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**Risk      Factors**

***You      should carefully consider the risks, uncertainties and other factors described      below before you decide whether to buy shares of our common stock. Any of the      factors could materially and adversely affect our business, financial condition,      operating results and prospects and could negatively impact the market price      of      our common stock. Also, you should be aware that the risks and uncertainties      described below are not the only ones**we face**. Additional      risks and uncertainties that we do not yet know of, or that we currently think      are immaterial, may also impair our business operations. You should also refer      to the other**info**rmation contained in and incorporated by      reference into this**Quarterly** **R**eport,      including our financial statements and the related      notes.***

**Risks      Related to our industry**

***We      have had significant losses and anticipate future losses; if additional funding      cannot be obtained, we may**need to**reduce or discontinue our      product development and commercialization efforts and we may be unable to      continue our operations.***

***If      we are unsuccessful in developing our products, our ability to generate revenues      will be significantly impaired.***

| ·   | we                will not be able to maintain our current research and development                schedules; |
|--------------------|---------------------------------------------------------------------------------------------------------------|

| ·   | we                may be unsuccessful in our efforts to secure profitable procurement                contracts from the U.S. government or others for our biodefense                products; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | we                will encounter problems in clinical trials;                or |
|--------------------|---------------------------------------------------------------------------------|

| ·   | the                technology or product will be found to be ineffective or                unsafe. |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | it                is uneconomical or the market for the product does not develop or                diminishes; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | we                are not able to enter into arrangements or collaborations to manufacture                and/or market the product; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                product is not eligible for third-party reimbursement from government                or                private insurers; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | others                hold proprietary rights that preclude us from commercializing the                product; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | others                have brought to market similar or superior products;                or |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | the                product has undesirable or unintended side effects that prevent or                limit                its commercial use. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

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***Our      business is subject to extensive governmental regulation, which can be costly,      time consuming and**subjects us to unanticipated      delays.***

***There      may be unforeseen challenges in developing our biodefense      products.***

***We      will be dependent on government funding, which is inherently uncertain, for      the      success of our biodefense operations.***

***The      manufacture of our products is a highly exacting process, and if we or one      of      our materials suppliers encounter problems manufacturing our products, our      business could suffer.***

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***If      the parties we depend on for      supplying our drug substance raw materials and certain manufacturing-related      services do not timely supply these products and services, it may delay or      impair our ability to develop, manufacture and market our      products.***

***We      do not have sales and marketing experience and our lack of experience may      restrict our success in commercializing our product      candidates.***

***Our      products, if approved, may not be commercially viable due to changes in health      care practice and third party reimbursement      limitations.***

***We      may not be able to retain rights licensed to us by third parties to      commercialize key products or to develop the third party relationships we need      to develop, manufacture and market our products.***

***We      may suffer product and other liability claims; we maintain only limited product      liability insurance, which may not be sufficient.***

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***We      may not be able to compete successfully with our competitors in the      biotechnology industry.***

***We      may be unable to commercialize our products if we are unable to protect our      proprietary rights, and we may be liable for significant costs and damages      if we      face a claim of intellectual property infringement by a third      party.***

***Our      business could be harmed if we fail to retain our current personnel or if they      are unable to effectively run our business.***

**Risks      Related to our Common Stock**

***Our      stock price is highly volatile.***

| ·   | announcements                of technological innovations, more important bio-threats or new commercial                therapeutic products by us, our collaborative partners or our present                or                potential competitors; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our                quarterly operating results and                performance; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | announcements                by us or others of results of pre-clinical testing and clinical                trials; |
|--------------------|---------------------------------------------------------------------------------------------------------------------|

| ·   | developments                or disputes concerning patents or other proprietary                rights; |
|--------------------|--------------------------------------------------------------------------------------------------------|

| ·   | acquisitions; |
|--------------------|---------------|

| ·   | litigation                and government proceedings; |
|--------------------|-------------------------------------------------------|

| ·   | adverse                legislation; |
|--------------------|-------------------------------------|

| ·   | changes                in government regulations; |
|--------------------|---------------------------------------------------|

| ·   | economic                and other external factors; and |
|--------------------|---------------------------------------------------------|

| ·   | general                market conditions |
|--------------------|------------------------------------------|

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***Our      stock trades on the over the counter bulletin board***

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***Shareholders      may suffer substantial dilution**.*

| ·   | warrants                to purchase approximately 31,700,000 shares of our common stock at                a                current weighted average exercise price of approximately                $0.72; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | anti-dilution                rights associated with a minimal portion of the above warrants which                can                permit purchase of additional shares and/or lower exercise prices                under                certain circumstances; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | stock                options to purchase approximately 11,800,000 shares of our common                stock of                a current weighted average exercise price of approximately                $0.50. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Our      shares of common stock are thinly traded, so stockholders may be unable to      sell      at or near ask prices or at all if they need to sell shares to raise money      or      otherwise desire to liquidate their shares.***