----

----

| DELAWARE                                                            |                                                        | 41-1505029                                   |
|---------------------------------------------------------------------|-------------------------------------------------------------|----------------------------------------------|
| (State      or other jurisdiction of incorporation or organization) |                                                        | (I.R.S.      Employer Identification Number) |
|                                                                |                                                        |                                         |
| 850      Bear Tavern Road, Suite 201Ewing,      NJ                  |                                                        | 08628                                        |
| (Address      of principal executive offices)                       |                                                        | (Zip      Code)                              |
|                                                                | (609)      538-8200                                         |                                         |
|                                                                | (Issuer’s      telephone number, including area code) |                                         |

| Large      accelerated filer  o | Accelerated      filer o      | Non-accelerated      filer o  | Smaller      reporting company x |
|--------------------------------------|--------------------------------------------------------|------------------------------------|----------------------------------|

----

Table of Contents

| Item         | Description                                                                                       | Page   |
|--------------|---------------------------------------------------------------------------------------------------|--------|
|         |                                                                                              |   |
| Part      I  | FINANCIAL      INFORMATION                                                                        |   |
| 1.           | Consolidated Financial Statements.                                                                | 3      |
| 2.           | Management’s Discussion and Analysis of Financial Condition      and Results of Operations. | 16     |
| 3.           | Quantitative and Qualitative Disclosure About Market      Risk.                                   | 26     |
| 4.           | Controls and Procedures.                                                                          | 26     |
|         |                                                                                              |   |
| Part      II | OTHER      INFORMATION                                                                            |   |
| 5.           | Exhibits.                                                                                         | 28     |
|         |                                                                                              |   |

----

Tableof Contents

ITEM 1 -FINANCIALSTATEMENTS

DOR BioPharma, Inc.

|                                                                                                                                                            |   |   | June      30, 2008                        |    |   |   |   |   | December      31, 2007 |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------------------|---------|--------|--------|--------|--------|------------------------|---------|
|                                                                                                                                                            |   |   |           (Unaudited) |    |   |   |   |   |                   |    |
| AssetsCurrent      assets:                                                                                                                                      |   |   |                                      |    |   |   |   |   |                   |    |
|         Cash                                                                                                            |   | $      | 1,077,570                                 |    |   |   |   | $      | 2,220,128              |    |
|         Grants      receivable                                                                                          |   |   | 99,929                                    |    |   |   |   |   | 97,845                 |    |
|         Prepaid      expenses                                                                                           |   |   |  175,805                             |    |   |   |   |   | 119,178                |    |
| Total      current assets                                                                                                                                       |   |   | 1,353,304                                 |    |   |   |   |   | 2,437,151              |    |
|                                                                                                                                                            |   |   |                                      |    |   |   |   |   |                   |    |
| Office      and laboratory equipment, net                                                                                                                       |   |   | 24,214                                    |    |   |   |   |   | 25,941                 |    |
| Intangible      assets, net                                                                                                                                     |   |   | 1,387,507                                 |    |   |   |   |   | 1,320,787              |    |
| Total      assets                                                                                                                                               |   | $      | 2,765,025                                 |    |   |   |   | $      | 3,783,879              |    |
|                                                                                                                                                            |   |   |                                      |    |   |   |   |   |                   |    |
| Liabilities      and shareholders’ equity                                                                                                                 |   |   |                                      |    |   |   |   |   |                   |    |
| Current      liabilities:                                                                                                                                       |   |   |                                      |    |   |   |   |   |                   |    |
|         Accounts      payable                                                                                           |   | $      | 1,306,904                                 |    |   |   |   | $      | 847,610                |    |
|         Accrued      compensation                                                                                       |   |   | 224,754                                   |    |   |   |   |   | 345,903                |    |
|  Total      current liabilities                                                                                                                            |   |   | 1,531,658                                 |    |   |   |   |   | 1,193,513              |    |
|                                                                                                                                                            |   |   |                                      |    |   |   |   |   |                   |    |
| Shareholders’      equity:                                                                                                                                |   |   |                                      |    |   |   |   |   |                   |    |
|         Common      stock, $.001 par value. Authorized 250,000,000                                                      |   |   |                                      |    |   |   |   |   |                   |    |
|              shares; 101,256,776      and 94,996,547, respectively issued and outstanding |   |   | 101,256                                   |    |   |   |   |   |  94,996           |    |
|         Additional      paid-in capital                                                                                 |   |   | 102,655,708                               |    |   |   |   |   | 101,391,090            |    |
|         Accumulated      deficit                                                                                        |   |   | (101,523,597                              |  ) |   |   |   |   | (98,895,720            | )  |
|                                                                                                                                                            |   |   |                                      |    |   |   |   |   |                   |    |
| Total      shareholders’ equity                                                                                                                           |   |   | 1,233,367                                 |    |   |   |   |   |  2,590,366        |    |
|                                                                                                                                                            |   |   |                                      |    |   |   |   |   |                   |    |
| Total      liabilities and shareholders’ equity                                                                                                           |   | $      | 2,765,025                                 |    |   |   |   |   |  3,783,879        |    |
|                                                                                                                                                            |   |   |                                      |    |   |   |   |   |                   |    |

----

Tableof Contents

|                                                                               |   |    | 2008                  |    |    | 2007               |          |
|------------------------------------------------------------------------------------|--------|---------|---------------------------------------------------------------|---------|---------|--------------------|--------------------|
|                                                                               |   |    |                                                          |    |    |               |               |
| Revenues                                                                           |   | $       |        488,244                                           |    | $       | 279,481            |               |
| Cost      of revenues                                                              |   |    | (      391,845                                                | )       |    | (      107,418     | )                  |
|            Gross profit                                   |   |    | 96,399                                                        |    |    | 172,063            |               |
|                                                                               |   |    |                                                          |    |    |               |               |
| Operating      expenses:                                                           |   |    |                                                          |    |    |               |               |
|        Research and development                                               |   |    |        743,601                                           |    |    | 1,031,015          |               |
|        General and administrative                                             |   |    |               554,526 |    |    |  654,481      |               |
|        Stock based compensation research and development                 |   |    |        39,583                                            |    |    |        31,195 |               |
|        Stock based compensation general and administrative               |   |    |  36,793                                                  |    |    |  82,126       |               |
|            Total operating expenses                       |   |    | 1,374,503                                                     |    |    | 1,798,817          |               |
|                                                                               |   |    |                                                          |    |    |               |               |
| Loss      from operations                                                          |   |    | (1,278,104                                                    | )       |    | (1,626,754         | )                  |
|                                                                               |   |    |                                                          |    |    |               |               |
| Other      income (expense):                                                       |   |    |                                                          |    |    |               |               |
|        Interest income                                                        |   |    |  6,821                                                   |    |    | 71,694             |               |
|        Interest (expense)                                                     |   |    |  (      423                                              | )  |    | (      607         | )             |
|            Total other income (expense)                   |   |    | 6,398                                                         |    |    | 71,087             |               |
|                                                                               |   |    |                                                          |    |    |               |               |
| Net      loss                                                                      |   |  $ | (1,271,706                                                    | )       |  $ | (1,555,667         | )                  |
|                                                                               |   |    |                                                          |    |    |               |               |
| BasicBBasic      and diluted net loss per share                               |   | $       | (      0.01                                                   | )       | $       | (      0.02        | )                  |
|                                                                               |   |    |                                                          |    |    |               |               |
| Basic  Basic      and diluted weighted average common shares outstanding |   |    | 100,877,708                                                   |    |    | 92,585,933         |               |

----

Tableof Contents

DOR BioPharma, Inc.

|                                                                                                                                      |   |    | 2008                    |    |    | 2007               |          |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|-----------------------------------------------------------------|---------|---------|--------------------|--------------------|
|                                                                                                                                      |   |    |                                                            |    |    |               |               |
| Revenues                                                                                                                                  |   | $       |        1,165,884                                           |    | $       | 514,652            |               |
| Cost      of revenues                                                                                                                     |   |    | (      921,024                                                  | )       |    | (      185,489     | )                  |
|            Gross profit                                                                                          |   |    | 244,860                                                         |    |    | 329,163            |               |
|                                                                                                                                      |   |    |                                                            |    |    |               |               |
| Operating      expenses:                                                                                                                  |   |    |                                                            |    |    |               |               |
|        Research and development                                                                                                      |   |    |        1,343,603                                           |    |    | 2,073,773          |               |
|        General and administrative                                                                                                    |   |    |               1,402,637 |    |    |  1,862,938    |               |
|        Stock based compensation research and development                                                                        |   |    |        79,166                                              |    |    |        87,529 |               |
|        Stock based compensation general and administrative                                                                      |   |    |  73,586                                                    |    |    |  157,710      |               |
|            Total operating expenses                                                                              |   |    | 2,898,992                                                       |    |    | 4,181,950          |               |
|                                                                                                                                      |   |    |                                                            |    |    |               |               |
| Loss      from operations                                                                                                                 |   |    | (2,654,132                                                      | )       |    | (3,852,787         | )                  |
|                                                                                                                                      |   |    |                                                            |    |    |               |               |
| Other      income (expense):                                                                                                              |   |    |                                                            |    |    |               |               |
|        Interest income                                                                                                               |   |    |  26,857                                                    |    |    | 133,941            |               |
|        Interest (expense)                                                                                                            |   |    |  (      603                                                | )  |    | (      1,020       | )             |
|            Total other income (expense)                                                                          |   |    | 26,254                                                          |    |    | 132,921            |               |
|                                                                                                                                      |   |    |                                                            |    |    |               |               |
| Net      loss                                                                                                                             |   |  $ | (2,627,878                                                      | )       |  $ | (3,719,866         | )                  |
|                                                                                                                                      |   |    |                                                            |    |    |               |               |
|                  Basic and diluted net loss per share                         |   | $       | (      0.03                                                     | )       | $       | (      0.04        | )                  |
|                                                                                                                                      |   |    |                                                            |    |    |               |               |
|             Basic      and diluted weighted average common shares outstanding |   |    | 99,328,191                                                      |    |    | 88,071,875         |               |

----

Tableof Contents

|                                                                                  |   | 2008          |             | 2007    |    |
|---------------------------------------------------------------------------------------|--------|---------------|------------------|---------|---------|
| Operating      activities                                                             |   |          |             |    |    |   |   |
|         Net loss                                                            |   | $             | (      2,627,878 | )       | $       | (      3,719,866 | ) |
|                                                                                  |   |          |             |    |    |   |   |
| Adjustments      to reconcile net loss to net cash used by operating      activities: |   |          |             |    |    |   |   |
|          Amortization and depreciation                                 |   |          | 70,049           |    |    |  54,423 |   |
|          Non-cash stock compensation                                   |   |          | 537,278          |    |    | 893,216 |   |
|                                                                                  |   |          |             |    |    |   |   |
| Change      in operating assets and liabilities:                                      |   |          |             |    |    |   |   |
|          Grants receivable                                             |   |          | (2,084           | )  |    | 5,022 |   |
|          Prepaid expenses                                              |   |          |  (56,627    | )  |    | (      100,125 | ) |
|          Accounts payable                                              |   |          | 458,795          |    |    | (      1,010,854 | ) |
|          Proceeds sale of equipment                                    |   |          | 500              |    |    | - |   |
|          Accrued compensation                                          |   |          | (121,149         | )  |    | (      279,306 | ) |
| Total      adjustments                                                                |   |          | 886,762          |    |    | (      437,624 | ) |
|                                                                                  |   |          |             |    |    |   |   |
|          Net cash used by operating activities                         |   |          | (      1,741,116 | )       |    | (      4,157,490 | ) |
|                                                                                  |   |          |             |    |    |   |   |
| Investing      activities:                                                            |   |          |             |    |    |   |   |
|  Acquisition      of intangible assets                                           |   |          | (131,142         | )       |    | (      171,948 | ) |
|  Purchase      of office equipment                                               |   |          | (      3,900     | )       |    | (      2,405 | ) |
|          Net cash used by investing activities                         |   |          | (      135,042   | )       |    | (      174,353 | ) |
|                                                                                  |   |          |             |    |    |   |   |
| Financing      activities:                                                            |   |          |             |    |    |   |   |
|  Proceeds      from sale of common stock                                         |   |          | 658,600          |    |    | 6,235,404 |   |
|  Proceeds      from equity line                                                  |   |          | 75,000           |    |    | - |   |
|  Proceeds      from exercise of warrants                                         |   |          | -                |    |    |  1,530,763 |   |
|  Proceeds      from exercise of stock options                                    |   |          | -                |    |    | 117,000 |   |
|          Net cash provided by financing activities                     |   |          | 733,600          |    |    | 7,883,167 |   |
|                                                                                  |   |          |             |    |    |   |   |
| Net      increase (decrease) in cash and cash equivalents                             |   |          | (      1,142,558 | )       |    | 3,551,324 |   |
|          Cash and cash equivalents at beginning of period              |   |          | 2,220,128        |    |    | 119,636 |   |
|          Cash and cash equivalents at end of period                    |   | $             | 1,077,570        |    | $       | 3,670,960 |   |
|                                                                                  |   |          |             |    |    |   |   |
| Supplemental      disclosure of cash flow:                                            |   |          |             |    |    |   |   |
|          Cash paid for interest                                        |   | $             | 180              |    | $       | 413 |   |
| Non-cash      transactions:                                                           |   |          |             |    |    |   |   |
|          Non-cash stock payment to an institutional investor           |   |        $ | 270,000          |    | $  | - |   |

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

| ·   | The      Company is and will continue to seek capital in the private and/or public      equity markets to continue itsoperations. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company will also seek capital through licensing of  orBec. |
|--------------------|----------------------------------------------------------------------|

| ·   | The      Company has implemented an austerity budget plan including suspension of      its programs not supported by grant funding, reduction of office      personnel, reduction in overhead expenses, and payment in stock in lieu of      salary to two employees. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company is continuing to seek grant funds and to respond to requests for      proposals from governmentalsources. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company will utilize Names Patient Sales wherever possible in countries      outside the United States to generate revenues from  orBec. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company is exploring outlicensing opportunities for LPM-Leuprolide and      BioDefense programs in the United States and in  Europe. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company has engaged investment bankers to assist in exploring merger and      acquisition opportunities. |
|--------------------|-------------------------------------------------------------------------------------------------------------------|

----

Tableof Contents

|                         | Weighted      Average Amortization period (years) |   Cost                 |   |  AccumulatedAmortization |   |   Net      Book Value  |
|------------------------------|---------------------------------------------------|----------------------------------|--------|-------------------------------|--------|----------------------------------|
| June      30, 2008           |                                              |                             |   |                          |   |                             |
| Licenses                     | 12.2                                              | $         462,234 |   | $   129,263    |   | $         332,971 |
| Patents                      | 9.4                                               |    1,764,632      |   |    710,096     |   |    1,054,536      |
| Total                        | 10.0                                              | $ 2,226,866                      |   | $   839,359         |   | $ 1,387,507                      |
|  December      31, 2007 |                                              |                             |   |                          |   |                             |
| Licenses                     | 12.7                                              | $         462,234 |   | $   115,681    |   | $         346,553 |
| Patents                      | 9.7                                               |    1,633,490      |   |    659,256     |   |    974,234        |
| Total                        | 10.4                                              | $ 2,095,724                      |   | $   774,937         |   | $1,320,787                       |

| Year | Amortization      Amount              |
|------|---------------------------------------|
| 2008 | $   130,000            |
| 2009 |      138,000 |
| 2010 |      140,000 |
| 2011 |      142,000 |
| 2012 |      145,000 |

----

Tableof Contents

----

Tableof Contents

|                                       |   | June      30, |                            |
|--------------------------------------------|--------|---------------|---------------------------------|
|                                       |   | 2008          |                            | 2007 |   |
| Net      Revenues                          |   |          |                            |   |   |   |   |
| BioDefense                                 |   | $             | 488,244                         |   | $ | 279,481 |   |
|        Total                          |   | $             | 488,244                         |   | $ | 279,481 |   |
|                                       |   |          |                            |   |   |   |   |
| Loss      from Operations                  |   |          |                            |   |   |   |   |
| BioDefense                                 |   | $             | (    70,268 | ) | $ | 72,716 |   |
| BioTherapeutics                            |   |          | (      645,378                  | ) |   | (      878,684 | ) |
| Corporate                                  |   |          | (      562,459                  | ) |   | (      820,785 | ) |
|        Total                          |   | $             | (      1,278,105                | ) | $ | (      1,626,753 | ) |
|                                       |   |          |                            |   |   |   |   |
| Identifiable      Assets                   |   |          |                            |   |   |   |   |
| BioDefense                                 |   | $             | 1,221,901                       |   | $ | 1,363,124 |   |
| BioTherapeutics                            |   |          | 310,535                         |   |   | 362,397 |   |
| Corporate                                  |   |          | 1,232,589                       |   |   | 2,178,384 |   |
|        Total                          |   | $             | 2,765,025                       |   | $ | 3,903,905 |   |
|                                       |   |          |                            |   |   |   |   |
| Amortization      and Depreciation Expense |   |          |                            |   |   |   |   |
| BioDefense                                 |   | $             | 15,381                          |   | $ | 37,069 |   |
| BioTherapeutics                            |   |          | 19,224                          |   |   | 10,069 |   |
| Corporate                                  |   |          | 1,361                           |   |   | 2,138 |   |
|        Total                          |   | $             | 35,966                          |   | $ | 49,276 |   |
|                                       |   |          |                            |   |   |   |   |
| Interest      Income                  |   |          |                            |   |   |   |   |
| Corporate                             |   |  $       | 6,398                      |   |  $ | 71,694  |   |
|         Total                    |   |  $       | 6,398                      |   |  $ | 71,694  |   |
|                                       |   |          |                            |   |   |   |   |
| Stock      Option Compensation             |   |          |                            |   |   |   |   |
| BioDefense                                 |   |  $       | 19,517                     |   |  $ | 14,680 |   |
| BioTherapeutic                        |   |          | 20,066                     |   |   |  16,515 |   |
| Corporate                             |   |          | 36,793                     |   |   |  82,126 |   |
|         Total               |   |  $       | 76,376                     |   |  $ | 113,321 |   |
|                                       |   |          |                            |   |   |   |   |

----

Tableof Contents

|                                       |   | June      30, |                             |
|--------------------------------------------|--------|---------------|----------------------------------|
|                                       |   | 2008          |                             | 2007 |   |
| Net      Revenues                          |   |          |                             |   |   |   |   |
| BioDefense                                 |   | $             | 677,640                          |   | $ | 514,652 |   |
|        Total                          |   | $             | 677,640                          |   | $ | 514,652 |   |
|                                       |   |          |                             |   |   |   |   |
| Loss      from Operations                  |   |          |                             |   |   |   |   |
| BioDefense                                 |   | $             | (    104,383 | ) | $ | 106,394 |   |
| BioTherapeutics                            |   |          | (      1,077,623                 | ) |   | (      1,576,691 | ) |
| Corporate                                  |   |          | (1,472,126                       | ) |   | ( 2,382,490 | ) |
|        Total                          |   | $             | (      2,564,132                 | ) | $ | ( 3,852,787 | ) |
|                                       |   |          |                             |   |   |   |   |
| Amortization      and Depreciation Expense |   |          |                             |   |   |   |   |
| BioDefense                                 |   | $             | 29,598                           |   | $ | 39,931 |   |
| BioTherapeutics                            |   |          | 37,637                           |   |   | 8,131 |   |
| Corporate                                  |   |          | 2,814                            |   |   | 3,062 |   |
|        Total                          |   | $             | 70,049                           |   | $ | 51,124 |   |
|                                       |   |          |                             |   |   |   |   |
| Interest      Income                  |   |          |                             |   |   |   |   |
| Corporate                             |   |  $       | 26,254                      |   |  $ | 133,941  |   |
|         Total                    |   |  $       | 26,254                      |   |  $ | 133,941  |   |
|                                       |   |          |                             |   |   |   |   |
| Stock      Option Compensation             |   |          |                             |   |   |   |   |
| BioDefense                                 |   |  $       | 39,034                      |   |  $ | 29,361 |   |
| BioTherapeutic                        |   |          | 40,132                      |   |   |  58,168 |   |
| Corporate                             |   |          | 73,586                      |   |   |  157,710 |   |
|         Total               |   |  $       | 152,752                     |   |  $ | 245,239 |   |
|                                       |   |          |                             |   |   |   |   |

----

Tableof Contents

ITEM 2 –MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL AND RESULTS OFOPERATIONS

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

----

Tableof Contents

| ·   | We      will continue to seek capital in the private and/or public equity markets      to continue our operations. |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | We      will also seek capital through licensing of  orBec. |
|--------------------|-------------------------------------------------------------|

| ·   | We      have implemented an austerity budget plan including suspension of our      programs not supported by grant funding, reduction of office personnel,      reduction in overhead expenses, and payment in stock in lieu of salary to      two employees. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      will continue to seek grant funds and to respond to requests for proposals      from governmental sources. |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

| ·   | We      will utilize Names Patient Sales wherever possible in countries outside      the United States to generate revenues from  orBec. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      are exploring outlicensing opportunities for LPM-Leuprolide and BioDefense      programs in the United States and inEurope. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We      have engaged investment bankers to assist in exploring merger and      acquisition opportunities. |
|--------------------|-----------------------------------------------------------------------------------------------------------|

|                                                | 2008                                                                                                                                    | 2007                                                                                                                 |
|-----------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|
| Program      - Research & Development Expenses  |                                                                                                                                    |                                                                                                                 |
| orBec®                                         | $          941,302                                                                    | $     1,611,579                                                                             |
| RiVax™                                        | 183,710                                                                                                                                 | 234,876                                                                                                              |
| BT-VACC™                                      | 106,663                                                                                                                                 | 197,514                                                                                                              |
| Oraprine™                                     | 3,500                                                                                                                                   | 3,400                                                                                                                |
| LPMTM-Leuprolide                                    | 108,428                                                                                                                                 | 26,404                                                                                                               |
|   Research      & Development Expense | $      1,343,603                                                                                          | $     2,073,773                                                                             |
|                                                |                                                                                                                                    |                                                                                                                 |
| Program      - Reimbursed under Grants              |                                                                                                                                    |                                                                                                                 |
| orBec®                                         | $                                 - | $                   - |
| RiVax™                                        | 865,802                                                                                                                                 | 161,586                                                                                                              |
| BT-VACC™                                      | 55,222                                                                                                                                  | 23,903                                                                                                               |
| Oraprine™                                     | -                                                                                                                                       | -                                                                                                                    |
| LPMTM-Leuprolide                                    | -                                                                                                                                       | -                                                                                                                    |
|   Reimbursed      under Grant             | $              921,024                                                                          | $       185,489                                                                   |
|                                                |                                                                                                                                    |                                                                                                                 |
| TOTAL                                               | $     2,264,627                                                                                                | $    2,259,262                                                                                   |

----

Tableof Contents

|                                                                |                                            June 30, 2008 |    |                                                                                                                                               |    | December      31, 2007 |   |   |   |
|---------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|---------|------------------------|--------|--------|--------|
| Deferred      tax assets:                                           |                                                                                                                                                                                                                                              |    |                                                                                                                                               |    |                   |   |   |   |
| Net      operating loss carry forwards                              | $      27,000,000                                                                                                                                                                                                                                 |    | $25,000,000                                                                                                                                   |    |                   |   |
| Orphan      drug and research and development credit carry forwards | 1,800,000                                                                                                                                                                                                                                         |    | 2,000,000                                                                                                                                          |    |                   |   |
| Other                                                               | 3,000,000                                                                                                                                                                                                                                         |    | 3,000,000                                                                                                                                          |    |                   |   |
| Total                                                               |   31,800,000                                                                                                                                                                                                                            |    |   30,000,000                                                                                                                             |    |                   |   |
| Valuation      allowance                                            | ( 31,800,000                                                                                                                                                                                                                                 |  ) | ( 30,000,000                                                                                                                                  |  ) |                   |   |
| Net      deferred tax assets                                        |              $                       -                                                      |    |        $                 - |    |                   |   |

| 2008 | $        910,000 |
|------|----------------------------------------------------------|
| 2009 | 1,330,000                                                |
| 2010 | 1,410,000                                                |
| 2011 | 870,000                                                  |
| 2012 | 3,870,000                                                |

|                                                 |            2008                                   |              2007                 |
|------------------------------------------------------|----------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
|                                                 |                                                                                                     |                                                                                               |
| Income      tax loss at federal statutory rate  |                      (34.00)% |                     (34.00)% |
| State      taxes, net of federal benefit        |               (4.00)               |               (4.29)         |
| Valuation      allowance                        |              38.00                      |               38.29          |
| Provision      for income taxes (benefit)       |               -      %             |                -      % |

| Contractual      Obligation           | Year2008                        | Year2009                 | Year2010                       |
|---------------------------------------|---------------------------------|--------------------------|--------------------------------|
| Non-cancelable      obligation (1)(2) | $    21,000 | $        4,500 | $         4,500 |
| TOTALS                                | $  21,000             | $       4,500       | $   4,500       |

| (1)   | On      October 1, 2007, we signed a one year lease to occupy office space in      Ewing, New Jersey. |
|-----------------|-------------------------------------------------------------------------------------------------------|

| (2)   | On      April 24, 2008, we signed a three year lease for a  copier. |
|-----------------|---------------------------------------------------------------------|

----

Tableof Contents

ITEM 3-_

----

Tableof Contents

|   | 31.1 | Certification      of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a)      (under Section 302 of the Sarbanes-Oxley Act of 2002).  |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification      of Principal Financial Officer pursuant to Exchange Act rule      13(a)-14(a) (under Section 302 of the Sarbanes-Oxley Act of      2002).  |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002.                       |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------|
|   | 32.2 | Certification      of Principal Financial Officer pursuant to Section 906  of the      Sarbanes-Oxley Act of 2002.   |

----

----

Tableof Contents

EXHIBITNO.     

| 31.1 | Certification      of Chief Executive Officer pursuant to Exchange Act rule 13(a)-14(a)      (under Section 302 of the Sarbanes-Oxley Act of  2002). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification      of Principal Financial Officer pursuant to Exchange Act rule 13(a)-14(a)      (under Section 302 of the Sarbanes-Oxley Act of  2002). |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002. |
|------|---------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification      of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley      Act of 2002. |
|------|-------------------------------------------------------------------------------------------------------------------|

----

Tableof Contents