**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 information contained in and incorporated by reference into this      Quarterly Report, including our financial statements and the related      notes.***
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**Risks      Related to our industry**

***We      have had significant losses and anticipate future losses; if additional funding      cannot be obtained, we may reduce or discontinue our product development and      commercialization efforts and we may be unable to continue our      operations.***
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***If          we are unsuccessful in developing our products, our ability to generate          revenues          will be significantly impaired.***
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| ·   | we                will not be able to maintain our current research and development                schedules; |
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| ·   | we                may be unsuccessful in our efforts to secure profitable procurement                contracts from the U.S. government or others for our biodefense products; |
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| ·   | we                will encounter problems in clinical trials; or |
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| ·   | the                technology or product will be found to be ineffective or unsafe. |
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| ·   | it                is uneconomical or the market for the product does not develop or                diminishes; |
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| ·   | the                product is not eligible for third-party reimbursement from government                or                private insurers; |
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| ·   | others                hold proprietary rights that preclude us from commercializing the                product; |
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| ·   | others                have brought to market similar or superior products; |
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| ·   | the                product has undesirable or unintended side effects that prevent or                limit                its commercial use; or |
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| ·   | we                are not able to enter into arrangements or collaborations to manufacture                and/or market the product. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

***          Our business is subject to extensive governmental regulation, which can be        costly, time consuming and subjects us to unanticipated        delays.***
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***There          may be unforeseen challenges in developing biodefense          products.***

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

***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 health care          changes          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.***
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***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.***
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***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.***
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***Our          business could be harmed if we fail to retain our current personnel or          if they          are unable to effectively run our business.***
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**Risks          Related to our Common Stock**

***Our          stock price is highly volatile.***
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| ·   | announcements                of technological innovations, more important bio-threats or new commercial                therapeutic products by us, our collaborative partners or our present                or                potential competitors; |
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| ·   | our                quarterly operating results and                performance; |
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| ·   | announcements                by us or others of results of pre-clinical testing and clinical                trials; |
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| ·   | developments                or disputes concerning patents or other proprietary                rights; |
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| ·   | acquisitions; |
|--------------------|---------------|
| ·   | litigation                and government proceedings; |
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| ·   | adverse                legislation; |
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| ·   | changes                in government regulations; |
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| ·   | economic                and other external factors; and |
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| ·   | 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***
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| ·   | warrants                to purchase a total of approximately 31,800,000 shares of our common                stock                at a current weighted average exercise price of approximately $0.72; |
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| ·   | anti-dilution                rights associated with a portion of the above warrants which can                permit                purchase of shares at lower exercise prices under certain circumstances;                and |
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| ·   | options                to purchase approximately 11,700,000 shares of our common stock of                a                current weighted average exercise price of approximately $0.50. |
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***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.***