SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                           FORM 10-KSB
 (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, 2007

[ ]  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.
        ______________________________________________
        (Name of Small Business Issuer in Its Charter)

              Maryland                         52-1230461
   ________________________________     ______________________
   (State or other jurisdiction of      (I.R.S. Employer
    incorporation or organization)       Identification Number)

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

                         (410) 997-2599
       ________________________________________________
       (Issuer's telephone number, including area code)

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

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

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

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

     Check  whether  the issuer is not required to  file  reports
pursuant to Section 13 or 15(d) of the Exchange Act.  [ ]

     Check  whether the issuer (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the
past  12  months (or for such shorter period that the  registrant
was  required to file such reports), and (2) has been subject  to
such filing requirements for the past 90 days.

     YES   [X]          NO   [ ]

     Check  if  there  is no disclosure of delinquent  filers  in
response  to Item 405 of Regulation S-B contained in  this  form,
and  no disclosure will 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-KSB or  any
amendment to this Form 10-KSB.  [  ]

     Indicate  by check mark whether the registrant  is  a  shell
company (as defined in Rule 12b-2 of the Exchange Act).

     YES   [ ]          NO   [X]

     State  issuer's  revenues for its most  recent  fiscal  year
$2,286,730

     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 sold, or the average
bid and asked price of such common equity, as of a specified date
within the past 60 days.  $1,012,436 as of April 11, 2008
                          _______________________________
(Note:   The  officers and directors of the issuer are considered
         affiliates for purposes of this calculation.)

     State  the  number  of shares outstanding  of  each  of  the
issuer's  classes of common equity, as of the latest  practicable
date.
As  of  April  11,  2008  there  were  110,337,072  shares of the
_________________________________________________________________
issuer's common stock outstanding.
_________________________________

                                  -1-
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  STATEMENT,  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.   DESCRIPTION OF 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  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 is the  developer
of  AstaXin(R),  a  natural  astaxanthin product made from yeast,
which  is  used  as  a  source  of  pigment  for  coloring farmed
salmonids.

     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
accounting contribution was valued at zero.

                               -2-

     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 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.

     As  a result of the Joint Venture termination, Igene is  not
currently  producing  astaxanthin products,  and  is  researching
several  alternatives for a potential new source  of  production.
At  the  current  pace,  Igene expects  to  have  inventories  of
existing  product  necessary to meet  demand  through  the  third
quarter  of 2008.  Igene expects to be out of the market  for  an
uncertain  period  of time following the third  quarter  of  2008
until  a  new  source  of production can be identified,  commence
operations and yield salable product.

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 current 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  its  product,  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, 2007, Igene had expended  approximately
$17,253,000  on research and development since its  inception  on
October 27, 1981.  The costs listed below for 2007 and 2006  were
reimbursed by the Joint Venture through October 31, 2007.   Sales
of  astaxanthin (through Igene and the Joint Venture) resulted in
revenues  of $49,400,000 as of December 31, 2007, $39,500,000  of
which were realized through the Joint Venture.   From November 1,
through  December  31,  2007,  $2,286,730  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 2008.

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

     2007   $ 983,610
     2006   $ 847,598

                                 -3-

     Igene's research and development activities have resulted in
the  development of processes to produce the products 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.   An estimated 1,000,000 metric tons  of  farm-
raised salmon are produced annually worldwide.  The Joint Venture
derived revenue during 2007  and  2006 from sales of  AstaXin(R),
the  majority  of  which  sales  were  to  fish  producers in the
aquaculture industry  in Chile.  Additional revenues were derived
from sales exported  to the European Union, Japan 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, include 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.

                                 -4-

     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.

     With  the  termination  of  the  Joint  Venture,  Igene  has
undertaken  the  process  of negotiating  for  new  manufacturing
capacity.  The Company estimates the current supply of AstaXin(R)
product will be sold by the fourth quarter of 2008.  In finding a
new   manufacturing  facility,  Igene  will  need  to  locate   a
fermentation facility that will provide both a dependable  and  a
cost  effective structure.   Should Igene be able  to  accomplish
this, it would then need to reenter the market place.

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,  2007, 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.  Fourteen employees are
based  in  the  U.S,  and four 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 2.   DESCRIPTION OF PROPERTY

     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 $126,000.  Approximately  2,000  square
feet  of  this  space  is used for executive  and  administrative
offices  and  approximately 2,500 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.

     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.

                                 -5-

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, except as
set forth below.

     In  connection  with  the issuance of convertible  notes  by
Igene  in 2001 to each of NorInnova AS (formerly Forskningsparken
I  Tromso AS), Knut Gjernes, Magne Russ Simenson and Nord  Invest
AS  (collectively,  the "note holders"), which convertible  notes
matured  in  November 2004, the note holders  filed  a  compliant
against  Igene  in  Circuit Court of Howard County,  Maryland  on
November 29, 2006 seeking payment of all outstanding amounts  due
under the convertible notes.   On February 23, 2007, Igene,  paid
an aggregate amount of $762,638 to the note holders as settlement
of  all  claims related to the convertible notes.  The  complaint
was dismissed with prejudice on March 6, 2007.

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

     None.
                               PART II

ITEM 5.   MARKET   FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER
          MATTERS  AND SMALL BUSINESS ISSUER PURCHASES OF  EQUITY
          SECURITIES

Common Stock

     Commencing  on or about June 12, 1989, Igene's common  stock
began  trading on the over-the-counter market on a limited  basis
and  is  quoted on the National Quotation Bureau's OTC  "bulletin
board".   The  following  table shows, by calendar  quarter,  the
range  of representative bid prices for Igene's common stock  for
2007 and 2006.

<TABLE>
<CAPTION>
               Calendar Quarter           High            Low
               ________________          ______          ______
     <S>       <C>                       <C>             <C>
     2007:     First Quarter             $.0250          $.0200
               Second Quarter            $.0500          $.0200
               Third Quarter             $.0350          $.0200
               Fourth Quarter            $.0230          $.0100

     2006:     First Quarter             $.1200          $.0400
               Second Quarter            $.1200          $.0360
               Third Quarter             $.0600          $.0250
               Fourth Quarter            $.0420          $.0090
</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 April 11, 2008 was 250.  As of April 11, 2008,  the
high  bid and low offer prices for the common stock, as shown  on
the  "over-the-counter  bulletin board"  were  $.020  and  $.015,
respectively.

                                 -6-

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 a quarterly
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 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, 2007, total dividends in
arrears  on  Igene's preferred stock equaled $137,171 (or  $12.32
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
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 (the "Second Amendment")  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.

Securities Authorized for Issuance Under Equity Incentive Plans

  Equity Compensation Plan Information as of December 31, 2007

<TABLE>
<CAPTION>

                                                                                   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          44,845,000                        $.059                    27,387,334
  plans approved by
  security holders<F1>

  Equity compensation                 ---                          ---                           ---
  plans not approved by
  security holders
                         _______________________      _______________________      _______________________
     TOTAL                     44,845,000                        $.059                    27,387,334
                         _______________________      _______________________      _______________________

<FN>
<F1>   Includes  Igene's 2001 Stock Incentive Plan,  1997  Stock
       Option Plan and 1986 Stock Option Plan (collectively, the
       "Plans").
</FN>
</TABLE>

                                 -7-

Sales of Unregistered Securities

     During  the  first  quarter of 2006,  Igene's  manufacturing
agent,  Fermic, earned 545,569 shares of common stock as part  of
the  manufacturing  agreement between Igene and  Fermic.   Fermic
earns  2,250  shares of common stock for each  kilogram  of  pure
astaxanthin produced and delivered, up to 20,000,000  shares,  as
part  of the manufacturing agreement. The average price is  based
on  the  market value of the shares at the time the  product  was
produced.   The 545,569 shares were earned at an average price of
$.056  per  share  for  2006.  Through  December  31,  2006,  all
20,000,000  shares  have  been  earned  under  the  manufacturing
agreement.   Igene  relied  on  the exemption  from  registration
provided  under Section 4(2) of the Securities Act  of  1933,  as
amended,  to  issue the shares to Fermic.  Igene  relied  on  the
representations   and   warranties  of   Fermic   made   in   the
manufacturing agreement in claiming the aforementioned exemption,
including  the  representation  that  Fermic  is  an  "accredited
investor"  as  defined  in Rule 501 of Regulation  D  promulgated
under the Securities Act of 1933, as amended.

     On  September  30,  2006, Igene issued 1,000,000  shares  of
common  stock  to  the  Joint Venture's  new  Vice  President  of
Manufacturing,  Joseph  Downs,  as  part  of  his  agreement   in
accepting  the  position.  The cost was  expensed  in  the  third
quarter  2006 as payroll expense, at a cost of $0.05  per  share,
for  a total expense of $50,000. The shares of common stock  were
issued pursuant to the exemption from registration provided under
Section  4(2) of the Securities Act, as Mr. Downs is an executive
of the Company.

     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.

Default Upon Senior Securities

     As previously stated in Igene's quarterly report on Form 10-
QSB  for  the third quarter of 2001 filed on November  13,  2001,
Igene entered into Convertible Promissory Notes (the "Convertible
Notes") with each of the following note holders for the following
respective amounts (a) NorInnova AS (formerly Forskningsparken  I
Tromso  AS) for $106,500; (b) Knut Gjernes for $7,500; (c)  Magne
Russ  Simenson for $378,000; and (d) Nord Invest AS for $313,000.
Each of the Convertible Notes had a maturity date of November  1,
2004.   On  November 18, 2005, each of the holders of Convertible
Notes provided Igene with written notice of default under each of
the Convertible Notes.

     On November 29, 2006, holders of the Convertible Notes filed
a  complaint against Igene in the Circuit Court of Howard County,
Maryland seeking payment of all outstanding amounts due under the
Convertible  Notes.   On February 23, 2007, Igene, paid  $762,638
to  the  Convertible  Note holders as settlement  of  all  claims
related  to  the Convertible Notes.  The complaint was  dismissed
with prejudice on March 6, 2007.


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
          OPERATION

     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

                                 -8-

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.

     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 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 termination, Igene is  now
researching  several alternatives for a potential new  source  of
production.   At  the  current  pace,  Igene  expects   to   have
inventories of existing product necessary to meet demand  through
the third quarter of 2008.  Igene expects to be out of the market
for  an  uncertain period of time following the third quarter  of
2008 until a new source of production can be identified, commence
operations and yield salable product.

     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:    Gross  profit  from  inception   was   a   negative
$21,304,462 on sales of $38,380,752, less manufacturing  cost  of
$59,685,214.   Selling  and general and  administrative  expenses
were  $16,542,813,  and  interest expense  was  $5,805,227.   The
resulting loss was $43,652,502.  Igene's 50% portion of the Joint
Venture loss was $21,826,251.

      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  are  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  and were 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 was sold as part of the termination of the Joint Venture.

Sales and other revenue

     As  part  of  the  Joint  Venture Agreement,  all  sales  of
AstaXin(R) prior to October 31, 2007 were recognized through  the
Joint Venture.  Therefore, Igene recorded no sales during 2006 or
in  2007 prior to October 31, 2007.  During November and December
of  2007,  Igene  recorded sales of $2,286,730.  Sales  had  been
limited in past years due to insufficient production quantity and
are expected to decline to zero sometime during the third quarter
of 2008 and remain negligible until a source of production can be
identified and production begins.  Igene is currently researching
various  alternatives  for  future production  but  has  not  yet
engaged  any new source of production.  Management believes  that
this decision is of fundamental importance to Igene and continues
to seek an appropriate production partner.

                               -9-
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 during 2006 or 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%.  The increase in gross profit 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,  there  can  be no  assurance  of  the  continued
dependability of production.  As a result, future cost  of  sales
is  expected  to  increase through the  third  quarter  of  2008,
whereupon sales, and cost of sales, are expected to be negligible
until  a  source of production can be identified and commencement
of  production  cannot  be predicted and  no  assurances  can  be
provided.   Igene  is currently researching various  alternatives
for future production.

Expenses reimbursement by Joint Venture

     As  part  of the Joint Venture Agreement, 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.
We  do  not expect cash flows from operations to continue  beyond
the third quarter of 2008 unless and until a source of production
is  identified and production begins.  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.  For the year ended
December 31, 2006, costs reimbursed by the Joint Venture  totaled
$1,660,519.    Of   the  reimbursement  received,   approximately
$848,000 covered research and development costs, $98,000  covered
marketing and selling expenses and approximately $715,000 covered
general and administrative costs.

Marketing and selling expenses

     Marketing  and selling expenses for 2007 were  $158,104,  an
increase  of  $59,864,  or 61%, from the  marketing  and  selling
expenses of $98,240 for 2006.  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,  and  Igene will  continue  marketing  of  the
product   while  reviewing  and  developing  future  sources   of
production.  As a result it is expected this figure will increase
as  it is only representative of marketing efforts for less  than
one  quarter  of 2007.  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.   However,
we  do  not expect cash flows from operations to continue  beyond
the third quarter of 2008 unless and until a source of production
is identified and production begins.  Prior to the termination of
the  Joint  Venture, costs reimbursed by the  Joint  Venture  for
marketing costs totaled $49,216 during 2007, and $98,000 for  the
year ended December 31, 2006.

Research, development and pilot plant expenses

     Research, development and pilot plant expenses for 2007  and
2006  were  $983,610  and $847,598, respectively,  reflecting  an
increase of $136,012 or 16%.  Costs are expected to be maintained
at  this  level  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 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  of 2007, all research and development 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.  However, we do not expect cash  flows  from
operations  to continue beyond the third quarter of  2008  unless
and  until  a  source of production is identified and  production
begins.   Prior  to the termination of the Joint  Venture,  costs
reimbursed   by  the  Joint  Venture  related  to  research   and
development  totaled $861,108 during 2007, and $848,000  for  the
year ended December 31, 2006.

                                -10-

General and administrative expenses

     General  and  administrative expenses for 2007 decreased  by
$49,086,  or 5%, from 2006 (from $1,022,051 to $972,965).   These
costs are expected to remain at the current 2007 level.  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 expected to be funded  by  cash
flows from operations, to the extent available for such purposes.
However,  we do not expect cash flows from operations to continue
beyond  the  third quarter of 2008 unless and until a  source  of
production  is identified and production begins.   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 and $715,000 for the year ended December 31,
2006.

Interest expense (net of interest income)

     Interest  expense  for  2007 and  2006  was  $2,160,638  and
$2,029,928  respectively, an increase of $130,710  or  6%.   This
interest  expense  (net  of  interest  income)  was  composed  of
interest  on  Igene's long term financing from its directors  and
other  stockholders  and  interest on  Igene's  subordinated  and
convertible  debentures, as well as amortization of  discount  on
Igene's   notes  and  debentures  of  $1,406,780  for  2007   and
$1,276,137 for 2006.  The expense recorded for 2007 and 2006  was
reduced by interest income of $50,581 and $77,982 respectively.

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 $1,899,073 for 2007 and a  net  loss  of
$2,431,910  for 2006.  This resulted in a net loss  of  $.02  per
basic common share for 2007 based on a weighted average of common
stock  outstanding  of  109,679,538.  As of  December  31,  2007,
potentially  dilutive shares totaled 378,227,265,  and  were  not
considered  in the computation as the result of the loss  as  the
effect  would  be anti-dilutive.  For the fiscal year  2006,  the
result was a net loss per basic and diluted common share of  $.02
based  on  a  weighted  average of common  stock  outstanding  of
108,387,454.

Financial Position

     During  2007 and  2006, the following also affected  Igene's
financial position:

   - 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.

   - During  2006,  decreases in  accounts receivable and prepaid
     expenses   and   other  assets  of  $14,619   and   $27,419,
     respectively,  and increases in accounts payable and accrued
     expenses of $899,534 were sources of cash.

     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
liquidation  preference  or redemption  value  of  the  preferred
stock.   As  of December 31, 2007, total dividends in arrears  on
Igene's Series A preferred stock equaled $137,171 (or $12.32  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, 2007, Igene had working capital of $3,940,737,  and
cash and cash equivalents of $1,026,350.

                                -11-

     Cash provided by operating activities in 2007 was $1,202,644
as compared to cash provided of $100 in 2006.

     Cash  used  by investing activities in 2007 was $255,080  as
compared to $109,147 used by investing activities in 2006.

     Cash provided by financing activities was $57,000 in 2007 as
compared  to  cash  provided by financing activities  of  $11,088
during 2006.

     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), resulting in increased cash
through the third quarter of 2008.  Thereafter sales are expected
to  decline  to  zero and remain negligible  until  a  source  of
production  is identified and production begins.  There  will  be
additional delay between the commencement of production  and  the
receipt  of  proceeds  from any sale of such  product.   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 2007 and 2006.

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 collectibility
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.

ITEM 7.   CONSOLIDATED FINANCIAL STATEMENTS

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

                                -12-

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 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, McElravy, Kinchen &Associates, P.C. ("McElravy")
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 McElravy as its new independent  registered
public  accounting firm effective as of January  15,  2008.   The
selection of McElravy was approved by the Audit Committee of  the
Board of Directors of Igene on January 15, 2008.

ITEM 8A(T). 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
(defined  below)).   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  Securities  Exchange Act of 1934, as amended (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.

                              -13-

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, 2007. 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.  We have identified the following  material
weaknesses.

 1. As  of  December  31,  2007, 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  its  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-B.    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,  2007,  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,  2007,  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,  2007,  based  on  the
criteria  established in "Internal Control-Integrated  Framework"
issued by the COSO.

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.

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,  2007,
that  materially affected, or is reasonably likely to  materially
affect, the Company's internal control over financial reporting.

                               -14-

ITEM 8B.  OTHER INFORMATION

     None.

                               -15-

PART III

ITEM 9. DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS,   CONTROL
        PERSONS   AND   CORPORATE  GOVERNANCE;  COMPLIANCE   WITH
        SECTION 16(a) OF THE EXCHANGE ACT

     Igene's  directors  are elected annually by the stockholders
of Igene; however, no annual meeting of stockholders was held  in
2007.   The  directors, executive officers and key  employees  of
Igene as of December 31, 2007 are as follows:

<TABLE>
<CAPTION>

Name                           Age     Position with Igene
__________________________    _____    __________________________
<S>                           <C>      <C>
Michael G. Kimelman            69      Chairman of the Board of
                                       Directors<F1>

Thomas L. Kempner              80      Vice Chairman of
                                       the Board of Directors<F2>

Stephen F. Hiu                 51      Director, President, Chief
                                       Technical Officer,
                                       and Director of Research
                                       and Development

Patrick F. Monahan             57      Director, Vice-President,
                                       Secretary, and Director
                                       of Manufacturing

Sidney R. Knafel               77      Director<F2>

Edward J. Weisberger           43      Chief Financial Officer

<FN>
<F1>  Member of the Audit Committee of the Board of Directors
<F2>  Member of the Finance 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 in July of 2006, and because  no
annual  stockholder  meeting  was  held  in  2007,  is  currently
holding-over  from  his prior term.    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 that time  and
through the present, he has been a founder and member of Kimelman
&  Baird,  LLC.   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 Igene 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.,    and
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 Igene since  1999.
Mr. Hiu was elected a director in August 1990 and he has been the
Director  of  Research and Development since  January  1989  and,
prior thereto, was Senior Scientist since December 1985, when  he
joined Igene.  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 since 2002,  and
as  Director  of Manufacturing and as a director of  Igene  since
1991.   Mr.  Monahan has also served as Secretary of Igene  since
September  1998 and has managed Igene's fermentation pilot  plant
since  1982.  He received an Associate of Arts 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.

                               -16-

SIDNEY  R.  KNAFEL has served as a director of Igene 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. as well as a number of  private
companies.

EDWARD  J.  WEISBERGER has served as Chief Financial  Officer  of
Igene  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 2007, all filing requirements applicable  to
its  reporting officers, directors and greater than  ten  percent
beneficial  owners  were timely satisfied except  one  delinquent
Form 4 filing by Thomas L. Kempner resulting in four transactions
being  untimely  reported, and one delinquent Form  4  filing  by
Michael Kimelman in 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-B.  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 10.  EXECUTIVE COMPENSATION

     The  following tables show the compensation paid or  accrued
by  Igene  to  each  of the three officers (the "named  executive
officers").  During 2007, no directors were compensated for their
Board  or  Committee activities.  Other than the 1986,  1997  and
2001  Stock  Incentive  Plans  and  the  Simple  Retirement  Plan
described  below,  Igene  has  no  profit  sharing  or  incentive
compensation plans.

<TABLE>
<CAPTION>

Summary Compensation Table

                                                                       All Other
Name and                                                               Compensation
Principal Position         Year    Salary($)<F1>    Stock Awards($)    ($)<F2>        Total($)
_______________________   ______   ____________     ________________   ____________   ____________

<S>                       <C>      <C>              <C>                <C>            <C>
Stephen Hiu               2007     $ 153,886        $       0          $   6,396      $ 160,282
President
                          2006       142,580                0              6,575        149,155



                                 -17-

                                                                       All Other
Name and                                                               Compensation
Principal Position         Year    Salary($)<F1>    Stock Awards($)    ($)<F2>        Total($)
_______________________   ______   ____________     ________________   ____________   ____________

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

Edward Weisberger         2007       132,793                0              5,712        138,505
Weisberger Chief
Financial Officer         2006       125,817                0              5,750        131,567


<FN>
<F1>  Gross Salary of the named executive officers listed.

<F2>  Includes annual taxable compensation for health insurance
      premium and employer match of 401(k).

<F3>  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>

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, 2007.  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              $    .10            04/16/2008
                            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             1,050,000                   .10            04/16/2008
                            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 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.    Igene's
contributions  to  the plan for 2007 and 2006  were  $28,392  and
$25,996,  respectively, which is expensed  in  the  statement  of
operations.

                              -18-

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 2007. 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  three  stock  incentive  plans.
Igene's  2001 Stock Incentive Plan (the "2001 Plan"),  which  was
approved by Igene's stockholders on June 12, 2001, authorized for
issuance  restricted  stock  and  options  to  purchase   up   to
55,000,000  shares  of common stock.  Igene's 1997  Stock  Option
Plan   (the   "1997  Plan"),  which  was  approved   by   Igene's
stockholders  on  November  17,  1997,  authorized  for  issuance
options  to  purchase up to 20,000,000 shares  of  common  stock.
Igene's  1986  Stock  Option Plan (the "1986  Plan"),  which  was
approved  by Igene's stockholders on May 5, 1987, authorized  for
issuance options to purchase up to 97,000 shares of common  stock
(the  2001 Plan, the 1997 Plan and the 1986 Plan are collectively
referred to herein as the "Plans").  A committee of the Board  of
Directors administers the Plans.

     The  purpose  of  the  Plans  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 these Plans  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 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  Plans contain anti-dilution provisions in the event  of
certain corporate transactions.

     The  Board  of Directors may at any time withdraw  from,  or
amend,   the  Plans  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 2001 Plan  after
April 30, 2011.  Igene maintains the 1997 Plan and the 1986 Plan,
but  additional  options  may no longer be  granted  under  those
plans.

     Options  to  acquire 47,612,666 shares of common stock  have
been  granted  under  Plans  and  44,845,000  options  are  still
outstanding under the Plans as of December 31, 2007.  No  options
or restricted awards were granted during 2007 and 2006.

                               -19-

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

     The  following table sets forth information as of March  17,
2008  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 17, 2008 there were  110,337,072
shares  of common stock issued and outstanding.  Shares of common
stock  subject  to options or warrants currently  exercisable  or
exercisable  within  60  days  of  March  17,  2008  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.  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                      14,993,633<F1>         12.07
  9110 Red Branch Road
  Columbia, MD 21045

Thomas L. Kempner                  147,804,528<F2>         61.53
  61 Broadway
  New York, NY 10006

Michael G. Kimelman                 50,197,723<F3>         31.52
  100 Park Avenue
  New York, NY 10017

Sidney R. Knafel                   145,777,554<F4>         61.27
  810 Seventh Avenue
  New York, NY 10019

Patrick F. Monahan                   9,315,033<F5>          7.92
  9110 Red Branch Road
  Columbia, MD 21045

Edward J. Weisberger                 4,570,000<F6>          3.98
  9110 Red Branch Road
  Columbia, MD 21045

All Directors and Officers         372,658,471<F7>         84.25
  as a Group (6 persons)

Others
______

Joseph C. Abeles                    17,954,407<F8>         14.23
  220 E. 42nd Street
  New York, NY 10017

Fraydun Manocherian                  7,905,135<F9>          7.13
  3 New York Plaza
  New York, NY 10004

Fermic                              20,000,000<F10>        18.13
  Col. San Nicolas Tolentino
  Iztapalapa 09850 Mexico, D.F.

                              -20-

<FN>

<F1>  Includes  1,148,633  shares  held  directly or indirectly by
  Dr.  Hiu and 13,845,000 shares issuable upon exercise of options
  held by Dr. Hiu that are currently exercisable.

<F2> Includes  17,933,110  shares held directly  or indirectly  by
  Mr.  Kempner  and  536,920  shares  issuable  upon  exercise  of
  warrants held by  Mr.  Kempner  that are currently  exercisable.
  Also  includes  43,800,135  shares  issuable  upon conversion of
  notes issued  by  Igene and held by Mr. Kempner.  Also  includes
  (i) 41,582,728 shares issuable upon exercise of warrants held by
  a  trust  under which Mr. Kempner is one of two trustees and the
  sole  beneficiary,   which   are   currently   exercisable  (ii)
  41,561,125 shares  issuable  upon exercise of warrants held by a
  trust  under which Mr. Kempner is one of two trustees and one of
  his  brothers  is  the  sole  beneficiary,  which  are currently
  exercisable  (iii) 2,079,411  shares  issuable  upon exercise of
  warrants  held  by  trusts under which Mr. Kempner is one of two
  trustees  and  is  a  one-third  beneficiary  that are currently
  exercisable, and (iv) 81,120 shares  and 229,979 shares issuable
  upon exercise of warrants held by trusts under which Mr. Kempner
  is  executer  and  is a one-third beneficiary that are currently
  exercisable.

<F3> Includes  1,264,360 shares held directly or indirectly by Mr.
  Kimelman,  and  14,000,000  shares issuable  upon  exercise  of
  options, 17,680,341 shares issuable upon the conversion of notes
  issued by Igene, and 17,253,022 shares issuable upon exercise of
  warrants,  all  of  which  are  held  by  Mr.  Kimelman  and are
  currently exercisable.

<F4> Includes  18,190,551  shares held directly or indirectly  by
  Mr.  Knafel, 42,619,509 shares issuable upon the conversion  of
  notes  issued  by Igene and held by Mr. Knafel  and  84,967,494
  shares  issuable  upon  the  exercise  of  warrants  owned   or
  beneficially owned by Mr. Knafel that are currently exercisable.

<F5> Includes  2,047,533  shares  held  directly or indirectly by
  Mr. Monahan  and  7,267,500 shares issuable upon  the  exercise
  of options held by Mr. Monahan that are currently exercisable.

<F6> Includes  70,000 shares held directly by Mr. Weisberger  and
  4,500,000  shares  issuable upon exercise of options  that  are
  currently exercisable.

<F7> Includes  42,863,601  shares  of  common  stock,  39,612,500
  shares  issuable  upon exercise of options that  are  currently
  exercisable, 110,823,687 shares issuable upon the conversion of
  notes issued by Igene and 197,313,091 shares issuable upon  the
  exercise of warrants that are currently exercisable.

<F8> Includes  the  following: 2,128,294 shares held directly  or
  indirectly  by Mr. Abeles, 6,723,701 shares issuable  upon  the
  conversion of $311,663 of long-term notes issued by Igene,  and
  9,102,412 shares issuable upon exercise of warrants held by Mr.
  Abeles that are currently exercisable.

<F9> Includes  7,375,935 shares of common stock owned directly or
  indirectly by Mr. Manocherian and 529,200 shares issuable  upon
  the  exercise of warrants owned directly or indirectly  by  Mr.
  Manocherian that are currently exercisable.

<F10> Includes 20,000,000 shares of common stock.

</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-KSB is hereby incorporated by
reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
          DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

     In  order  to provide Igene with sufficient funds to  settle
the  litigation with the holders of the convertible notes  issued
by  Igene in 2001, on February 15, 2007, Igene 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 Igene.  These debentures are convertible into shares
of  Igene's  common stock at $0.02 per share based on  the  offer
made  to  the original debenture holders as the market  price  of
Igene's  shares as of February 2007.  As of April 15, 2008  these
debentures have accrued $44,450 of interest, and no payments have
been made.

                              -21-

     In  order  to  provide  Igene with working  capital  as  the
inventory  received  from  the Joint  Venture  is  sold  and  the
receivables are collected, on December 12, 2007, Igene issued and
sold  an  aggregate 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 Igene.   As
of  April  12, 2008 these notes have accrued $8,500 of  interest,
and no payments have been made.

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.

                              -22-

ITEM 13.   EXHIBITS

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

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     Warrant  Agreement  by  and  between  the Registrant and
        American  Stock  Transfer  and Trust Company, as Warrant
        Agent, dated as of March 31, 1998,  constituting Exhibit
        4.3 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.

4.4     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.

4.5     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.

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.

                                  -23-

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.

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


ITEM 14.  PRINCIPAL ACCOUNTANTS FEES AND SERVICES

                  REGISTERED PUBLIC ACCOUNTANTS

     The accounting firm of McElravy, Kinchen & Assosicates, P.C.
("McElravy")  has been engaged to audit the financial  statements
of  Igene  for the fiscal year 2008.  McElravy served as  Igene's
registered  public accountants to audit the financial  statements
for 2007.  J.H. Cohn LLP originally served as the auditor in 2007
and  served as Igene's registered public accountants to audit the
restated  financial  statements in 2006 and 2005.   Berenson  LLP
originally  served as the auditor in 2006 and 2005;  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
McElravy  has advised Igene that neither the accounting firm  nor
any  of  its  members  of  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 fees paid or accrued  by  the
Company for the audit and other services provided by McElravy and
J.H.  Cohn  LLP for fiscal year 2007, and by J. H. Cohn  LLP  for
fiscal year 2006:

<TABLE>
<CAPTION>

                            FY 2007                FY 2006
                            ________               ________
   <S>                      <C>                    <C>
   Audit Fees               $ 33,000               $100,844
   Audit-Related Fees              0                      0
   Tax Fees                        0                  5,000
   All Other Fees                  0                      0
                            ________               ________

        TOTAL               $ 33,000               $105,844

</TABLE>

     Audit  services  provided by McElravy and J.H. Cohn LLP  for
fiscal  year  2007, and by J. H. Cohn LLP for  fiscal  year  2006
consisted  of the audit of the consolidated financial  statements
of  Igene  and  quarterly reviews of financial statements.   "Tax
Fees" include charges primarily related to tax return preparation
and  tax  consulting services.  In 2003, the SEC adopted  a  rule
pursuant  to the Federal 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 Igene's independent auditors.  All  of  the
2006  services  described above were pre-approved  by  the  Audit
Committee pursuant to this SEC rule to the extent that  rule  was
applicable during fiscal year 2006.

                               -24-

     The Audit Committee's policy is to pre-approve all audit and
permitted  non-audit services, except that de  minimis  non-audit
services,  as  defined in Section 10A(i)(1) of the Exchange  Act,
may  be  approved  prior  to the completion  of  the  independent
auditor's  audit.  The Audit Committee has reviewed summaries  of
the  services  provided and the related fees and  has  determined
that  the  provision  of non-audit services  is  compatible  with
maintaining the independence of Berenson LLP.

                               -25-



     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     _______________________________________________________

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

We  have  audited the accompanying consolidated balance sheet  of
IGENE Biotechnology, Inc. as of December 31, 2007 and the related
consolidated  statements  of  operations,  stockholders'   equity
(deficit) and cash flows for the year 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. The financial statements for  the
period January 1, 2006 through December 31, 2006, were audited by
other  auditors whose reports expressed unqualified  opinions  on
those statements.

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,  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/ McElravy, Kinchen & Associates, P.C.
________________________________________
    McElravy, Kinchen & Associates, P.C.

www.mkacpas.com
Houston, Texas
April 28, 2008

                               -26-


     REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Audit Committee and Stockholders
IGENE Biotechnology, Inc.

We  have  audited  the  accompanying consolidated  statements  of
operations,  stockholders' deficiency and  cash  flows  of  IGENE
Biotechnology,  Inc. and subsidiary for the year  ended  December
31,  2006.   These  consolidated  financial  statements  are  the
responsibility  of the Company's management.  Our  responsibility
is   to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We  conducted our audit in accordance with the standards  of  the
Public  Company  Accounting  Oversight  Board   (United  States).
Those  standards require that we plan and perform  the  audit  to
obtain   reasonable  assurance  about  whether  the  consolidated
financial statements are free of material misstatement.  An audit
includes  examining,  on  a test basis, evidence  supporting  the
amounts and disclosures in the consolidated 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  audit  provides a reasonable  basis  for  our
opinion.

In our opinion, the consolidated financial statements referred to
above  present fairly, in all material respects, the  results  of
operation  and  cash  flows  of  IGENE  Biotechnology,  Inc.  and
subsidiary  for the year ended December 31, 2006,  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  consolidated  financial  statements,  the
Company's  recurring  losses,  and limited  capitalization  raise
substantial  doubt  about its ability  to  continue  as  a  going
concern.   Management's plans regarding those  matters  are  also
described  in Note 13.  The financial statements do  not  include
any  adjustments  that  might result from  the  outcome  of  this
uncertainty.


                                     /S/ J. H. COHN LLP
                                     ___________________________
                                         J. H. COHN LLP

New York, New York
December 11, 2007

                               -27-

<TABLE>
<CAPTION>
                        IGENE Biotechnology, Inc. and Subsidiary
                               Consolidated Balance Sheet
                                    December 31, 2007

<S>                                                             <C>
ASSETS
______
CURRENT ASSETS
  Cash and cash equivalents                                        $   1,026,350
  Accounts receivable                                                  2,718,884
  Inventory                                                            8,059,777
  Prepaid expenses and other current assets                               38,351
                                                                   ______________
     TOTAL CURRENT ASSETS                                             11,843,362

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

     TOTAL ASSETS                                                  $  13,099,285
                                                                   ==============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
________________________________________
CURRENT LIABILITIES
  Accounts payable and accrued expenses                            $   7,902,625
                                                                   ______________
     TOTAL CURRENT LIABILITIES                                         7,902,625

LONG-TERM DEBT
  Notes payable (Net of unamortized discount)                          4,643,449
  Convertible Debentures (Net of unamortized discount)                 3,244,664
  Contingent Liability on Joint Venture Separation                     5,000,000
  Accrued interest                                                     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 $20.32 per share.   Authorized 1,312,500 shares;
  issued and outstanding 11,134 shares. Redemption amount
  $226,243.                                                              226,243
                                                                   ______________

     TOTAL LIABILITIES                                                27,459,057
                                                                   ______________
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock -- $.01 par value per share.  Authorized
    750,000,000 shares; issued and outstanding 110,337,072 shares      1,103,371
  Additional paid-in capital                                          33,276,687
  Accumulated deficit                                                (48,739,830)
                                                                   ______________
     TOTAL STOCKHOLDERS' DEFICIENCY                                  (14,359,772)
                                                                   ______________

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                $  13,099,285
                                                                   ==============

</TABLE>

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

                               -28-

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

                                                                Years ended December 31,
                                                                       2007            2006
                                                              _____________   _____________

<S>                                                           <C>             <C>
REVENUE
_______
  Sales                                                       $  2,286,730    $        ---
  Cost of sales                                                  1,681,632             ---
                                                              _____________   _____________
     GROSS PROFIT                                                  605,098             ---

     EQUITY IN REPAID ADVANCES (LOSS) OF JOINT VENTURE             170,821        (109,147)
                                                              _____________   _____________
OPERATING EXPENSES
__________________
     Marketing and selling                                         158,104          98,240
     Research, development and pilot plant                         983,610         847,598
     General and administrative                                    972,965       1,022,051
     Less expenses reimbursed by Joint Venture                  (1,576,701)     (1,660,519)
                                                              _____________   _____________
     TOTAL OPERATING EXPENSES                                      537,978         307,370
                                                              _____________   _____________
     OPERATING PROFIT (LOSS)                                       237,941        (416,517)

GAIN ON DISPOSAL                                                     5,692             ---

OTHER INCOME                                                        17,932          14,535

INTEREST EXPENSE (net of interest income of $50,581 for 2007,
 $77,982 for 2006) (including amortization of debt discount
 of $1,406,780 for 2007, $1,276,137 for 2006)                   (2,160,638)     (2,029,928)
                                                              _____________   _____________
     NET GAIN (LOSS)                                          $ (1,899,073)   $ (2,431,910)
                                                              =============   =============
     BASIC AND DILUTED NET LOSS PER COMMON SHARE              $      (0.02)   $      (0.02)
                                                              =============   =============
     WEIGHTED AVERAGE SHARES OUTSTANDING                       109,679,538     108,387,454
                                                              =============   =============

</TABLE>

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

                                 -29-

<TABLE>
<CAPTION>
                                             IGENE Biotechnology, Inc. and Subsidiary
                                       Consolidated Statements of Stockholders' Deficiency
                                              Years ended December 31, 2007 and 2006


                                                     Common Stock               Additional                          Total
                                               ____________________________     Paid-in           Accumulated       Stockholders'
                                                 # Shares       Amount          Capital           Deficit           Deficiency
                                               _____________  _____________     _____________     _____________     _____________

<S>                                            <C>            <C>               <C>               <C>               <C>
Balance at January 1, 2006                      107,456,869   $  1,074,569      $ 29,968,765      $(44,408,847)     $(13,365,513)

Conversion of redeemable
  preferred stock into common stock                  14,750            148           141,452               ---           141,600

Conversion of warrants                                7,884             79               709               ---               788

Shares issued to VP of Manufacturing              1,000,000         10,000            40,000               ---            50,000

Additional paid-in capital
  as part of debt issuance                              ---            ---         3,082,676               ---         3,082,676

Shares issued for employee stock
  incentive program                                 312,000          3,120             7,180               ---            10,300

Shares issued for manufacturing
  agreement                                         545,569          5,455            24,905               ---            30,360

Net loss for 2006                                       ---            ---               ---        (2,431,910)       (2,431,910)
                                               _____________  _____________     _____________     _____________     _____________
Balance at December 31, 2006                    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)
                                               =============  =============     =============     =============     =============

</TABLE>


The accompanying notes are an integral part of the consolidated
financial statements.
                                 -30-

<TABLE>
<CAPTION>

                                      IGENE Biotechnology, Inc. and Subsidiary
                                        Consolidated Statements of Cash Flows



                                                                                   Years ended December 31,
                                                                                        2007              2006
                                                                                _____________     _____________
<S>                                                                             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
____________________________________
     Net loss                                                                   $ (1,899,073)     $ (2,431,910)
     Adjustments to reconcile net loss to net
     cash provided by operating activities:
          Amortization of debt discount                                            1,406,780         1,276,137
          Depreciation                                                                12,438            16,488
          Gain on disposal of equipment                                               (5,692)              ---
          Issuance of common stock for Director of Manufacturing                      21,000               ---
          Issuance of common stock for VP of Manufacturing                               ---            50,000
          Manufacturing cost paid in shares of common stock                              ---            30,360
          Increase in preferred stock for cumulative dividend
             classified as interest                                                    7,126             8,306
          Equity in (repaid advances) loss of unconsolidated joint venture           107,821           109,147
          Decrease (increase) in:
             Accounts receivable                                                  (3,698,884)           14,619
             Inventory                                                             1,814,157               ---
             Prepaid expenses and other assets                                       (24,258)           27,419
          Increase (decrease) in:
             Accounts payable and other accrued expenses                           3,569,050           899,534
                                                                                _____________     _____________
             NET CASH PROVIDED BY OPERATING ACTIVITIES                             1,310,465               100
                                                                                _____________     _____________
CASH FLOWS FROM INVESTING ACTIVITIES
____________________________________
      Cash proceed from sale of property and equipment                                20,000               ---
      Cash used for purchase of property and equipment                              (275,080)              ---
      Recoupment of payment (advances) to joint venture                             (107,821)         (109,147)
                                                                                _____________     _____________

             NET CASH USED IN INVESTING ACTIVITIES                                  (362,901)         (109,147)
                                                                                _____________     _____________

CASH FLOWS FROM FINANCING ACTIVITIES
____________________________________
      Proceeds from issuance of convertible debentures                               762,000               ---
      Repayment of convertible debentures                                           (705,000)              ---
      Proceeds from exercise of employee stock options                                   ---            10,300
      Repayment from exercise of warrants                                                ---               788
                                                                                _____________     _____________
             NET CASH PROVIDED BY FINANCING ACTIVITIES                                57,000            11,088
                                                                                _____________     _____________
NET DECREASE IN CASH AND CASH EQUIVALENTS                                          1,004,564           (97,959)

CASH AND CASH EQUIVALENTS - BEGINNING OF THE YEAR                                     21,786           119,745
                                                                                _____________     _____________
CASH AND CASH EQUIVALENTS - END OF THE YEAR                                     $  1,026,350      $     21,786
                                                                                =============     =============
SUPPLEMENTARY DISCLOSURE AND CASH FLOW INFORMATION
__________________________________________________
      Cash paid during the year for interest                                    $     57,637      $     35,250
      Cash paid during the year for income taxes                                         ---               ---

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

</TABLE>

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

                               -31-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

(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  and  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 and Igene announced  a  50:50
    joint   venture  to  produce AstaXin(R) for  the  aquaculture
    industry.  Production  utilized Tate  &  Lyle's  fermentation
    capability  together with the unique technology developed  by
    Igene.  Part of Tate & Lyle'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, the Joint Venture with Tate & Lyle  was
    terminated.    Igene   is  currently  reviewing   alternative
    sources for future production.

    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.

    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, 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 FASB statement number 2.

                                  -32-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

    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  ten  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 acceptable  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 income.

    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.

    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.

                                 -33-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

    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, 2007.

    Long-Lived Assets
    _________________

    Statement  of  Financial  Accounting  Standards  (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.

    Statement  of  Financial  Accounting  Standards  (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. After  a
    review  of  the  Company's  historical  cash  flows  it   was
    determined  the  Company  cannot reasonably  forecast  future
    cash  flows.  Igene received a valuation of its tangible  and
    intangible  assets held December 31, 2007  and  has  recorded
    the values based on the received valuation.

    Inventories
    ___________

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

    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.

                                 -34-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

    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 will begin  in
    2008.

    Customer  contracts are for a term of one year and the  value
    will  be  amortized over 2008.  The non- compete contract  is
    for a term of five years and will amortized over the life  of
    the  contract.   Intellectual property will  tested  annually
    for impairment, and any impaired value shall be written-off.

    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.

    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  Financial  Accounting  Standards  Board
    ("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  2006,  7,375  shares of redeemable  preferred  stock,
    with  a  recorded aggregate value of $141,600, were converted
    into  14,750  shares of common stock.  This included  the  8%
    Cumulative  Convertible Preferred Stock,  Series  B  and  has
    relieved the Company of this amount of long-term debt.

                                 -35-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

    During  the  course  of  2006, Fermic, Igene's  manufacturing
    agent,  earned 545,569 shares of common stock as part of  the
    manufacturing  agreement.   Fermic  earned  2,250  shares  of
    common  stock for each kilogram of pure astaxanthin  produced
    and delivered as part of the agreement. The average price  is
    based  on  the  market value of the shares at  the  time  the
    product  was  produced.   Fermic has  earned  all  20,000,000
    shares  available  under the contract.   The  545,569  shares
    were earned at an average price of $.056 per share for 2006.

    During  2006, 312,000 shares of common stock were  issued  as
    part   of  employee  stock  option  exercises.   The  Company
    received $10,300 based on an average exercise price of  $.033
    per share.

    During  2006, 7,884 warrants were exercised for $788.   7,884
    new  shares  of  common  stock were issued  pursuant  to  the
    exercise.

    During 2006, 1,000,000 shares of common stock were issued  to
    the  Joint  Venture's new Vice President of Manufacturing  as
    part  of  his agreement in accepting the position.  The  cost
    was expensed at a cost of $.05 per share or $50,000.

    During 2007 and 2006, Igene recorded dividends in arrears  on
    its  8%  Redeemable Preferred Stock, Series  A  at  $.64  per
    share  aggregating  $7,126 and $8,306 respectively,  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  customers  in Chile, which is an important  market  for
    Igene's  product, AstaXin(R).  Chile has  from  time  to time
    experienced   political  unrest  and  currency   instability.
    Because  of  the volume of business transacted  by  Igene  in
    Chile,  recurrence  of  such  unrest  or  instability   could
    adversely affect the businesses of its customers in Chile  or
    Igene's  ability  to  collect  its  receivables  from   these
    customers.   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>
         <S>                                      <C>
         Laboratory equipment and fixtures        $    130,964
         Idle equipment                                706,667
         Pilot plant equipment and fixtures             91,503
         Office furniture and fixtures                  36,990
                                                  _____________
                                                       966,124
         Less accumulated depreciation                (252,631)
                                                  _____________
                                                  $    713,493
                                                  =============
</TABLE>

                                 -36-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

(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
    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.

                               -37-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

<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
  Assembled WorkForce                               ---                           ---            ---            ---
  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                    11,573,000                     8,998,182     (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>

                               -38-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

    As  a  result of the Joint Venture termination, Igene is  now
    researching several alternatives for a potential  new  source
    of  production.  At the current pace, Igene expects  to  have
    inventories  of  existing product necessary  to  meet  demand
    through the third quarter of 2008.  Igene expects to  be  out
    of  the market for an uncertain period of time following  the
    third  quarter  of 2008 until a new source of production  can
    be   identified,  commence  operations  and   yield   salable
    product.

    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:   Gross  profit  from
    inception   was   a   negative  $21,304,462   on   sales   of
    $38,380,752,   less   manufacturing  cost   of   $59,685,214.
    Selling   and   general  and  administrative  expenses   were
    $16,542,813,  and  interest  expense  was  $5,805,227.    The
    resulting loss was $43,652,502.  Igene's 50% portion  of  the
    Joint Venture loss was $21,826,251.

    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 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
                                                                  _____________
          <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
                                                                  =============
                                -39-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006


          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
                                                                  =============
</TABLE>
<TABLE>
<CAPTION>

                                                             Period from March 19, 2003
                                                               (initial investment) to
                                                                  September 30, 2007
                                                             __________________________
<S>                                                             <C>
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
     ______________________

     As  previously stated in the Registrant's third quarter Form
     10-QSB, on November 13, 2001, Igene entered into Convertible
     Promissory Notes (the "Convertible Notes") with each of  the
     following note holders for the following respective amounts:
     (a) NorInnova AS (formerly Forskningsparken I Tromso AS) for
     $106,500;  (b)  Knut  Gjernes for  $7,500;  (c)  Magne  Russ
     Simenson  for $378,000; and (d) Nord Invest AS for $313,000.
     Each  of  the  Convertible Notes  had  a  maturity  date  of
     November  1,  2004.   On  November 18,  2005,  each  of  the
     Convertible Note Holders provided Igene with written  notice
     of default under each of the Convertible Notes.

     On  November 29, 2006, the Convertible Note holders filed  a
     complaint against the Company in the Circuit Court of Howard
     County,  Maryland seeking payment of all outstanding amounts
     due under the Convertible Notes.   On February 23, 2007, the
     Company  paid  $762,638 to the Convertible Note  holders  as
     settlement  of all claims related to the Convertible  Notes.
     The complaint was dismissed with prejudice on March 6, 2007.

     In  an  attempt to settle the matter, the Note holders  were
     offered  the  ability to extend the notes they  held  for  a
     period  of  ten  years  at  an interest  rate  of  5%.   The
     conversion would be changed from the original debenture rate
     of  $.10 (ten cents) per share to the current market rate of
     $.02 (two cents) per share.  They rejected the offer.

     The  funds to settle the litigation were provided by Igene's
     directors  using  the terms offered above to  the  debenture
     holders.   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  are  convertible into shares of  Igene's  common
     stock  at  $.02  per share based on the offer  made  to  the
     original  debenture holders as the market price  of  Igene's
     shares at the time the debentures terms were agreed upon.

                                 -40-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

     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  are
     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.    These
     debentures, if not converted earlier, become due on July 17,
     2012.

     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  are
     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.    These
     debentures, if not converted earlier, become due on February
     22, 2012.

     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 are 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.  Interest is payable at maturity.

     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.
     Interest is payable at maturity.

     The  warrants  issued  in connection  with  the  above  debt
     totaling  66,427,651 warrants have been valued at $1,896,094
     utilizing the Black Scholes model.  In addition, there was a
     beneficial  conversion  feature due to  the  resulting  bond
     discount.   The total discount resulting from the  valuation
     of  the  warrants and the beneficial conversion feature  was
     $3,792,188  which is being amortized over the  life  of  the
     debt (ten years).

     Convertible  debentures  are summarized  as  follows  as  of
     December 31, 2007:

<TABLE>
<CAPTION>
                                                                                   Accrued
                                                              Principal           Interest
                                                           _____________      _____________
     <S>                                                   <C>                <C>
     8%, 10-year, convertible debenture issued 7/17/02     $    300,000       $    130,718
     8%, 10-year, convertible debenture issued 2/22/02        1,000,000            464,877
     8%, 10-year, convertible debenture issued 3/1/01         1,014,212            554,274
     8%, 10-year, convertible debenture issued 3/27/01        1,500,000            774,180
     5%, 10-year, convertible debenture issued 2/15/07          762,000             32,672
                                                           _____________      _____________
                                                           $  4,576,212       $  1,956,721
     Less unamortized debt discount                          (1,331,548)               ---
                                                           _____________      _____________
                                                           $  3,244,664       $  1,956,721
                                                           =============      =============

</TABLE>

(7)  Notes Payable
     _____________

     This  long  term  debt, approximately $5,800,000  which  was
     scheduled to become payable in March 2003, had been extended
     to be due March 2006.  It has been extended a second time to
     be  due March 2009.  Management felt any attempts to satisfy
     the  debt on its original due date would have had materially
     adverse effects on the Company.

                                 -41-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

     As  a  part of the terms of the first extension of the debt,
     the  exercise  prices  of the warrants  and  any  conversion
     features were discounted by 25%, thus a $.10 warrant is  now
     convertible  at $.075.  As part of the terms of  the  second
     extension  of the debt, the exercise prices of the  warrants
     and  any  conversion features were discounted again by  25%,
     thus a  $.075 warrant is now convertible at $.056.

     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 $0.05 per share to $0.135 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.
     Concurrently,  with  each  of the $1,082,500  of  promissory
     notes, the holders also received 13,174,478 warrants for  an
     equivalent  number  of  shares at the equivalent  price  per
     share. The warrants expire ten years from the date of  issue
     of  the  notes.  As a result of the extension  of  debt  the
     warrant  exercise prices were reduced by 25%.   These  notes
     were  modified in conjunction with the 1998 rights  offering
     to be due on March 31, 2003, and have been extended to March
     31,  2009 as part of the extension.  The notes bear interest
     at the prime rate.

     As  part of the rights offering in March 1998, Igene  issued
     $5,000,000 of its 8% Notes due March 31, 2003 and 50,000,000
     warrants  to  purchase  one share  of  common  stock  at  an
     exercise  price of $0.10 per share expiring March 31,  2008.
     The  maturity date of these notes had been extended to March
     31, 2006, and the exercise price reduced to $.075 per share.
     The maturity date of these notes have again been extended to
     March 31, 2009, and the exercise price reduced to $.056  per
     share.

     The  warrants  issued  in connection  with  the  above  debt
     totaling  65,168,639 warrants have been valued  at  $731,127
     utilizing  the Black-Scholes valuation model  at  March  31,
     2003.   In  addition, as a result of the  repricing  of  the
     warrants  in  March  2006, the warrants  were  re-valued  at
     $2,663,310.   The  $1,082,500  of  convertible  debt  has  a
     beneficial  conversion feature in addition to the  valuation
     of  the related warrants.  The total discount resulting from
     the  valuation of the warrants and the beneficial conversion
     was $3,082,676 which is being amortized over the life of the
     debt (three years).

     Payable  are  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>

     Combined aggregate amounts of maturities for all convertible
     debentures and notes payable are as follows:

<TABLE>
<CAPTION>

                 Year                  Amount
                ______                ________
                <S>                   <C>
                 2009                 $ 5,842,267
                 2010                         ---
                 2011                   2,514,212
                 2012                   1,300,000
                 2017                     762,000

</TABLE>

                                -42-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

(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,
     2007,  total dividends in arrears on Igene's preferred stock
     equal $137,171 (or $12.32 per share) on Igene's Series A and
     are  included  in  the  carrying  value  of  the  redeemable
     preferred stock.

(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  and
     1986  Plans  remain outstanding with unchanged  terms.   The
     number of shares authorized for issuance under the 2001 Plan
     is 55,000,000.  This is in addition to the 20,000,000 shares
     authorized  for  issuance  under  the  1997  Plan,  and  the
     2,000,000  shares  authorized for issuance  under  the  1986
     Plan.


                                 43-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

     The   following  is  a  summary  of  options   granted   and
     outstanding  under  the plans as of December  31,  2007  and
     2006:

<TABLE>
<CAPTION>

                                                     2007                                2006
                                      ___________________________________  ___________________________________
                                                             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        48,427,750    $          .061
    Options granted                               ---                ---               ---                ---

    Options exercised                             ---                ---           312,000    $          .033
    Options forfeited,
      or withdrawn with
      consent of holders                          ---                ---         1,600,000    $          .100
    Options expired                               ---                ---         1,670,750    $          .050
    Options outstanding
      and exercisable,
      end of year                          44,845,000    $          .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                        4.6
             $.027          1,500,000                        7.9
             $.050          1,500,000                        1.8
             $.050          3,837,500                        2.0
             $.050          2,500,000                        3.9
             $.065             45,000                        3.0
             $.080          5,500,000                        3.8
             $.100         10,389,500                        6.5
             $.100          3,240,000                        0.3
                        ______________
             $.059         44,845,000
                        ==============

</TABLE>

     Warrants
     ________

     The  following table summarizes warrants issued, outstanding
     and exercisable:

<TABLE>
<CAPTION>
                                As of December 31,
                         _______________________________
                                 2007              2006
                         _____________     _____________
     <S>                 <C>               <C>

     Issued               205,261,073       205,261,073
     Outstanding          205,261,073       205,261,073
     Exercisable          205,261,073       205,261,073

</TABLE>

                                  -44-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006


     Common Stock
     ____________

     At  December 31, 2007, 205,261,073 shares of authorized  but
     unissued  common  stock  were  reserved  for  issuance  upon
     exercise  of  outstanding  warrants,  44,845,000  shares  of
     authorized  but  unissued  common stock  were  reserved  for
     exercise  pursuant to the 1997 and 2001 Stock Option  Plans,
     22,268  shares of authorized but unissued common stock  were
     reserved for issuance upon conversion of Igene's outstanding
     preferred  stock,  and 127,948,924 shares of authorized  but
     unissued stock were reserved for issuance upon conversion of
     outstanding convertible notes.

     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, 2007, total dividends  in  arrears  on
     Igene's preferred stock equal $137,171 (or $12.32 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
     _________________________

     Net  loss  per common share for 2007 and 2006  is  based  on
     109,679,538   and   108,387,454  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 2006 because to do so  would  have
     been  anti-dilutive.   As of December  31,  2007  and  2006,
     dilutive and potentially dilutive shares totaled 378,077,265
     and 374,414,599 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 $101,000,
     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, 2007 and 2006 approximated $118,850  and
     $118,600, respectively.

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

                   Year         Amount
                  ______      __________
                   2008       $ 101,000
                   2009         103,000
                   2010         106,000
                   2011           9,000
                              __________
                  Total       $ 319,000
                              ==========


                                   -45-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006


     Effective   May   20,  2000,  Igene  signed   an   exclusive
     manufacturing   agreement  with   Fermic,   S.A.   de   C.V.
     ("Fermic"),  of Mexico City, Mexico, for the  production  of
     AstaXin(R).   The  Fermic   contract   provides   that   the
     manufacturer  has  a  limited  exclusive  right  to  produce
     AstaXin(R) and is paid a monthly fee in cash, which is based
     on manufacturing capacity, plus shares of Igene common stock
     based  on  production quantities.  Fermic provides equipment
     and  facilities  necessary  to  manufacture  and  store  the
     product  and  is  responsible for purchasing raw  materials.
     The  Joint Venture is responsible for sales efforts and  for
     ensuring the quality of the pigment.  The Joint Venture also
     has  a role in ensuring that the manufacturing process works
     effectively.  The term of the contract has expired.

     Based on production of AstaXin(R), Igene  had  committed  to
     issue  to  Fermic  up to a maximum of 20,000,000  shares  of
     Igene  common stock during the six year period which expired
     May 20, 2006 in accordance with the manufacturing agreement.
     Based  on quantities of AstaXin(R) produced, all shares have
     been  earned  and issued to Fermic.  Since the inception  of
     the  agreement,  stock has been recorded as a  manufacturing
     expense  and  also  as  an  increase  in  common  stock  and
     additional  paid in capital of $1,356,520.  The  expense  is
     now  recorded  on  the books of the Joint Venture  with  the
     related  receivable from the Joint Venture on the  books  of
     Igene.   This  amount has been computed based  on  the  fair
     value of the stock as of the period in which the shares were
     earned.

(12) Income Taxes
     ____________

     No  income tax benefit or deferred tax asset is reflected in
     the   financial   statements.   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,  2007  Igene has  federal  and  state  net
     operating loss carry-forwards of approximately   $22,871,000
     that  expire at various dates from 2008 through  2027.   The
     recorded  deferred  tax  asset,  representing  the  expected
     benefit  from  the future realization of the  net  operating
     losses, net of the valuation allowance, was   $-0- for  2007
     and 2006.

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

       Net operating loss carry-forward benefit    $ 7,776,000
       Valuation allowance                          (7,776,000)
                                                   ____________
       Deferred tax asset, net                     $       ---
                                                   ============

(13) Going Concern
     _____________

     Igene has incurred net losses in each year of its existence,
     aggregating  approximately  $48,739,000  from  inception  to
     December 31, 2007 and its liabilities exceeded its assets by
     approximately  $14,360,000  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 discussed as of October 31, 2007 Igene has terminated its
     relationship with the Joint Venture with Tate & Lyle.  Igene
     maintains  the  saleable inventory after the termination  of
     the relationship and is currently reviewing alternatives for
     a  future  manufacturing alternative.  In the interim  Igene
     will  sell  the existing inventory in order to maintain  its
     relationship  with customers and use these  funds  to  cover
     expenses.

                                 -46-

             IGENE Biotechnology, Inc. and Subsidiary
            Notes to Consolidated Financial Statements
              Years ended December 31, 2007 and 2006

(14) Nature of Risks and Concentrations
     __________________________________

     Revenue during 2007 and 2006 were derived from sales of  the
     product, AstaXin(R). The majority of the 2007 and 2006 sales
     were to fish producers in the aquaculture industry in Chile.

     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.   The separation from Tate & Lyle has left Igene  with
     no  production  facility  and inventory  which  should  last
     through  the  fourth  quarter of 2008.  Igene  is  currently
     reviewing  alternatives for manufacturing, but has  not  yet
     secured  one.   It  is also considered at  least  reasonably
     possible  that operations located outside the United  States
     could be disrupted in the near term.  However, Igene has  at
     present no information that would lead it to believe that it
     will lose its principal product, principal customers, or its
     contracted  manufacturer; or that its operations  in  Mexico
     City or Chile will be disrupted, though this belief can  not
     be assured.

(15) Retirement Plan
     _______________

     Effective February 1, 1997 Igene adopted a Simple Retirement
     Plan  under Internal Revenue Code Section 408(p).  The  plan
     was  a  defined  contribution plan,  which  covered  all  of
     Igene's  U.S.  employees  who receive  at  least  $5,000  of
     compensation  for  the preceding year.  The  plan  permitted
     elective employee contributions.  Effective January 1, 2003,
     Igene  made an elective contribution of 3% of each  eligible
     employee's    compensation   for   each    year.     Igene's
     contributions to the plan for 2003 were $17,631.

     Effective  February 1, 2004 Igene discontinued  use  of  the
     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.     Igene's
     contributions to the plan for 2007 and 2006 were $28,392 and
     $25,996, respectively, which is expensed in the statement of
     operations.

                              -47-

                           SIGNATURES


In  accordance with Section 13 or 15(d) of the Exchange Act,  the
registrant 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 May 1, 2008


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.

<TABLE>
<CAPTION>
Signature                      Title                            Date
_________                      _____                            ____
<S>                            <C>                              <C>
/S/ STEPHEN F. HIU             Director, President, Chief       May 1, 2008
________________________       Technical Officer (principal
    STEPHEN F. HIU             executive officer)

/S/ EDWARD J. WEISBERGER       Chief Financial Officer          May 1, 2008
________________________       (principal financial and
    EDWARD J. WEISBERGER        accounting officer)

/S/ THOMAS L. KEMPNER          Vice Chairman of Board           May 1, 2008
________________________       of Directors
    THOMAS L. KEMPNER

/S/ MICHAEL G. KIMELMAN        Chairman of the Board            May 1, 2008
________________________       of Directors
    MICHAEL G. KIMELMAN

/S/ SIDNEY R. KNAFEL           Director                         May 1, 2008
________________________
    SIDNEY R. KNAFEL

/S/ PATRICK F. MONAHAN         Director, Vice President         May 1, 2008
________________________	 Secretary and
    PATRICK F. MONAHAN         Director of Manufacturing

</TABLE>

                          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     Warrant  Agreement  by  and  between  the Registrant and
        American  Stock  Transfer  and Trust Company, as Warrant
        Agent, dated as of March 31, 1998,  constituting Exhibit
        4.3 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.

4.4     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.

4.5     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.

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.

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