 of Regulations S-K.

EXHIBIT                      DESCRIPTION
NO.

3.1     Articles  of  Incorporation of  the  Registrant,  as
        amended   as  of  November  17,  1997,  constituting
        Exhibit  3.1 to the Registration Statement No.  333-
        41581  on  Form SB-2 filed with the SEC on  December
        5, 1997, are hereby incorporated by reference.
3.2     Articles  of  Amendment to Articles of Incorporation
        of  the  Registrant, constituting Exhibit 3.1(b)  to
        the Registration Statement No. 333-76616 on Form  S-
        8  filed  with  the  SEC on January  11,  2002,  are
        hereby incorporated by reference.
3.3     By-Laws of the Registrant, constituting Exhibit  3.2
        to the Registration Statement No. 33-5441 on Form S-
        1  filed  with  the SEC on May 6, 1986,  are  hereby
        incorporated by reference.
4.1     Form   of  Variable  Rate  Convertible  Subordinated
        Debenture  Due 2002 (Class A), constituting  Exhibit
        4.4  to  the  Registration Statement No. 33-5441  on
        Form  S-1  filed  with the SEC on May  6,  1986,  is
        hereby incorporated by reference.
4.2     Form of Indenture by and between the Registrant  and
        American  Stock  Transfer  and  Trust  Company,   as
        Trustee,  dated as of March 31, 1998,   constituting
        Exhibit  4.2 to the Registration Statement No.  333-
        41581  on Form SB-2/A filed with the SEC on  January
        23, 1998, is hereby incorporated by reference.
4.3     First  Amendment  to Indenture, Securities,  Warrant
        Agreement  and Warrant Certificates by  and  between
        Registrant  and  American Stock Transfer  and  Trust
        Company  dated  as  of March 18, 2003,  constituting
        Exhibit  10.11 to the Quarterly Report on  Form  10-
        QSB  filed  with the SEC on May 14, 2003, is  hereby
        incorporated by reference.
4.4     Second  Amendment to Indenture, Securities,  Warrant
        Agreement  and Warrant Certificates by  and  between
        Registrant  and  American Stock Transfer  and  Trust
        Company  dated  as  of March 28, 2006,  constituting
        Exhibit  4.5  to  the Annual Report on  Form  10-KSB
        filed  with  the  SEC on April 13, 2006,  is  hereby
        incorporated by reference.
4.5     Third  Amendment  to Indenture, Securities,  Warrant
        Agreement  and Warrant Certificates by  and  between
        Registrant  and  American Stock Transfer  and  Trust
        Company dated as of October 23, 2008.*
10.1    Form  of  Conversion and Exchange Agreement used  in
        May  1988  in  connection with  the  conversion  and
        exchange  by certain holders of shares of  preferred
        stock  for  common stock and Warrants,  constituting
        Exhibit 10.19 to the Registration Statement No.  33-
        5441  on Form S-1 filed with the SEC on May 6, 1986,
        is hereby incorporated by reference.
10.2    Preferred  Stockholders' Waiver Agreement dated  May
        5,   1988,   constituting  Exhibit   10.3   to   the
        Registration  Statement No.  33-23266  on  Form  S-1
        filed  with  the  SEC on July 22,  1988,  is  hereby
        incorporated by reference.
10.3    Form   of  Agreement  between  the  Registrant   and
        Certain   Investors   in   Preferred   Stock   dated
        September  30,  1987, constituting Exhibit  10.4  to
        the  Registration Statement No. 33-23266 on Form  S-
        1/A, is hereby incorporated by reference.
10.4    Agreement   of  Lease  between  Columbia   Warehouse
        Limited  Partnership  and the  Registrant  effective
        December  15,  1995, constituting Exhibit  10.13  to
        the  Annual Report on Form 10-KSB filed with the SEC
        on   April  12,  1996,  is  hereby  incorporated  by
        reference.

                                -26-

10.5    First Amendment to Lease between the Registrant  and
        Red  Branch  Center,  LLC made September  13,  2000,
        constituting  Exhibit 10.8 to the Annual  Report  on
        Form 10-KSB filed with the SEC on April 2, 2001,  is
        hereby incorporated by reference.
10.6    Separation  Agreement  between  the  Registrant  and
        Tate  & Lyle Fermentation Products Ltd. dated as  of
        October 31, 2007, constituting Exhibit 10.1  to  the
        Current  Report on Form 8-K filed with  the  SEC  on
        November   6,   2007,  is  hereby  incorporated   by
        reference.
10.7    Limited  Liability  Company Agreement  dated  as  of
        January   8,   2009  between  Archer-Daniels-Midland
        Company  and  the  Registrant, constituting  Exhibit
        10.1  to  the Current Report on Form 8-K filed  with
        the  SEC on January 21, 2009, is hereby incorporated
        by  reference. [Portions of this exhibit  have  been
        omitted  pursuant  to  a  request  for  confidential
        treatment.]
21.1    Subsidiaries*
31.1    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal executive officer.*
31.2    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal financial officer.*
32.1    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal executive  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*
32.2    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal financial  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*

*Filed herewith

                               -27-


     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
IGENE Biotechnology, Inc.
Columbia, Maryland

We  have audited the accompanying consolidated balance sheets  of
IGENE  Biotechnology, Inc. as of December 31, 2008 and 2007,  and
the  related consolidated statements of operations, stockholders'
deficiency  and  cash  flows  for the  years  then  ended.  These
financial  statements  are the responsibility  of  the  Company's
management. Our responsibility is to express an opinion on  these
financial statements based on our audits.

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

In  our  opinion,  the  financial statements  referred  to  above
present  fairly, in all material respects, the financial position
of  IGENE  Biotechnology, Inc. as of December 31, 2008 and  2007,
and  the results of its operations and cash flows for the periods
described   above   in  conformity  with  accounting   principles
generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
that  the  Company will continue as a going concern. As discussed
in  Note 13 to the financial statements, the Company has suffered
recurring  losses from operations which raises substantial  doubt
about  its  ability to continue as a going concern.  Management's
plans regarding those matters also are described in Note 13.  The
consolidated financial statements do not include any  adjustments
that might result from the outcome of this uncertainty.

/s/ M&K CPAS, PLLC
____________________
     M&K CPAS, PLLC

www.mkacpas.com
Houston, Texas
March 25, 2009

                               -28-

<TABLE>
<CAPTION>
                            IGENE Biotechnology, Inc. and Subsidiary
                                   Consolidated Balance Sheets
                                          December 31,

                                                                            2008           2007
                                                                       _____________   _____________
<S>                                                                    <C>             <C>
ASSETS
_______

CURRENT ASSETS
  Cash and cash equivalents                                            $  1,488,011    $  1,026,350
  Accounts receivable                                                     1,045,767       2,718,884
  Inventory                                                               2,398,520       8,059,777
  Prepaid expenses and other current assets                                  23,702          38,351
                                                                       _____________   _____________
       TOTAL CURRENT ASSETS                                               4,956,000      11,843,362

  Property and equipment, net                                               831,838         713,493
  5 year non-compete, net                                                   123,181         153,977
  Customer contracts                                                            ---         233,658
  Intellectual property                                                     149,670         149,670
  Other assets                                                                5,125           5,125
                                                                       _____________   _____________

       TOTAL ASSETS                                                    $  6,065,814    $ 13,099,285
                                                                       =============   =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
________________________________________
CURRENT LIABILITIES
  Accounts payable and accrued expenses                                $  2,849,455    $  7,902,625
                                                                       _____________   _____________

       TOTAL CURRENT LIABILITIES                                          2,849,455       7,902,625


LONG-TERM DEBT
  Notes payable (net of unamortized discount)                               353,598       4,643,449
  Convertible Debentures (net of unamortized discount)                          ---       3,244,664
  Contingent Liability on Joint Venture Separation                        5,000,000       5,000,000
  Accrued interest                                                          307,247       6,442,076

REDEEMABLE PREFERRED STOCK
  Carrying amount of redeemable preferred stock, 8% cumulative,
     convertible, voting, series A, $.01 par value per share.
     Stated value $20.96 and 23.32, respectively per share.
     Authorized 1,312,500 shares; issued and outstanding 11,134 shares.
     Redemption amount $233,377 and $226,243, respectively.                 233,377         226,243
                                                                       _____________   _____________

        TOTAL LIABILITIES                                                 8,743,677      27,459,057
                                                                       _____________   _____________

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock -- $.01 par value per share.  Authorized
  3,000,000,000 shares; issued and outstanding 1,518,503,841
  and 110,337,072 shares respectively                                    15,185,038       1,103,371
  Additional paid-in capital                                             34,885,649      33,276,687
  Accumulated deficit                                                   (52,730,767)    (48,739,830)
  Other comprehensive loss                                                  (17,783)            ---
                                                                       _____________   _____________

        TOTAL STOCKHOLDERS' DEFICIENCY                                   (2,677,863)    (14,359,772)
                                                                       _____________   _____________

        TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                 $  6,065,814    $ 13,099,285
                                                                       =============   =============
</TABLE>


The accompanying notes are an integral part of the consolidated
financial statements.

                              -29-

<TABLE>
<CAPTION>
                              IGENE Biotechnology, Inc. and Subsidiary
                               Consolidated Statements of Operations

                                                                         Years ended December 31,
                                                                                2008        2007
                                                                       _____________   _____________
<S>                                                                    <C>             <C>

REVENUE
_______
  Sales                                                                $  7,644,477    $  2,286,730
  Cost of sales                                                           6,395,062       1,681,632
                                                                       _____________   _____________
  GROSS PROFIT                                                            1,249,415         605,098

  EQUITY IN REPAID ADVANCES (LOSS) OF JOINT VENTURE                             ---         170,821
                                                                       _____________   _____________

OPERATING EXPENSES
__________________
  Marketing and selling                                                     731,094         158,104
  Research, development and pilot plant                                   1,655,908         983,610
  General and administrative                                              1,050,703         972,965
  Less expenses reimbursed by Joint Venture                                     ---      (1,576,701)
                                                                       _____________   _____________
  TOTAL OPERATING EXPENSES                                                3,437,705         537,978
                                                                       _____________   _____________
  OPERATING PROFIT (LOSS)                                                (2,188,290)        237,941

GAIN ON DISPOSAL                                                                ---           5,692

OTHER INCOME                                                                225,813          17,932

INTEREST EXPENSE (including amortization of debt
   discount of $1,294,680 for 2008, and $1,406,780 for 2007)             (2,028,460)     (2,160,638)
                                                                       _____________   _____________
   NET (LOSS)                                                          $ (3,990,937)   $ (1,899,073)
                                                                       _____________   _____________

OTHER COMPREHENSIVE LOSS
   Foreign exchange translation                                             (17,783)            ---

   TOTAL COMPREHENSIVE (LOSS)                                          $ (4,008,720)   $ (1,899,073)
                                                                       =============   =============
   NET LOSS PER COMMON SHARE BASIC AND FULLY DILUTED                   $      (0.02)   $      (0.02)
                                                                       =============   =============
   WEIGHTED AVERAGE SHARES OUTSTANDING                                  187,037,119     109,679,538
                                                                       =============   =============
</TABLE>


The accompanying notes are an integral part of the consolidated
financial statements.
                              -39-

<TABLE>
<CAPTION>
                                       IGENE Biotechnology, Inc. and Subsidiary
                                  Consolidated Statements of Stockholders' Deficiency
                                        Years ended December 31, 2008 and 2007



                                          Common Stock                        Additional     Other          Total
                                  ____________________________  Paid-in       Accumulated    Comprehensive  Stockholders'
                                      # Shares       Amount     Capital       Deficit        Loss           Deficiency
                                  _____________   ____________  ____________  _____________  _____________  _____________
<S>                               <C>             <C>           <C>           <C>            <C>            <C>
Balance at January 1, 2007          109,337,072   $ 1,093,371   $33,265,687   $(46,840,757)  $        ---   $(12,481,699)

Shares issued to Director of
  Manufacturing                       1,000,000        10,000        11,000            ---            ---         21,000

Net loss for 2007                           ---           ---           ---     (1,899,073)           ---     (1,899,073)
                                  _____________   ____________  ____________  _____________  _____________  _____________

Balance at December 31, 2007        110,337,072   $ 1,103,371   $33,276,687   $(48,739,830)  $        ---   $(14,359,772)



Exchange of debt for equity         645,956,606     6,459,566     1,765,419            ---            ---      8,224,985

Exchange of debt for equity         762,210,163     7,622,101      (156,457)           ---            ---      7,465,644

Loss due to currency translation            ---           ---           ---            ---        (17,783)       (17,783)

Net loss for 2008                           ---           ---           ---    ( 3,990,937)           ---     (3,990,937)
                                  _____________   ____________  ____________  _____________  _____________  _____________

Balance at December 31, 2008      1,518,503,841   $15,185,038   $34,885,649   $(52,730,767)  $    (17,783)  $ (2,677,863)
                                  =============   ============  ============  =============  =============  =============


</TABLE>

The accompanying notes are an integral part of the consolidated financial
statements.

                                   -31-


<TABLE>
<CAPTION>
                           IGENE Biotechnology, Inc. and Subsidiary
                            Consolidated Statements of Cash Flows


                                                                         Years ended December 31,
                                                                       _____________________________
                                                                                2008            2007
                                                                       _____________   _____________
<S>                                                                    <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
____________________________________
  Net income (loss)                                                    $ (3,990,937)   $ (1,899,073)
  Adjustments to reconcile net loss to net
  cash provided by operating activities:
    Amortization of debt discount                                         1,294,680       1,406,780
    Depreciation                                                            107,821          12,438
    Gain on disposal of equipment                                               ---          (5,692)
    Issuance of common stock for Director of Manufacturing                      ---          21,000
    Amortizations of customer contracts and non-compete                     264,454             ---
    Increase in preferred stock for cumulative dividend
        classified as interest                                                7,134           7,126
    Equity in (repaid advances) loss of unconsolidated joint venture            ---         107,821
    Decrease (increase) in:
        Accounts receivable                                               1,673,117      (3,698,884)
        Inventory                                                         5,661,257       1,814,157
        Prepaid expenses and other assets                                    14,649         (24,258)
    Increase (decrease) in:
    Accounts payable and other accrued expenses                          (4,326,565)      3,569,050
                                                                       _____________   _____________
        NET CASH PROVIDED BY OPERATING ACTIVITIES                           705,610       1,310,465
                                                                       _____________   _____________

CASH FLOWS FROM INVESTING ACTIVITIES
____________________________________
    Cash proceed from sale of property and equipment                            ---          20,000
    Cash used for purchase of property and equipment                       (226,166)       (275,080)
    Recoupment of payment (advances) to joint venture                           ---        (107,821)
                                                                       _____________   _____________
        NET CASH USED IN INVESTING ACTIVITIES                              (226,166)       (362,901)
                                                                       _____________   _____________

CASH FLOWS FROM FINANCING ACTIVITIES
____________________________________
    Proceeds from issuance of convertible debentures                            ---         762,000
    Repayment of convertible debentures                                         ---        (705,000)
                                                                       _____________   _____________
        NET CASH PROVIDED BY FINANCING ACTIVITIES                               ---          57,000
                                                                       _____________   _____________

LOSS DUE TO CURRENCY TRANSLATION                                            (17,783)            ---

NET DECREASE IN CASH AND CASH EQUIVALENTS                                   461,661       1,004,564

CASH AND CASH EQUIVALENTS - BEGINNING OF THE YEAR                         1,026,350          21,786
                                                                       _____________   _____________
CASH AND CASH EQUIVALENTS - END OF THE YEAR                            $  1,488,011    $  1,026,350
                                                                       =============   =============

SUPPLEMENTARY DISCLOSURE AND CASH FLOW INFORMATION
__________________________________________________
  Cash paid during the year for interest                               $        ---    $     57,637
  Cash paid during the year for income taxes                                    ---             ---

NON-CASH TRANSACTIONS
_____________________
  Exchange of assets and liabilities of joint venture partner          $        ---    $  9,325,521

  Exchange of debt for common stock                                    $ 15,690,630    $        ---

</TABLE>


The accompanying notes are an integral part of the consolidated financial
statements.
                              -32-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

(1) Summary of Significant Accounting Policies
    __________________________________________

    Nature of Operations
    ____________________

    Igene  Biotechnology, Inc. ("Igene") was  incorporated  under
    the  laws  of the State of Maryland on October 27,  1981,  as
    "Industrial Genetics, Inc."  Igene changed its name  to  "IGI
    Biotechnology,  Inc."  on  August 17,  1983,  and  to  "Igene
    Biotechnology, Inc." on April 14, 1986.  Igene is located  in
    Columbia,  Maryland, has an operational subsidiary in  Chile,
    and  through  February  2003, had  a  subsidiary  in  Norway.
    Igene  was  formed to develop, produce and market value-added
    specialty  biochemical  products.  Igene  is  a  supplier  of
    natural astaxanthin, an essential nutrient in different  feed
    applications  and  a  source of pigment for  coloring  farmed
    salmon   species.    Igene  is  also  venturing   to   supply
    astaxanthin as a nutraceutical ingredient.  Igene is  focused
    on   fermentation  technology,  pharmacology,  nutrition  and
    health   in   its  marketing  of  products  and  applications
    worldwide.

    Igene  has  devoted  its  resources  to  the  development  of
    proprietary  processes to convert selected  agricultural  raw
    materials  or  feedstocks into commercially useful  and  cost
    effective   products   for  the  food,   feed,   flavor   and
    agrochemical  industries.  In developing these processes  and
    products,  Igene has relied on the expertise  and  skills  of
    its  in-house  scientific staff and,  for  special  projects,
    various consultants.

    In  an  effort to develop a dependable source of  production,
    on  March  19,  2003,  Tate & Lyle  PLC  ("Tate")  and  Igene
    announced  a  50:50  joint venture (the "Joint  Venture")  to
    produce AstaXin(R) for  the aquaculture industry.  Production
    utilized  Tate's  fermentation capability together  with  the
    unique   technology  developed  by  Igene.  Part  of   Tate's
    existing Selby, England citric acid facility was modified  to
    include   the   production  of  1,500  tons  per   annum   of
    astaxanthin.

    On   October  31,  2007,  Igene  and  Tate  entered  into   a
    Separation Agreement pursuant to which the Joint Venture  was
    terminated.  As part of the Separation Agreement, Igene  sold
    to  Tate its 50% interest in the Joint Venture and the  Joint
    Venture  sold  to Igene its intellectual property,  inventory
    and  certain assets and lab equipment utilized by  the  Joint
    Venture  as  well  as  Igene's  subsidiary  in  Chile.    The
    purchase price paid by Tate to Igene for its 50% interest  in
    the  Joint Venture was 50% of the Joint Venture's net working
    capital.   The purchase price paid by Igene for the inventory
    was  an  amount  equal  to  50% of the  Joint  Venture's  net
    working  capital, the assumption of various  liabilities  and
    the  current  market price of the inventory,  less  specified
    amounts.  In addition, Igene agreed to pay to Tate an  amount
    equal  to  5%  of  Igene's gross revenues from  the  sale  of
    astaxanthin up to a maximum of $5,000,000.  Tate  agreed  for
    a  period  of  five  years not to engage in  the  astaxanthin
    business.

    On  January  8,  2009, Igene entered into an  agreement  with
    Archer-Daniels-Midland Company ("ADM") pursuant to which  the
    Company  and  ADM formed a joint venture (the  "ADM  JV")  to
    manufacture  and  sell  astaxanthin and  derivative  products
    throughout the world.  Each of the Company and ADM has a  50%
    ownership   interest   in  the   ADM   JV   and   has   equal
    representation on the Board of Managers of the ADM JV.

    Principles of Consolidation
    ___________________________

    The  accounts  of  our other wholly-owned  subsidiary,  Igene
    Chile,  are included in the consolidation of these  financial
    statements.    All  significant  intercompany  accounts   and
    transactions have been eliminated in consolidation.

    Cash and cash equivalents
    _________________________

    Igene  considers  cash equivalents to be  short-term,  highly
    liquid  investments  that have original  maturities  of  less
    than  90  days.  These include interest bearing money  market
    accounts.  There were no cash equivalents as of December  31,
    2008 or 2007.

                                 -33-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    Accounts Receivable
    ___________________

    Accounts  receivable  are  stated at  the  amount  management
    expects   to   collect   from   the   outstanding   balances.
    Management   provides  for  probable  uncollectible   amounts
    through  a  charge to earnings and a credit  to  a  valuation
    allowance   based  upon  its  assessment   of   the   current
    collection   status  of  individual  accounts.     Delinquent
    amounts  that are outstanding after management has  conducted
    reasonable  collection  efforts are  written  off  through  a
    charge  to  the valuation allowance and a credit to  accounts
    receivable.   Management  has  determined  no  allowance  was
    necessary as of December 31, 2008 or 2007.

    Research and development costs
    ______________________________

    For  financial reporting purposes, research, development  and
    pilot  plant  scale-up  costs  are  charged  to  expense   as
    incurred,  consistent  with  Financial  Accounting  Standards
    Board ("FASB") Statement No. 2.

    Property and Equipment
    ______________________

    Property  and  equipment are stated at cost less  accumulated
    depreciation  and amortization computed using  the  straight-
    line  method.   Premises and equipment are  depreciated  over
    the  useful  lives of the assets, which generally range  from
    three  to  seven years for furniture, fixtures and equipment,
    three  to  five  years  for computer software  and  hardware.
    Leasehold  improvements are amortized over the terms  of  the
    respective  leases  or  the estimated  useful  lives  of  the
    improvements,  whichever  is  shorter.   The  cost  of  major
    renewals and betterments are capitalized, while the costs  of
    ordinary maintenance and repairs are expensed as incurred.

    Estimates
    _________

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

    Foreign Currency Translation and Transactions
    _____________________________________________

    Since   the   day-to-day  operations   of   Igene's   foreign
    subsidiary   in   Chile  are  dependent   on   the   economic
    environment of the parent's currency, the financial  position
    and  results of operations of Igene's foreign subsidiary  are
    determined  using Igene's reporting currency  (U.S.  dollars)
    as  the  functional currency.  All exchange gains and  losses
    from  remeasurement of monetary assets and  liabilities  that
    are  not denominated in U.S. dollars are recognized currently
    in  other  comprehensive income. All transactional gains  and
    losses  are  part of income or loss from operations  pursuant
    to SFAS 52.

    Fair value of financial instruments
    ___________________________________

    The  carrying amounts of cash and cash equivalents,  accounts
    receivable,    accounts   payable,   and   short-term    debt
    approximate  fair  value  because  of  the  relatively  short
    maturity  of  these  instruments.   Management  believes  the
    carrying  amount  of long-term debt approximates  fair  value
    because of similar current rates at which Igene could  borrow
    funds with consistent remaining maturities.

                                -34-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    Accounting for stock-based compensation
    _______________________________________

    Effective    January   1,   2006,   Igene   began   recording
    compensation expense associated with stock options and  other
    forms of equity compensation in accordance with Statement  of
    Financial  Accounting Standards ("SFAS")  123R,  "Share-Based
    Payment,"  as  interpreted by SEC Staff  Accounting  Bulletin
    No.  107.  Prior to January 1, 2006, Igene had accounted  for
    stock options according to the provisions of APB Opinion  No.
    25,  "Accounting for Stock Issued to Employees," and  related
    interpretations,   and  therefore  no  related   compensation
    expense  was  recorded for awards granted with  no  intrinsic
    value.  Igene  adopted  the modified  prospective  transition
    method  provided for under SFAS 123R, and, consequently,  has
    not retroactively adjusted results from prior periods.

    Stock  issued to employees is recorded at the fair  value  of
    the  shares  granted based upon the closing market  price  of
    Igene's  stock  at  the measurement date  and  recognized  as
    compensation  expense over the applicable  requisite  service
    period.  Warrants granted to non-employees  are  recorded  at
    the  estimated  fair value of the options granted  using  the
    Black-Scholes  pricing model and recognized  as  general  and
    administrative expense over the applicable requisite  service
    period.

    Credit Risk
    ___________

    Igene  does  not  require collateral from its customers  with
    respect  to accounts receivable but performs periodic  credit
    evaluations  of  such customers' financial conditions.  Igene
    determines any required allowance by considering a number  of
    factors  including  lengths of time accounts  receivable  are
    past  due  and previous loss history. Igene provides reserves
    for  accounts receivable when they become uncollectible,  and
    payments  subsequently  received  on  such  receivables   are
    credited to the allowance for doubtful accounts.

    Igene's  cash may exceed FDIC protection levels at  different
    points  throughout  the year; management  believes  the  risk
    associated with this possible exposure is minimal. Igene  was
    within FDIC protection limits at December 31, 2008.

    Long-Lived Assets
    _________________

    SFAS  144,  "Accounting  for  the Impairment or  Disposal  of
    Long-Lived   Assets,"   requires  that   long-lived   assets,
    including  certain identifiable intangibles, be reviewed  for
    impairment   whenever  events  or  changes  in  circumstances
    indicate  that the carrying value of the assets  in  question
    may not be recoverable.

    SFAS  142,  "Goodwill and Other Intangible Assets,"  provides
    that  some  intangible  assets are not  subject  to  periodic
    amortization,  but  are  evaluated  at  least  annually   for
    impairments.  Igene received a valuation of its tangible  and
    intangible assets held December 31, 2007. Igene performed  an
    impairment test on the valuation of these assets at  December
    31, 2008 and determined no impairment was necessary.

    Inventories
    ___________

    Inventories  consist of finished goods, and are stated  based
    on  the valuation received at the close of the separation  of
    the  Joint  Venture and are at the lower of cost  or  market.
    Inventory is tracked by specific lot number.

                               -35-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    Income Taxes
    ____________

    Igene  utilizes the asset and liability method in  accounting
    for  income taxes. Under this method, deferred tax assets and
    liabilities are recognized for operating loss and tax  credit
    carry   forwards   and  for  the  future   tax   consequences
    attributable  to differences between the financial  statement
    carrying  amounts  of  existing assets  and  liabilities  and
    their   respective  tax  bases.  Deferred  tax   assets   and
    liabilities are measured using enacted tax rates expected  to
    apply  to taxable income in the year in which those temporary
    differences  are  expected to be recovered  or  settled.  The
    effect on deferred tax assets and liabilities of a change  in
    tax  rates is recognized in the results of operations in  the
    period   that  includes  the  enactment  date.  A   valuation
    allowance  is  recorded  to reduce the  carrying  amounts  of
    deferred  tax assets unless it is more likely than  not  that
    the value of such assets will be realized.

    Revenue Recognition
    ___________________

    Igene's  revenue  recognition policy is consistent  with  the
    criteria  set forth in Staff Accounting Bulletin  (SAB)  104,
    "Revenue   Recognition   in   Financial   Statements,"    for
    determining  when  revenue  is  realized  or  realizable  and
    earned.  In accordance with the requirements of SAB 104,  the
    Company  recognizes revenue when (1) persuasive  evidence  of
    an  arrangement  exists, (2) delivery has occurred,  (3)  the
    seller's   price   is   fixed  or   determinable,   and   (4)
    collectability is reasonably assured.

    Intangible Assets
    _________________

    Intangible  assets with estimable useful lives are  amortized
    over  respective  estimated useful lives,  and  reviewed  for
    impairment in accordance with SFAS 142, "Goodwill  and  Other
    Intangible  Assets."  Igene has recorded values for  customer
    contracts,  intellectual property and a non-compete  contract
    received  as part of the separation from Tate & Lyle.   These
    values  are  based on the independent valuation  received  at
    the  close  of  the venture.  As this valuation was  received
    after  December  31, 2007, and deemed to be  accurate  as  of
    that  date, no amortization was taken for 2007, and has  been
    taken in 2008.

    Customer  contracts are for a term of one year and the  value
    was amortized over 2008.  The non- compete contract is for  a
    term  of  five years and will be amortized over the  life  of
    the  contract.   The  original  value  of  the  contract  was
    $153,977   at  December  31,  2007,  of  which  $30,796   was
    amortized during 2008.  Intellectual property will be  tested
    annually  for  impairment, and any impaired  value  shall  be
    written-off.    The  intellectual  property  represents   the
    technology  used  in  the production of astaxanthin  as  this
    asset  is currently creating revenue in excess of its  value.
    Management  has determined its life is currently  indefinite.
    At  December 31, 2008 the value was recorded at $149,670.  It
    was  determined  based  on future revenue  expectations  that
    this was not impaired.

    New accounting pronouncements
    _____________________________

    In  September 2006, the Financial Accounting Standards  Board
    issued  Statement of Financial Accounting Standards  ("SFAS")
    157,  "Fair  Value  Measurements."   SFAS  157  defines  fair
    value,  establishes a framework for measuring fair  value  in
    generally   accepted  accounting  principles  ("GAAP"),   and
    expands disclosures about fair value measurements.

    Prior  to SFAS 157, there were different definitions of  fair
    value and limited guidance for applying those definitions  in
    GAAP.  Moreover, that guidance was dispersed among  the  many
    accounting    pronouncements   that   require   fair    value
    measurements. SFAS 157 clarifies that the exchange  price  is
    the   price   in   an  orderly  transaction  between   market
    participants  to sell the asset or transfer the liability  in
    the  market in which the reporting entity would transact  for
    the  asset  or  liability, that is,  the  principal  or  most
    advantageous market for the asset or liability.

                              -36-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    SFAS  157  is effective for financial statements  issued  for
    fiscal  years beginning after November 15, 2007, and  interim
    periods  within those fiscal years. The Company is  currently
    evaluating  the impact, if any, that SFAS 157  will  have  on
    its  financial  position,  results  of  operations  and  cash
    flows.

    In  June 2006, the FASB issued Financial Accounting Standards
    Board  Interpretation ("FIN") 48, "Accounting for Uncertainty
    in  Income  Taxes-an  interpretation of  FASB  Statement  No.
    109."   FIN  48  provides  a  comprehensive  model  for   the
    recognition,  measurement  and disclosure  in  the  financial
    statements  of uncertain tax positions taken or  expected  to
    be  taken  on  a  tax  return. The  Company  adopted  FIN  48
    effective  beginning  on January 1, 2007.    The  Company  is
    currently evaluating the impact this interpretation may  have
    on  its  future  financial position, results  of  operations,
    earnings per share, or cash flows.

    Management  does  not  believe  the  effects  of  the   above
    described  recent  pronouncements  or  others  will  have   a
    significant impact on our financial statements.

(2) Non-cash investing and financing activities
    ___________________________________________

    During  November  of  2008, Igene commenced  the  process  of
    offering to exchange common stock to holders of Igene  notes,
    debentures   and  warrants.   The  exchanges  that   occurred
    resulted   in  recording  of  additional  paid  in   capital,
    pursuant  to  APB  26 for related party debt forgiveness,  on
    the  termination  of  the debt in the amount  of  $8,649,796.
    The details are as follows:

    Pursuant  to the terms of an Indenture dated as of March  31,
    1998,   as  amended  (the  "Indenture")  between  Igene   and
    American  Stock  Transfer & Trust Company,  as  Trustee  (the
    "Trustee"), Igene issued and sold $5,000,000 of its 8%  notes
    (the  "8% Notes").  Concurrently with the issuance of the  8%
    Notes,  Igene issued, pursuant to a Warrant Agreement by  and
    between  Igene  and American Stock Transfer &  Trust  Company
    (the  "Warrant Agent") dated as of March 31, 1998, as amended
    (the  "Warrant Agreement"), 50,000,000 warrants  to  purchase
    shares  of  Igene  common stock for $.10 per  share  expiring
    March  31,  2008.   The  warrant  purchase  price  under  the
    Warrant  Agreement was reduced to $.075 per  share,  and  the
    maturity  date  of  the 8% Notes was extended  to  March  31,
    2006,  by an amendment dated March 18, 2003, and approved  by
    the requisite number of holders of the securities.

    On  March 28, 2006, Igene and American Stock Transfer & Trust
    Company,  in  its  capacity  as Trustee  and  Warrant  Agent,
    entered  into  a  Second Amendment to Indenture,  Securities,
    Warrant Agreement and Warrant Certificates that extended  the
    maturity date of the 8% Notes to March 31, 2009, and  reduced
    the  warrant price under the Warrant Agreement from $.075  to
    $.056 per share.

    On  October  23,  2008, Igene and American Stock  Transfer  &
    Trust  Company, in its capacity as Trustee and Warrant Agent,
    entered  into  a  Third  Amendment to Indenture,  Securities,
    Warrant Agreement and Warrant Certificates that extended  the
    maturity  date  of  the  8% Notes  to  March  31,  2019.  The
    warrants under the Warrant Agreement expired as of March  31,
    2008.

    On  December 3, 2008, Igene completed an offering to exchange
    145,600  of  our shares of common stock, par value  $.01  per
    share,  for  each  $1,000 principal amount of  the  8%  Notes
    outstanding and accrued interest thereon.  As of  that  date,
    $4,759,767  of  8%  notes  principal were  outstanding,  with
    $4,064,450   accrued  interest  thereon.   Of  these   notes,
    $4,436,515  of  notes principal with $3,788,419  of  interest
    were  exchanged for 645,956,606 shares of Igene common  stock
    at  a price of $.005 per share.  As a result, additional pain
    in  capital  was recorded for the gain of $4,995,151  on  the
    retirement,  pursuant  to  APB  26  for  related  party  debt
    forgiveness.

                                -37-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    On   November  28,  2008,  Igene  commenced  an  offering  to
    exchange  shares  of  its  common stock  to  holders  of  its
    privately  held debt and associated warrants.  Much  of  this
    indebtedness  was  held  by current and  past  directors  and
    consisted of the following:

    The  funds  to settle the ProBio litigation were provided  by
    Igene's  directors.  On February 15, 2007, Igene  issued  and
    sold   $762,000   in  aggregate  principal   amount   of   5%
    convertible debentures, 50% each to two directors  of  Igene.
    These  debentures  were convertible into  shares  of  Igene's
    common  stock at $.02 per share.  At the time of the exchange
    the  accrued interest on this debt was $67,641.  All debt and
    interest  under the 5% convertible debentures were  exchanged
    for 66,371,244 shares of common stock.

    Igene  issued $3,814,212 of 8% convertible debentures between
    March  2001  and July 2002.  The debt had accrued  $2,204,106
    of  interest  at the time of the exchange.  Also,  66,427,650
    warrants  were  issued in connection with the 8%  convertible
    debentures.  All of the debt and interest, as well as all  of
    the  warrants, were exchanged for 528,578,590 shares of Igene
    common  stock.   The original issuances that  comprised  this
    liability are as follows:

    On   July  17,  2002,  Igene  issued  and  sold  $300,000  in
    aggregate principal amount of 8% convertible debentures,  50%
    each  to  two  directors  of Igene.   These  debentures  were
    convertible into shares of Igene's common stock at  $.03  per
    share  based  on the market price of Igene's  shares  at  the
    time the debentures were agreed to.  In consideration of  the
    commitment  to  purchase the 8% convertible debenture,  these
    directors  also received an aggregate of 10,000,000  warrants
    to purchase common stock at $.03 per share.

    On  February  22, 2002, Igene issued and sold  $1,000,000  in
    aggregate principal amount of 8% convertible debentures,  50%
    each  to  two  directors  of Igene.   These  debentures  were
    convertible into shares of Igene's common stock at  $.04  per
    share  based  on the market price of Igene's  shares  at  the
    time the debentures were agreed to.  In consideration of  the
    commitment  to  purchase the 8% convertible debenture,  these
    directors  also received an aggregate of 25,000,000  warrants
    to purchase common stock at $.04 per share.

    In  March  2001,  Igene  issued  $1,014,211  of 8%,  10-year,
    convertible  debentures  to certain  directors  of  Igene  in
    exchange  for  the cancellation of $800,000 of  demand  notes
    payable  (including accrued interest of $14,212) and $200,000
    in  cash.  $600,000 of these demand notes were issued  during
    2000   and   $200,000   were  issued   subsequently.    These
    debentures  were  convertible  into  10,142,110   shares   of
    Igene's  common  stock  at $.08 per share.   These  directors
    also  received 10,142,110 warrants to purchase  common  stock
    at $.08 per share.

    In   March  2001,  certain directors of Igene also committed
    to  provide  additional funding in the form of  8%,  10-year,
    convertible  debentures  in the  amount  of  $1,500,000.   In
    consideration  of  this  commitment,  these  directors   also
    received  18,750,000  warrants to purchase  common  stock  at
    $.08  per  share.   These  debentures  are  convertible  into
    18,750,000 shares of Igene's common stock at $.08 per share.

    Convertible debentures were summarized as follows:

<TABLE>
<CAPTION>

                                                                             Accrued
                                                           Principal         Interest
                                                           ____________      ____________
     <S>                                                   <C>               <C>
     8%, 10-year, convertible debenture issued 7/17/02     $    300,000      $    152,745
     8%, 10-year, convertible debenture issued 2/22/02        1,000,000           538,301
     8%, 10-year, convertible debenture issued 3/1/01         1,014,212           567,262
     8%, 10-year, convertible debenture issued 3/27/01        1,500,000           945,798
     5%, 10-year, convertible debenture issued 2/15/07          762,000            67,641
                                                           ____________      ____________
                                                           $  4,576,212      $  2,271,747

</TABLE>
                               -38-


                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    Beginning  November 16, 1995, and continuing through  May  8,
    1997, Igene issued promissory notes to certain directors  for
    aggregate  consideration of $1,082,500.  These notes  specify
    that  at any time prior to repayment the holder has the right
    to  convert  the  notes to common stock of  Igene  at  prices
    ranging from $.05 per share to $.135 per share, based on  the
    market  price of common shares at the respective issue dates.
    The  notes  were convertible in total into 13,174,478  shares
    of  common stock.  As a result of the extensions they are now
    convertible into 23,421,273 shares of common stock.   At  the
    time  of  the exchange the debt had accrued interest  in  the
    amount  of  $832,485.  Of the amount outstanding  holders  of
    $1,041,878  of debt with $801,269 of accrued interest  agreed
    to  exchange their holdings for 147,451,719 shares  of  Igene
    common  stock.   As  part of this debt Igene  had  60,541,666
    warrants   outstanding  to  purchase  Igene   common   stock.
    60,301,666  of  these warrants were additionally  settled  in
    exchange for 19,808,610 shares of Igene common stock.

    In  total,  762,210,163  shares of Igene  common  stock  were
    issued  in  exchange for $5,618,090 of notes and  debentures,
    $3,073,015  of  related  interest,  and  126,729,316  related
    warrants.

    During 2008 and 2007, Igene recorded dividends in arrears  on
    its  8%  Redeemable Preferred Stock, Series  A  at  $.64  per
    share  aggregating $7,126 on such preferred stock, which  has
    been  removed  from  paid-in  capital  and  included  in  the
    carrying  value of the redeemable preferred stock. (see  also
    note 9).

(3) Concentration of Credit Risk
    ____________________________

    Igene   is   potentially  subject  to  the   effects   of   a
    concentration   of   credit  risk  in  accounts   receivable.
    Accounts  receivable is substantially composed of receivables
    from  two  customers,  with one of the customers  maintaining
    58%  of  the  December  31, 2008 receivables  balance  and  a
    second  customer  maintaining 39% of the December  31,  2008,
    receivables  balance.   Because of  the  volume  of  business
    transacted  with  these  two  customers  by  Igene,   Igene's
    ability  to  collect  its receivables  from  these  customers
    could  adversely affect its business.  In order  to  minimize
    risk,  Igene  strictly evaluates the companies  to  which  it
    extends  credit  and  all  prices  are  denominated  in  U.S.
    dollars so as to minimize currency fluctuation risk.   Losses
    due  to  credit risks in accounts receivable are expected  to
    be immaterial.

(4) Property and Equipment
    ______________________

    Property  and equipment are stated at cost and are summarized
    as follows:

<TABLE>
<CAPTION>
                                                   2008            2007
                                            ____________    ____________
    <S>                                     <C>             <C>
    Laboratory  equipment and fixtures      $   184,744     $   130,964
    Idle equipment                              793,921         706,667
    Pilot plant equipment and fixtures          169,170          91,503
    Office furniture and fixtures                44,920          36,990
                                            ____________    ____________
                                              1,192,755         966,124
    Less accumulated depreciation              (360,917)       (252,631)
                                            ____________    ____________
                                            $   831,838     $   713,493
                                            ============    ============
</TABLE>

(5) Investment in Joint Venture
    ___________________________

    On  March  19,  2003,  Igene entered  into  a  Joint  Venture
    Agreement  with  Tate & Lyle Fermentation  Products  Ltd.,  a
    subsidiary  of  Tate & Lyle PLC ("Tate")  pursuant  to  which
    Igene  and  Tate agreed to form a joint venture  (the  "Joint
    Venture")  to  manufacture, market and sell  astaxanthin  and
    derivative  products throughout the world for all uses  other
    than  as  a  nutraceutical  or  otherwise  for  direct  human
    consumption.   Tate  contributed  $24,600,000  to  the  Joint
    Venture,  which  included  certain  of  its  facility  assets
    previously  used  in  citric  acid  production,  while  Igene
    transferred  to the Joint Venture its technology relating  to
    the  production  of astaxanthin and assets  related  thereto.
    The  initial value of Igene's investment in the Joint Venture

                            -39-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    had  been  recorded at an amount equal to the book  value  of
    Igene's  consideration contributed at  the  creation  of  the
    Joint  Venture.   As  the  cost  of  Igene's  technology  and
    intellectual property had been previously expensed and had  a
    carrying amount of zero, the investment in the Joint  Venture
    had  been  recorded  with  a book value  of  $316,869,  which
    represents  the  unamortized production costs contributed  to
    the  Joint  Venture.   In  addition, Igene  also  contributed
    $6,000  to the capital of the Joint Venture.  Sales and  cost
    of  sales activity were recorded as part of the operations of
    the unconsolidated venture.

    On   October  31,  2007,  Igene  and  Tate  entered  into   a
    Separation  Agreement  pursuant to which  the  Joint  Venture
    Agreement  was  terminated.  As part of the Agreement,  Igene
    sold  to  Tate its 50% interest in the Joint Venture and  the
    Joint  Venture  sold  to  Igene  its  intellectual  property,
    inventory  and certain assets and lab equipment  utilized  by
    the  Joint  Venture.   The purchase price  paid  by  Tate  to
    Igene  for  its  50% interest was 50% of the Joint  Venture's
    net  working capital.  The purchase price paid by  Igene  for
    the  inventory  was  an amount equal  to  50%  of  the  Joint
    Venture's  net  working  capital, the assumption  of  various
    liabilities  and the current market price of  the  inventory,
    less specified amounts.  In addition, Igene agreed to pay  to
    Tate  an  amount equal to 5% of Igene's gross  revenues  from
    the  sale of astaxanthin up to a maximum of $5,000,000.  Tate
    agreed  for  a  period of five years not  to  engage  in  the
    astaxanthin business.

    Upon  the  termination of the Joint Venture it was determined
    that the transaction should be recorded as the purchase of  a
    business.   Based  on that determination, a valuation  expert
    was  hired to determine the fair value of the assets received
    and  the  liabilities  assumed.  As the fair  value  received
    exceeded  the  liabilities assumed  the  fair  value  of  the
    assets   received  were  reduced  to  equal  the  liabilities
    assumed.  The table below shows the original determined  fair
    value, the reduction, and the subsequent values recorded.


                                -40-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

<TABLE>
<CAPTION>
                                                                    Assets
                                               Fair Value           Subject             Allocate Excess Fair Value Over Cost
                                       ___________________________  to pro-rata     _____________________________________________
                                          Credit          Debit     Reduction       Adjustment         Credit          Debit
                                       ___________________________  _____________   _____________   _____________   _____________
<S>                                    <C>           <C>            <C>             <C>             <C>             <C>
Tangible Assets Acquired

 Current Assets
   Inventory                             9,873,934                                                     9,873,934

 Non-Current Assets
   Downstream Assets and Lab Equipment   4,000,000                     4,000,000      (3,569,294)        430,706
   Deferred Tax Assets                           -                                                             -
   Chilean Subsidiary                        8,182                         8,182          (7,301)            881
                                       ____________                                                 _____________
   Total Assets                         13,882,116                                                    10,305,521

Assumed Liabilities
  Rebate Liabilities                                     857,550                                                        857,550
  A/P                                                    890,000                                                        890,000
  Royalty of 5% up to $5M (contingent)                 5,000,000                                                      5,000,000
  Removal of downstream assets                           500,000                                                        500,000
  Collection Obligation                                   51,069                                                         51,069
                                                     ____________                                                   ____________
  Total Liabilities                                    7,298,619                                                      7,298,619

Net Tangible Assets/Liabilities          6,583,497                                                     3,006,902

Intangible Assets Acquired
  5 year non-compete                     1,430,000                     1,430,000     (1,276,023)         153,977
  Customers contracts                    2,170,000                     2,170,000     (1,936,342)         233,658
  Intellectual Property                  1,390,000                     1,390,000     (1,240,330)         149,670
                                       ____________                                                 _____________
  Total Intangible Assets Acquired       4,990,000                                                       537,306

Total Net Assets Acquired               11,573,497                     8,998,183     (8,029,289)       3,544,208
                                       ============                                                 =============
Consideration Paid
  Deferred Payment
  T&L Calculated Deferred Payment        1,564,207
  Downstream Assets and Lab Equipment    1,000,000
    Net Deferred Payment                 2,564,207
  Cash Payment                                   1
  Forgive Receivable from JV               980,000
  Fair value Igene shares in JV                  -

Total Consideration Paid                 3,544,208                                                     3,544,208
                                       ============                                                 =============
Extraordinary Gain                               -                                                             -
Goodwill/(Negative Goodwill)            (8,029,289)                                                            -
                                       ============                                                 =============
</TABLE>

                              -41-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    As  a result of the Joint Venture, the production, sales  and
    marketing  of  astaxanthin through October  2007  took  place
    through the unconsolidated Joint Venture.  From inception  on
    March  18,  2003 through the Joint Venture's final  reporting
    on   September  30,  2007,  Igene's  portion  of  the   Joint
    Venture's  net loss was $21,826,251.  The loss was  a  result
    of  a 50% interest in the following, aggregating $43,652,502:
    (i)  gross  profit from inception was a negative  $21,304,462
    on   sales  of  $38,380,752,  less  manufacturing   cost   of
    $59,685,214,  (ii)  selling  and general  and  administrative
    expenses  were  $16,542,813, and (iii) interest  expense  was
    $5,805,227.

    Because the Company accounts for its investment in the  Joint
    Venture  under  the  equity method of  accounting,  it  would
    ordinarily recognize as part of loss from equity the loss  of
    its  50%  ownership portion of the loss of the Joint Venture.
    However, losses in the Joint Venture are recognized  only  to
    the  extent  of the Investment in and Advances to  the  Joint
    Venture.  Losses in excess of this amount are suspended  from
    recognition  in the financial statements and carried  forward
    to  offset  Igene's  share  of  the  Joint  Venture's  future
    income, if any.

    At  September  30,  2007,  prior to the  recognition  of  its
    portion of the Joint Venture loss, Igene's investment in  the
    Joint  Venture consisted of $322,869 and its net advances  to
    the  Joint  Venture amounted to $1,007,888, for  a  total  of
    $1,330,757.   Through  December 31,  2006,  Igene  recognized
    $1,491,981 of the $15,922,400 loss, which existed as part  of
    the  Joint  Venture.  In the first six months  of  2007,  the
    balances  of  the funds due to Igene were reduced  by  a  net
    repayment  of  $258,628,  representing  the  June  30,   2007
    balance  of $1,233,353.  For the three months ended September
    30,  2007, Igene recognized a loss from the advance for  that
    period  of  $97,404.  This advance decreased  the  additional
    suspended   loss   of  $1,293,769  for  the   quarter.    The
    cumulative   suspended  loss  at  September  30,   2007   was
    $20,495,494 and it will be carried forward to offset  Igene's
    share  of  earnings  from the Joint  Venture,  if  any.   The
    balance  in  the Advances to and Investment in Joint  Venture
    account  on  the  Company's condensed consolidated  financial
    statements was zero at September 30, 2007.

    The  following  unaudited condensed  statement  displays  the
    activity  of  the  Joint Venture for the  period  of  initial
    investment  at  March 19, 2003 in the Joint  Venture  through
    September  30, 2007.  As shown, 50% of the activity,  limited
    to  Igene's  investment,  is  recorded  as  part  of  Igene's
    Financial  Statements as loss from investment  in  the  Joint
    Venture:

<TABLE>
<CAPTION>

                                                                   September 30,
                                                                           2007
                                                                 _______________
                                                                   (unaudited)
     <S>                                                         <C>
     ASSETS
       CURRENT ASSETS
          Cash                                                   $    2,645,000
          Account Receivable                                          4,711,000
          Inventory                                                  13,069,000
                                                                 _______________
                                                                     20,425,000
       OTHER ASSETS
          Property, plant and equipment, net                         19,668,000
          Intangibles                                                24,614,000
                                                                 _______________
            TOTAL ASSETS                                         $   64,707,000
                                                                 ===============

        LIABILITIES AND EQUITY
        CURRENT LIABILITIES
          Accounts payable and accrued expenses
          (majority of which is due to one joint venturer)       $   48,419,000
          Working capital loan                                        7,628,000
                                                                 _______________
            TOTAL LIABILITIES                                        56,047,000
          Equity                                                      8,660,000
            TOTAL LIABILITIES AND EQUITY                         $   64,707,000
                                                                 ===============

                                                      Period from March 19, 2003
                                                         (initial investment) to
                                                              September 30, 2007
                                                              __________________

          Net Sales                                              $   38,380,752
          Less: manufacturing cost                                  (59,685,214)
                                                                 _______________
          Gross Profit (Loss)                                       (21,304,462)
          Less: selling, general and administrative                 (16,542,813)
                                                                 _______________
          Operating Loss                                            (37,847,275)
          Interest Expense                                           (5,805,227)
                                                                 _______________
          Net Loss                                               $  (43,652,502)
                                                                 ===============
          Igene's 50% equity interest in the net loss            $  (21,826,251)
          Igene's Investment in and Advances to the Joint Venture    (1,330,757)
                                                                 _______________
          Igene's suspended loss at September 30, 2007           $  (20,495,494)
                                                                 ===============

</TABLE>

(6) Convertible Debentures
    ______________________

    On   November  28,  2008,  Igene  commenced  an  offering  to
    exchange  shares of its common stock for its  privately  held
    debt  and warrants.  Igene's much of this liability was  held
    by   current  and  past  directors  and  consisted   of   the
    following:

    The  funds  to settle the ProBio litigation were provided  by
    Igene's  directors.  On February 15, 2007, Igene  issued  and
    sold   $762,000   in  aggregate  principal   amount   of   5%
    convertible debentures, 50% each to two directors  of  Igene.
    These  debentures  were convertible into  shares  of  Igene's
    common  stock  at  $.02  per  share.   At  the  time  of  the
    exchange,  the  accrued interest on this  debt  was  $67,641.
    All  debt  and  interest under the 5% convertible  debentures
    were exchanged for 66,371,244 shares of common stock.

    Igene  issued $3,814,212 of 8% convertible debentures between
    March  2001  and July 2002.  The debt had accrued  $2,204,106
    of  interest  at the time of the exchange.  Also,  66,427,650
    warrants  were  issued in connection with the 8%  convertible
    debentures.  All of the debt and interest, as well as all  of
    the  warrants,  under  the  8%  convertible  debentures  were
    exchanged for 528,578,590 shares of Igene common stock.   The
    original  issuances  that comprised  this  liability  are  as
    follows:

    On   July  17,  2002,  Igene  issued  and  sold  $300,000  in
    aggregate principal amount of 8% convertible debentures,  50%
    each  to  two  directors  of Igene.   These  debentures  were
    convertible into shares of Igene's common stock at  $.03  per
    share  based  on the market price of Igene's  shares  at  the
    time the debentures were agreed to.  In consideration of  the
    commitment  to  purchase the 8% convertible debenture,  these
    directors  also received an aggregate of 10,000,000  warrants
    to purchase common stock at $.03 per share.

                              -43-


                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007


    On  February  22, 2002, Igene issued and sold  $1,000,000  in
    aggregate principal amount of 8% convertible debentures,  50%
    each  to  two  directors  of Igene.   These  debentures  were
    convertible into shares of Igene's common stock at  $.04  per
    share  based  on the market price of Igene's  shares  at  the
    time the debentures were agreed to.  In consideration of  the
    commitment  to  purchase the 8% convertible debenture,  these
    directors  also received an aggregate of 25,000,000  warrants
    to purchase common stock at $.04 per share.

    In   March  2001,  Igene  issued  $1,014,211 of 8%,  10-year,
    convertible  debentures  to certain  directors  of  Igene  in
    exchange  for  the cancellation of $800,000 of  demand  notes
    payable  (including accrued interest of $14,212) and $200,000
    in  cash.  $600,000 of these demand notes were issued  during
    2000   and   $200,000   were  issued   subsequently.    These
    debentures  were  convertible  into  10,142,110   shares   of
    Igene's  common  stock  at $.08 per share.   These  directors
    also  received 10,142,110 warrants to purchase  common  stock
    at $.08 per share.

    In   March  2001,  certain  directors of Igene also committed
    to  provide  additional funding in the form of  8%,  10-year,
    convertible  debentures  in the  amount  of  $1,500,000.   In
    consideration  of  this  commitment,  these  directors   also
    received  18,750,000  warrants to purchase  common  stock  at
    $.08  per  share.   These  debentures  are  convertible  into
    18,750,000 shares of Igene's common stock at $.08 per share.

     Convertible debentures were summarized as follows:

<TABLE>
<CAPTION>

                                                                             Accrued
                                                           Principal         Interest
                                                           ____________      ____________
     <S>                                                   <C>               <C>
     8%, 10-year, convertible debenture issued 7/17/02     $    300,000      $    152,745
     8%, 10-year, convertible debenture issued 2/22/02        1,000,000           538,301
     8%, 10-year, convertible debenture issued 3/1/01         1,014,212           567,262
     8%, 10-year, convertible debenture issued 3/27/01        1,500,000           945,798
     5%, 10-year, convertible debenture issued 2/15/07          762,000            67,641
                                                           ____________      ____________
                                                           $  4,576,212      $  2,271,747

</TABLE>


    Beginning  November 16, 1995, and continuing through  May  8,
    1997, Igene issued promissory notes to certain directors  for
    aggregate  consideration of $1,082,500.  These notes  specify
    that  at any time prior to repayment the holder has the right
    to  convert  the  notes to common stock of  Igene  at  prices
    ranging from $.05 per share to $.135 per share, based on  the
    market  price of common shares at the respective issue dates.
    The  notes  were convertible in total into 13,174,478  shares
    of  common stock.  As a result of the extensions they are now
    convertible into 23,421,273 shares of common stock.   At  the
    time  of the exchange, the debt had accrued interest  in  the
    amount  of  $832,485.  Of the amount outstanding, holders  of
    $1,041,878  of debt with $801,269 of accrued interest  agreed
    to  exchange their holdings for 147,451,719 shares  of  Igene
    common  stock.   As part of this debt, Igene  had  60,541,666
    warrants   outstanding  to  purchase  Igene   common   stock.
    60,301,666  of  these warrants were additionally  settled  in
    exchange for 19,808,610 shares of Igene common stock.

    In  total,  762,210,163  shares of Igene  common  stock  were
    issued  in  exchange for $5,618,090 of notes and  debentures,
    $3,073,015  of  related  interest,  and  126,729,316  related
    warrants.

(7) Notes Payable
    _____________

    Pursuant  to the terms of an Indenture dated as of March  31,
    1998,   as  amended  (the  "Indenture")  between  Igene   and
    American  Stock  Transfer & Trust Company,  as  Trustee  (the
    "Trustee"), Igene issued and sold $5,000,000 of its 8%  notes
    (the  "8% Notes").  Concurrently with the issuance of the  8%
    Notes,  Igene issued, pursuant to a Warrant Agreement by  and
    between  Igene  and American Stock Transfer &  Trust  Company
    (the  "Warrant Agent") dated as of March 31, 1998, as amended
    (the  "Warrant Agreement"), 50,000,000 warrants  to  purchase
    shares  of  Igene  common stock for $.10 per  share  expiring
    March  31,  2008.   The  warrant  purchase  price  under  the

                              -44-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

    Warrant  Agreement was reduced to $.075 per  share,  and  the
    maturity  date  of  the 8% Notes was extended  to  March  31,
    2006,  by an amendment dated March 18, 2003, and approved  by
    the requisite number of holders of the securities.

    On  March 28, 2006, Igene and American Stock Transfer & Trust
    Company,  in  its  capacity  as Trustee  and  Warrant  Agent,
    entered  into  a  Second Amendment to Indenture,  Securities,
    Warrant Agreement and Warrant Certificates that extended  the
    maturity date of the 8% Notes to March 31, 2009, and  reduced
    the  warrant price under the Warrant Agreement from $.075  to
    $.056 per share.

    On  October  23,  2008, Igene and American Stock  Transfer  &
    Trust  Company, in its capacity as Trustee and Warrant Agent,
    entered  into  a  Third  Amendment to Indenture,  Securities,
    Warrant Agreement and Warrant Certificates that extended  the
    maturity  date  of  the  8% Notes  to  March  31,  2019.  The
    warrants under the Warrant Agreement expired as of March  31,
    2008.

    On  December 3, 2008, Igene completed an offering to exchange
    145,600  of  our shares of common stock, par value  $.01  per
    share,  for  each  $1,000 principal amount of  the  8%  Notes
    outstanding and accrued interest thereon.  As of  that  date,
    $4,759,767  of  8%  notes  principal were  outstanding,  with
    $4,064,450   accrued  interest  thereon.   Of  these   notes,
    $4,436,515  of  notes principal with $3,788,419  of  interest
    were  exchanged for 645,956,606 shares of Igene common  stock
    at  a price of $.005 per share.  As a result, additional paid
    in  capital  was recorded to recognize the gain of $4,995,151
    on  the  retirement,  pursuant to APB 26  for  related  party
    debt forgiveness.

     Notes payable are summarized as follows as of December 31,
     2008:

<TABLE>
<CAPTION>
                                                                                   Accrued
                                                                  Principal       Interest
                                                                  _____________   _____________
        <S>                                                       <C>             <C>

        Long-term unsecured notes payable, bearing interest
            at prime, scheduled to mature
            March 31, 2003, extended to March 31,
            2019, convertible into common stock                   $     40,622    $     31,432
        Long-term unsecured notes payable, bearing interest
            at 8%, scheduled to mature March 31, 2003,
            extended to March 31, 2019                                 323,252         275,815
                                                                  _____________   _____________
        Less unamortized debt discount                                 (10,276)
                                                                  _____________   _____________
                                                                  $    353,598    $    307,247
                                                                  =============   =============

</TABLE>


    Combined  aggregate  amounts  of  maturities  for  all  notes
    payable are in 2019.


     Notes Payable was summarized as follows as of December 31,
     2007:

<TABLE>
<CAPTION>
                                                                                    Accrued
                                                                  Principal       Interest
                                                                  _____________   _____________
        <S>                                                       <C>             <C>
        Long-term unsecured notes payable, bearing interest
            at prime, scheduled to mature
            March 31, 2003, extended to March 31,
            2009, convertible into common stock                   $  1,082,500    $    770,389
        Long-term unsecured notes payable, bearing interest
            at 8%, scheduled to mature March 31, 2003,
            extended to March 31,  2009                              4,759,767       3,714,966
                                                                  _____________   _____________
                                                                  $  5,842,267    $  4,485,355
        Less unamortized debt discount                              (1,198,818)
                                                                  _____________   _____________
                                                                  $  4,643,449    $  4,485,355
                                                                  =============   =============
</TABLE>

                                -45-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007


(8)  Redeemable Preferred Stock
     __________________________

     Each share of redeemable preferred stock is entitled to vote
     on  all matters requiring shareholder approval as one  class
     together  with  holders  of common  stock.   Each  share  of
     redeemable preferred stock is entitled to two votes and each
     share of common stock is entitled to one vote.

     Redeemable preferred stock is convertible at the  option  of
     the  holder  at  any time, unless previously redeemed,  into
     shares of Igene's common stock at the rate of two shares  of
     common  stock for each share of preferred stock  (equivalent
     to a conversion price of $4.00 per common share), subject to
     adjustment under certain conditions.

     Shares of redeemable preferred stock are redeemable for cash
     in  whole or in part at the option of Igene at any  time  at
     the  stated value plus accrued and unpaid dividends  to  the
     redemption  date.   Dividends  are  cumulative  and  payable
     quarterly on January 1, April 1, July 1 and October 1, since
     January 1, 1988.

     Mandatory redemption of Series A preferred stock was  to  be
     made  in  October 2002.  As Igene is operating at a negative
     cash flow and negative earnings, Maryland law does not allow
     for  the  redemption of these shares.   As  such  they  will
     remain  outstanding and continue to accrue  dividends  until
     such  time as Igene is able to undertake redemption,  though
     there can be no assurance this will develop.  Igene does not
     expect  to  be  able to redeem the Series A preferred  stock
     unless,  after  giving  effect to such  redemption  (a)  the
     Company  would be able to pay its indebtedness in the  usual
     course of business and (b) the Company's total assets  would
     be  greater than the sum of its total liabilities  plus  the
     amount  that  would  be needed if the  Company  were  to  be
     dissolved as of the time of the distribution, to satisfy the
     preferential  rights upon dissolution of stockholders  whose
     preferential  rights on dissolution are  superior  to  those
     receiving the distribution.

     In  December 1988, as part of an overall effort  to  contain
     costs  and conserve working capital, Igene suspended payment
     of   the   quarterly   dividend  on  its  preferred   stock.
     Resumption   of   the  dividend  will  require   significant
     improvements  in cash flow.  Unpaid dividends  cumulate  for
     future payment or addition to the liquidation preference  or
     redemption value of the preferred stock.  As of December 31,
     2008,  total dividends in arrears on Igene's preferred stock
     equal $144,305 (or $12.96 per share) on Igene's Series A and
     are  included  in  the  carrying  value  of  the  redeemable
     preferred stock.  The redemption amount of shares  is  $8.00
     per share plus the accrued dividends.  For the 11,134 shares
     outstanding this equated to a value of $233,377 and $226,243
     for   the   years   ended  December  31,  2008   and   2007,
     respectively.

(9)  Stockholders' Equity
     ____________________

     Options
     _______

     In  June  of 2001, the stockholders approved the 2001  Stock
     Option Plan (the "2001 Plan"), which succeeds the 1997 Stock
     Option Plan (the "1997 Plan"), which succeeded Igene's  1986
     Stock  Option  Plan  (the  "1986 Plan"),  as  amended.   All
     outstanding, unexercised options granted under the 1997 Plan
     and  the  1986  Plan  have expired.  The  number  of  shares
     authorized  for issuance under the 2001 Plan was 55,000,000,
     and  amended at the November 2008 stockholders'  meeting  to
     300,000,000.

                               -46-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007


     The   following  is  a  summary  of  options   granted   and
     outstanding under the plan as of December 31, 2008 and 2007:

<TABLE>
<CAPTION>

                                          2008                         2007
                              ___________________________   ___________________________
                                                Weighted                      Weighted
                                                 Average                       Average
                                                Exercise                      Exercise
                                   Number          Price         Number          Price
                              ____________   ____________   ____________   ____________
    <S>                       <C>            <C>            <C>            <C>
    Options outstanding
    and exercisable,
    beginning of year          44,845,000     $     .059     44,845,000    $      .059
    Options granted                   ---            ---            ---            ---

    Options exercised                 ---            ---            ---            ---
    Options forfeited,
    or withdrawn with
    consent of holders                ---            ---            ---            ---
    Options expired             4,240,000     $     .100            ---            ---
                              ____________   ____________   ____________   ____________
    Options outstanding
    and exercisable,
    end of year                40,605,000     $     .059     44,845,000    $      .059
                              ============   ============   ============   ============

</TABLE>

<TABLE>
<CAPTION>
                                Options Outstanding

                                                          Weighted Average
            Exercise Price           Shares         Remaining Life (Years)
            ______________        ____________      ______________________
            <S>                   <C>               <C>
                   $.025           16,333,000                  3.6
                   $.027            1,500,000                  6.9
                   $.050            1,500,000                  0.8
                   $.050            3,837,500                  1.0
                   $.050            2,500,000                  2.9
                   $.065               45,000                  2.0
                   $.080            5,500,000                  2.8
                   $.100            9,389,500                  5.5
                                  ____________

                   $.059           40,605,000
                                  ============
</TABLE>


     Warrants
     ________

     The  following table summarizes warrants issued, outstanding
     and exercisable:

<TABLE>
<CAPTION>

                                       As of December 31,
                                  _____________________________
                                         2008             2007
                                  ____________     ____________
     <S>                          <C>              <C>
     Issued                        11,000,000      205,261,073
     Outstanding                   11,000,000      205,261,073
     Exercisable                   11,000,000      205,261,073

</TABLE>

                                -47-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

     Common Stock
     ____________

     At  December  31, 2008, 11,000,000 shares of authorized  but
     unissued  common  stock  were  reserved  for  issuance  upon
     exercise  of  outstanding  warrants,  40,605,000  shares  of
     authorized  but  unissued  common stock  were  reserved  for
     exercise  pursuant to outstanding equity  awards  under  the
     2001  Stock  Option  Plan, 22,268 shares of  authorized  but
     unissued  common  stock  were  reserved  for  issuance  upon
     conversion  of  Igene's outstanding  preferred  stock,   and
     656,428  shares  of  authorized  but  unissued  stock   were
     reserved   for  issuance  upon  conversion  of   outstanding
     convertible notes.

     During  November  of  2008,  Igene  commenced  offerings  to
     exchange  common stock to holders of Igene notes, debentures
     and  warrants.   The exchanges that occurred resulted  in  a
     gain  on  the  termination of the  debt  in  the  amount  of
     $8,399,925.  The details are as follows:

     Pursuant to the terms of an Indenture dated as of March  31,
     1998,  as  amended  (the  "Indenture")  between  Igene   and
     American  Stock  Transfer & Trust Company, as  Trustee  (the
     "Trustee"), Igene issued and sold $5,000,000 of its 8% notes
     (the "8% Notes").  Concurrently with the issuance of the  8%
     Notes, Igene issued, pursuant to a Warrant Agreement by  and
     between  Igene  and American Stock Transfer & Trust  Company
     (the "Warrant Agent") dated as of March 31, 1998, as amended
     (the  "Warrant Agreement"), 50,000,000 warrants to  purchase
     shares  of  Igene common stock for $.10 per  share  expiring
     March  31,  2008.   The  warrant purchase  price  under  the
     Warrant  Agreement was reduced to $.075 per share,  and  the
     maturity  date  of the 8% Notes was extended  to  March  31,
     2006,  by an amendment dated March 18, 2003 and approved  by
     the requisite number of holders of the securities.

     On March 28, 2006, Igene and American Stock Transfer & Trust
     Company,  in  its  capacity as Trustee  and  Warrant  Agent,
     entered  into  a Second Amendment to Indenture,  Securities,
     Warrant Agreement and Warrant Certificates that extended the
     maturity date of the 8% Notes to March 31, 2009, and reduced
     the warrant price under the Warrant Agreement from $.075  to
     $.056 per share.

     On  October  23, 2008, Igene and American Stock  Transfer  &
     Trust Company, in its capacity as Trustee and Warrant Agent,
     entered  into  a  Third Amendment to Indenture,  Securities,
     Warrant Agreement and Warrant Certificates that extended the
     maturity  date  of  the  8% Notes to  March  31,  2019.  The
     warrants under the Warrant Agreement expired as of March 31,
     2008.

     On December 3, 2008, Igene completed an offering to exchange
     145,600  of our shares of common stock, par value  $.01  per
     share,  for  each $1,000 principal amount of  the  8%  Notes
     outstanding and accrued interest thereon.  As of that  date,
     $4,759,767  of  8%  notes principal were  outstanding,  with
     $4,064,450  accrued  interest  thereon.   Of  these   notes,
     $4,436,515  of notes principal with $3,788,419  of  interest
     were  exchanged for 645,956,606 shares of Igene common stock
     at a price of $.005 per share.  As a result, additional paid
     in  capital was recorded to recognize the gain of $4,995,151
     on  the  retirement,  pursuant to APB 26 for  related  party
     debt forgiveness.

     On  November  28,  2008,  Igene  commenced  an  offering  to
     exchange shares of Igene common stock to holders of  Igene's
     privately  held  debt and the associated warrants.   Igene's
     liabilities consisted of the following:

     The  funds to settle the ProBio litigation were provided  by
     Igene's  directors.  On February 15, 2007, Igene issued  and
     sold   $762,000  in  aggregate  principal   amount   of   5%
     convertible debentures, 50% each to two directors of  Igene.
     These  debentures  were convertible into shares  of  Igene's
     common stock at $.02 per share.  At the time of the exchange
     the accrued interest on this debt was $67,641.  All debt and
     interest  under the 5% convertible debentures were exchanged
     for 66,371,244 shares of common stock.

                                -48-

                IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007


     Igene issued $3,814,212 of 8% convertible debentures between
     March  2001  and July 2002.  The debt had accrued $2,204,106
     of  interest at the time of the exchange.  Also,  66,427,650
     warrants  were issued in connection with the 8%  convertible
     debentures.  All of the debt and interest, as well as all of
     the warrants, were exchanged for 528,578,590 shares of Igene
     common  stock.   The original issuances that comprised  this
     liability are as follows:

     On  July  17,  2002,  Igene  issued  and  sold  $300,000  in
     aggregate principal amount of 8% convertible debentures, 50%
     each  to  two  directors  of Igene.  These  debentures  were
     convertible into shares of Igene's common stock at $.03  per
     share  based  on the market price of Igene's shares  at  the
     time the debentures were agreed to.  In consideration of the
     commitment  to purchase the 8% convertible debenture,  these
     directors also received an aggregate of 10,000,000  warrants
     to purchase common stock at $.03 per share.

     On  February  22, 2002, Igene issued and sold $1,000,000  in
     aggregate principal amount of 8% convertible debentures, 50%
     each  to  two  directors  of Igene.  These  debentures  were
     convertible into shares of Igene's common stock at $.04  per
     share  based  on the market price of Igene's shares  at  the
     time the debentures were agreed to.  In consideration of the
     commitment  to purchase the 8% convertible debenture,  these
     directors also received an aggregate of 25,000,000  warrants
     to purchase common stock at $.04 per share.

     In  March  2001,  Igene issued $1,014,211  of  8%,  10-year,
     convertible  debentures to certain  directors  of  Igene  in
     exchange  for  the cancellation of $800,000 of demand  notes
     payable (including accrued interest of $14,212) and $200,000
     in  cash. $600,000 of these demand notes were issued  during
     2000   and   $200,000   were  issued  subsequently.    These
     debentures  were  convertible  into  10,142,110  shares   of
     Igene's  common  stock at $.08 per share.   These  directors
     also  received 10,142,110 warrants to purchase common  stock
     at $.08 per share.

     In  March 2001, certain directors of Igene also committed to
     provide  additional  funding in the  form  of  8%,  10-year,
     convertible  debentures  in the amount  of  $1,500,000.   In
     consideration  of  this  commitment,  these  directors  also
     received  18,750,000 warrants to purchase  common  stock  at
     $.08  per  share.   These debentures  are  convertible  into
     18,750,000 shares of Igene's common stock at $.08 per share.

     Convertible debentures were summarized as follows:

<TABLE>
<CAPTION>

                                                                             Accrued
                                                           Principal         Interest
                                                           ____________      ____________
     <S>                                                   <C>               <C>
     8%, 10-year, convertible debenture issued 7/17/02     $    300,000      $    152,745
     8%, 10-year, convertible debenture issued 2/22/02        1,000,000           538,301
     8%, 10-year, convertible debenture issued 3/1/01         1,014,212           567,262
     8%, 10-year, convertible debenture issued 3/27/01        1,500,000           945,798
     5%, 10-year, convertible debenture issued 2/15/07          762,000            67,641
                                                           ____________      ____________
                                                           $  4,576,212      $  2,271,747

</TABLE>


     Beginning November 16, 1995, and continuing through  May  8,
     1997, Igene issued promissory notes to certain directors for
     aggregate consideration of $1,082,500.  These notes  specify
     that at any time prior to repayment the holder has the right
     to  convert  the  notes to common stock of Igene  at  prices
     ranging from $.05 per share to $.135 per share, based on the
     market price of common shares at the respective issue dates.
     The  notes were convertible in total into 13,174,478  shares
     of common stock.  As a result of the extensions they are now
     convertible into 23,421,273 shares of common stock.  At  the
     time  of the exchange the debt had accrued interest  in  the
     amount  of  $832,485.  Of the amount outstanding holders  of
     $1,041,878 of debt with $801,269 of accrued interest  agreed
     to  exchange their holdings for 147,451,719 shares of  Igene
     common  stock.   As part of this debt Igene  had  60,541,666
     warrants   outstanding  to  purchase  Igene  common   stock.
     60,301,666  of these warrants were additionally  settled  in
     exchange for 19,808,610 shares of Igene common stock.

                                 -49-

               IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007

     In  total,  762,210,163 shares of Igene  common  stock  were
     issued  in  exchange for $5,618,090 of notes and debentures,
     $3,073,015  of  related  interest, and  126,729,316  related
     warrants.   Igene  recorded  additional  paid  in   capital,
     pursuant  to  APB 26 for related party debt forgiveness,  to
     recognize  the gain on termination of this private  debt  in
     the  amount of $3,832,921.  This gain plus the gain  on  the
     public notes of $4,567,004 resulted in the $8,399,925.

     On  October  15, 2007, Mr. Monahan, Igene's Vice  President,
     Secretary   and  Director  of  Manufacturing,   was   issued
     1,000,000 shares of Igene's common stock, valued at $21,000,
     in  connection  with his employment with, and  services  to,
     Igene.   The shares of common stock were issued pursuant  to
     the  exemption from registration provided under Section 4(2)
     of  the  Securities  Act,  as Mr. Monahan  is  an  executive
     officer of the Company.

     Preferred Stock
     _______________

     As  of  December  31, 2008, total dividends  in  arrears  on
     Igene's  preferred  stock equaled $144,297  (or  $12.96  per
     share)  on Igene's Series A and are included in the carrying
     value of the redeemable preferred stock.

(10) Net Loss Per Common Share
     _________________________

     Basic  net loss per common share for 2008 and 2007 is  based
     on  187,037,119  and  109,679,538 weighted  average  shares,
     respectively.  For purposes of computing net loss per common
     share,  the  amount  of  net  loss  has  been  increased  by
     dividends  declared and cumulative undeclared  dividends  in
     arrears on preferred stock.

     Common  stock  equivalents,  including:  options,  warrants,
     convertible   debt,   convertible   preferred   stock,   and
     exercisable rights have not been included in the computation
     of earnings per share in 2008 or 2007 because to do so would
     have   been  anti-dilutive.   Potentially  dilutive   shares
     totaled  52,283,696 and 378,077,265 as of December 31,  2008
     and 2007, respectively.

(11) Commitments
     ___________

     Igene is obligated for office and laboratory facilities  and
     other rentals under operating lease agreements, which expire
     in 2011. The base annual rentals are approximately $103,000,
     increasing  to $106,000 by the end of the lease  term,  plus
     the  Company's  share of taxes, insurance and  other  costs.
     Annual  rent  expense relating to the leases for  the  years
     ended  December 31, 2008 and 2007 approximated $124,470  and
     $118,850,  respectively. As per SFAS 13, rent expenses  will
     be recorded on a straight line basis.

     Future  minimum  rental payments, in the aggregate  and  for
     each of the next three years are as follows:

                   Year          Amount
                  ______        ________

                   2009          103,000
                   2010          106,000
                   2011            9,000
                                ________
                  Total         $218,000
                                ========

(12) Income Taxes
     ____________

     No  income tax benefit or deferred tax asset is reflected in
     the  financial statements for 2007 and 2008.   Deferred  tax
     assets   are  recognized  for  future  deductible  temporary
     difference  and tax loss carry forwards if their realization
     is "more likely than not."

     At  December  31,  2008,  Igene has federal  and  state  net
     operating loss carry-forwards of approximately   $23,990,000
     that expire at various dates from 2009 through 2028.

                                -50-

               IGENE Biotechnology, Inc. and Subsidiary
               Notes to Consolidated Financial Statements
                 Years ended December 31, 2008 and 2007


     The  sources of the deferred tax asset are approximately  as
     follows:

     Net operating loss carry-forward benefit    $  9,356,000
     Valuation allowance                           (9,356,000)
                                                 _____________
     Deferred tax asset, net                     $        ---
                                                 =============

(13) Going Concern
     _____________

     Igene has incurred net losses in each year of its existence,
     aggregating  approximately  $52,730,000  from  inception  to
     December 31, 2008 and its liabilities exceeded its assets by
     approximately  $2,678,000  at  that  date.   These   factors
     indicate  that  Igene  will  not  be  able  to  continue  in
     existence unless it is able to raise additional capital  and
     attain profitable operations.

     As of October 31, 2007, Igene terminated its relationship in
     the  Joint  Venture with Tate & Lyle.  Igene  maintains  the
     saleable inventory after the termination of the relationship
     and  will  sell the existing inventory in order to  maintain
     its relationship with customers and use these funds to cover
     expenses.

     On  January  8,  2009, Igene entered into an agreement  with
     Archer-Daniels-Midland Company ("ADM") pursuant to which the
     Company  and  ADM formed a joint venture (the "ADM  JV")  to
     manufacture  and  sell astaxanthin and  derivative  products
     throughout the world.  Each of the Company and ADM has a 50%
     ownership   interest   in  the  ADM   JV   and   has   equal
     representation  on  the Board of Managers  of  the  ADM  JV.
     Igene hopes this will provide profitable operations.

(14) Nature of Risks and Concentrations
     __________________________________

     Revenue during 2008 and 2007 were derived from sales of  the
     product AstaXin(R). The majority of the 2008 and 2007  sales
     were to fish producers in the aquaculture industry.

     The preceding concentrations subject Igene to certain risks.
     For  example, it is considered at least reasonably  possible
     that any particular customer, distributor, product line,  or
     provider of services or facilities could be lost in the near
     term.

(15) Retirement Plan
     _______________

     Effective  February 1, 2004, Igene discontinued use  of  its
     Simple   Retirement   Plan  and  began   use   of   a   401K
     savings/retirement  plan, or 401(k) Plan.  The  401(k)  Plan
     permits our eligible employees to defer annual compensation,
     subject to limitations imposed by the Internal Revenue Code.
     All  employees  that have been employed for six  months  are
     eligible   for   the   plan.   The  plan  permits   elective
     contributions  by  the  Company's eligible  employees  based
     under  the  Internal  Revenue Code,  which  are  immediately
     vested  and non-forfeitable upon contribution to the  401(k)
     Plan.   Effective  January 1, 2004, Igene made  an  elective
     contribution, subject to limitations, of 4% of each eligible
     employee's  compensation  for  each  year.   For  2008,  the
     percentage  was  increased to 5%.  Igene's contributions  to
     the  plan  for  2008  and  2007 were  $42,657  and  $28,392,
     respectively,  which  is  expensed  in  the   statement   of
     operations.

(16) Subsequent events
     _________________

     On  January  8,  2009, Igene entered into an agreement  with
     Archer-Daniels-Midland Company ("ADM") pursuant to which the
     Company  and  ADM formed a joint venture (the "ADM  JV")  to
     manufacture  and  sell astaxanthin and  derivative  products
     throughout the world.  Each of the Company and ADM has a 50%
     ownership   interest   in  the  ADM   JV   and   has   equal
     representation  on  the Board of Managers  of  the  ADM  JV.
     Igene hopes this will provide profitable operations.


                               -51-

                           SIGNATURES


Pursuant  to  the  requirements of Section 13  or  15(d)  of  the
Securities  Exchange Act of 1934, the registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized.


                           IGENE Biotechnology, Inc.
                           (Registrant)


                       By  /s/ STEPHEN F. HIU
                           ______________________________________
                               STEPHEN F. HIU
                               President, Chief Technical Officer
                               and Treasurer

                       Date March 31, 2009

In  accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.


Signature                  Title                              Date


/s/ STEPHEN F. HIU         Director, President, Chief         March 31, 2009
________________________   Technical  Officer (principal
    STEPHEN F. HIU         executive officer)

/s/ EDWARD J. WEISBERGER   Chief Financial Officer            March 31, 2009
________________________   (principal financial and
    EDWARD J. WEISBERGER   accounting officer)

/s/ THOMAS L. KEMPNER      Vice Chairman of Board             March 31, 2009
________________________   of Directors
    THOMAS L. KEMPNER

/s/ MICHAEL G. KIMELMAN    Chairman of the Board              March 31, 2009
________________________   of Directors
    MICHAEL G. KIMELMAN

/s/ SIDNEY R. KNAFEL       Director                           March 31, 2009
________________________
    SIDNEY R. KNAFEL

/s/ PATRICK F. MONAHAN     Director, Vice President           March 31, 2009
________________________   Secretary and
    PATRICK F. MONAHAN     Director of Manufacturing


<PAGE>


                           EXHIBIT INDEX

EXHIBIT                     DESCRIPTION
NO.

3.1     Articles  of  Incorporation of  the  Registrant,  as
        amended   as  of  November  17,  1997,  constituting
        Exhibit  3.1 to the Registration Statement No.  333-
        41581  on  Form SB-2 filed with the SEC on  December
        5, 1997, are hereby incorporated by reference.

3.2     Articles  of  Amendment to Articles of Incorporation
        of  the  Registrant, constituting Exhibit 3.1(b)  to
        the Registration Statement No. 333-76616 on Form  S-
        8  filed  with  the  SEC on January  11,  2002,  are
        hereby incorporated by reference.

3.3     By-Laws of the Registrant, constituting Exhibit  3.2
        to the Registration Statement No. 33-5441 on Form S-
        1  filed  with  the SEC on May 6, 1986,  are  hereby
        incorporated by reference.

4.1     Form   of  Variable  Rate  Convertible  Subordinated
        Debenture  Due 2002 (Class A), constituting  Exhibit
        4.4  to  the  Registration Statement No. 33-5441  on
        Form  S-1  filed  with the SEC on May  6,  1986,  is
        hereby incorporated by reference.

4.2     Form of Indenture by and between the Registrant  and
        American  Stock  Transfer  and  Trust  Company,   as
        Trustee,  dated as of March 31, 1998,   constituting
        Exhibit  4.2 to the Registration Statement No.  333-
        41581  on Form SB-2/A filed with the SEC on  January
        23, 1998, is hereby incorporated by reference.

4.3     First  Amendment  to Indenture, Securities,  Warrant
        Agreement  and Warrant Certificates by  and  between
        Registrant  and  American Stock Transfer  and  Trust
        Company  dated  as  of March 18, 2003,  constituting
        Exhibit  10.11 to the Quarterly Report on  Form  10-
        QSB  filed  with the SEC on May 14, 2003, is  hereby
        incorporated by reference.

4.4     Second  Amendment to Indenture, Securities,  Warrant
        Agreement  and Warrant Certificates by  and  between
        Registrant  and  American Stock Transfer  and  Trust
        Company  dated  as  of March 28, 2006,  constituting
        Exhibit  4.5  to  the Annual Report on  Form  10-KSB
        filed  with  the  SEC on April 13, 2006,  is  hereby
        incorporated by reference.

4.5     Third  Amendment  to Indenture, Securities,  Warrant
        Agreement  and Warrant Certificates by  and  between
        Registrant  and  American Stock Transfer  and  Trust
        Company dated as of October 23, 2008.*

10.1    Form  of  Conversion and Exchange Agreement used  in
        May  1988  in  connection with  the  conversion  and
        exchange  by certain holders of shares of  preferred
        stock  for  common stock and Warrants,  constituting
        Exhibit 10.19 to the Registration Statement No.  33-
        5441  on Form S-1 filed with the SEC on May 6, 1986,
        is hereby incorporated by reference.

10.2    Preferred  Stockholders' Waiver Agreement dated  May
        5,   1988,   constituting  Exhibit   10.3   to   the
        Registration  Statement No.  33-23266  on  Form  S-1
        filed  with  the  SEC on July 22,  1988,  is  hereby
        incorporated by reference.

10.3    Form   of  Agreement  between  the  Registrant   and
        Certain   Investors   in   Preferred   Stock   dated
        September  30,  1987, constituting Exhibit  10.4  to
        the  Registration Statement No. 33-23266 on Form  S-
        1/A, is hereby incorporated by reference.

10.4    Agreement   of  Lease  between  Columbia   Warehouse
        Limited  Partnership  and the  Registrant  effective
        December  15,  1995, constituting Exhibit  10.13  to
        the  Annual Report on Form 10-KSB filed with the SEC
        on   April  12,  1996,  is  hereby  incorporated  by
        reference.

10.5    First Amendment to Lease between the Registrant  and
        Red  Branch  Center,  LLC made September  13,  2000,
        constituting  Exhibit 10.8 to the Annual  Report  on
        Form 10-KSB filed with the SEC on April 2, 2001,  is
        hereby incorporated by reference.

10.6    Separation  Agreement  between  the  Registrant  and
        Tate  & Lyle Fermentation Products Ltd. dated as  of
        October 31, 2007, constituting Exhibit 10.1  to  the
        Current  Report on Form 8-K filed with  the  SEC  on
        November   6,   2007,  is  hereby  incorporated   by
        reference.

<PAGE>

10.7    Limited  Liability  Company Agreement  dated  as  of
        January   8,   2009  between  Archer-Daniels-Midland
        Company  and  the  Registrant, constituting  Exhibit
        10.1  to  the Current Report on Form 8-K filed  with
        the  SEC on January 21, 2009, is hereby incorporated
        by  reference. [Portions of this exhibit  have  been
        omitted  pursuant  to  a  request  for  confidential
        treatment.]

21.1    Subsidiaries*

31.1    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal executive officer.*

31.2    Rule  13a-14(a)  or 15d-14(a) Certification  of  the
        Registrant's principal financial officer.*

32.1    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal executive  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*

32.2    Rule  13a-14(b)  or 15d-14(b) Certification  of  the
        Registrant's  principal financial  officer  pursuant
        to  18  U.S.C. Section 1350 as adopted  pursuant  to
        Rule 906 of the Sarbanes-Oxley Act of 2002.*

*Filed herewith