**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-Q**




**QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE****SECURITIES
                EXCHANGE ACT OF 1934**For
                the quarterly period ended March 31,
                2007




Commission
      file number: 0-32019




**TASKER
      PRODUCTS CORP.**


(Exact
      name of registrant as specified in its charter)




**Nevada**
            
            **88-0426048**(State
                of incorporation)
            
            (IRS
                Employer Identification No.)




**39
      Old Ridgebury Road-Suite 14, Danbury, CT 06810-5116**


(Address
      of principal executive offices)




**(203)
      730-4350**


(Registrant’s
      telephone number)




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




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange
      Act.




Large
                accelerated filer o
            Accelerated
                filer o
            Non-accelerated
                filer x




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




The
      number of shares outstanding of the registrant’s common stock as of May 10, 2007
      was 108,674,042.







**TASKER
      PRODUCTS CORP.**




**INDEX**




**PART
                I. FINANCIAL INFORMATION****Item
                1.**
            **Financial
                Statements**Unaudited
                Condensed Consolidated Balance Sheets as of March 31, 2007 and December
                31, 2006
            2Unaudited
                Condensed Consolidated Statements of Operations for the three months
                ended
                March 31, 2007 and 2006
            3Unaudited
                Condensed Consolidated Statements of Cash Flow for the three months
                ended
                March 31, 2007 and 2006
            4Notes
                to Unaudited Condensed Consolidated Financial Statements
            5**Item
                2.**
            **Management’s
                Discussion And Analysis Of Financial Condition And Results Of
                Operations**
            17**Item
                3.**
            **Quantitative
                And Qualitative Disclosures About Market Risk**
            23**Item
                4.**
            **Controls
                And Procedures**
            23**PART
                II. OTHER INFORMATION****Item
                1.**
            **Legal
                Proceedings**
            24**Item
                1A.**
            **Risk
                Factors**
            25**Item
                2.**
            **Unregistered
                Sales Of Equity Securities And Use Of Proceeds**
            26**Item
                6.**
            **Exhibits**
            27**SIGNATURES**
            27




**Forward-Looking
      Statements**




In
      this
      Quarterly Report, we state our beliefs of future events and of our future
      financial performance. In some cases, you can identify those so-called
“forward-looking statements” by words such as “may,” “will,” “should,”
“expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“potential,” or “continue” or the negative of those words and other comparable
      words. These forward-looking statements are subject to risks and uncertainties
      that could cause actual results to differ materially from historical results
      or
      those we anticipate. Factors that could cause actual results to differ from
      those contained in the forward-looking statements include, but are not limited
      to: our ability to obtain new financing and/or generate revenue growth in the
      near future; our history of losses; our limited experience in the marketing
      of
      our products; our ability to compete with other products in our market space;
      the risk of unfavorable federal regulation; and the other risks and
      uncertainties discussed in this Quarterly Report and in Amendment No. 1 to
      our
      Annual Report on Form 10-K for the year ended December 31, 2006 and such other
      reports and documents that we file from time to time with the Securities and
      Exchange Commission. Statements included in this Quarterly Report are based
      upon
      information known to us as of the date that this Quarterly Report is filed
      with
      the Securities and Exchange Commission, and we assume no obligation to update
      or
      alter our forward-looking statements made in this Quarterly Report, whether
      as a
      result of new information, future events or otherwise, except as otherwise
      required by applicable federal securities laws.




1




**PART
      I — FINANCIAL INFORMATION**




**Item
      1. Financial Statements**




**TASKER
      PRODUCTS CORP. AND SUBSIDIARIES**


**UNAUDITED
      CONDENSED CONSOLIDATED BALANCE SHEETS**


**(In
      thousands except per share data)**




**March
                31,**
            
            **December 31,****2007**
            
            **2006****ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            434
            
            $
            932Accounts
                receivable, net of allowance for doubtful accounts of $30 and $24,
                respectively
            
            
            237
            
            
            176Notes
                receivable
            
            
            50
            
            
            50Inventories
            
            
            301
            
            
            300Prepaid
                expenses and other current assets
            
            
            130
            
            
            268Deferred
                financing costs
            
            
            1,019
            
            
            501Total
                current assets
            
            
            2,171
            
            
            2,227Notes
                receivable, net of current portion
            
            
            684
            
            
            669Property
                and equipment, net
            
            
            1,267
            
            
            1,311Intangible
                assets, net
            
            
            7,681
            
            
            7,887Goodwill
            
            
            9,835
            
            
            9,835Deposits,
                net
            
            
            37
            
            
            38Total
                assets
            
            $
            21,675
            
            $
            21,967**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilities:Accounts
                payable
            
            $
            651
            
            $
            1,227Other
                accrued liabilities
            
            
            2,035
            
            
            2,509Notes
                payable - acquisition of IRL
            
            
            408
            
            
            679Notes
                payable - convertible bridge note, net of discount
            
            
            2,006
            
            
            320Warrants
                payable - placement agent
            
            
            1,044
            
            
            409Notes
                payable - shareholders
            
            
            573
            
            
            564Total
                current liabilities
            
            
            6,717
            
            
            5,708Long-term
                liabilities:Other
                long term liabilities
            
            
            27
            
            
            30Total
                long-term liabilities
            
            
            27
            
            
            30Stockholders’
                equity:Common
                stock, $0.001 par value; 300,000 shares authorized; 108,340 and 106,340
                shares issued and outstanding, respectively
            
            
            108
            
            
            106Additional
                paid-in capital
            
            
            109,712
            
            
            105,131Accumulated
                deficit
            
            
            (94,889
            )
            
            (89,008
            )Total
                stockholders’ equity
            
            
            14,931
            
            
            16,229Total
                liabilities and stockholders’ equity
            
            $
            21,675
            
            $
            21,967




See
      accompanying notes




2


**TASKER
      PRODUCTS CORP. AND SUBSIDIARIES**


**UNAUDITED
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS**


**(In
      thousands except per share data)**




**Three Months Ended**
              **March
                31,****2007**
            
            **2006**Revenues
            
            $
            426
            
            $
            221Cost
                of goods sold
            
            
            95
            
            
            68Gross
                margin
            
            
            331
            
            
            153Operating
                expensesSelling,
                general & administrative (1)
            
            
            3,207
            
            
            4,082Product
                development (1)
            
            
            484
            
            
            376Depreciation
                and amortization
            
            
            277
            
            
            574Total
                operating expenses
            
            
            3,968
            
            
            5,032Loss
                from operations
            
            
            (3,637
            )
            
            (4,879
            )Other
                income (expense):Interest
                expense
            
            
            (105
            )
            
            (27
            )Interest
                income
            
            
            17
            
            
            39Amortization
                of fair value assigned to beneficial conversionfeature
                and amortization of fair value of warrants
            
            
            (1,686
            )
            
            —Amortization
                of deferred financing costs
            
            
            (521
            )
            
            —Liquidated
                damages
            
            
            —
            
            
            (87
            )Gain
                on extinguishment of obligations
            
            
            51
            
            
            —Loss
                on disposal of vehicle
            
            
            —
            
            
            (50
            )Other
            
            
            —
            
            
            79Total
                other income (expense), net
            
            
            (2,244
            )
            
            (46
            )Net
                loss
            
            $
            (5,881
            )
            $
            (4,925
            )Net
                loss per common share, basic and diluted
            
            $
            (0.06
            )
            $
            (0.05
            )Weighted
                average common shares outstanding, basic and diluted
            
            
            106,896
            
            
            100,527




**Three Months Ended**
              **March
                31,****2007**
            
            **2006**(1)  
                Stock-based compensation is allocated as follows:Selling,
                general & administrative
            
            $
            1,344
            
            $
            1,667Product
                development
            
            
            136
            
            
            56Total
            
            $
            1,480
            
            $
            1,723




See
      accompanying notes




3


**TASKER
      PRODUCTS CORP. AND SUBSIDIARIES**


**UNAUDITED
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(In
      thousands)**




**Three Months Ended****March 31,****2007**
            
            **2006****Cash
                flows from operating activities:**
            
            ****
            
            ****Net
                loss
            
            $
            (5,881
            )
            $
            (4,925
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Non-cash
                itemsDepreciation
                and amortization
            
            
            277
            
            
            574Noncash
                interest and liquidated damages
            
            
            (7
            )
            
            99Noncash
                loss on disposal of assets
            
            
            —
            
            
            50Write
                off of raw materials
            
            
            20
            
            
            —Stock-based
                compensation
            
            
            1,480
            
            
            1,723Allowance
                for uncollectible accounts receivable
            
            
            6
            
            
            —Loss
                on equity investment
            
            
            —
            
            
            5Amortization
                of discount on convertible bridge notes
            
            
            1,686
            
            
            —Amortization
                of deferred financing costs
            
            
            522
            
            
            —Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (67
            )
            
            76Inventories
            
            
            (20
            )
            
            24Prepaid
                expenses and other current assets
            
            
            138
            
            
            7Accounts
                payable
            
            
            (575
            )
            
            (213
            )Other
                accrued liabilities
            
            
            (389
            )
            
            37Net
                cash used in operating activities
            
            
            (2,810
            )
            
            (2,543
            )**Cash
                flows from investing activities:**Purchases
                of available-for-sale securities
            
            
            —
            
            
            (3,450
            )Purchases
                of property and equipment
            
            
            (27
            )
            
            (33
            )Net
                cash used in investing activities
            
            
            (27
            )
            
            (3,483
            )**Cash
                flows from financing activities:**Proceeds
                from private placements, net of issue costs
            
            
            3,041
            
            
            9,335Deferred
                financing costs
            
            
            (428
            )
            
            (592
            )Exercise
                of warrants / options
            
            
            —
            
            
            37Repayment
                of auto loan
            
            
            (3
            )
            
            —Repayments
                on note payable - IRL
            
            
            (271
            )
            
            (260
            )Net
                cash provided by financing activities
            
            
            2,339
            
            
            8,520**Net
                (decrease) increase in cash and cash equivalents**
            
            
            (498
            )
            
            2,494**Cash
                and cash equivalents, beginning of period**
            
            
            932
            
            
            1,037**Cash
                and cash equivalents, end of period**
            
            $
            434
            
            $
            3,531**Supplemental
                disclosures of cash flow information:**Interest
                paid
            
            $
            4
            
            $
            13**Supplemental
                disclosures of non-cash investing and financing
                activities:**Fair
                value of warrants issued as private placement fees
            
            $
            635
            
            $
            594Recognition
                of debt discount and beneficial conversion on debt
            
            $
            3,079
            
            $
            —Conversion
                of debt and accrued interest into common stock
            
            $
            —
            
            $
            194





See
      accompanying notes




4




**TASKER
      PRODUCTS CORP. AND SUBSIDIARIES**


**NOTES
      TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**




**1.**  **Basis
      of Presentation**




Tasker
      Products Corp. (formerly known as Tasker Capital Corp.) was formed
      on May 13, 1996 and was in the development stage through December 31,
      2005. The quarterly period ended March 31, 2006 is the
      first period during which Tasker Products Corp. is considered an operating
      company.




Tasker
      Products Corp. and its subsidiaries (collectively, the “Company”) manufacture,
      distribute and market products using pHarlo technology, a process that enables
      copper sulfate, a compound with bacteriostatic properties, to remain active
      throughout a wide range of pH values. The Company currently markets, Unifresh®
Footbath, a grooming aid for dairy cows; Tasker Blue, an antimicrobial aid
      in
      the scalder (which is a method of loosening feathers so that they can be picked
      and removed mechanically) and post-feather picker process (the method used
      in
      chicken processing that receives chickens immediately after the scalder and
      mechanically removes feathers) sections of poultry processing; and Tasker
      Pacific BlueTM Seafood Wash, a product used in commercial and retail seafood
      processing to extend shelf life and reduce or eliminate odors.




The
      accompanying unaudited condensed consolidated financial statements of the
      Company as of March 31, 2007 and December 31, 2006 and for the three month
      periods ended March 31, 2007 and 2006 reflect all adjustments of a normal and
      recurring nature to present fairly the consolidated financial position, results
      of operations and cash flows for the interim periods.  These unaudited
      condensed, consolidated financial statements have been prepared by the Company
      pursuant to the instructions to Form 10-Q and Article 10 of Regulation
      S-X.  Pursuant to such instructions, certain financial information and
      footnote disclosures normally included in such financial statements have been
      condensed or omitted.




These
      unaudited condensed consolidated financial statements should be read in
      conjunction with the audited consolidated financial statements of the Company
      and notes thereto, together with management’s discussion and analysis or plan of
      operations, contained in Amendment No. 1 to the Company’s annual report on Form
      10-K for the year ended December 31, 2006. The results of operations for the
      three month period ended March 31, 2007 are not necessarily indicative of the
      results that may occur for the year ending December 31, 2007.




Certain
      prior period amounts have been reclassified to conform to the current year
      presentation. ****




**2.
      Recent Accounting Pronouncements**




In
      July
      2006, the Financial Accounting Standards Board issued Interpretation
      No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48
      creates a single accounting and disclosure model for uncertain tax positions,
      provides guidance on the minimum threshold that a tax uncertainty is required
      to
      meet before it can be recognized in the financial statements and applies to
      all
      tax positions taken by a company, both those deemed to be routine as well as
      those for which there may be a high degree of uncertainty.




FIN
      48
      establishes a two-step approach for evaluating tax positions. The first step,
      recognition, occurs when a company concludes (based solely on the technical
      aspects of the tax matter) that a tax position is more likely than not to be
      sustained on examination by a taxing authority. The second step, measurement,
      is
      only considered after step one has been satisfied and measures any tax benefit
      at the largest amount that is deemed more likely than not to be realized upon
      ultimate settlement of the uncertainty. Tax positions that fail to qualify
      for
      initial recognition are recognized in the first subsequent interim period that
      they meet the more likely than not standard, when they are resolved through
      negotiation or litigation with the taxing authority or upon the expiration
      of
      the statute of limitations. Derecognition of a tax position previously
      recognized would occur when a company subsequently concludes that a tax position
      no longer meets the more likely than not threshold of being sustained. FIN
      48
      also significantly expands the financial statement disclosure requirements
      relating to uncertain tax positions. FIN 48 is effective for fiscal years
      beginning after December 15, 2006. The
      adoption of the provisions of FIN 48 did not have a material impact on the
      Company’s financial position, results of operations and cash flows.




5




**3.
      Liquidity**




*Going
      Concern*




The
      Company has incurred losses in its operations in each quarter since it changed
      its business direction in late 2002. For the three months ended March 31, 2007,
      the Company has incurred a net loss of approximately $5.9 million. The Company
      has not generated positive cash flow from operations for the three months ended
      March 31, 2007 and 2006. The Company expects to continue to incur losses until
      it can generate sufficient revenue growth from existing and new business
      arrangements.




At
      March
      31, 2007, the Company had a total of approximately $434,000 of cash and cash
      equivalents.




Between
      December 1, 2006 and March 31, 2007, the Company received cash in the amount
      of
      approximately $4,999,000 (including cash received during December 2006, in
      the
      amount of approximately $1,920,000) from several investors. In exchange for
      the
      cash received, the Company issued to the investors 10% Secured Convertible
      Bridge Notes (the “Convertible Bridge Notes”), which are convertible into
      68,950,621 shares of common stock at a conversion price of $0.0725 per share.
      As
      an inducement for the investors to purchase the Convertible Bridge Notes, the
      Company issued to these investors four-year warrants, which entitle them to
      purchase an aggregate of 27,771,778 shares of the Company’s common stock, which
      number of shares is based on 50% of the principal amount of the notes purchased
      by the investor and divided by the per share exercise price of $0.09. As
      compensation for its services as placement agent, Indigo Securities, LLC
      received cash of approximately $499,900 and seven-year warrants to purchase
      an
      aggregate of 6,895,062 shares of the Company’s common stock at an exercise price
      of $0.0725 per share. The placement agent warrants contain a "cashless exercise"
      option.




Between
      April 1, 2007 and April 23, 2007, the date that the Company ceased accepting
      subscriptions for its Convertible Bridge Notes, the Company received additional
      cash of approximately $1,296,000 and issued additional Convertible Bridge Notes,
      which are convertible into 17,878,221 shares of common stock at a conversion
      price of $0.0725 per share. In conjunction with these Convertible Bridge Notes,
      the Company issued to the investors warrants to purchase an aggregate of
      7,200,950 shares of common stock at an exercise price of $0.09 per share. Indigo
      Securities, LLC received cash of approximately $129,600 and seven-year warrants
      to purchase an aggregate of 1,787,822 shares of the Company's common stock
      at an
      exercise price of $0.0725 per share. The placement agent warrants contain a
      "cashless exercise" option.




Based
      upon the Company’s projections of future revenues from its products and cash on
      hand, including cash of $4.4 million received from the sale of the Company’s
      Convertible Bridge Notes between January 1, 2007 and April 23, 2007, the date
      that the Company ceased accepting subscriptions for its Convertible Bridge
      Notes, the Company will not have adequate working capital to fund its operations
      during the next twelve months. The
      Company is rapidly depleting its cash resources and its ability to continue
      to
      operate and grow its business is dependent upon obtaining new financing. 
The cost of any new financing may be prohibitive. While the Company has been
      in
      the process of aggressively developing, marketing and selling its products,
      there can be no assurances that those efforts will be met with success in the
      marketplace or that the timing of the Company’s efforts will be consistent with
      its cash availability and burn rate. If the Company is unable to arrange new
      financing, the Company will not have sufficient cash to support its operations
      and meet its obligations. The Company anticipates that it will need
      approximately an additional $4 - $6 million to support its operations and meet
      its obligations over the next twelve months. The Company is currently reviewing
      alternative methods of financing, including private issuances of debt and/or
      equity.




In
      view
      of the matters described above, recoverability of a major portion of the
      recorded asset amounts shown in the accompanying balance sheet is dependent
      upon
      continued operations of the Company, which in turn is dependent upon the
      Company’s ability to raise additional capital, obtain financing and to succeed
      in its future operations. The financial statements do not include any
      adjustments relating to the recoverability and classification of recorded asset
      amounts or amounts and classification of liabilities that might be necessary
      should the Company be unable to continue as a going concern.




6




*Registration
      Rights Agreements*




Since
      the
      Company’s inception, the Company has funded operations and investing activities
      through the sale of common stock, warrants and convertible debt under several
      private placements. Requirements for liquidated damages under some of these
      private placements may have an impact on the Company’s future liquidity. To
      date, the Company has satisfied and/or received waivers for the provisions
      of a
      majority of the agreements that would have otherwise required the Company to
      pay
      liquidated damages.




At
      March
      31, 2007, there was no derivative liability balance related to the April 2004
      and July 2004 registration rights agreements, since
      the
      shares purchased under the April 2004 and July 2004 private placements could
      be
      sold under Rule 144(k) of the Securities Act of 1933. Conversely, as of March
      31, 2007, we had recorded approximately $441,000, the full and maximum potential
      amount of the actual incurred liquidated damages associated with the April
      2004
      and the July 2004 registration rights agreements.




On
      April
      26, 2006, the Company filed a registration statement registering resale of
      securities purchased in the September 2005 and January 2006 private placements.
      This registration statement was declared effective by the SEC on October 31,
      2006. As it relates to the September 2005 private placement, the Company
      believes that it has used its best efforts to cause the registration statement
      to be declared effective and, therefore, pursuant to the terms of the
      September 2005 registration rights agreement, the Company believes that is
      not currently liable for liquidated damages as a result of the registration
      statement not being declared effective by May 23, 2006. Should the rights
      holders dispute that the Company used its best efforts, and the Company either
      accedes to their assertion or is found to not have used its best efforts, the
      estimated maximum amount of liquidated damages for which the Company would
      be
      liable, assuming ineffectiveness from May 23, 2006 to October 31, 2006 and
      for illustration purposes only, from April 1, 2007 to the end of the period
      covered by the registration agreement is approximately $96,000.




As
      it
      relates to the January 2006 private placement, the Company, despite using
      its best efforts, failed to have the registration statement declared effective
      by the SEC on or before October 26, 2006. Consequently, as of December 31,
      2006,
      the Company is required to issue to each holder of the January 2006 private
      placement, shares and warrants equal to one percent of the respective number
      of
      shares and warrants purchased by each holder or an aggregate of 133,359 shares
      of common stock and warrants to purchase 133,359 shares of common stock. As
      of
      March 31, 2007, the Company had not issued these shares and
      warrants.




**4.
      Notes Receivable**




On
      March 28, 2005, in connection with the 2005 acquisition of the pHarlo
      Assets, the Company issued to David Creasey, a principal of pHarlo Citrus
      Technologies and Indian River Labs, a loan of $625,000. This loan is secured
      by
      options and stock that Mr. Creasey holds in the Company. As of March 31,
      2007, the balance of this loan is approximately $734,000 including accrued
      interest of approximately $109,000.





7




**5.
      Goodwill and Other Intangible Assets**




The
      net
      carrying values of goodwill and other intangible assets at March 31, 2007 were
      as follows (in thousands):




**Gross Carrying
                 Amount**
            
            **Impairment
                Charges**
            
            **Accumulated**
              **Amortization**
            
            **Net Carrying 
                Amount/ Adjusted Basis**Amortizable
                utility patents
            
            $
            22,500
            
            $
            12,239
            
            $
            2,580
            
            $
            7,681Goodwill
            
            $
            41,677
            
            $
            31,842
            
            $
            —
            
            $
            9,835




The
      net
      carrying values of goodwill and other intangible assets at December 31, 2006
      were as follows (in thousands):




**Gross Carrying
                 Amount**
            
            **Impairment
                Charges**
            
            **Accumulated**
              **Amortization**
            
            **Net Carrying 
                Amount/ Adjusted Basis**Amortizable
                utility patents
            
            $
            22,500
            
            $
            12,239
            
            $
            2,374
            
            $
            7,887Goodwill
            
            $
            41,677
            
            $
            31,842
            
            $
            —
            
            $
            9,835






The
      Company recorded amortization expense of $207,000 and $511,000 related to the
      other intangible assets for three months ended March 31, 2007 and 2006,
      respectively.




Future
      expected amortization expense of intangible assets for the remaining three
      quarters of the current fiscal year and the subsequent fiscal years is as
      follows (in thousands):




2007
            
            $
            6202008
            
            
            8272009
            
            
            8272010
            
            
            8272011
            
            
            8272012
                and thereafter
            
            $
            3,753




**6.**  **Warrants
      and Stock Options**


**Warrants:**
  Outstanding
        warrants (excluding warrants issued for compensation subsequent to adoption
        of
        FAS 123R, which excluded warrants are included below under share-based
        payments) at March 31, 2007, were as follows:
  ·
              Warrants
                  to purchase 524,850 shares of common stock issued with notes payable
                  in
                  November 2002. The warrants have a five-year term and were issued
                  with an
                  exercise price of $2.00 per share.


8


·
              Warrants
                  to purchase 300,000 shares of common stock issued to pHarlo in
                  connection
                  with a license agreement in November 2002. The warrants have a
                  five-year
                  term and were issued with an exercise price of $0.25 per
                  share.  ·
              Warrants
                  to purchase 3,100,000 shares of common stock issued to consultants
                  in
                  November 2002. The warrants have a five-year term and were issued
                  with an
                  exercise price of $0.25 per share.  ·
              Warrants
                  to purchase 400,000 shares of common stock issued to a consultant
                  in May
                  2004. The warrants have a five-year term and were issued with an
                  exercise
                  price of $0.25 per share.  ·
              Warrants
                  to purchase 562,500 shares of common stock issued to a placement
                  agent in
                  connection with the December 2004 private placement. The warrants
                  have a
                  five-year term and were issued with an exercise price of $2.00
                  per
                  share.  ·
              Warrants
                  to purchase 1,473,770 shares of common stock issued to investors
                  in
                  connection with the September 2005 private placement. The warrants
                  have a
                  five-year term and were issued with an exercise price of $1.00
                  per
                  share.  ·
              Warrants
                  to purchase 13,335,925 shares of common stock issued to investors
                  in
                  connection with the January 2006 private placement. The warrants
                  have a
                  five-year term and were issued with an exercise price of $1.00
                  per
                  share.  ·
              Warrants
                  to purchase 800,155 shares of common stock issued to a placement
                  agent in
                  connection with the January 2006 private placement. The warrants
                  have a
                  five-year term and were issued with an exercise price of $1.00
                  per
                  share.  ·
              Warrants
                  to purchase 27,771,778 shares of common stock issued to lenders
                  in
                  connection with the sale of the Convertible Bridge Notes between
                  December
                  1, 2006 and March 31, 2007. The warrants have a four-year term
                  and were
                  issued with an exercise price of $0.09 per
                  share.  ·
              Warrants
                  to purchase 3,912,011 shares of common stock issued to a placement
                  agent
                  in connection with the sale of the Convertible Bridge Notes between
                  December 1, 2006 and March 31, 2007. The warrants have a seven-year
                  term
                  and were issued with an exercise price of $0.0725 per share.


9


The
        following table summarizes the Company’s warrant activity (excluding warrants
        issued for compensation subsequent to adoption of FAS 123R, which excluded
        warrants are included below under share-based payments) for the quarter
        ended March 31, 2007:
  **Number of 
                  warrants**
              
              **Exercise Price**
                **per
                  warrant**
              
              **Weighted average
                  exercise price**
                **per
                  warrant**Outstanding,
                  January 1, 2007
              
              
              33,812,133
              
              $$
              0.0725
                  - 2.00
              
              $
              0.59Granted
              
              
              21,351,919
              
              $$
              0.0725
                  - 0.09
              
              $
              0.09Exercised
              
              
              (2,983,051
              )
              $
              0.0725
              
              $
              0.07Outstanding,
                  March 31, 2007
              
              
              52,181,001
              
              $$
              0.0725
                  - 2.00
              
              $
              0.42
 
 The
        Warrants granted pursuant to the April 2004 Private Placement originally
        had
        exercise prices of $0.10 and $0.20. However, in accordance with the terms
        of the
        agreement and upon specified events the exercise prices of all warrants issued
        in this placement were modified to $0.05 per share in September 2004 and
        further
        modified to $0.01 per share in May 2005. All of the warrants issued in
        connection to the April 2004 Private Placement were exercised during
        2006.
  The
        Warrants granted pursuant to the July 2004 Private Placement originally had
        an
        exercise price of $0.25. However, in accordance with the terms of the agreement
        and upon specified events the exercise price of all warrants issued in this
        placement were modified to $0.05 per share in September 2004 and further
        modified to $0.01 per share in May 2005. All of the warrants issued in
        connection to the July 2004 Private Placement were exercised during
        2006.
  The
        Warrants granted pursuant to the September 2005 Private Placement originally
        had
        an exercise price of $3.00. In January 2006, in connection with an amendment
        to
        the agreement the exercise price of the warrants was reduced from $3.00 to
        $1.00
        per share.
  As
        of
        March 31, 2007, the weighted average contractual life of warrants
        outstanding was approximately 1.5 years.
  **Share-based
        payments:**
  On
        January 1, 2006, the Company adopted the provisions of SFAS No. 123R
“Share-Based Payment” using the modified prospective transition method. The
        total expense associated with warrants issued for compensation, non-plan
        options
        and employee stock-option based employee compensation plans was approximately
        $1,480,000 and $1,724,000 for the three months ended March 31, 2007 and 2006,
        respectively.
  The
        aggregate intrinsic value in the tables below represent the total intrinsic
        value (the difference between the closing stock price on the last trading
        day of
        the quarter ended March 31, 2007 and the exercise price, multiplied by the
        number of in-the-money options and warrants) that holders would have received
        had all such holders exercised their options and warrants on March 31, 2007.
        This amount changes each reporting period based on changes in the fair market
        value of the Company’s common stock. Total intrinsic value of options exercised
        for the three months ended 2006 was $82,000. No options or warrants were
        exercised during the three months ended March 31, 2007.
  At
        March
        31, 2007, future compensation cost related to non-vested stock options and
        warrants, less estimated forfeitures, is approximately $2,157,000 and will
        be
        recognized over an estimated weighted average period of 1.5 years..
  *Options:*
  A
        summary
        of stock option activity is as follows:
  **Number
                  of options**
              
              **Weighted
                  Average Exercise Price per option**
              
              **Weighted
                  Average Remaining**
                **Contractual
                  Term (years)**
              
              **Aggregate**
                **Intrinsic
                  Value**Outstanding,
                  January 1, 2007
              
              
              20,610,701
              
              $
              0.66Granted
              
              
              333,333
              
              $
              0.40Cancelled/forfeited
              
              
              (633,802
              )
              $
              1.54Outstanding,
                  March 31, 2007
              
              
              20,310,232
              
              $
              0.45
              
              
              5.8
              
              $
              506,150Options
                  exercisable at March 31, 2007
              
              
              19,716,065
              
              $
              0.45
              
              
              7.7
              
              $
              476,500


10


The
        following table summarizes additional information about stock options granted
        during the three months ended March 31:
  **2007**
              
              **2006**Weighted-average
                  fair value of grants
              
              $
              0.02
              
              $
              0.67Risk-free
                  interest rate
              
              
              5.177
              %
              
              4.88
              %Expected
                  option term
              
              
              0.25
                  year
              
              
              6.1
                  yearsStock
                  price volatility
              
              
              160
              %
              
              135
              %Dividend
                  yield
              
              
              —
              
              
              —
 
 *Warrants:*
  Outstanding
        warrants issued for compensation at March 31, 2007, were as
        follows:
  ·
            Warrants
                to purchase 18,000,000 shares of common stock issued to our President
                and
                Chief Executive Officer on December 1, 2006, as part of his compensation.
                The warrants have a ten-year term and were issued with exercise prices
                ranging from $0.11 to $0.18 per share.  ·
            Warrants
                to purchase 3,030,000 shares of common stock issued to employees,
                directors and consultants on December 26, 2006, as part of their
                compensation. The warrants have a ten-year term and were issued with
                an
                exercise price of $0.14 per share.  ·
            Warrants
                to purchase 750,000 shares of common stock issued to a director on
                January
                11, 2007, as part of his compensation. The warrants have a ten-year
                term
                and were issued with an exercise price of $0.15 per
                share.  ·
            Warrants
                to purchase 9,010,000 shares of common stock issued to employees,
                directors and consultants on February 5, 2007, as part of their
                compensation. The warrants have a ten-year term and were issued with
                an
                exercise price of $0.14 per share.  ·
            Warrants
                to purchase 870,000 shares of common stock issued to employees, directors
                and consultants on March 14, 2007, as part of their compensation.
                The
                warrants have a ten -year term and were issued with an exercise price
                of
                $0.19 per share.  ·
            Warrants
                to purchase 50,000 shares of common stock issued to a former consultant
                to
                settle a pending litigation matter on March 14, 2007. The warrants
                have a
                five -year term and were issued with an exercise price of $0.15 per
                share.  ·
            Warrants
                to purchase 10,125,000 shares of common stock issued to our Executive
                Chairman on March 14, 2007, as part of his compensation. The warrants
                have
                a ten-year term and were issued with exercise prices of $0.19 per
                share.  A
        summary
        of share-based payment warrant activity is as follows:
 **Number
                  of**
                **warrants**
              
              **Weighted
                  Average Exercise Price**
                **per
                  warrant**
              
              **Weighted
                  Average Remaining**
                **Contractual**
                **Term
                  (years)**
              
              **Aggregate**
                **Intrinsic
                  Value**Outstanding,
                  January 1, 2007
              
              
              21,030,000
              
              $
              0.11Granted
              
              
              20,805,000
              
              $
              0.17Cancelled/forfeited
              
              
              (19,688
              )
              $
              0.14Outstanding,
                  March 31, 2007
              
              
              41,815,312
              
              $
              0.15
              
              
              9.8
              
              $
              2,024,780Warrants
                  exercisable at March 31, 2007
              
              
              10,124,066
              
              $
              0.14
              
              
              9.8
              
              $
              611,666
 
  The
        following table summarizes additional information about share-based payment
        warrant s granted during the three months ended March 31:
  **2007**
              
              **2006**Weighted-average
                  fair value of grants
              
              $
              0.14
              
              $
              —Risk-free
                  interest rate
              
              
              4.4%-4.8
              %
              
              —
              %Expected
                  option term
              
              
              2.5-6
                  years
              
              
              —Stock
                  price volatility
              
              
              139
              %
              
              —
              %Dividend
                  yield
              
              
              —
              
              
              —
 
 **7.
        Net Loss Per Common Share**




The
      following table sets forth the computation of basic and diluted net loss per
      common share for the three months ended March 31, 2007 and 2006:




**Three Months Ended****March
                31,****2007**
            
            **2006****(in thousands except per share data)****Numerator
                for basic and diluted net loss per share:**Net
                loss
            
            $
            (5,881
            )
            $
            (4,925
            )Net
                loss available to common stockholders
            
            $
            (5,881
            )
            $
            (4,925
            )**Denominator:**Denominator
                for basic and diluted net loss per share - weighted-average
                shares
            
            
            106,896
            
            
            100,527**Basic
                and diluted net loss per common share:**
            
            $
            (0.06
            )
            $
            (0.05
            )




11




As
      of
      March 31, 2007, 20,310,232 options and 94,016,001 warrants were excluded from
      the computation of net loss per share because their effect would be
      anti-dilutive. As of March 31, 2006, 22,010,777 options, and 21,497,200 warrants
      were excluded from the computation of net loss per share because the effect
      would be anti-dilutive.




**8.
      Inventories**




Inventories
      consisted of the following:




**March
                31,**
            
            **December 31,****2007**
            
            **2006****(in thousands)**Raw
                Materials
            
            $
            128
            
            $
            89Finished
                Goods
            
            
            173
            
            
            211$
            301
            
            $
            300




Inventories
      are stated at the lower of cost or market. Cost is determined using the
      first-in, first-out (FIFO) method.




**9.**  **Other
      Accrued Liabilities**




Other
      accrued liabilities consisted of the following (in thousands):




**March
                31, 2007**
            
            **December
                31, 2006**Accrued
                wages
            
            $
            130
            
            $
            90Accrued
                interest
            
            
            241
            
            
            148Liquidated
                damages
            
            
            464
            
            
            464Accrued
                legal and accounting fees
            
            
            140
            
            
            240Accrued
                consulting
            
            
            151
            
            
            198Litigation
                settlement
            
            
            250
            
            
            423Accrued
                purchases
            
            
            14
            
            
            99Other
            
            
            645
            
            
            847$
            2,035
            
            $
            2,509


**10.
      Notes Payable**




*Notes
      Payable to Shareholders*




During
      the year ended December 31, 2002, the Company completed a private placement
      offering for cash proceeds of $524,850. The Company issued 524,850 shares of
      common stock, issued warrants to purchase 524,850 shares of common stock at
      a
      price of $2.00 per share and issued 5% promissory notes with a face value of
      $524,325, to the investors. The principal amount and accrued interest are due
      on
      November 26, 2007.




12




**March
                31, 2007**
            
            **December
                31, 2006****(in
                thousands)**Notes
                payable, with interest at 5%, fair value
            
            $
            524
            
            $
            524Less:
                Discount to record note at fair value
            
            
            (224
            )
            
            (224
            )300
            
            
            300Less:
                Note converted into equity
            
            
            (50
            )
            
            (50
            )Amortization
                of discount to March 31, 2007
            
            
            220
            
            
            217$
            470
            
            $
            467




The
      fair
      value attributed to the notes is based upon the fair value of the underlying
      financial instruments. The discount resulting from recording the notes at fair
      value is being amortized using the effective interest method over the five-year
      term of the notes.  As of
      March 31, 2007, we have accrued interest related to these notes of approximately
      $103,000.




*Note
      Payable IRL*




As
      partial consideration for the purchase of the pHarlo assets in 2005, Tasker
      issued a promissory note in the amount of $1,931,973 to Indian River Labs,
      LLC
      (“IRL”). The promissory note bears interest of 3.4% per annum and is payable in
      equal bi-weekly principal installments of $37,153, plus interest, through July
      2007. The following schedule outlines the activity for this note through March
      31, 2007 and December 31, 2006:




**March
                31, 2007**
            
            **December
                31, 2006****(in
                thousands)**Note
                payable, with interest at 3.4%, fair value
            
            $
            1,932
            
            $
            1,932Principal
                repayments
            
            
            (1,524
            )
            
            (1,253
            )$
            408
            
            $
            679




*Convertible
      Bridge Notes*




In
      December 2006, as amended in February 2007, the Company began a Convertible
      Bridge Note offering in which the Company agreed to issue and sell Convertible
      Bridge Notes and warrants to purchase shares of common stock at $0.09 per share.
      The warrants expire in seven years from the date of issuance. The Convertible
      Bridge Notes mature six months from issuance and have various maturity dates
      starting June 1, 2007, bear interest at 10% per annum and are convertible into
      shares of common stock at a price of $0.0725 per share, including interest,
      or
      other securities pursuant to the terms of the Convertible Bridge
      Notes.




Between
      December 1, 2006 and March 31, 2007, the Company had received cash in the amount
      of approximately $4,999,000 (including cash received during December 2006,
      in
      the amount of approximately $1,920,000) from several investors. In exchange
      for
      the cash received, the Company issued to the investors 10% Secured Convertible
      Bridge Notes (the “Convertible Bridge Notes”), which are convertible into
      68,950,621 shares of common stock at a conversion price of $0.0725 per share.
      As
      an inducement for the investors to purchase the Convertible Bridge Notes, the
      Company issued to these investors four-year warrants, which entitle them to
      purchase an aggregate of 27,771,778 shares of the Company’s common stock, which
      number of shares is based on 50% of the principal amount of the notes purchased
      by the investor and divided by the per share exercise price of
      $0.09.




13




All
      of
      the proceeds were allocated to the warrants and embedded beneficial conversion
      feature. The combined discount is being amortized as additional (noncash)
      interest expense with a corresponding increase to the Convertible Bridge Notes
      over the six-month term of the notes using the effective interest method. As
      of
      March 31, 2007, the Company had amortized $2,006,000 of the combined discount
      to
      interest expense.




In
      recording the Convertible Bridge Notes, the Company first allocated the proceeds
      from the sale of the Convertible Bridge Notes between the Convertible Bridge
      Notes and the warrants based upon their relative fair values, resulting in
      the
      recognition of a discount of $1,316,000. The value of the warrants was computed
      using the Black-Scholes option pricing model. Second, in accordance with EITF
      No. 00-27, “Application of Issue 98 **-** 5 to
      Certain Convertible Instruments” after allocating a portion of the Convertible
      Bridge Note proceeds to the warrants, the Company calculated the value of the
      embedded beneficial conversion feature in the note by comparing the carrying
      value of the proceeds, net of the warrant discount, to the fair value of the
      shares issuable upon conversion of the debentures. If there is a beneficial
      conversion, it is recognized, as an additional discount to the extent of the
      remaining proceeds. The Company recognized an additional discount of $3,683,000
      for the embedded beneficial conversion feature.




As
      compensation for serving as placement agent, Indigo Securities, LLC received
      cash of approximately $499,900 and seven-year warrants to purchase an aggregate
      of approximately 6,895,062 shares of the Company’s common stock at an exercise
      price of $0.0725 per share. These warrants contain a "cashless exercise" option.
      The total fee of $1,596,000, including the fair value of the warrants issued,
      has been recorded as deferred financing costs and is being amortized as
      additional (noncash) interest expense over the life of the notes using the
      effective interest method. On March 6, 2007, we issued 2,000,000 shares of
      our
      common stock to our placement agent pursuant to the cashless exercise of
      2,983,051 of these warrants.




**11.
      Contractual Obligations and Commitments**




The
      Company has the following commitments as of March 31, 2007, which are comprised
      primarily of a research and development fee contract, consulting and employment
      contracts, vendor agreements, notes payable, as well as numerous operating
      leases.




**Payments**
              **Due by****Period**
            
            **Less Than**
            
            **1-3**
            
            **3-5**
            
            **More Than****Contractual Obligations**
            
            **Total**
            
            **1 Year**
            
            **Years**
            
            **Years**
            
            **5 Years****(in thousands)**Research
                & development (“R&D”) fees (1)
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —
            
            $
            —Consulting
                agreements
            
            
            130
            
            
            39
            
            
            91
            
            
            —
            
            
            —Employment
                agreements (2)
            
            
            1,356
            
            
            437
            
            
            919
            
            
            —
            
            
            —Vendor
                agreements
            
            
            21
            
            
            16
            
            
            5
            
            
            —
            
            
            —Operating
                leases
            
            
            944
            
            
            279
            
            
            665
            
            
            —
            
            
            —Note(s)
                payable
            
            
            982
            
            
            982
            
            
            —
            
            
            —
            
            
            —**Total**
            
            **$**
            **3,433**
            
            **$**
            **1,753**
            
            **$**
            **1,680**
            
            **$**
            —
            
            **$**
            **—**





(1)          
        On January 26, 2006, R&D fees payable under a Patent and Sub-License
        Agreement with pHarlo IP were amended so as to have no minimum amounts payable
        after 2006; however, they are capped at $2,000,000 for 2007, $4,000,000 for
        2008, $8,000,000 for 2009 and $10,000,000 for 2010 and beyond. No fees were
        paid
        during the three months ended March 31, 2007.


(2)           As
      of March 31, 2007 the estimated future minimum annual compensation under these
      employment agreements, for 2007, 2008 and 2009, is approximately $437,000,
      $580,000 and $189,000, respectively.




14




**12.
      Related Party Transactions**




*Greg
      Osborn*




In
      April
      2007, the Company entered into an employment agreement with Greg Osborn in
      connection with his appointment as Executive Chairman, effective March 14,
      2007.
      The agreement provides for, among other things, a term of up to 21 months,
      an
      annual salary of $60,000, an annual bonus at the discretion of the board, the
      grant of initial warrants for the purchase of 2,625,000 shares of the Company’s
      common stock exercisable on a quarterly basis over the term of the agreement
      at
      an exercise price of $0.19 per share, the grant of additional warrants
      exercisable for 7,500,000 shares of the Company’s common stock at an exercise
      price of $0.19 per share with vesting contingent upon achievement of
      contractually specified performance goals, severance payments and a cash payment
      of $20,000 per month for a period of nine months commencing when the Company
      reaches profitability. Mr. Osborn is the Managing Partner of the firm that
      served from December 2006 to April 2007 as placement agent for the offering
      of
      the Convertible Bridge Notes.




Mr.
      Osborn purchased Convertible Bridge Notes in the aggregate principal amount
      of
      $25,000 and received four-year warrants to purchase an aggregate of 138,888
      shares of the Company's common stock at an exercise price of $0.09 per
      share.





As
      of
      March 31, 2007, Indigo Securities, LLC, the placement agent of the Convertible
      Bridge Notes received in the aggregate a fee of approximately $499,900 and
      seven-year warrants to purchase an aggregate of approximately 6,895,062 shares
      of the Company's common stock at an exercise price of $0.0725 per share. These
      warrants contain a "cashless exercise" option.





*Wynn
      Starr*




In
      2004,
      the Company entered into an Exclusive Field of Use License Agreement and Product
      Sale Agreement with Wynn Starr Special Products, LLC. Under the terms of this
      agreement, as amended through January 23, 2007, the Company has granted Wynn
      Starr the exclusive, worldwide right to market and distribute products used
      as
      post-harvesting processing aids for the poultry industry based on the pHarlo
      technology. In return for this license, Wynn Starr will purchase licensed
      products from the Company and will withhold up to 25% of the net sale price
      per
      gallon sold, based on different increments of achieved net sale prices. The
      amended agreement also includes other target performance criteria such that,
      if
      met by Wynn Starr, the Company will issue to Wynn Starr a warrant to purchase
      up
      to 1,300,000 shares of the Company’s common stock with an exercise price based
      upon the closing price of the Company’s common stock on January 23, 2007, the
      date of the amendment. As of March 31, 2007, no royalties were due and none
      had
      been paid to the Company under this royalty arrangement. Steven B. Zavagli,
      a
      former member of the Company’s board of directors, is the founder, Chairman and
      the Chief Executive Officer of Wynn Starr and Wynn Starr’s ultimate parent
      company, Wynn Starr Flavors, Inc.




*Gordon
      Davis*




During
      the three months ended March 31, 2007, the Company paid Gordon O. Davis, the
      former Chairman of the Board of Directors, approximately $59,000 under a
      consulting services agreement, as amended on March 7, 2007. **** Mr.
      Davis
      is the father in law of the Company’s Chief Financial Officer.




**13.
       Segments — Enterprise Wide Disclosures**




The
      Company owns several utility patents that allow it to produce, market and
      distribute certain product applications related to these utility patents. The
      Chief Operating Decision Maker (CODM) of the Company is the President and CEO.
      The operating results of each product application, other than for revenue,
      are
      not separately tracked or reported. Operating results by product application
      are
      not reviewed by the CODM because discrete financial information is not
      available. Consequently, as permitted by the provisions of SFAS No. 131,
“Disclosure About Segments of an Enterprise and Related Information,” the
      Company has one reportable segment for financial statement
      purposes.




15




*Revenue
      by Product*




The
      Company’s revenue by product is as follows:




**Three Months Ended**
              **March
                31,****2007**
            
            **2006****(in
                thousands)**Unifresh®
                Footbath
            
            $
            248
            
            $
            129Close
                CallTM
            
            
            1
            
            
            92Poultry
                Processing
            
            
            177
            
            
            —$
            426
            
            $
            221




*Dependence
      on Certain Customers*




The
      Company’s dependence on certain customers as a percentage of total revenue is as
      follows:




**Three Months Ended**
              **March
                31,****2007**
            
            **2006**Customer
                A
            
            
            —
            %
            
            36.5
            %Customer
                B
            
            
            38.5
            %
            
            —
            %Customer
                C
            
            
            17.7
            %
            
            —
            %Customer
                D
            
            
            14.7
            %
            
            —
            %




**14.
       Subsequent Events**




Between
      April 1, 2007 and April 23, 2007, the date that the Company stopped accepting
      subscriptions to its Convertible Bridge Notes, the Company received additional
      cash of approximately $1,296,000 and issued additional Convertible Bridge Notes,
      which are convertible into 17,878,221 shares of common stock at a conversion
      price of $0.0725 per share. In conjunction with these Convertible Bridge Notes,
      the Company issued to the investors warrants, to purchase an aggregate of
      approximately 7,200,950 shares of its common stock at an exercise price of
      $0.09
      per share. The placement agent received cash of approximately $129,600 and
      seven-year warrants to purchase an aggregate of 1,787,822 shares of the
      Company's co mmon
      stock at an exercise price of $0.0725 per share. The placement agent warrants
      contain a "cashless exercise" option.




16




**Item
      2. Management’s Discussion And Analysis of Financial Condition And Results Of
      Operations**




The
      following discussion and analysis of our financial condition and results of
      operations should be read in conjunction with the consolidated financial
      statements and notes thereto appearing elsewhere in this Quarterly Report on
      Form 10-Q. This discussion contains forward-looking statements that involve
      risks and uncertainties. See “Forward-Looking Statements” for a description of
      the important factors that could cause actual results to differ materially
      from
      those contained in these forward-looking statements.




**Business
      Overview**





We
      manufacture, distribute and market a variety of products using a process we
      refer to as “pHarlo technology.” These products are covered by one or more
      patents, or base patents, and manufactured using the pHarlo technology, which
      is
      covered by those patents. The pHarlo technology utilizes a safe solution, which
      we call the pHarlo concentrate, and is a solution whose components have been
      accepted as Generally Recognized as Safe by the U.S. Food and Drug
      Administration, or FDA. This safe solution enables copper sulfate, a compound
      with bacteriostatic properties, i.e., the ability to inhibit bacteria growth,
      to
      remain active throughout a wide range of pH values, or measurements of acidity
      or alkalinity in a solution.




We
      currently market:




·
            Unifresh
                Footbath, a grooming aid for dairy cows;




·
            Tasker
                Pacific Blue Seafood Wash, a product used in commercial and retail
                seafood
                processing to extend shelf life and reduce or eliminate odors; and




·
            Tasker
                Blue, an antimicrobial aid to be used in the scalder process of poultry
                processing, which is a method of loosening feathers so that they
                can be
                picked and removed mechanically, and the post-feather picker process,
                which is the method used in chicken processing that receives chickens
                immediately after the scalder and mechanically removes
                feathers.




We
      are
      currently seeking to license and/or sell the Close CallTM brand and derivative
      applications.




*Unifresh®
      Footbath*




We
      currently market Unifresh®Footbath concentrate, a grooming aid that helps clean
      and disinfect the hooves of dairy cows. Because of the bacteriostatic properties
      of the pHarlo technology, this product helps control bacteria that infect the
      hooves of cows and cause interdigital dermatitis, or a bacterial infection
      of
      the skin on a cow’s hoof, and interdigital papillomatosis, or a disease that
      affects a cow’s hoof that may cause severe lameness, decreased milk yield, body
      weight loss, decreased reproductive performance and increased veterinary
      expenses. Unifresh ®Footbath concentrate was launched during the third quarter
      of 2005. In the fourth quarter of 2005, we discovered that our Unifresh
®Footbath product’s effectiveness was diminished in water that had abnormally
      high alkaline content. We reformulated our Unifresh ®Footbath concentrate with
      the addition of a compound that neutralizes alkali, or a type of base that
      has a
      pH greater than 7, which can increase the pH of water or soil. In the first
      quarter of 2006, we introduced our enhanced formulation to the market. It is
      currently being sold to dairy farms throughout the U.S. through our sales force,
      independent brokers and farm product distributors. We currently market the
      product as a grooming aid. No federal agency approvals are required for
      marketing this product.




*Poultry
      Processing*




In
      August
      2005, we began the in-plant commercial verification process for USDA approval
      to
      use the pHarlo technology in the scalder process of poultry processing. The
      first in-plant commercial verification test was completed in October 2005,
      and
      submitted to the USDA shortly thereafter. On February 6, 2006, we received
      a
      letter from the Food Safety and Inspection Service (“FSIS”) of the USDA
      consenting to the continuation of in-plant trials of our Scalder application
      at
      the facility in Athens, Georgia, as well as two additional poultry processors.
      The trial involved the application of the pHarlo technology as an antimicrobial
      in the scalder and post-feather picker processes. In August 2006 we received
      a
      Letter of No Objections from the USDA indicating that it had no objections
      to
      the use of our product as an antimicrobial processing aid in poultry Scalder
      and, in December 2006, we received a similar letter from the USDA to use our
      product in the Picker and New York Dressed Cabinet. During the fiscal quarter
      ended March 31, 2007, we submitted protocols to be used in the testing of an
      application for use in the On-Line Reprocessor (“OLR”) and Chiller sections. We
      received the FSIS’s consent to proceed with in-plant testing of these
      applications. Tests of the company’s OLR application are currently in process at
      one plant and tests of its Chiller application are scheduled to begin shortly.
      Upon the successful completion of these tests, the company will have
      applications in six of the seven intervention points of poultry
      processing.




17




*Seafood
      Processing Products*




We
      recently began marketing the pHarlo technology for use in pathogen reduction,
      or
      a process by which certain bacteria that cause disease or illness are reduced
      in
      number or eliminated, and the shelf life of seafood is extended. Our product,
      Tasker Pacific Blue Seafood Wash, has been tested at the North Carolina State
      Center for Marine Science & Technology, Virginia Tech University and
      Mississippi State University on shrimp, mahi mahi, salmon, flounder, scallops
      and catfish. The results of these studies indicated that the pHarlo technology
      could possibly double the shelf life on catfish filets and significantly
      increase the shelf life of scallops. No federal agency approvals are required
      for the marketing of this product.




In
      the
      processing of fish and seafood species, water is used in the process at many
      points after harvesting. Therefore, the use of dip tanks and sprays of chilled
      water are normal and common. The addition of the Tasker Pacific Blue Seafood
      Wash to these wash waters is an easy adaptation of existing process equipment.
      Our seafood application is currently in trial testing by a seafood company
      located in the southeast and in several supermarkets in the northeast.




*Close
      CallTM*




Until
      March 2007, we marketed Close CallTM as an oral hygiene breath drink that
      eliminates odors from tobacco, garlic, onion and alcohol. The FDA requires
      companies making structure or function claims relating to a dietary supplement
      product, such as Close CallTM, to “certify that the firm has substantiation that
      the claim is truthful and not misleading.” While the FDA does not require any
      presentation of this support, it does require a notice of dietary supplement
      ingredients and claims. We believe that our Close CallTM product could be
      marketed more efficiently by a company either already established in the
      industry or with more commercial resources. Therefore, we are actively seeking
      to license and/or sell the Close Call TM brand or derivative
      applications.




**Financial
      Overview**




Until
      December 31, 2005, we were a development stage company. The quarterly period
      ended March 31, 2006 was the first period we were considered an operating
      company.




Based
      upon our projections of future revenues from our products and cash on hand,
      including cash of $4.4 million received from the sale of our Convertible Bridge
      Notes between January 1, 2007 and April 23, 2007, the date that we ceased
      accepting subscriptions for our Convertible Bridge Notes, we will not have
      adequate working capital to fund our operations during the next twelve months.
      We are rapidly
      depleting our cash resources and our ability to continue to operate and grow
      our
      business is dependent upon obtaining new financing.  The cost of any new
      financing may be prohibitive. While
      we
      have been in the process of aggressively developing, marketing and selling
      our
      products, there can be no assurance that those efforts will be met with success
      in the marketplace or that the timing of our efforts will be consistent with
      our
      cash availability and burn rate. If we are unable to obtain new financing and/or
      generate sufficient revenue growth from existing and new business arrangements,
      we will not have sufficient cash to support our operations and meet our
      obligations. We anticipate that we will need approximately an additional $4
      - $6
      million to support our operations and meet our obligations over the next twelve
      months. We are currently reviewing alternative methods of financing, including
      private issuances of debt and/or equity.




18




**Related
      Party Transactions**





*Greg
      Osborn*




In
      April
      2007, we entered into an employment agreement with Greg Osborn in connection
      with his appointment as Executive Chairman, effective March 14, 2007. The
      agreement provides for, among other things, a term of up to 21 months, an annual
      salary of $60,000, an annual bonus at the discretion of the board, the grant
      of
      initial warrants for the purchase of 2,625,000 shares of common stock
      exercisable on a quarterly basis over the term of the agreement at an exercise
      price of $0.19 per share, the grant of additional warrants exercisable for
      7,500,000 shares of common stock at an exercise price of $0.19 per share with
      vesting contingent upon achievement of contractually specified performance
      goals, severance payments and a cash payment of $20,000 per month for a period
      of nine months commencing when we reach profitability. Mr. Osborn is the
      Managing Partner of Indigo Securities, LLC, the firm that served from December
      2006 to April 2007 as placement agent for the offering of our Convertible Bridge
      Notes.




Mr.
      Osborn purchased Convertible Bridge Notes in the aggregate principal amount
      of
      $25,000 and received four-year warrants to purchase an aggregate of 138,888
      shares of our common stock at an exercise price of $0.09 per share.





As
      of
      March 31, 2007, Indigo Securities, LLC, the placement agent of our Convertible
      Bridge Notes received in the aggregate a fee of approximately $499,900 and
      seven-year warrants to purchase an aggregate of approximately 6,895,062 shares
      of our common stock at an exercise price of $0.0725 per share. These warrants
      contain a "cashless exercise" option.





*Wynn
      Starr*





In
      2004,
      we entered into an Exclusive Field of Use License Agreement and Product Sale
      Agreement with Wynn Starr Special Products, LLC. Under the terms of this
      agreement, as amended through January 23, 2007, we have granted Wynn Starr
      the
      exclusive, worldwide right to market and distribute products used as
      post-harvesting processing aids for the poultry industry based on the pHarlo
      technology. In return for this license, Wynn Starr will purchase licensed
      products from us and will remit to us up to 25% of the net sale price per gallon
      sold, based on different increments of achieved net sale prices. This amended
      agreement also includes other target performance criteria such that, if met
      by
      Wynn Starr, we will issue to Wynn Starr a warrant to purchase up to 1,300,000
      shares of our common stock with an exercise price based upon the closing price
      of our common stock on January 23, 2007, the date of the amendment. Net sales
      price and licensed products are defined in the Exclusive Field of Use License
      Agreement and Products Sale Agreement. As of December 31, 2006 no royalties
      were
      due and none had been paid to us under this royalty arrangement. Steven B.
      Zavagli, a former member of our board of directors, is the founder, Chairman
      and
      the Chief Executive Officer of Wynn Starr and Wynn Starr’s ultimate parent
      company, Wynn Starr Flavors, Inc.




*Gordon
      Davis*





During
      the three months ended March 31, 2007 and 2006, we paid Gordon O. Davis, the
      former Chairman of the Board of Directors, approximately $59,000 and $20,000,
      respectively, under a consulting services agreement, as amended on March 7,
      2007. Mr. Davis is the father in law of our Chief Financial
      Officer.




19




**Critical
      Accounting Policies and Estimates**




We
      believe that several accounting policies are important to understanding our
      historical and future performance. We refer to these policies as “critical”
because these specific areas generally require us to make judgments and
      estimates about matters that are uncertain at the time we make the estimate,
      and
      different estimates—which also would have been reasonable—could have been used,
      which would have resulted in different financial results.




The
      critical accounting policies we identified in our most recent Annual Report
      on
      Form 10-K for the fiscal year ended December 31, 2006 related to stock-based
      compensation, derivative instruments, goodwill and intangible assets and the
      valuation of acquired intangible assets. It is important that the discussion
      of
      our operating results that follows be read in conjunction with the critical
      accounting policies disclosed in Amendment No. 1 to our Annual Report on Form
      10-K, as filed with the SEC on April 27, 2007.





**Three
      Months Ended March 31, 2007 Compared to Three Months Ended March 31,
      2006**




*Revenues*




Revenues
      for the three months ended March 31, 2007 were approximately $426,000 compared
      with approximately $221,000 for the corresponding period in 2006. This increase
      is primarily due to increased sales in Unifresh ® Footbath and Tasker Blue, our
      poultry processing product. We expect that revenue will continue to increase
      throughout fiscal year 2007 primarily due to our intensified marketing efforts
      and the expansion of our distributor network for Unifresh® Footbath and our
      poultry processing product.




*Selling,
      General and Administrative*




Selling,
      General and Administrative (“SGA”) expenses are primarily comprised of sales and
      marketing costs, compensation costs, professional fees, and general
      administrative costs. SGA costs for the three months ended March 31, 2007
      decreased by approximately $875,000 from approximately $4.1 million for the
      three months ended March 31, 2006, to approximately $3.2 million for the three
      months ended March 31, 2007. We anticipate that SGA costs will continue to
      decrease, as a percentage of revenues and in absolute dollars, in fiscal year
      2007.




Sales
      and
      marketing expenses consist primarily of salaries and other related costs for
      sales and marketing personnel, sales commissions, promotional expenses,
      advertising, public relations and trade shows. Sales and marketing costs for
      the
      three months ended March 31, 2007 increased by approximately $195,000 primarily
      due to the increase in commission, trade show and promotional expenses incurred
      as a result of our intensified marketing efforts.




Compensation
      expense consists primarily of salaries and other related costs for senior
      management, finance and administrative employees of our company. Compensation
      expense decreased by approximately $373,000 primarily due to a reduction in
      administrative and warehouse personnel.




Professional
      fees for the three months ended March 31, 2007 decreased by approximately
      $2,000.




General
      and administrative expenses consist primarily of rent, insurance and travel
      and
      entertainment expenses. The decrease in general administrative costs for the
      three months ended March 31, 2007 by approximately $372,000 was attributable
      to
      a settlement
      fee of approximately $249,000 for the termination of minimum purchase commitment
      obligations for Close CallTM bottles and a settlement fee of approximately
      $55,000, related to the settlement of the “BOC” claim, incurred in the three
      months ended March 31, 2006, a
      decrease in insurance expense of $49,000, a decrease in equipment rental expense
      of $13,000, a decrease in the rent expense of $8,000.




Stock
      based compensation expense for selling, general and administrative employees
      decreased by approximately $323,000, to approximately $1.4 million for the
      three
      months ended March 31, 2007 as compared to $1.7 million for the same time period
      in 2006. The expense associated with these awards is recorded as expense within
      the same functional expense category as cash compensation for the respective
      employee is recorded. For the three months ended March 31, 2007, stock
      compensation expense was allocated as follows:




**(in thousands)**Sales
                and marketing
            
            $
            168Product
                development
            
            
            136General
                and administrative
            
            
            1,176$
            1,480




20




*Product
      Development*




Product
      development consists primarily of personnel costs to support product
      development. Product development and research costs for the three months ended
      March 31, 2007 increased by approximately $108,000 to approximately $484,000
      from approximately $376,000 for the three months ended March 31, 2006. The
      increase was primarily due to a $52,000 increase in bonus expense related to
      the
      achievement of regulatory approvals and an increase in product development
      and
      clinical trials of approximately $39,000 related to the increased testing
      activity of our poultry processing product.




*Depreciation
      and Amortization Expense*




Depreciation
      and amortization expense, which includes the amortization of identifiable
      intangible assets, decreased by approximately $297,000 from approximately
      $574,000 in the three months ended March 31, 2006, to approximately $277,000
      for
      the three months ended March 31, 2007, primarily due to the reduction in the
      carrying value of the intangible assets as a result of the impairment charge
      of
      $12.2 million recorded in the second quarter of 2006.




*Interest
      Expense*




Interest
      expense increased by approximately $78,000 from $27,000 for the three months
      ended March 31, 2006, to approximately $ 105,000 for the three months ended
      March 31, 2007. The increase was primarily due to an increase of $92,000 in
      accrued interest expense related to the Convertible Bridge Notes.




*Amortization
      of fair value assigned to beneficial conversion feature and amortization of
      fair
      value of warrants*




$1,226,000
      is due to the amortization of the debt discount related to the fair value of
      the
      beneficial conversion feature of the Convertible Bridge Notes and $460,000
      is to
      due to the amortization of the discount related to the fair value of the
      four-year warrants.




*Amortization
      of deferred financing costs*




$346,000
      is due to the amortization of the fair value of the placement agent seven-year
      warrants and $175,000 is due to the amortization of the placement agent
      fee.




*Interest
      Income*




Interest
      income decreased by approximately $22,000 from $39,000 for the three months
      ended March 31, 2006, to approximately $17,000 for the three months ended March
      31, 2007 primarily due to a decreased cash balance in the three months ended
      March 31, 2007, as compared to the same period ending March 31,
      2006.




*Other
      expenses*




For
      the
      three months ended March 31, 2007, we had a gain from the extinguishment of
      debt
      for $ 51,000 as a result of settlement of vendor obligations at lower amounts
      than what we had originally recorded. For
      the
      three months ended March 31, 2006, w e
      accrued
      approximately $87,000 for (i) liquidated damages for failure to have a
      current prospectus available for the resale of common stock sold in the April
      2004 and July 2004 private placements and (ii) a loss on a disposal of a vehicle
      in the amount of $50,000 as a result of the Settlement and Release Agreement
      we
      entered into with a former executive. This increase in expense was partially
      offset by the reduction of the fair market value of the registration rights
      liability by approximately $85,000.




21




**Liquidity
      and Capital Resources**




*Overview*




Since
      our
      inception, we have funded operations and investing activities through the sale
      of common stock, warrants and convertible debt under several private placements.
      Requirements for liquidated damages under some of these private placements
      may
      have an impact on our future liquidity. To date we have satisfied and/or
      received waivers for the provisions of a majority of the agreements, that would
      have otherwise required us to pay liquidated damages. However, we have not
      received waivers and from time to time we have not satisfied some of the
      provisions of the registration rights agreements for the April 2004 and July
      2004 convertible debt. Nevertheless, our obligation to accrue liquidated damages
      under these registration rights agreements ceased in April 30 and July 22,
      2006,
      respectively. Through December 31, 2006, we have accrued $442,000 in liquidated
      damages related to these agreements. Also, as of December 31, 2006, we have
      accrued the full amount of liquidated damages of $23,000 required under the
      January 26, 2006 registration rights agreement.




*Liquidity
      - Going Concern*




Based
      upon our projections of future revenues from our products and cash on hand,
      including cash of $4.4 million received from the sale of our Convertible Bridge
      Notes between January 1, 2007 and April 23, 2007, the date that we ceased
      accepting subscriptions for our Convertible Bridge Notes, we will not have
      adequate working capital to fund our operations during the next twelve months.
      We are rapidly
      depleting our cash resources and our ability to continue to operate and grow
      our
      business is dependent upon obtaining new financing.  The cost of any new
      financing may be prohibitive. While
      we
      have been in the process of aggressively developing, marketing and selling
      our
      products, there can be no assurance that those efforts will be met with success
      in the marketplace or that the timing of our efforts will be consistent with
      our
      cash availability and burn rate. If we are unable to obtain new financing and/or
      generate sufficient revenue growth from existing and new business arrangements,
      we will not have sufficient cash to support our operations and meet our
      obligations. We anticipate that we will need approximately an additional $4
      - $6
      million to support our operations and meet our obligations over the next twelve
      months. We are currently reviewing alternative methods of financing, including
      private issuances of debt and/or equity.





*Operating
      Activities*




At
      March
      31, 2007 our cash and cash equivalents balances were approximately $434,000
      compared with $932,000 at December 31, 2006.




Net
      cash
      used in operating activities for the three months ended March 31, 2007 was
      approximately $2.8 million, compared to net cash used in operating activities
      of
      approximately $2.5 million for the three months ended March 31,
      2006.




*Investing
      Activities*




Net
      cash
      used in investing activities for the three months ended March 31, 2007 was
      approximately $27,000 as compared to approximately $3.5 million for the three
      months ended March 31, 2006. The decrease in net cash used in investing
      activities was primarily due to lack of excess funds to invest in marketable
      securities during 2007.




22




*Financing
      Activities*




Net
      cash
      provided by financing activities during the three months ended March 31, 2007
      was approximately $2.3 million, as compared to approximately $8.5 million for
      the three months ended March 31, 2006.




The
      net
      cash provided by financing activities for the three months ended March 31,
      2007
      principally represents proceeds from the sale of Convertible Bridge Notes,
      net
      of placement agent fees and legal costs.




As
      partial consideration for the purchase of the pHarlo assets in the July 2005
      acquisition, we issued a promissory note in the amount of $1,931,973 to Indian
      River Labs, L.L.C. (“IRL”). The promissory note bears interest of 3.4% per annum
      and is payable in equal bi-weekly principal installments of $37,153, plus
      interest, through July 2007. During the three months ended March 31, 2007 we
      paid approximately $271,000 under the IRL promissory note.




**Registration
      Rights Agreements**




On
      April
      26, 2006, we filed a registration statement registering the resale of securities
      purchased in the September 2005 and January 2006 private placements. This
      registration statement was declared effective by the SEC on October 31, 2006. As
      it
      relates to the September 2005 private placement, we have used our best efforts
      to cause the registration statement to be declared effective and, therefore,
      pursuant to the terms of the September 2005 registration rights agreement,
      we
      believe that we are not currently liable for liquidated damages as a result
      of
      the registration statement not being declared effective by May 23, 2006. Should
      the rights holders dispute that our best efforts were used, and we either accede
      to their assertion or are found to not have used our best efforts, the estimated
      maximum amount of liquidated damages for which we would be liable, assuming ineffectiveness
      from May 23, 2006 to October 31, 2006 and for illustration purposes only,
      from April 1, 2007 to the end of the period covered by the registration
      agreement is approximately $96,000.





As
      it
      relates to the January 2006 private placement, despite using our best
      efforts, we failed to have the registration statement declared effective by
      the
      SEC on or before October 26, 2006. Consequently, as of December 31, 2006 we
      were
      required to issue to each holder of the January 2006 private placement,
      shares and warrants equal to one percent of the respective number of shares
      and
      warrants purchased by each holder or an aggregate of 133,359 shares of common
      stock and warrants to purchase 133,359 shares of common stock. As
      of
      March 31, 2007, we had not issued these shares and warrants.




**Off-Balance
      Sheet Arrangements**




During
      the three and twelve months ended March 31, 2007 and December 31, 2006,
      respectively, we did not engage in material off-balance sheet activities,
      including the use of structured finance, special purpose entities; material
      trading activities in non-exchange traded commodity contracts; or transactions
      with persons or entities that benefit from their non-independent relationship
      with us.





**Item
      3. Quantitative and Qualitative Disclosures about Market Risk**




Our
      exposure to market risk, including changes in interest rates, relates primarily
      to cash and cash equivalents. These investments bear interest at a variable
      interest rate, which is subject to market changes. We have not entered into
      any
      interest rate swap agreements, or other instruments to minimize our exposure
      to
      interest rate fluctuations. We have not had any derivativeinstruments in the past and do not presently plan to in the future. Our
      investment portfolio consists of demand deposits and money market mutual funds.
      Due to the highly liquid nature of our investment, a sudden sharp change in
      interest rates would not have a material adverse effect on the value of the
      portfolio.




**Item
      4. Controls and Procedures**




As
      required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange
      Act”), we carried out an evaluation of the effectiveness of the design and
      operation of our disclosure controls and procedures (as defined by Rule
      13a-15(e) under the Exchange Act) as of the end of the period covered by this
      report. This evaluation was carried out under the supervision and with the
      participation of our Chief Executive Officer, Lanny Dacus and our Chief
      Financial Officer, Stathis Kouninis.




23




Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed in our reports filed or
      submitted under the Exchange Act is recorded, processed, summarized and
      reported, within the time periods specified in the Securities and Exchange
      Commission’s rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed in our reports filed under the Exchange Act is
      accumulated and communicated to management, including our Chief Executive
      Officer and Chief Financial Officer, to allow timely decisions regarding
      required disclosure.




Based
      upon that evaluation, our Chief Executive Officer and Chief Financial Officer
      concluded that our disclosure controls and procedures as of the end of the
      period covered by this report were not effective. Commencing in February 2006,
      we instituted and are continuing to implement corrective actions with respect
      to
      the deficiencies in our disclosure controls and procedures caused by the lack
      of
      an automated financial reporting system and a small accounting staff that does
      not allow for a thorough review process. We will complete the design of
      financial reports so that we do not rely on spreadsheets and we will add
      additional accounting staff when our financial condition allows us to do
      so.




There
      were no changes to our internal control over financial reporting (as defined
      on
      Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal
      quarter that have materially affected, or are reasonably likely to materially
      affect, our internal controls over financial reporting.




While
      every effort will be made to ensure the financial reporting system will adhere
      to our internal controls, we cannot be certain that material weaknesses will
      not
      be identified prior to the filing of management’s annual report on internal
      control over financial reporting.





**PART
      II — OTHER INFORMATION**




**Item
      1. Legal Proceedings**




We
      are
      involved in certain legal proceedings and we are subject to certain lawsuits,
      claims and regulations in the ordinary course of our business. Although the
      ultimate effect of these matters is often difficult to predict, we believe
      that
      their resolution will not have a material adverse effect on our financial
      statements.




The
      following is a list of our litigation matters:





On
      January 5, 2006, a civil action captioned Robert
      L. Mandell, D.M.D., and Anthony M. Boschetti, D.M.D. v. Tasker Products Corp.,
      Arthur P. Bergeron and Richard J. Kirby was
      filed in the Middlesex Superior Court in Massachusetts. In the complaint, the
      plaintiffs allege that we, our former President, Mr. Bergeron, and our
      alleged former agent, Mr. Kirby, breached an agreement to pay for a study
      regarding our Breath RephreshTM product, a mouthwash predecessor to Close Call.
      The plaintiffs seek recovery of $100,000 in connection with the breach of
      contract claim. In April 2007, we resolved this matter by the payment of $40,000
      and the issuance of a warrant for the purchase of 50,000 shares of our common
      stock at an exercise price of $0.15 per share.




On
      January 2006, we received correspondence from Provco Ventures I, LP, an
      investor in our September 2005 private placement, alleging securities law
      claims in connection with the September 2005 private placement. On March 6,
      2007, we paid Provco Ventures $50,000 in settlement of its claim.




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On
      May
      25, 2006, a civil action captioned James
      Collins v. Tasker Products Corp . was
      filed in the Connecticut Superior Court for the Judicial District of Stamford.
      In the complaint, Mr. Collins alleges that Tasker breached the employment
      agreement between him and our company. Specifically, Mr. Collins alleges that
      he
      is due severance compensation pursuant to the employment agreement. On June
      29,
      2006, we filed our answer to the complaint. The answer also alleges numerous
      counterclaims against Mr. Collins, including a violation of Connecticut’s
      Uniform Trade Secrets Act, breach of duty of loyalty and various computer
      related offenses. In February 2007, we entered into a settlement agreement
      in
      connection with this civil action. The settlement agreement provides for among
      other things (i) payment to Collins of $400,000 in cash, of which $150,000
      was
      paid on February 20, 2007 and $250,000 is payable within 90 days after February
      16, 2007 (the "Second Payment"), (ii) acceleration of previously granted stock
      options exercisable for 1,000,000 shares of common stock granted to Collins
      to
      the extent that they have not already vested, which stock options expire 90
      days
      from February 16, 2007, (iii) registration of the shares of common stock
      underlying such stock options with the Securities and Exchange Commission and
      reduction of the exercise price of such stock options from an exercise price
      of
      $1.45 per share to $0.40 per share, (iv) granting of mutual general releases
      and
      (v) withdrawal by Collins of the Lawsuit with prejudice once the Second Payment
      has been made and such shares of common stock have been registered.




**Item
      1A. Risk Factors**




Except
      for the following revised risk factor, there have been no material changes
      in
      the risk factors from those disclosed in our Annual Report on Form 10-K for
      the
      year ended December 31, 2006.




**RISKS
      RELATED TO OUR BUSINESS**




***Unless
      we obtain new financing and/or generate revenue growth in the near future,
      our
      liquidity position will become significantly impaired***




Based
      upon our projections of future revenues from our products and cash on hand,
      including cash of $4.4 million received from the sale of our Convertible Bridge
      Notes between January 1, 2007 and April 23, 2007, the date that we ceased
      accepting subscriptions for our Convertible Bridge Notes, we will not have
      adequate working capital to fund our operations during the next twelve months.
      We are rapidly
      depleting our cash resources and our ability to continue to operate and grow
      our
      business is dependent upon obtaining new financing.  The cost of any new
      financing may be prohibitive. While
      we
      have been in the process of aggressively developing, marketing and selling
      our
      products, there can be no assurance that those efforts will be met with success
      in the marketplace or that the timing of our efforts will be consistent with
      our
      cash availability and burn rate. If we are unable to obtain new financing and/or
      generate sufficient revenue growth from existing and new business arrangements,
      we will not have sufficient cash to support our operations and meet our
      obligations. We anticipate that we will need approximately an additional $4
      - $6
      million to support our operations and meet our obligations over the next twelve
      months. We are currently reviewing alternative methods of financing, including
      private issuances of debt and/or equity.





***We
      have lost money in each fiscal quarter since we changed our business model
      to
      the development of products in the oral care, food processing, skin care, water
      purification and pet industries*** **.** ***We
      expect future losses and we may never become
      profitable.***




We
      have
      incurred losses from operations in each quarter since we changed our business
      direction in late 2002. Our net losses for the three months ended March 31,
      2007
      and the years ended December 31, 2006, 2005 and 2004 were approximately
      $5,881,000, $62,943,000, $18,269,000, and $6,072,000, respectively. We expect
      to
      continue to incur losses for at least the next twelve months. We anticipate
      operating expenses will increase as we attempt to build our brands, expand
      our
      customer base and develop new products. To become profitable, we must increase
      revenue substantially and achieve and maintain positive gross margins. We may
      not be able to increase revenue and gross margins sufficiently to achieve
      profitability. If we are not able to achieve profitability, our results of
      operations and financial condition will be materially and adversely
      affected.





Our
      consolidated financial statements have been prepared assuming that we will
      continue as a going concern. As discussed in the consolidated financial
      statements, we have incurred negative cash flow from operations and net losses
      since inception and have a working capital deficiency. These conditions, among
      others, raise substantial doubt about our ability to continue as a going
      concern.




25




**RISKS
      RELATED TO OUR COMMON STOCK**




***The
      large number of shares available for future sale could adversely affect the
      price of our common stock.***




As
      of
      March 31, 2007, approximately 19.7 million shares of common stock were issuable
      upon exercise of outstanding stock options with a weighted average exercise
      price of $0.45 per share, and approximately 94 million shares of common stock
      were issuable upon exercise of outstanding warrants with an exercise price
      of
      between $0.725 to $2.00 per share. In addition, the registration rights
      agreement for the January 2006 private placement requires us to pay liquidated
      damages in the form of additional common stock and warrants. As of March 31,
      2007, 133,359 shares and 133,359 warrants are issuable as liquidated damages
      under the terms of the January 2006 registration rights agreement. Substantially
      all of the shares underlying these options and warrants have been or would
      be
      registered for resale, and none of them are subject to any contractual
      restrictions on resale. Also, Between April 1, 2007 and April 23, 2007, the
      date
      that the Company ceased accepting subscriptions for its Convertible Bridge
      Notes, an additional 17,878,221 shares of common stock at a conversion price
      of
      $0.0725 per share and warrants to purchase 7,200,950 shares of common stock
      with
      an exercise price of $0.09 per share are issuable in conjunction with the
      additional Convertible Bridge Notes we sold between December 1, 2006 and March
      2007. Also in relation to these notes an additional 1,787,822 shares of common
      stock at an exercise price of $0.0725 per share are issuable to the placement
      agent. Future sales of any of these shares, or the anticipation of such sales,
      could adversely affect the market price of our common stock and could materially
      impair our future ability to raise capital through an offering of equity
      securities. Further, any issuance of a substantial number of these shares would
      dilute the ownership interest of existing stockholders and could result in
      increased volatility in the price of our common stock.





**Item
      2. Unregistered Sales of Equity Securities and Use of Proceeds**





During
      the three-month period ended March 31, 2007, we granted the following stock
      options and warrants:




·
            On
                February 16, 2007, stock options to purchase an aggregate of 333,333
                shares of common stock, at an exercise price of $0.40 per share,
                with a
                contract term of ninety days and immediate vesting, were granted
                as a
                settlement to a former employee.




·
            Warrants
                to purchase 17,105,122 shares of common stock issued to lenders in
                connection with the sale of the Convertible Bridge Notes between
                January
                1, 2007 and March 31, 2007. The warrants have a four-year term and
                were
                issued with an exercise price of $0.09 per
                share.




·
            Warrants
                to purchase 4,246,789 shares of common stock issued to a placement
                agent
                in connection with the sale of Convertible Bridge Notes between January
                1,
                2007 and March 31, 2007. The warrants have a seven- year term and
                were
                issued with an exercise price of $0.0725 per share.




·
            Warrants
                to purchase 750,000 shares of common stock issued to a director on
                January
                11, 2007, as part of his compensation. The warrants have a ten-year
                term
                and were issued with an exercise price of $0.15 per
                share.




·
            Warrants
                to purchase 9,010,000 shares of common stock issued to employees,
                directors and consultants on February 5, 2007, as part of their
                compensation. The warrants have a ten-year term and were issued with
                an
                exercise price of $0.14 per share.




26




·
            Warrants
                to purchase 870,000 shares of common stock issued to employees, directors
                and consultants on March 14, 2007, as part of their compensation.
                The
                warrants have a ten -year term and were issued with an exercise price
                of
                $0.19 per share.




·
            Warrants
                to purchase 50,000 shares of common stock issued to a former consultant
                to
                settle a pending litigation matter on March 14, 2007. The warrants
                have a
                five -year term and were issued with an exercise price of $0.15 per
                share.




·
            Warrants
                to purchase 10,125,000 shares of common stock issued to our Executive
                Chairman on March 14, 2007, as part of his compensation. The warrants
                have
                a ten-year term and were issued with exercise prices of $0.19 per
                share.




·
            On
                March 6, 2007, we issued 2,000,000 shares of our common stock to
                our
                placement agent, pursuant to the cashless exercise of 2,983,051 of
                warrants previously earned.




The
      issuances of common stock, warrants and stock options were not registered under
      the Securities Act because such issuances were exempt from registration pursuant
      to Section 4(2) of the Securities Act of 1933, as they were transactions by
      an issuer that did not involve a public offering of securities.




**Item
      6. Exhibits**




31.1
            
            Rule
                13a-14(a)/15d-14(a) Certification by Principal Executive
                Officer31.2
            
            Rule
                13a-14(a)/15d-14(a) Certification by Principal Financial
                Officer32.1
            
            Section
                1350 Certifications by Principal Executive Officer32.2
            
            Section
                1350 Certifications by Principal Financial
                Officer




**SIGNATURES**




In
      accordance with the requirements of the Exchange Act, the Registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.


TASKER
                PRODUCTS CORP.Date: May
                15, 2007
            By:
            /s/ Stathis
                KouninisStathis
                Kouninis
                Chief
                  Financial Officer
                (Principal
                  Financial and Accounting
                  Officer)




**Exhibit
      Index**




31.1
            
            Rule
                13a-14(a)/15d-14(a) Certification by Principal Executive
                Officer31.2
            
            Rule
                13a-14(a)/15d-14(a) Certification by Principal Financial
                Officer32.1
            
            Section
                1350 Certifications by Principal Executive Officer32.2
            
            Section
                1350 Certifications by Principal Financial
                Officer




27