UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549


                                 FORM 10-KSB

(Mark One)

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934

     For the fiscal year ended December 31, 2006

   OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934.

         For the transition period from __________ to ______________

                       Commission file number 000-33023

                           Duska Therapeutics, Inc.
                ----------------------------------------------
                (Name of Small Business Issuer in Its Charter)

                        Nevada                            86-0982792
    ----------------------------------------------     ----------------
    (State or Other Jurisdiction of Incorporation)     (I.R.S. Employer
                   Identification No.)

 Two Bala Plaza, Suite 300, Bala Cynwyd, Pennsylvania        19004
 ----------------------------------------------------     ----------
       (Address of Principal Executive Offices)           (Zip Code)

                                (610) 660-6690
              ------------------------------------------------
              (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act: None

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

                                 Common Stock
                               ----------------
                               (Title of Class)


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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes [X]    No [ ]

Check if there is no disclosure of delinquent filers in respect to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.  [X]

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

State issuer's revenues for its most recent fiscal year ending December 31,
2006:  $ -0-

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as
of March 27, 2007 was approximately $1,952,511 based on the closing sales price
reported by the OTC Bulletin Board on such date.

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the last practicable date.

There were 2,492,584 shares of the Company's common stock outstanding on March
27, 2007.

Transitional Small Business Disclosure Format (check one):  YES [ ]   NO [X]

DOCUMENTS INCORPORATED BY REFERENCE:  None.


<PAGE>



<TABLE>
<CAPTION>

                                TABLE OF CONTENTS
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                                                                         Page
                                                                         ----
<S>                                                                      <C>


PART I                                                                      1
1.       DESCRIPTION OF BUSINESS                                            1
2.       DESCRIPTION OF PROPERTY                                           30
3.       LEGAL PROCEEDINGS                                                 30
4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               30

PART II                                                                    31
5.       MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
         BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES                    31
6.       MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION         32
7.       FINANCIAL STATEMENTS                                              58
8.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE                                              58
8A.      CONTROLS AND PROCEDURES                                           58

PART III                                                                   59
9.       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT                 59
10.      EXECUTIVE COMPENSATION                                            64
11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS                                       69
12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                    70
13.      EXHIBITS AND REPORTS ON FORM 8-K                                  72
14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES                            72
</TABLE>


                                      -i-
<PAGE>




                             INTRODUCTORY COMMENT

Throughout  this Annual Report on Form 10-KSB, the terms "we," "us," "our," and
"our company" refer to Duska Therapeutics, Inc. ("Duska"), a Nevada corporation
formerly known  as Shiprock, Inc., and, unless the context indicates otherwise,
also  includes  our  wholly-owned  subsidiary,  Duska  Scientific  Co.  ("Duska
Scientific"), a Delaware corporation.

                          FORWARD-LOOKING STATEMENTS

         The Private  Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements.  This document contains forward-looking
statements, which reflect  the  views  of our management with respect to future
events and financial performance.  These forward-looking statements are subject
to a number of uncertainties and other factors  that could cause actual results
to  differ  materially  from such statements.  Forward-looking  statements  are
identified by words such  as "anticipates," "believes," "estimates," "expects,"
"intends," "plans," "projects," "targets" and similar expressions.  Readers are
cautioned not to place undue  reliance  on  these  forward-looking  statements,
which  are  based  on the information available to management at this time  and
which speak only as  of  this  date.   We  undertake no obligation to update or
revise any forward-looking statements, whether  as a result of new information,
future events or otherwise.  For a discussion of  some  of the factors that may
cause actual results to differ materially from those suggested  by the forward-
looking statements, please read carefully the information under "Risk  Factors"
beginning on page 41.

         The identification in this document of factors that may affect  future
performance  and  the  accuracy  of  forward-looking  statements is meant to be
illustrative and by no means exhaustive. All forward-looking  statements should
be evaluated with the understanding of their inherent uncertainty.


                                      -ii-
<PAGE>




                                      PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

BUSINESS

         Duska  Therapeutics, Inc. ("Duska") is a Nevada corporation  based  in
Bala Cynwyd, Pennsylvania  that  carries  out  all  of  its business operations
through  its  wholly  owned  subsidiary,  Duska  Scientific  Co.,   a  Delaware
corporation ("Duska Scientific").  Duska is a biopharmaceutical company that is
focusing  on  the  development of diagnostic and therapeutic products based  on
adenosine 5'-triphosphate  (ATP),  and  P2 receptors. ATP is a natural compound
found  in every cell of the human body, where  it  constitutes  the  source  of
energy for  all  bodily  functions.   ATP  is released from many types of cells
under normal and disease conditions.  Extracellular ATP regulates the functions
of different cell types in various tissues and  organs,  including  the  heart,
lung,  intestine  and  kidney,  by  activating cell surface receptors called P2
receptors  (P2R). The pharmacological  activation  and  inhibition  of  P2R  by
specific  compounds,  which  bind  to  these  receptors,  called  agonists  and
antagonists,  respectively,  is  the basis for the development of new drugs for
the   diagnosis   or   treatment   of  various   human   disorders,   including
cardiovascular, pulmonary, neural and renal diseases.

Corporate Business Strategy

         The cloning in recent years  of receptors activated by ATP and related
compounds  (P2R)  has  created  opportunities  for  the  development  of  novel
therapeutic and diagnostic modalities addressing significant medical needs that
have not been fully met heretofore. Indeed, drug discovery based on modulations
of signal transduction pathways controlled  by  P2R  has  been  growing.  These
modulations  can  be achieved by biological compounds or pharmacological agents
acting as agonists,  partial  agonists,  antagonists  or  allosteric  modifiers
(i.e., compounds that bind to receptors and thereby alter their affinity  to an
agonist  or an antagonist) of P2R, as well as agents that target specific steps
in  the  intra-cellular   signal   transduction  cascade  controlled  by  these
receptors.

         We focus on the development  of  new  drugs  based  on our P2R-related
technologies.  Our Scientific Advisory Board consists of experts  in  the field
of  ATP and P2R as well as in clinical fields in which our current and proposed
product candidates have specific diagnostic and therapeutic targets.

         Our  product  portfolio  contains  several  proposed drugs in three of
which, i.e., ATPace(TM), ATPotent(TM), and Aspirex(TM),  the  active ingredient
is ATP.  In addition, we own technology on the basis of which we are developing
new therapeutic modalities for  the management of chronic obstructive pulmonary
disease  (COPD),  chronic  cough  and  asthma  and  glaucoma.  If  we would  be
successful  in  our  attempts  to  license   a   compound  that  may  serve  as
Vagonixen(TM) drug candidate for the treatment of  COPD  and  chronic cough, we


                                       1
<PAGE>



would  need  to  allocate  a very significant portion of our resources  to  the
development of this proposed  drug, which currently is at an earlier stage than
either ATPace(TM) or ATPotent(TM).   Subject  to the availability of sufficient
financial and other resources, we plan to initiate a drug discovery program for
Ocuprene(TM), our proposed drug candidate for the  treatment  of  glaucoma.  At
this time, we do not have the financial resources to initiate a drug  discovery
program for Ocuprene(TM).

         Our strategy for development of our lead product candidates and
proposed product candidates is as follows:

         o   ATPace(TM)  is a proposed drug for the diagnosis and treatment  of
             certain cardiac  arrhythmias  (abnormal heart rate). These include
             bardycardia (slow heart rate),  which is one of the main causes of
             syncope  (fainting), and paroxysmal  supraventricular  tachycardia
             (PSVT; rapid heart rate originating in the atria), which is one of
             the  most  common   forms  of  arrhythmia.  The  rate  of  patient
             enrollment in our Phase II clinical trial with ATPace(TM) had been
             slower than we had originally  anticipated.   Therefore,  on March
             27,  2006  we suspended the enrollment of patients into the trial,
             and as we announced in the Company's Annual Report on Form 10-KSB,
             we have considered  alternative strategies for an expeditious drug
             development pathway.  Specifically,  we asked Cato Research, Inc.,
             our Clinical Research Organization (CRO) to assess the feasibility
             of  filing  for New Drug Application (NDA)  for  ATPace(TM)  as  a
             therapeutic drug  for  the  acute management of PSVT under section
             505(b)(2) of the FDA. This section  covers  "an  application  that
             contains   full   reports   of   investigations   of   safety  and
             effectiveness  but  where  at least some information required  for
             approval comes from studies  not conducted by or for the applicant
             and  for  which  the  applicant has  not  obtained  the  right  of
             reference". Following an  in-depth  analysis, the CRO has notified
             us that regarding ATPace(TM) "505(b)(2) application is a potential
             route to approval, however, only under  certain  conditions".  The
             CRO  recommended  that  we  obtain relevant data from patients who
             have  recently  been  studied  or   treated   using  an  identical
             formulation  to ATPace(TM) to supplement published  data  of  more
             than a thousand  patients  that Duska has forwarded to the CRO. We
             have  contracted  Dr.  Daniel Flammang  in  France  and  Professor
             Bernard Belhassen in Israel,  both  of  whom  possess  the desired
             data.  They  have agreed to furnish Duska with the required  data.
             The data from  Prof.  Belhassen  and Dr. Flammang will be combined
             with Duska's own data generated in  Phase I and II clinical trials
             with  ATPace(TM).  The  CRO  has  estimated   that  it  will  take
             approximately six to 12 months to complete the  preparation of the
             NDA for ATPace(TM), under Section 505(b)(2) of the FDA.


                                       2
<PAGE>



         o   ATPotent(TM) is a proposed drug for the potential treatment of
             infertile males whose sperm malfunction and are unable to induce
             pregnancy.  Pre-clinical studies at the University of Pennsylvania
             have recently been completed.  A  preliminary report submitted by
             the investigators have shown that mouse sperm treated  with  ATP,
             the active ingredient of ATPotent(TM), demonstrated improved
             motility and an approximately 400% increase in the in vitro
             fertilization rate as compared with the control group. Recent
             preliminary  studies performed for Duska by European scientists
             associated with the company have reproduced the  effects  of  ATP
             on the motility of human sperm obtained from 27 patients with
             asthenozoospermia (lack or reduced sperm motility).  Based on
             these new observations, we have filed a provisional patent
             application on February  27, 2007. Together with our  partner,
             Cooper  Surgical,  Inc.,  we  are currently  designing a proof of
             concept  study with the drug  prototype  to be carried out at a
             leading US academic center.  Upon  completion of the  latter study
             with favorable results,  Duska will approach  the  FDA to discuss
             the potential pathway   for   the  clinical   development   of
             ATPotent(TM).

         o   Aspirex(TM) is a  proposed  diagnostic  drug for (i)  the
             identification of patients with asthma, (ii) the  differential
             diagnosis between chronic obstructive pulmonary disorder (COPD)
             vs. asthma and (iii) for monitoring the efficacy of a given
             therapy in the management of patients with these diseases.  The
             drug is designed to be used as an inhaler in  bronchial-challenge
             studies  in the clinical  pulmonary  laboratory.  Duska believes
             that Aspirex(TM) could  constitute  a diagnostic tool  that  is
             superior  to  the two diagnostic drugs currently used in the
             United  States and in Europe.   Last year the company recruited
             Professor Riccardo Polosa, M.D., an internationally  recognized
             leader in the field of clinical bronchoprovocation (airway-
             challenge studies)  for the position of Clinical  Director of the
             Aspirex(TM)  development program and as a member  of  the
             company's  Scientific  Advisory Board. Together with  Dr. Polosa,
             the Company is now  preparing  a pre-clinical  study  which  is
             expected to commence  in the 2nd quarter of 2007.


         o   Vagonixen(TM) is our proposed drug for the  treatment  of  chronic
             obstructive  pulmonary  disease  (COPD)  and  chronic  cough.  Our
             proprietary position in this field consists of the blockage  of  a
             specific ATP receptor subtype in the lungs.  A recent pre-clinical
             study  that  we  sponsored  at  a leading U.S. academic center has
             shown  that  a compound owned by a  large  pharmaceutical  company
             effectively blocks  our  targeted  receptor  subtype  in the lung.
             Based on this study, we have filed for a patent covering  the  use
             of  this compound for the treatment of COPD and chronic cough.  We
             currently  are  seeking  to  enter  into  an  exclusive world wide
             licensing   agreement  with  that  large  pharmaceutical   company

                                       3
<PAGE>



             covering  the  development  of  the  compound  for  all  potential
             clinical indications  including  COPD  and  chronic  cough.  If we
             consummate this license agreement, we would consult with  the  FDA
             regarding  the  development  of  this  compound,  based upon a new
             formulation,  as  our  Vagonixen(TM)  drug  candidate.    We  have
             commenced   preliminary   discussions   with   several   companies
             concerning  a  potential future strategic alliance with regard  to
             the development  of  Vagonixen(TM).  We have yet to enter into any
             agreement.  Therefore,  our  current  goal, subject to acquiring a
             license for the compound and having sufficient  capital resources,
             will  be  to  complete  a  Phase I trial for Vagonixen(TM)  before
             entering into any strategic alliance for this proposed drug.


         o     Ocuprene(TM) is our proposed drug for the treatment of glaucoma.
               In March 2005, we acquired  ownership  of  a P2 receptor-related
               technology   upon   which  we  will  base  the  development   of
               Ocuprene(TM).  We  intend   to   launch  a  drug  discovery  and
               development  program initially aimed  at  the  discovery  of  an
               appropriate small synthetic molecule or an RNAi product to serve
               as this drug candidate.   We  currently  are  discussing  with a
               leading  U.S.  academic medical center a potential collaboration
               aimed at discovering such a drug candidate.


History and Background of Our Company

         Prior to August 2004,  our company was known as Shiprock, Inc. and had
been engaged in very limited activities  in  an  unrelated business.  On August
30, 2004, Shiprock completed a merger in which Shiprock, through a wholly-owned
subsidiary formed specifically for this purpose, acquired  in  a  merger all of
the outstanding shares of Duska Scientific in exchange for 17,727,801 shares of
Shiprock's  common  stock  and  warrants  and  options  to purchase a total  of
13,441,301 shares of Shiprock's common stock upon cancellation  of  outstanding
warrants  and  options to purchase shares of Duska Scientific.  As a result  of
the merger, Duska  Scientific  became  a  wholly-owned  subsidiary of Shiprock.
After  the  merger,  Shiprock  changed its name to "Duska Therapeutics,  Inc.,"
replaced its officers and directors  with those of Duska Scientific, ceased its
prior limited business operations, which  were  outside  of  the  field of drug
development,  and  moved  its offices to Bala Cynwyd, Pennsylvania.  Since  the
merger our operations have been solely dedicated to developing new products for
the diagnosis or treatment  of  human  diseases  based  upon  ATP  and  P2R  as
previously  conducted  by  Duska  Scientific; we are not planning on making any
change in our business operations.



                                      4
<PAGE>



         Our operating subsidiary,  Duska  Scientific,  was founded by Dr. Amir
Pelleg as a Delaware corporation in 1996. In 1999, Duska  Scientific  commenced
its  drug development operations by acquiring a U.S. patent covering ATPace(TM)
and Vagonixen(TM)  from  Dr.  Pelleg,  the inventor, and the rights to a second
U.S. patent from the co-inventors, Dr. Pelleg  and  Dr. Edward Schulman, who in
turn  acquired  these  rights  from Drexel University College  of  Medicine  in
Philadelphia,  Pennsylvania.  Dr.  Pelleg  was  a  Professor  of  Medicine  and
Pharmacology at the Drexel University College of Medicine until September 2004.
At that time, he  became  our  full-time  employee serving in the capacities of
President, Chief Operating Officer and Chief  Scientific Officer, having served
as President and Chief Scientific Officer of Duska  Scientific  on  a part-time
basis.  Dr. Pelleg is now an Adjunct Professor at the Drexel University College
of  Medicine.  Dr. Schulman is a Professor of Medicine at the Drexel University
College  of Medicine. We subsequently acquired an exclusive license to a patent
covering ATPotent(TM) from the Italian scientists, Dr. Francesco DiVirgilio and
Dr. Carlo  Foresta,  who  were co-inventors of this technology. Dr. DiVirgilio,
who is a Professor of Immunology  at the University of Ferrara in Italy and Dr.
Schulman, are members of our Scientific  Advisory  Board.   Recently,  we  have
acquired  from a group of European clinical scientists the exclusive rights for
a technology,  on the basis of which we are planning to develop Ocuprene(TM) as
a new therapeutic modality in the management of glaucoma.

Glossary of Certain Terms
-------------------------

acrosome reaction         an  event  in  the process of fertilization that is a
                          prerequisite for the sperm's fusion with and crossing
                          through the inner lining membranes of the ovum (egg),
                          and penetration into the ovum (egg)

agonist                   a compound that has a stimulating effect when it
                          binds to a receptor

antagonist                a compound that  has  an  inhibitory  effect  when it
                          binds  to a receptor due to its inability to activate
                          the receptor  and  preventing  of  the  binding of an
                          agonist

adenosine                 a  biological  compound  found in every cell  of  the
                          human body; released from  cells  when  oxygen supply
                          does not meet oxygen demand.  Extracellular adenosine
                          protects   tissues   from  injury  caused  by  oxygen
                          deprivation

ATP                       adenosine  5'-triphosphate;   a  biological  compound
                          found in every cell of the human  body where it plays
                          a  critical  role  in cellular metabolism  and  as  a
                          source of energy.  ATP  is  released from cells under
                          normal  (physiologic) and disease  (pathophysiologic)
                          conditions.    Extracellular  ATP  acts  as  a  local
                          physiologic regulator

bradycardia               slow heart rate

                                      5
<PAGE>


COPD                      chronic obstructive pulmonary disease

FDA                       United States Food  and Drug Administration, which is
                          the   agency   that  oversees   and   regulates   the
                          development of new drugs in the United States

HUT                       head-up tilt table  test, which is a provocative test
                          used  to  identify  patients  with  neurally-mediated
                          syncope.  One of the  most commonly used tests in the
                          management of patients with syncope

IND                       Investigational  New  Drug   application,   which  is
                          submitted  to  the  FDA prior to the commencement  of
                          clinical trials in humans with a new drug

in vitro                  in the test tube; outside of the human body (or other
                          living organism), in an artificial environment

in vivo                   in the living human body or other organism

ligand                    a biological compound or a pharmacological agent that
                          binds  to  a receptor;  a  ligand  can  activate  the
                          receptor (as an agonist), block it (as an antagonist)
                          or modify the affinity of the receptor to agonists or
                          antagonists (as an allosteric modifier)

mast cells                inflammatory   cells   containing  special  cytoplasm
                          granules  which  store  mediators   of  inflammation,
                          including  histamine.  Upon their activation  through
                          both immune  and  nonimmune  mechanisms,  mast  cells
                          release these mediators into the extracellular space.
                          Mast  cell  mediator  release  is most significant in
                          either acute inflammation or in  allergic  responses.
                          Under  normal  conditions, mature mast cells are  not
                          seen in the peripheral circulation

NDA                       New Drug Application, which is submitted to the FDA
                          upon completion of clinical trials to obtain
                          government marketing approval

neurogenic                derived from the activity of neural elements

purinergic receptors      P receptors (PR):  a family of cell-surface receptors
                          that bind purine molecules

P1 receptors (P1R)        adenosine receptors, including four subtypes:  A1,
                          A2A, A2B, A3

P2 receptors (P2R)        cell-surface receptors  that are activated by ATP and
                          other adenine nucleotide  and  which are divided into
                          two families of receptors:  P2X and P2Y


                                      6
<PAGE>


receptor                  a protein on the cell surface or inside the cell that
                          is the binding sites of ligands, including agonists
                          and antagonists

signal transduction       a  cascade  of  molecular  events  inside   the  cell
                          triggered by the binding of an agonist (a ligand)  to
                          a  receptor  and  characterized  by the activation of
                          specific molecules (proteins; enzymes).   This is the
                          mechanism  through  which physiologic regulators,  as
                          well as pharmacologic  agents, exert their effects at
                          the cellular level.

sperm                     the reproductive cells of men, produced in the testes

syncope                   fainting in which a temporary loss of consciousness
                          and postural tone occurs suddenly

vagus nerve               a   major   cranial   nerve  that   carries   sensory
                          information from various  organs  including the lungs
                          and heart, to the brain and signals from the brain to
                          the  lungs  and  heart that cause bronchoconstriction
                          and depressed cardiac functions (e.g., slowing of the
                          heart  rate  and  reduced   force   of  heart  muscle
                          contraction), respectively


Background of Our Technologies

         Technology

         Adenosine  5'-triphosphate  (ATP)  is a natural substance that plays a
critical  role  in  intracellular  metabolism  and  fueling  bodily  functions.
Intracellular ATP, which is the energy source of  all  functions  of  the human
body,  is  released from various cell types into the extracellular space  under
physiologic  and  pathophysiologic  conditions.  In 1929, Drs. Drury and Szent-
Gyorgyi  were the first to observe the  pronounced  cardiovascular  effects  of
extracellular adenosine, a byproduct of ATP's degradation; since then, numerous
studies have  documented various effects of ATP in different cells, tissues and
organs mediated  by  specific  cell-surface  receptors called P2 receptors ("P"
denoting purinergic; P2R).  ATP is considered  a  local regulator that plays an
important physiologic role under both normal and disease conditions.











                                      7
<PAGE>


         Purinergic Signal Transductions

         In the late 1970's, Dr. Geoffrey Burnstock,  who  is  Chairman  of our
Scientific  Advisory  Board, hypothesized that specific cell surface receptors,
which he called purinoceptors, or P receptors, mediate the actions of adenosine
and  ATP.   Dr.  Burnstock   classified   these   into  P1  and  P2  receptors,
respectively.  It is now well established that extracellular  ATP  and  related
compounds exert their effects by activating the P2 receptors (P2R) and that the
P1  receptors (P1R) mediate the effects of extracellular adenosine, the product
of enzymatic degradation of ATP.  P2R are further sub-divided into two receptor
families:  P2X  and  P2Y.   P2X  are ligand activated cationic channels in cell
membranes  and P2Y are G protein coupled,  seven  trans-cell-membrane  domains
receptors.  At least 15 different P2R have been cloned heretofore.

         The activation of the cell surface P2R by a specific compound triggers
a chain of events  culminating with various effects, depending on the cell type
expressing these receptors.

         Sources of Extracellular ATP

         There are several  sources  for  extracellular  ATP.  ATP is stored in
relatively large amounts in platelets and is released during  their activation.
Similarly,  ATP  is  stored in red blood cells from which it is released  under
conditions of imbalance  between  oxygen  supply  and  oxygen demand as well as
during  certain  changes  in the blood flow.  In addition,  several  biological
substances can induce the release of ATP from cells that line blood vessels and
smooth muscle cells.  ATP is also released from nerve cells and from exercising
skeletal muscles, as well as inflammatory cells.

         In the heart, ATP  is  released  into  the  extracellular  fluid under
various  conditions.  Specifically, ATP release is evoked by sympathetic  nerve
stimulation and by endogenous cardiac stimulants.  In addition, ATP is released
in the heart  whenever  the  supply  of  oxygen  to the heart does not meet the
demand  for oxygen and from cardiac muscle cells deprived  of  adequate  oxygen
supply in vitro.

The Products and Proposed Product Candidates in Development

A.       ATPace(TM)

                  Background and Rationale

                  Syndrome:   Syncope,  or  fainting,  is  a  transient loss of
consciousness.  It is a common medical problem that is associated  with  a high
mortality  rate  in  a  selected  subgroup of patients, and yet one of the most
challenging  diagnostic  problems  in  clinical  practice.   Syncope  exerts  a
dramatic and deleterious effect on the quality of life of affected patients, in
particular elderly patients.






                                      8
<PAGE>


                  There are multiple  causes  of syncope.  Although advances in
recent  years in the evaluation of syncope have  been  substantial,  there  are
still many  unanswered  questions regarding the pathophysiology of syncope, and
there is a need for novel diagnostic approaches.  Neurally mediated syncope (or
reflex syncope), the most  common  type  of  syncope,  is  caused  by  systemic
arterial  hypotension  (i.e.,  low  blood  pressure) or bradycardia (i.e., slow
heart rate) or both.

                  Epidemiology:  Syncope is  common  in the general population.
Caucasians seem to be more affected than blacks; the reason for this difference
is  unknown.   The  age  distribution  of syncope is bimodal  with  a  peak  in
teenagers, and the elderly.  Using the lifetime  cumulative incidence parameter
as the most appropriate measure of an episodic disease such as syncope, a clear
age  dependency  in  adults  is revealed.  Aging is associated  with  increased
incidence;  specifically, while  the  cumulative  incidence of syncope in young
adults  (i.e., 20-29 years old) is approximately 5%,  in  the  elderly,  it  is
approximately  20% (60-69 years old) to 30% (70-79 years old) and approximately
50% in subjects  80  years  old  and older.  In young populations, the lifetime
cumulative incidence of syncope in  women  is  almost  twice  that  of men.  On
average,  3%  of  adults in the U.S. suffer from recurrent syncope.  The  sixth
leading cause of death  in the U.S. in people 65 years and older are accidents,
many of which are related  to  syncope and falls.  Falls occur in 20% of people
65 years and older, half of which are due to syncope.

                  Economic burden:   In  the  U.S.,  syncope accounts for 3% of
emergency room visits and 6% of hospital admissions.  Although syncope patients
are  subjected  to a series of examinations and tests costing  more  than  $800
million per year, a cause of syncope is found in only 40% of patients.

                  Cause  of the Disease:  Most common causes of syncope consist
of disturbances in the function  and/or structure of the cardiovascular system.
Other causes of syncope, including those arising from neurological, psychiatric
or endocrine/metabolic disturbances, are relatively rare.  In about half of the
patients where a probable diagnosis has been established, the syncope is due to
transient periods of decreased heart  rate  (bradycardia)  and  blood  pressure
(hypotension),  mediated  by the autonomic nervous system (that portion of  the
nervous system regulating the  function  of  the  cardiovascular system and the
glands).   Syncope  of  this  origin  is  termed neurally-mediated  (or  reflex
syncope).  Neurally-mediated syncopes (NMS)  are  classified  into  three types
based  on  their respective mechanism:  bradycardic (syncope due to slow  heart
rate), hypotensive  (syncope  due  to  low  blood  pressure)  and  mixed (i.e.,
combination of the above two mechanisms).

                  Currently,  detailed  history and physical examination,  non-
invasive cardiovascular studies, electrophysiological  studies and head-up tilt
table testing (HUT) provide a diagnosis of NMS in 60-70%  of  cases.   However,
establishing  the  cause  of  syncope  in a given patient may be very difficult
because of its unpredictable nature and  the  absence  of discerning diagnostic
tools.  Thus, there is increasing interest in diagnostic  tests  that  evaluate
the  autonomic  nervous  system  function  for the confirmation of a clinically
suspected diagnosis of NMS or to uncover a diagnosis  in previously unsuspected
instances.

                                      9
<PAGE>

                  Several tests, including HUT, are commonly used in diagnosing
NMS.  Of these, however, only HUT has been substantially  studied.  When NMS is
suspected,  HUT can be useful in confirming this clinical suspicion.   Although
the specificity  (i.e., negative test outcome in non-afflicted subjects) of HUT
is similar to that  of  other  dynamic clinical testing (i.e., 80% to 90%), the
exact sensitivity (i.e., positive  test  outcome  in afflicted subjects) of the
test is unknown, because there is no "gold standard"  against  which to compare
it.  One study determined that the "true sensitivity" of HUT is  only 61%.  The
American Heart Association (AHA), American College of Cardiology (ACC)  and the
Heart  Rhythm  Society  have  recommended  the use of HUT for the indication of
pacemaker therapy in patients with syncope due  to a slow heart rate.  However,
recent studies have failed to fully establish the utility of HUT as an accurate
predictor of effective cardiac pacemaker therapy  in  symptomatic patients with
recurrent  NMS.  Furthermore, of the three relevant mechanisms  of  NMS  (i.e.,
bradycardia,  hypotension and mixture of the former two), HUT is believed to be
the least sensitive  to  bradycardia.  Specifically, in a recent North American
study  of  100  consecutive  patients  with  syncope  of  unknown  origin,  HUT
identified bradycardia as the  relevant mechanism of the syncope in only seven,
while another test, known as carotid sinus massage where pressure is applied to
the side of the neck to artificially  trigger  a  reflex  involving  the  vagus
nerve, identified 37 such patients.

                  In  the  past  few years, Medtronic, Inc. has introduced into
the clinical setting a new device,  called  the  Insertable Loop Recorder (ILR)
(Reveal(TM) and later Reveal(TM) Plus), that correlates  symptoms  with cardiac
rhythm  abnormalities.   Specifically,  the ILR is an FDA-approved device  that
monitors electrocardiograms (ECG) for up to 14 months and automatically records
ECG rhythm data in patients who experience  transient  symptoms such as syncope
that may suggest cardiac arrhythmias (i.e., disturbances in heart beating rate)
as the cause.  Since the ILR is the only FDA approved diagnostic  tool  for the
identification  of  bradycardic syncope, it may be considered a useful standard
against which to compare new diagnostic tools.  However, the ILR requires minor
surgeries for its insertion as well as its removal and its diagnostic potential
is realized only if an event occurs during its limited functional period.

                  Clinical  target:   Despite  the  intensive study of HUT, and
other  tests  of  autonomic  nervous  system  function, there  is  no  test  or
combination of tests that permits detection of  susceptibility  to all types of
NMS.   Consequently,  it  is  currently very difficult to identify a  neurally-
mediated cause of syncope, not to mention a specific mechanism, in all patients
in whom such cause is suspected  based  on  their  medical history.  Therefore,
there  is  a  significant  need  for a diagnostic test that  can  identify  the
specific mechanism behind syncope.   In  particular,  given recent multi-center
randomized trials suggesting cardiac pacing as an effective  therapy in certain
groups  of syncopal patients, tests that unmask susceptibility  to  bradycardia
are especially important.


                                       10
<PAGE>



                  Since  ATP triggers a neural reflex involving the vagus nerve
and a similar reflex plays a critical role in the mechanism of NMS, it has been
hypothesized that the response  to  ATP manifested in slowing of the heart rate
(bradycardia) would be accentuated in  patients  with  this syndrome.  Clinical
studies in Europe by Dr. Daniel Flammang (who subsequently  became  a member of
our  Scientific  Advisory  Board)  and  his associates support this hypothesis.
Specifically,  studies by Dr. Flammang  involving  approximately  500  patients
have demonstrated  that  one  of  the  bradycardic effects of ATP manifested as
transient  AV nodal conduction block is accentuated  in  a  specific  group  of
patients with  syncope  of  unknown  origin or suspected NMS.  Furthermore, Dr.
Flammang has suggested that ATP can be  used  as  a diagnostic tool to identify
patients in whom the mechanism of syncope is bradycardia,  and  therefore could
benefit from cardiac pacemaker therapy.  An Italian clinical research group has
studied  the  feasibility  of  using ATP as a diagnostic tool to determine  the
mechanism of bradycardia in symptomatic syncope patients.  These investigators,
who used a different electrocardiographic  criterion  than  that  used  by  Dr.
Flammang  in  determining  the outcome of their studies, have demonstrated that
ATP can identify bradycardia as the overall mechanism of syncope in symptomatic
patients.   This  group  of investigators  found  a  good  correlation  (at  an
approximately 70% rate) between the frequency of bradycardic syncope determined
by an ILR versus that determined with ATP.  It should be noted, however, that a
study by an unrelated group of French investigators in 13 patients did not show
a correlation between the ILR and the ATP test.

                  Importantly, in patients with bradycardic NMS, HUT identified
the relevant mechanism in  59%  of patients, while the ATP test identified this
mechanism accurately in 86% of patients.   Assuming  that  we receive marketing
approval  for  ATPace(TM)  from  the  FDA,  we intend to conduct post-marketing
studies to compare ATPace(TM) to HUT in identifying  bradycardia when it is the
dominant mechanism in patients with syncope of unknown origin or NMS as well as
determining  the  potential  benefits  of cardiac pacemaker  therapy  in  these
patients.

B.                ATPace(TM) Test:  ATPace(TM),  a  liquid  formulation of ATP,
given as a rapid intravenous injection, causes a short lasting  (less  than  60
seconds) bradycardic effect (i.e., slowing of the heart rate) that is much more
pronounced  in  selected  groups  of patients with syncope of unknown origin or
suspected NMS.  ATPace(TM) thereby identifies patients with bradycardic syncope
who could benefit from cardiac pacemaker  therapy.  We anticipate that the test
will  be  quick, safe, cost-effective and convenient  when  compared  to  other
current diagnostic  alternatives.  Currently, the only approved diagnostic test
that can determine the  potential  benefits  of  cardiac  pacemaker  therapy in
patients  with  recurrent  syncope  is the ILR.  We will attempt to demonstrate
that ATPace(TM) has the potential to  benefit  a significant number of patients
whose syncope is often misdiagnosed and mistreated.



                                       11
<PAGE>




                  Product Development Plan

                  The rate of patient enrollment  in  our  ATPace(TM)  Phase II
trial  to  date was slower than we had originally anticipated. Accordingly,  we
suspended the  enrollment of patients into the trial, effective as of March 27,
2006, and as we  announced  in the Company's previous Annual Report on Form 10-
KSB,  we  have  considered  alternative  strategies  for  an  expeditious  drug
development pathway. Specifically,  we  asked Cato Research, Inc., our Clinical
Research Organization (CRO) to assess the  feasibility  of  filing for New Drug
Application (NDA) for ATPace(TM) as a therapeutic drug for the acute management
of PSVT under section 505(b)(2) of the FDA. This section covers "an application
that  contains  full reports of investigations of safety and effectiveness  but
where at least some  information  required  for approval comes from studies not
conducted by or for the applicant and for which  the applicant has not obtained
the right of reference". Following an in-depth analysis,  the  CRO has notified
us  that  regarding ATPace(TM) "505(b)(2) application is a potential  route  to
approval,  however,  only  under  certain  conditions".  Accordingly,  the  CRO
recommended  that  we obtain relevant data from patients who have recently been
studied or treated using  an  identical formulation to ATPace(TM) to supplement
published data of more than a thousand  patients that the company has forwarded
to the CRO. Therefore, we have contracted  Dr.  Daniel  Flammang  in France and
Professor  Bernard Belhassen in Israel, both of whom possess the desired  data,
and have agreed to furnish Duska with it. The data from Prof. Belhassen and Dr.
Flammang will  be  combined  with  Duska's own data generated in Phase I and II
clinical trials with ATPace(TM). The  CRO  has  estimated  that  it  will  take
approximately  six  to  12  months  to  complete the preparation of the NDA for
ATPace(TM), under Section 505(b)(2) of the FDA.

C.       ATPotent(TM)

                  Background and Rationale

                  Syndrome:  The diagnosis  of  male infertility is made when a
man has abnormal sperm parameters (i.e., low sperm  count and/or abnormal sperm
characteristics) and is unable to induce pregnancy after  12  to  18  months of
regularly  performed  intercourse.  In many cases, the reasons for the abnormal
sperm parameters are unknown.   Nonetheless,  various  procedures and treatment
regimens  are  currently  used  in  the  course of the clinical  management  of
infertile couples due to the male factor.   There  is,  however, a growing need
for  better  diagnostic  and  treatment  approaches in the management  of  this
syndrome.

                  Epidemiology:  It has been estimated that 6-8 million couples
in the U.S. alone, who are involuntarily childless  and require some assistance
to  conceive,  sought  medical  treatment  for  infertility   in   2003.   Male
infertility  accounts for about 40% of these cases and about 60% of the  latter
are patients with  oligoastheno-zoospermia (i.e., low sperm count and low sperm
motility).  A recent  study in the UK has found that the average "normal" sperm
count fell by 29% from  1989  to 2002, reflecting an on-going alarming trend in
developed countries.


                                      12
<PAGE>



                  Economic burden:  According  to the U.S. Department of Health
and Human Services, Centers for Disease Control  and  Prevention (CDC), in 2003
there were more than 430 clinics in the U.S. dedicated  to  the  diagnosis  and
treatment of sub-fertility and infertility.  Treatment options include surgical
interventions,  drug  and  hormonal  therapies as well as complex and expensive
procedures of Assisted Reproductive Technology,  or  ART.   The latter include,
among other technologies, in vitro fertilization, or IVF, and  intracytoplasmic
sperm injection, or ICSI.  According to a 2003 CDC study, approximately 122,800
ART procedures were performed in the U.S. in the approximately 390 clinics that
reported.  We believe that the fertility industry's annual revenue from various
treatments  is in the range of $2.7 billion.  We estimate the average  cost  of
one round of  IVF,  with  no  guarantee of success, is $10,000, and the average
amount spent to produce a baby using ART is $58,000.  Approximately 48,000 live
babies were born in the U.S. as  a result of ART performed in 2003.  We believe
that for the foreseeable future the clinical laboratory will continue to play a
pivotal role in improving the accuracy  of diagnosing and efficacy of treatment
of male infertility.

                  Cause of the Disease:   The  cause  of  male  infertility  is
determined  in  only  a minority of the cases.  Most of the time, the causes of
infertility are unknown  mainly  because of the inability to detect which sperm
functions are defective.  Factors  known  to  contribute  to  male  infertility
include:   (a)  gonadotrophin  deficiency;  (b) genital tract obstruction;  (c)
sperm autoimmunity; (d) coital dysfunctions;  and  (e)  reversible  effects  of
toxins,  drugs  or  illnesses.   The majority of the cases are secondary to the
unknown cause of low sperm count and low sperm motility.  Despite the inability
to determine the cause of the disorder,  couples  are treated with a variety of
ART procedures, including IUI, IVF and ICSI.

                  Clinical  target: A diagnosis of male  infertility  is  based
mainly  on  semen  analysis,  a  rather   inadequate   means  to  assess  sperm
fertilization  potential.  Furthermore, the majority (about  73%)  of  the  ART
procedures used  are  IVF.   About  40%  of IVF, performed for male infertility
among   infertile  couples,  will  result  in  poor   fertilization.    Several
pharmacological  agents  have  been  used  to enhance sperm in order to improve
fertilization rates during standard IVF procedures, but to date the FDA has not
approved  a  drug  for  treatment of male infertility.   Moreover,  conflicting
results and lack of appropriately designed and relevant clinical studies and no
definitive indications have  limited  the  use  of  sperm  stimulant  agents in
clinical  practice.   Thus,  there is a need for safe, effective and convenient
techniques for improving sperm performance and thereby improving the outcome of
IVF  and/or  intrauterine insemination  (IUI)  procedures,  with  the  goal  of
increasing the rate of pregnancies.


                                      13
<PAGE>



                  ATPotent(TM)   for   the   treatment   of  male  infertility:
ATPotent(TM) is being developed as a new pharmacological formulation  in  which
the  active  ingredient  is  ATP.   Asthenozoospermia,  i.e., lack or low sperm
motility,  is  a  common cause of male factor infertility. In  a  retrospective
study (1992-1999) that documented the prevalence of this pathology in infertile
men, 82% of the studied  samples  had  altered  motility.  However,  laboratory
interventions  aimed  at improving sperm function in conjunction with minimally
invasive infertility treatments  (intra-cervical or intrauterine insemination),
or standard in vitro fertilization (IVF) without resorting to intra-cytoplasmic
sperm injection (ICSI), are practically  nonexistent.  Italian  clinicians  and
scientists  have  shown that extracellular ATP-treated sperm from  22 infertile
males exhibited significant  increase (by 54%) of fertilization rate during IVF
procedures compared with non-treated  sperm..  We are the exclusive licensee of
a patented technology for ATP-based diagnosis of male infertility and treatment
of human sperm as a means to improve the  performance of human sperm during IUI
and/or  IVF  procedures  with a view to increasing  the  rate  of  pregnancies.
(ATPotent(TM) is not indicated  for use in conjunction with ICSI, a specific in
vitro fertilization procedure, which  is  employed  in special male infertility
cases.)  Please see "Intellectual Property."

                  Product Development Plan

                  Pre-clinical studies at the University  of  Pennsylvania have
recently  been  completed.  A final report submitted by the investigators  have
shown that mouse sperm treated with ATP, the active ingredient of ATPotent(TM),
demonstrated improved motility and an approximately  400%  increase in  the  in
vitro fertilization rate as compared  with  the  control  group.  In  addition,
ATP  treatment  of  human  sperm  either  with  normal  characteristics or with
low motility as well as human sperm  with low  motility  from  cryopreservation
(stored frozen) resulted in significant improvement  of  motility   parameters.
Furthermore,  recent  preliminary  studies  performed  for  Duska  by  European
scientists associated with the company have reproduced  the  effects  of ATP on
the  motility  of  human sperm obtained from 27 patients with asthenozoospermia
(lack or reduced sperm  motility).  Based  on  these  new observations, we have
filed a provisional patent application on February 27,  2007. Together with our
partner, Cooper Surgical, Inc., we are currently designing  a  proof of concept
study  with  the  drug  prototype  to  be carried out at a leading US  academic
center. Upon completion of the latter study  with favorable results, Duska will
approach the FDA to discuss the potential pathway  for the clinical development
of ATPotent(TM).

                  We  will consult with the FDA regarding  the  designation  of
ATPotent(TM) as a device  or  a  drug  as well as on the design of the clinical
trials  and  matters pertaining to the preparation  and  submission  of  a  new
device/drug approval  based  upon the specific clinical claims for this product
candidate.  The FDA may request  additional  human data required to demonstrate
the  final  clinical  endpoint of efficacy that is  outlined  in  our  proposed
protocols.  In either such  event,  the  action  of the FDA could significantly
increase the timing and cost of the ATPotent(TM) research program.


                                      14
<PAGE>



D.         Aspirex(TM)

Aspirex(TM)  is  a  proposed  diagnostic  drug for (i)  the  identification  of
patients  with  asthma,  (ii)  the  differential   diagnosis   between  chronic
obstructive  pulmonary disorder (COPD) vs. asthma and (iii) for monitoring  the
efficacy of a  given therapy in the management of patients with these diseases.
The drug is designed to be used as an inhaler in bronchial-challenge studies in
the clinical pulmonary  laboratory.   Duska  believes  that  Aspirex(TM)  could
constitute  a  diagnostic  tool  that  is  superior to the two diagnostic drugs
currently used in the United States and in Europe.

Last  year  the  company  recruited Professor  Riccardo  Polosa,  M.D.,  an
internationally recognized  leader  in the field of clinical bronchoprovocation
(airway-challenge  studies)  for  the position  of  Clinical  Director  of  the
Aspirex(TM) development program and  as  a  member  of the company's Scientific
Advisory Board. Together with Dr. Polosa, the Company  is  now preparing a pre-
clinical study which is expected to commence in the 3rd quarter of 2007.

E.       Vagonixen(TM)

                  Background and Rationale

                  Syndrome:  Chronic obstructive pulmonary disease  (COPD) is a
major global health problem that is causing an increasing burden on health-care
spending.   COPD  is  characterized  by  airflow  limitation  that is not fully
reversible.   The  airflow  limitation  in  most cases is both progressive  and
associated  with an abnormal inflammatory response  in  the  lungs  to  noxious
particles or  gases.   This progressive relentless loss of lung function is the
result of emphysema due  to  destruction  of lung tissue and narrowing of small
airways caused by the inflammation process.

                  Economic  burden:   The  Global  Burden  of  Disease  studies
predicts that COPD, which was ranked as the  sixth  most  common cause of death
worldwide  in  1990,  will  become  the third leading cause of death  by  2020.
Currently, the World Health Organization, or WHO, ranks COPD as the fourth most
common cause of death in developed countries.   In  North  America, COPD is the
only major cause of mortality that has risen over the last 30 years.  It is the
fourth  most  common  cause of death, and approximately 16 million  individuals
have been diagnosed as  symptomatic  COPD  patients.   The  estimated number of
persons  who    died  of  COPD in North America  in  2005 is  130,000.   Recent
estimates indicate that COPD  resulted  in $32.1 billion of direct and indirect
costs in 2002, which is a manifestation of the major economic impact on society
of this disease.

                  Cause of the Disease:   The  risk  factors  for both forms of
COPD  include  smoking, a familial predisposition, and occupational  exposures.
Smoking is by far  the major cause of COPD.  The chronic obstructive bronchitis
form of COPD is characterized  by  marked  cough,  excess sputum production and
breathlessness.  The emphysema form of COPD is characterized  by destruction of
normal lung tissue.  Usually, both forms co-exist to produce symptoms of cough,
sputum hypersecretion and breathlessness.


                                      15
<PAGE>



                  Clinical targets:  Pharmacologic therapy is necessary for the
management of symptoms.  However, none of the currently available therapies can
modify the long-term deterioration of lung function.  In the emphysema  form of
COPD,  the destruction of lung tissue that occurs with cigarette smoking cannot
be effectively  inhibited  or  reversed  by  existing  therapies.   In  chronic
bronchitis,  which  is  often  present  either  alone  or  in  combination with
emphysema, the potential therapeutic targets are airway nerves,  stimulation of
which  causes  cough  and promotes mucus hypersecretion, thereby producing  the
constriction of airways.

                  Bronchodilators  have  long  been the mainstay of symptomatic
treatment.  The parasympathetic limb of the autonomic nervous system (i.e., the
vagus nerve), a major carrier of neural sensory afferent traffic from the lungs
to the brain and efferent neural traffic from the  brain  to  the  lung, is the
dominant  neural  component  responsible  for  the  diameter of the airways  by
controlling the airways' smooth muscle tone.  The impairment  of  lung function
in  COPD is in part the result of altered cholinergic vagal bronchoconstrictive
tone.   Thus,  anticholinergic  agents that block this neural pathway have been
playing a central role in the management  of  COPD,  and are currently the most
common   therapy   in   COPD   (e.g.,   tiotropium   bromide;   a   long-acting
bronchodilator).

                  Critical    role    of    the    vagus    nerve    in   COPD:
Bronchoconstriction and excess mucous secretion are two major causes of airflow
limitation  in  COPD, both of which are directly regulated by the vagus  nerve.
In addition, vagal  nerve  endings  mediate chronic cough associated with COPD.
When these nerve endings are irritated, neural signals from the lungs go to the
brain (termed afferent neural traffic).   The brain processes these signals and
in response generates its own signals that  are  sent  to the lungs and airways
(termed  efferent  neural  traffic), where they induce bronchoconstriction  and
cough.  Indeed, certain drugs  that  can block the effects in the lungs of some
of these brain signals, traveling through  the  vagus  nerve,  are  used in the
treatment   of   COPD   (i.e.,   anticholinergic  agents).   Furthermore,   the
stimulation of these nerve endings leads to a local release of substances which
play an important role in inflammation  (i.e.,  neurogenic inflammation).  This
action is known as the axon reflex distinct from  the central reflexes outlined
above.   Thus,  a drug that could inhibit these two types  of  reflexes  (i.e.,
central  and  axon)   could   have  therapeutic  value  in  the  management  of
bronchoconstriction, cough and inflammation, all of which are characteristic of
COPD.

                  Potential role  of  extracellular  ATP  in obstructive airway
diseases:  Basic research studies have shown that intravenous administration of
ATP narrows airway diameter (bronchoconstriction) in the lungs  of  dogs.  This
bronchoconstrictive action of ATP is mediated by a central vagal reflex  and is
caused  by  the  activation  of a specific P2 receptor subtype located on vagal
sensory nerve terminals in the  lungs.   In  addition, these studies have shown
that ATP activates the P2 receptor located on  sensory  nerve  terminals in the
lungs believed to play a major mechanistic role in the cough reflex.


                                      16
<PAGE>



                  Consistent with these observations, it has subsequently  been
shown that aerosolized ATP produced marked bronchoconstriction in healthy human
subjects  and  more  potently  so  in asthmatic patients at concentrations well
below those of other agents, including  among  other  substances,  adenosine (a
byproduct  of ATP used in the clinical laboratory to induce bronchoconstriction
as a part of  pulmonary  function  evaluation).   In  addition, aerosolized ATP
induced cough in 70% of the studied healthy subjects and  100%  of the patients
with either COPD or asthma.  Furthermore, it was found that the level of ATP in
the lungs of COPD patients is approximately three times that found  in  healthy
subjects.

                  Taken  together,  these data indicate that extracellular  ATP
could  play  a  major  mechanistic role in  bronchoconstriction  and  cough  by
activating vagal sensory nerve terminals in the lungs.

                  P2 receptor  antagonist in COPD:  Extracellular ATP activates
a specific P2 receptor located on  pulmonary vagal nerve endings, which mediate
bronchoconstriction and cough.  Thus, the stimulation of vagal nerve endings in
the lungs by ATP exacerbates neurally-mediated  (vagal) bronchoconstriction and
cough,  the  hallmarks of chronic cough and COPD.   Therefore,  pharmacological
agents  that  block   these  receptor  sites  could  eventually  become  a  new
therapeutic modality in  the management of patients with these disorders.  Such
a therapy would constitute  a  novel  approach  in which the reduction of vagal
nerve input to the lungs (i.e., neural traffic from  the brain termed "efferent
neural traffic") is obtained by the inhibition of sensory  input  to  the brain
originating in the lungs (termed "afferent neural traffic").

                  Product Development Plan

                  Our product development plan is aimed at the development of a
specific  and  selective  antagonist  of  P2  receptor  subtype in the lungs as
Vagonixen(TM)  drug  candidate  for the management of patients  with  COPD  and
chronic cough.  We have identified an existing compound that had been developed
in the pre-clinical stage by a large  pharmaceutical  company  for an unrelated
disease  application that could serve as our Vagonixen(TM) drug candidate.   In
2004, we sponsored  a  preliminary in-vitro study of this compound at a leading
U.S. academic center that  showed  that this compound can effectively block the
P2R subtype in the lung, which is targeted by Duska.

                  In the event we acquire  this  compound, we intend to develop
it as Vagonixen(TM) drug candidate (that is a novel  powder  formulation) to be
administered by a dry powder inhaler (DPI).  DPI design is based  on  state-of-
the-art technology for drug administration into the lungs. The inhaler  will be
a  handheld  device  that delivers a precisely measured dose of medication into
the lungs.


                                      17
<PAGE>



F.       Ocuprene(TM)

                  Background and Rationale

                  Syndrome:   Glaucoma is a group of eye diseases characterized
by  progressive  optic  nerve damage  and  visual  field  loss  culminating  in
blindness.  Elevated fluid  pressure within the eye, or ocular hypertension, is
the primary treatable risk factor in glaucoma.

                  Epidemiology:  Data gathered by the WHO show that glaucoma is
the second leading cause of blindness  globally (after cataracts), estimated to
afflict 65 million people.  The WHO has  predicted  that the number of cases of
glaucoma will rise as the number of people aged 60 years  or  over  doubles  to
reach  1.2 billion by the year 2020.  Similarly, glaucoma is the second leading
cause of  blindness in the United States; according to the US Glaucoma Research
Foundation,  an estimated three million people in the United States suffer from
this disorder.

                  Rationale for a new drug development:  Current optional drugs
for the treatment  of ocular hypertension are selective and non-selective beta-
blockers,  carbonic  anhydrase   inhibitors,   prostaglandin   analogues,   and
adrenergic  and cholinergic agonists.  Although there has been recent growth in
the  range of  therapeutic  options,  including  multiple  drug  therapies  and
surgery,  glaucoma  treatment practices vary widely and all are non-optimal and
associated  with  significant  side  effects.   Therefore,  the  management  of
patients with glaucoma constitutes a significant unmet clinical need.

                  Scientists  in Europe associated with Duska have demonstrated
in an animal glaucoma model in  vivo  that increased intraocular pressure leads
to release of adenosine 5'-triphosphate  (ATP)  into the extracellular space in
the eye, upregulation of P2X7 receptor (P2X7) and  its  activation by ATP.  The
activation of P2X7 is known to trigger programmed cell death,  i.e., apoptosis,
which   in   this   setting  was  manifested  by  retinal  nerve  cell  damage.
Furthermore, the inhibition of this pathway by either the elimination of ATP or
the blockade of P2XR  prevented  retinal  nerve  cell  damage  associated  with
increased  intraocular pressure.  Similar data that are implicating P2X7 in the
retinal  nerve  cell  death  associated  with  ocular  hypertension  have  been
published  independently  by  ophthalmologic  researchers  at the University of
Pennsylvania and the University Eye Hospital in Tubingen, Germany.

                  Thus, we intend to carry out pre-clinical research work aimed
at discovering a pharmacologic agent that can block P2X7 and  a  genetic vector
that can block the signal transduction pathway controlled by this  receptor  in
the eye.


                                      18
<PAGE>



                  Product Development Plan

                  A  portion  of  the  proceeds of our recent private placement
will be used to support an on-going drug  discovery  program being conducted by
the  Italian  scientists  from  whom  we  acquired  our  relevant  Ocuprene(TM)
technology.   We  also  are currently discussing with a leading  U.S.  academic
medical center a potential  collaborative  project  aimed at evaluating genetic
and pharmacologic approaches in an in vivo glaucoma model  for P2X7 antagonists
and signal transduction pathway blockers controlled by this receptor.

Estimated Product Development Timelines

         We have estimated certain product development timelines  for  our  two
current  product  candidates,  ATPace(TM)  and  ATPotent(TM), for which we have
initiated  clinical  or  pre-clinical  trials,  respectively.    Our  estimated
timelines are based on a number of assumptions, including the timely receipt of
financing  to  fund clinical development work, FDA approvals of our  protocols,
and other factors.   Accordingly, the actual timeframes to complete development
of  these  product candidates  and  obtain  FDA  marketing  approval  could  be
substantially longer than projected.

         As  mentioned  above,  we  are  currently  working with the CRO on the
preparation of an NDA for ATPace(TM) to be submitted  under  section 505b(2) of
the FDA. The CRO has estimated that it will take approximately six to 12 months
to complete the preparation of this application.

         In  March  2007, we received  the  draft  of  the final  report  on  a
pre-clinical  laboratory   study  with  ATPotent(TM)  from  scientists  at  the
University of Pennsylvania.   We  are currently in the process of designing and
producing  the  prototype of this product  and  are  planning  on  carrying  an
additional pre-clinical  study  with  the  product  prototype  at  a leading US
academic  center.  Subject to the successful completion of this study  we  will
approach the FDA to  discuss  the  designation of the product (device or drug),
and the clinical studies required for  an approval of the product. We expect to
commence the discussion with the FDA in the 3rd quarter of 2007.



                                       19
<PAGE>



Additional Potential Applications for Our Technology

         In addition to our current and proposed product candidates that are in
various stages of active development, we have a pipeline of potential
diagnostic and therapeutic agents based on the modulation of the cellular
mechanisms controlled by P2 receptors, which regulate cellular function,
referred to as P2R signal transduction.

         These applications include:

         o        Primastrene(TM):   A  proposed  drug  for  the  treatment  of
                  asthma.  We have not to date identified a compound that could
                  serve as this drug.  However,  we  have recently approached a
                  leading  U.S.  medical  institution  for   the   purpose   of
                  performing  a  study  to  generate data for use in connection
                  with a grant application to the National Institutes of Health
                  for funding to support in part this development program.

         o        A diagnostic test for sick sinus syndrome, which may also be
                  predictive of effective cardiac pacemaker therapy.

         o        A diagnostic test for the identification of one of the most
                  common types of heart rhythm disturbance manifested as rapid
                  beating of the heart.

         We also may seek to acquire rights to additional relevant medical
technologies, including those in the P2 receptor technology area, with the
cardiovascular, respiratory and human reproduction areas being of particular
interest to us.

Markets Targeted

         With the exception of ATPace(TM), we  have  to  date  not performed an
analysis of the potential market for our product candidates.  However,  we have
reviewed   some  publicly  available  data  produced  by  independent  sources,
including government  agencies,  relevant  to  the overall markets in which our
product  candidates  are  expected to compete.  Our  present  strategy  in  the
development and marketing of  ATPace(TM)  and  ATPotent(TM) focuses on the U.S.
market,  which  is  the  largest single pharmaceutical  market  in  the  world.
However, with respect to Vagonixen(TM)  and  Ocuprene(TM)  for the treatment of
COPD  and  chronic  cough  and for glaucoma, respectively, and other  potential
product candidates, we will focus on the U.S. market as well as certain foreign
markets.  There can be no assurance,  however,  that the actual markets for our
product candidates will conform to the estimates provided below.


                                      20
<PAGE>



         ATPace(TM)

         We are planning on filing an NDA with a  therapeutic  claim, i.e., the
acute  termination of paroxysmal supraventricular tachycardia (PSVT)  involving
the atrio-ventricular node (AVN).   It has been estimated that there are 89,000
new cases/year and 570,000 persons with PSVT in the US alone; Thus, PSVT is one
of the most  common  cardiac  arrhythmias. In addition, we intend to pursue the
development of the product as a  diagnostic tool (the original indication) upon
its approval by the FDA for the therapeutic use.

         Although syncope patients  are  subjected  to a series of examinations
and  tests (including echocardiography, Holter monitoring,  magnetic  resonance
imaging  (MRI)  and  computed  tomography  (CT), electroencephalogram (EEG) and
similar tests) costing more than $800 million  per  year,  a potential cause of
syncope  is  found  in only 40% of patients.  We believe that ATPace(TM)  could
address a portion of this diagnostic market.

         ATPotent(TM)

         Asthenozoospermia, i.e., lack or low sperm motility, is a common cause
of  male  factor  infertility.   In  a  retrospective  study  (1992-1999)  that
documented the prevalence of this  pathology  in  infertile  men,  82%  of  the
studied  samples  had altered motility. However, laboratory interventions aimed
at improving sperm  function in conjunction with minimally invasive infertility
treatments (intra-cervical  or intrauterine insemination), or standard in vitro
fertilization  (IVF) without resorting  to  intra-cytoplasmic  sperm  injection
(ICSI), are practically  nonexistent.  According  to  the  U.  S. Department of
Health and Human Services, Centers for Disease Control and Prevention (CDC), in
2003  there  were more than 430 clinics in the U.S. dedicated to the  diagnosis
and treatment  of sub-fertility and infertility.  The CDC reported that in 2003
approximately  122,800   Assisted   Reproductive   Technology  procedures  were
performed for the treatment of infertility in the approximately  390 clinics in
the  U.S. that submitted survey data.  In 2002, fertility clinics in  the  U.S.
collected $2.7 billion for their services. Approximately 800,000 IUI procedures
are performed  each  year  in the US alone. We expect the primary target market
for ATPotent(TM) to be the IUI and IVF procedures which constitute a portion of
the overall ART procedures performed in the U.S.

         Vagonixen(TM)

         In North America, COPD  is  the  fourth most common cause of death and
approximately 16 million individuals have been  diagnosed  as  symptomatic COPD
patients.  Recent estimates indicate that COPD resulted in $32.1 billion direct
and  indirect  costs  in  2002, which is a manifestation of the major  economic
impact on society of this disease.   In  2005,  the estimated number of persons
who died of COPD in North America is 130,000.      It is expected that by 2020,
COPD will become the third leading cause of death  in the U.S.  COPD also is an
increasing cause of morbidity and mortality worldwide.  We  estimate  the total
COPD  therapeutic  market in the U.S. at $1.6-$2.0 billion annually and believe
that Vagonixen(TM) could address a small portion of that market.


                                      21
<PAGE>



         Ocuprene(TM)

         We estimate  the  total  worldwide glaucoma therapeutic market at $1.5
billion annually and believe that Ocuprene(TM) could address a small portion of
that market.

Manufacturing

         ATP powder, an inexpensive product, is manufactured by several leading
manufacturers   of  pharmaceutical  raw   materials.    The   world's   largest
manufacturer of ATP  supplies  us  with ATP powder, the specifications of which
are recorded by the FDA in a Drug Master  File.   We have entered into contract
manufacturing agreements with a U.S. subsidiary of  Boehringer-Ingelheim,  BVL,
that is FDA approved and another U.S. specialty company approved by the FDA  to
perform  the  analytical  services,  storage  and  packaging  of ATPace(TM) for
clinical supplies in connection with our ATPace(TM) clinical research program.

                  We have received from our contract manufacturer and have been
using in our clinical trials investigational ATPace(TM) drug supplies.  In case
that additional clinical studies would be required by the FDA before the agency
accepts  our  NDA,  we  may  need  to  contract  with BVL to produce sufficient
additional quantities of the investigational drug  to  complete  these clinical
trials.

Intellectual Property

         Our technology and current and proposed product candidates under
development are currently covered by the following patents and corresponding
pending patent applications described below:

         o        A  Process for Regulating Vagal Tone (U.S. Patent  #5,874,420
                  issued  on  February  23,  1999;  Australian  Patent #710,770
                  issued on January 20, 2000; European Patent #0906102B1 issued
                  on  June 16, 2004 (Canadian and Japanese patent  applications
                  are pending).   Duska Scientific is the owner of these patent
                  properties.  The granted United States and Australian patents
                  cover a method of  modulating  vagal  tone by administering a
                  mediator  of  P2X-  purinoceptors  on  vagal  afferent  nerve
                  terminals.   The  granted European applications  patents  and
                  pending Japanese application  claims  cover  the  use  of  an
                  antagonist  or  allosteric  modifier  of P2X-purinoceptors on
                  vagal afferent nerve terminals for reducing  vagal tone.  The
                  claims in all countries also cover the use of mediators of P2
                  purinoceptors  for  diagnosing  abnormal  vagal  tone.    The
                  mediator  of  P2X purinoceptors is exemplified in our current
                  product  candidate,  ATPace(TM),  and  our  proposed  product
                  candidate, Vagonixen(TM).


                                      22
<PAGE>



         o        Method for Inducing the Acrosome Reaction in Human and Animal
                  Spermatozoa  (U.S.  Patent  #5,474,890 issued on December 12,
                  1995; Australian Patent #666,011  issued  on  June  8, 1993).
                  Duska  Scientific is the exclusive licensee of these patents.
                  Claims cover  the  use  of  ATP-induced   acrosome reaction in
                  mammalian sperm as a diagnostic test as well as for treatment
                  of malfunctioning sperm in the management of male infertility
                  and  the  improvement  of  cryopreserved   sperm  during  IVF
                  procedures.

         o        Methods of Diagnosing, Monitoring and Treating Diseases (U.S.
                  Patent Application filed July 22, 2005).  Application  claims
                  the   benefit   of   provisional   U.S.   Patent  Application
                  #60/590,101  (filed  July  22,  2004),  and provisional  U.S.
                  Patent Application #60/662,033 (filed March 15, 2005).  Duska
                  Scientific  is the owner of this patent application.   Claims
                  cover  the  use   of   ATP  and  related  compounds  for  the
                  differential diagnosis of  obstructive  pulmonary diseases as
                  well as the evaluation of the efficacy of  a given therapy in
                  the management of patients with these disorders  as  well  as
                  additional  claims,  including those relating to the compound
                  that we intend to license  to  use  as our Vagonixen(TM) drug
                  candidate.

         o        Inhibition  of  Neuronal  Damage  (U.S.  Patent   Application
                  #60/685,802 filed May 31, 2005).  We are the owners  of  this
                  patent  application.   Claims cover materials and methods for
                  blocking neuronal damage  associated  with  the  pathological
                  action of ATP and conditions such as glaucoma.

         o        Screening Method for Modulation of Human Mast Cell Activation
                  (U.S.  Patent  #6,465,441  B2  issued  on  October 15, 2002).
                  Duska Scientific is the owner of this patent.   Claims  cover
                  the  use  of  human  lung  mast  cells in vitro for screening
                  inhibitors of ATP binding to P2Y-  purinoceptors,  for use as
                  histamine   release  inhibitors.   Animal  models  have  been
                  determined to  be of limited value since non-human mast cells
                  differ significantly  from human mast cells regarding several
                  critical  aspects of allergic  reaction-induced  inflammatory
                  mediators' release.

         o        Modulation of  Human  Mast  Cell  Activation   (U.S.   Patent
                  #6,372,724  issued  on  April  16, 2002;  Australian   Patent
                  #741,713  issued  on   March  24,  1998;  EPO,  Canadian  and
                  Japanese patents are pending.)  Duska Scientific is the owner
                  of  these  patent  properties.    Claims  cover  the  use  of
                  inhibitors  of  ATP  binding  to P2  receptors  on mast cells
                  for treatment  of  disorders   characterized  by  undesirable
                  histamine  release from  lung mast  cells.   The treatment is
                  exemplified    in     our    proposed    product    candidate
                  Primastrene(TM).


                                      23
<PAGE>


         o   Modulation of Sperm Motility  (Provisional US patent application #
             60/891,836 filed on February 27,  2007). We are the owners of this
             patent application.  Claims cover materials  and  methods  for the
             treatment  of  malfunctioning  mammalian sperm in order to improve
             their motility and thereby their ability to fertilize the egg.

         In addition to patents, we also license certain of our intellectual
property.

         Pursuant to a License and Assignment  Agreement  dated  November
15,  1999,  Dr.  Amir Pelleg and Dr. Edward S. Schulman (i) assigned  to  Duska
Scientific their ownership,  which they in turn acquired from Drexel University
College of Medicine, of an invention  and  all related patents and intellectual
property, including an issued U.S. patent, that  are  the  basis for ATPace(TM)
and  Vagonixen(TM) and (ii) granted to Duska Scientific an exclusive  worldwide
license  for their invention and all related patents and intellectual property,
including   a   pending  U.S.  patent  application,  that  are  the  basis  for
Primastrene.(TM)   In  consideration  for  this  assignment  and license, Duska
Scientific issued 240,000 shares of its common stock to Dr. Pelleg  and 240,000
shares  of  its  common  stock  to  Dr.  Schulman (a portion of which they each
assigned  to the medical institution with which  they  were  then  associated).
Duska Scientific  also  agreed to pay each of these individuals an amount equal
to (i) 2% of the net sales  of  products  by  Duska  Scientific  based  on  the
foregoing inventions and (ii) 2% of the license fees and any royalties or other
similar payments paid to Duska Scientific by any licensee that are based on the
foregoing  inventions  (a  portion of these royalties they each had assigned to
the medical institution with which they were then associated).  On December 14,
2001, Drs. Pelleg and Schulman  assigned to Duska Scientific their ownership of
the  invention, including the pending  U.S.  patent  application,  relating  to
Primastrene(TM)  and  they  continue  to have the right to receive the payments
from Duska Scientific as described above  with respect to Duska's net sales and
license fees and royalties or other similar  payments  paid to Duska Scientific
by any licensee that are based on this invention.

         Pursuant  to a License Agreement dated November  15,  1999,  Dr.
Francesco DiVirgilio  and  Dr.  Carlo  Foresta  granted  to Duska Scientific an
exclusive  worldwide  license for their invention and all related  patents  and
intellectual property,  including an issued U.S. patent, that are the basis for
ATPotent(TM).  In consideration  for  this  license,  Duska  Scientific  issued
115,200 shares of its common stock to Dr. DiVirgilio and 115,200 shares of  its
common  stock  to  Dr.  Foresta.   Duska  Scientific  also  agreed to pay these
individuals an aggregate amount equal to (i) 5% of the net sales of products by
Duska Scientific based on the foregoing invention and (ii) 5%  of  the  license
fees  and  any royalties or other similar payments paid to Duska Scientific  by
any licensee that are based on the foregoing invention.


                                      24
<PAGE>



Strategic Alliances

         We have entered into a number of strategic alliances and collaborative
arrangements  including  those  with  Medtronic,  Inc., CooperSurgical, Inc. (a
subsidiary   of  Cooper  Companies,  Inc.)  and  Cato  Research   Ltd.    These
arrangements are summarized below.

         Medtronic, Inc.

         In April  2003,  we  entered  into  an  agreement with Medtronic, Inc.
pursuant to which Medtronic will provide, at no cost  to  us,  support  for our
Phase  II  and  III  clinical trials with ATPace(TM).  As part of this support,
Medtronic will provide  a  number  of its cardiac pacing devices and insertable
loop recorders (ILR) for use by patients  in  the  trial  if  the  use  of this
equipment  is  not  covered  by  the  patients'  medical insurance.  Medtronic,
together with us, has approached qualified clinical  investigators as potential
principal  investigators,  and Medtronic will provide technical  assistance  in
connection with the use of its  medical  devices  utilized  in  the  trial  and
comments on protocol design and assistance, including reimbursement strategies.
We  intend to continue our collaboration with Medtronic following FDA approval,
which  may  include conducting additional post-marketing studies of ATPace(TM).
Under this agreement,  Medtronic  is  not obtaining any rights to ATPace(TM) or
other remuneration from us.

         CooperSurgical, Inc.

         In April 2004, we entered into  an agreement with CooperSurgical, Inc.
(a subsidiary of Cooper Companies, Inc.),  one  of  the  largest  suppliers  of
assisted  reproductive  technology  culture  media  in  the  U.S.,  under which
CooperSurgical  will  provide  technical and other assistance to us in specific
areas relating to the development of ATPotent(TM).  Following our completion of
the pre-clinical studies with ATPotent(TM),  CooperSurgical will have the right
to  acquire  the exclusive marketing rights for  ATPotent(TM).   In  the  event
CooperSurgical  exercises  this  right,  it  will  be responsible for funding a
substantial  portion  of  the Phase II and Phase III trials  with  ATPotent(TM)
(although we would be responsible  for the cost of preparing and submitting the
NDA to the FDA for this product candidate) and we and CooperSurgical will enter
into a marketing license agreement for  ATPotent(TM)  that  will provide for an
up-front  license  fee  and  royalty  payments  to us in amounts that  will  be
negotiated   by  the  parties.   We  will  provide  CooperSurgical   with   the
manufactured supplies of ATPotent(TM).


                                      25
<PAGE>



         Cato Research Ltd.

         In February  2004,  we  entered  into  an agreement with Cato Research
Ltd.,  a  leading  clinical contract research organization,  under  which  Cato
Research agreed to provide  clinical research management and regulatory affairs
support to us for our Phase II  and  Phase  III  clinical trials of ATPace(TM).
Cato Research previously had provided certain contracting  services  to  us for
our  Phase I clinical trial for ATPace(TM).  In consideration for its Phase  II
services,  we  issued some of our securities to affiliates of Cato Research and
may issue additional  securities  to  it  in consideration for services that it
provides for our Phase III clinical trials  of  ATPace(TM).   Our obligation to
use  Cato  Research for our Phase III clinical trials of ATPace(TM),  and  Cato
Research's obligation to provide such additional services to us, is conditioned
upon us raising  total  cumulative  net  proceeds  of  at least $5,000,000 from
qualified financing, any subsequent financing, upon the  exercise  of its stock
options  or  warrants,  license  fees  or other strategic alliance payments  or
research grants.

         In addition to Cato Research advising  and  assisting us with clinical
product development activities with ATPace(TM), Cato Research  may  provide  us
with  day-to-day  clinical  research management and regulatory affairs services
for our other product candidates  as  we  request  and under terms that will be
agreed to by both parties.  By gaining access to Cato Research's management and
its   organization   of  nearly  300  scientists,  physicians,   statisticians,
regulatory affairs professionals  and  other  personnel, we intend to implement
our  clinical  development  efforts  without having  to  establish  the  costly
clinical research and regulatory affairs  infrastructure  necessary  to advance
our product candidates through the regulatory approval process.

Competition

         A number of the major pharmaceutical companies have on-going  research
programs directed at developing diagnostic and therapeutic agents based  on the
modulation  of P2 signal transduction, and we are aware of at least one medium-
sized company  (Inspire  Pharmaceuticals,  Inc.) that is devoting a substantial
portion of its efforts to this field.  These  companies  may  develop  products
that  could  compete  with our current and proposed product candidates and  may
compete with us for the  acquisition  of  new  medical  applications  utilizing
technology in this field.

The Company has no way of knowing that other companies may be working on
bringing the same generic product into the market.  Many of the Company's
competitors are significantly larger and have substantially greater financial,
distribution, marketing and other resources
and have achieved better recognition for their brand names for product lines or
certain products than the Company.  There is no assurance that Duska will be
able to compete successfully against present or future competitors or that
competitive pressures faced by Duska will not have a material adverse effect on
the Company.


                                      26
<PAGE>



         Our  current  and  proposed product candidates are expected to compete
with  a  number  of products and  technologies  that  are  being  utilized  and
developed by companies,  academic  medical  centers  and research institutions.
Our  competitive  knowledge  is derived from and limited  to  certain  publicly
available information on our competition.   The  following  descriptions of the
status  and  capabilities  of  competitors' products may be incomplete  due  to
information not being available to us that was either not publicly disclosed by
these competitors or that was disclosed  more  recently  than  the  information
reviewed by us.

         ATPace(TM)

         Adenosine,  a  byproduct  of  the  enzymatic  degradation  of ATP,  is
currently the drug of choice for the acute termination of PSVT. We believe that
because  ATP,  the  active  ingredient  in  ATPace(TM),  can  also diagnose the
mechanism  of  several  arrhythmias, it will have a significant advantage  over
adenosine once approve for  marketing  by the FDA. Currently, there is no other
drug specifically approved by the FDA for the diagnosis of the cause of syncope
in  the  U.S.   Several  other existing diagnostic  tools  would  compete  with
ATPace(TM).  These would include  the  head-up  tilt table test (HUT), which is
not approved by the FDA but nonetheless is widely  used  in  clinical practice,
and  the  Medtronic  Reveal(TM) Plus Insertable Loop Recorder (ILR),  which  is
approved by the FDA.

         ATPotent(TM)

         Currently, there are a number of drugs that are being utilized to some
extent in clinical practice  for  the  treatment  of male infertility, although
none  of  these  drugs  are  approved  by the FDA specifically  for  this  use.
Preliminary studies in animals and human  subjects  with a diet supplement of L
carnitine, a biological compound found naturally in the  human  body, have been
shown to increase semen quality, especially in groups with lower baseline sperm
quality criteria.  However, whether L-carnitine supplementation can improve the
ability  of  sperm  of  infertile  males  to increase the rate of fertilization
remains  to  be determined.  We are currently  not  aware  of  any  other  drug
products under  development  that  require  FDA approval that would potentially
compete directly with ATPotent(TM).  ICSI, a  specific  in  vitro fertilization
procedure, can compete directly with ATPotent(TM) in certain cases.

         Vagonixen(TM)

         Vagonixen(TM)  can be expected to compete directly with  a  number  of
available  drugs  and  therapeutic   modalities,   including,   among   others,
Atrovent(TM)   (ipratropium   bromide)   and  Spiriva(TM)  (tiotropium  bromide
inhalation powder), both of which are anti-cholinergic  agents currently on the
market.   Drawbacks of Atrovent(TM) include its relatively  short  duration  of
action and  its  inhibition  of  a specific receptor that may actually enhance,
rather  than  reduce,  bronchoconstriction.    Spiriva(TM)  is  a  long  acting
anticholinergic  agent  designed  for  once daily dosing.   Vagonixen(TM)  will
compete with available and new drugs in  the  research  pipeline of a number of
companies but, based on its new mechanism of action, may provide certain safety
and efficacy advantages.

                                      27
<PAGE>


         Ocuprene(TM)

         Currently, there are a number of drugs or combinations  of  drugs,  as
well  as  surgery,  being  used  for the treatment of glaucoma.  In addition to
currently marketed beta-blockers,  carbonic anhydrase inhibitors, prostaglandin
analogues, and adrenergic and cholinergic  agonists,  a number of new drugs are
under  development  by  major  pharmaceutical  companies  and  other  entities.
Ocuprene(TM)  will compete with many of these existing and potential  products,
but will be based  on  a  therapeutic  mechanism and target that we believe may
provide  safety  and  efficacy  advantages over  currently  marketed  competing
products.

Government Regulation

         In order to clinically test,  manufacture,  and  market  products  for
therapeutic  use,  we  will have to satisfy mandatory procedures and safety and
effectiveness standards  established  by  various  regulatory  bodies.   In the
United  States,  the  Public Health Service Act and the Federal Food, Drug, and
Cosmetic Act, as amended, and the regulations promulgated thereunder, and other
federal and state statutes  and  regulations  govern,  among  other things, the
testing, manufacture, labeling, storage, record keeping, approval, advertising,
and  promotion  of  our  current  and  proposed  product  candidates.   Product
development  and approval within this regulatory framework takes  a  number  of
years and involves  the expenditure of substantial resources.  After laboratory
analysis and preclinical  testing  in  animals,  an  investigational  new  drug
application  is filed with the FDA to begin human testing.  Typically, a three-
phase clinical  testing program is then undertaken.  In Phase I, small clinical
trials are conducted  to  determine  the  safety  of the product.  In Phase II,
clinical trials are conducted to assess safety and gain preliminary evidence of
the efficacy of the product (i.e., proof of concept).   In  Phase III, clinical
trials   are  conducted  to  provide  sufficient  data  for  the  statistically
significant  proof  of  safety  and efficacy.  The time and expense required to
perform this clinical testing can  vary  and  is substantial.  No action can be
taken to market any new drug or biologic product  in the United States until an
appropriate marketing application has been approved  by  the  FDA.   Even after
initial FDA approval has been obtained, further clinical trials may be required
to provide additional data on safety and effectiveness and are required to gain
clearance  for  the use of a product as a treatment for indications other  than
those initially approved.  In addition, side effects or adverse events that are
reported  during  clinical  trials  can  delay,  impede  or  prevent  marketing
approval.  Similarly, adverse events that are reported after marketing approval
can result in additional  limitations  being  placed  on the product's use and,
potentially,  withdrawal of the product from the market.   Any  adverse  event,
either before or  after  marketing  approval,  can  result in product liability
claims against us.


                                      28
<PAGE>



         In  addition  to  regulating  and auditing clinical  trials,  the  FDA
regulates  and  inspects  equipment, facilities,  and  processes  used  in  the
manufacturing and testing of  such  products  prior  to  providing  approval to
market a product.  If after receiving clearance from the FDA, a material change
is  made in manufacturing equipment, location or process, additional regulatory
review  may  be  required.   We  will  also  have  to  adhere  to  current Good
Manufacturing  Practice and product-specific regulations  enforced by  the  FDA
through its facilities  inspection  program.   The  FDA  also conducts regular,
periodic   visits  to  re-inspect  equipment,  facilities,  laboratories,   and
processes  following   the   initial  approval.   If,  as  a  result  of  these
inspections, the FDA determines that any equipment, facilities, laboratories or
processes  do not comply with applicable  FDA  regulations  and  conditions  of
product approval, the FDA may seek civil, criminal, or administrative sanctions
and/or remedies  against  us,  including  the  suspension  of the manufacturing
operations.

Employees

         As of December 31, 2006, we employed one full-time  employee  and  two
part-time employees who are primarily engaged in our day to day operations, our
full  time employee is an officer of the Company.  In addition, certain members
of our  Board of Directors and members of our Scientific Advisory Board provide
us with research and development assistance on a part-time, limited basis.  Our
employees  are  not  represented  by  a  labor  organization  or  covered  by a
collective bargaining agreement.  We have not experienced work stoppages and we
believe that our relationship with our employees is good.



                                       29
<PAGE>





ITEM 2.  DESCRIPTION OF PROPERTY.

         We currently maintain our office space in Bala Cynwyd, Pennsylvania, a
suburb of Philadelphia, we lease these facilities under a month-to  month lease
that can be terminated with 60 days notice.    We currently pay rent  of $1,400
per  month  under  the  lease  for  office  space as well as certain additional
communication costs.  We believe our office space  is suitable and adequate for
its present use.

ITEM 3.  LEGAL PROCEEDINGS.

         We are not a party to any material legal proceedings.

         We  may occasionally become subject to legal  proceedings  and  claims
that arise in  the ordinary course of our business.  It is impossible for us to
predict with any  certainty  the  outcome  of  pending  disputes, and we cannot
predict whether any liability arising from pending claims  and  litigation will
be  material in relation to our consolidated financial position or  results  of
operations.

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

         None.



                                      30
<PAGE>




                                    PART II

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

         Market Information

         Our common stock has been traded on the OTC Bulletin Board over-the-
counter market since August 30, 2004 under the symbol "DSKT."  Prior to the
merger in which Duska Scientific became our wholly owned subsidiary on August
30, 2004, our common stock was listed on the OTC Bulletin Board over-the-
counter market under the symbol "SRKI."  Subsequent to the 1-for-20 reverse
split on March 26, 2007, our common stock has been traded on the OTC Bulletin
Board over-the-counter market under the symbol "DSKA."

         There was little or no trading in our common stock prior to the merger
on August 30, 2004 and there has been very limited trading  of  our stock.  The
following price information reflects inter-dealer prices, without  retail mark-
up, mark-down or commission and may not represent actual transactions:

                    Quarter Ending       High        Low
                    --------------------------------------
                    Fiscal 2006
                    --------------------------------------
                    March 31, 2006       $10.20      $6.20
                    June 30, 2006        $12.00      $4.00
                    September 30, 2006   $ 3.80      $1.00
                    December 31, 2006    $ 2.60      $0.20

                    Fiscal 2005
                    --------------------------------------
                    March 31, 2005       $60.00      $40.00
                    June 30, 2005        $45.00      $25.00
                    September 30, 2005   $45.00      $13.20
                    December 31, 2005    $20.20      $10.20

Stock Split

On March 26, 2007, we reversed our outstanding Common Stock on a twenty for one
(20:1) basis, while retaining the current par value of $0.001, with no
stockholder reduced below one hundred (100) shares, on a per stockholder of
record basis.  This reverse stock split reduced the number of issued and
outstanding common shares from 48,751,510 to 2,437,575 common shares and had no
effect on the authorized number of shares.  All numbers in this Form 10-KSB
have been adjusted to reflected the reverse split.

Holders

         As of March 27, 2007, there were approximately 155 holders  of  record
of our common stock.


                                       31
<PAGE>



Dividends

         We have not paid any dividends on our common stock to date and do  not
anticipate  that  we  will  be paying dividends in the foreseeable future.  Any
payment of cash dividends on  our  common stock in the future will be dependent
upon the amount of funds legally available, our earnings, if any, our financial
condition, our anticipated capital requirements  and  other  factors  that  the
Board  of  Directors  may  think are relevant.  We do not anticipate having any
earnings from which to pay dividends  in  the  foreseeable future and currently
intend to follow a policy of retaining all of our  earnings, if any, to finance
the development and expansion of our business and, therefore,  do not expect to
pay any dividends on our common stock in the foreseeable future.

Purchase  of  Equity  Securities  by  the  Small Business Issuer and Affiliated
Purchasers

         We did not repurchase any shares of our common stock during the fiscal
year ending 2006.

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

Overview

         On August 30, 2004, we completed a  merger  in which Duska Scientific,
our wholly-owned subsidiary, through which we currently  carry  out  all of our
business operations.  At the time of the merger, we had virtually no assets  or
liabilities  (prior  to  the  merger  we had engaged in very limited activities
unrelated to the bio-pharmaceutical industry).   In connection with the merger,
we changed our name to "Duska Therapeutics, Inc.",  replaced  our  officers and
directors  with  those of Duska Scientific, ceased our activities at that  time
and moved our offices  to  Bala Cynwyd, Pennsylvania.  We currently do not plan
to conduct any business other  than  the  business  that  Duska  Scientific has
conducted  since  its  organization.   Duska Scientific is a development  stage
company that has at this time a portfolio  of  several  products  including two
current  product  candidates  and two proposed product candidates that  are  in
various early stages of development.   We  have  not  generated any revenues to
date.   We  expect to continue to incur significant research,  development  and
administrative   expenses  before  any  of  our  current  or  proposed  product
candidates are approved for marketing, if ever, and generate any revenues.

         Although  we  acquired  Duska Scientific in the merger, for accounting
purposes,  the  merger  was  accounted  for  as  a  reverse  merger  since  the
stockholders  of  Duska Scientific  acquired  a  majority  of  the  issued  and
outstanding shares  of  our  common  stock,  and  the  directors  and executive
officers  of  Duska  Scientific  became  our  directors and executive officers.
Accordingly, our financial statements contained  herein, and the description of
our results of operations and financial condition,  reflect  (i) the operations
of Duska Scientific alone prior to the merger, and (ii) the combined results of
this company and Duska Scientific since the merger.  No goodwill  was  recorded
as a result of the merger.


                                       32
<PAGE>



Plan of Operation
-----------------

         We  are  a  development  stage enterprise.  As such, we are developing
products for clinical and therapeutic  uses, as more fully described in Part I,
Item 1 of this Form 10-KSB, but have not  yet  developed  any  products  to the
point  where  they  are producing revenue through sale or license.  To continue
operations, we must obtain  funds  through the issuance of additional equity or
debt.    We  completed a $300,000 private   offering  in  January  2007.   This
private offering will enable us to fund our planned level of operations through
approximately  June  2007.  In order to complete the work necessary to file new
drug applications  for  ATPace(TM)   and  ATPotent(TM),  we  will need to raise
substantial  additional  funding.   Our  Contract  Research  Organization   has
estimated  that  it  will  take  approximately six to 12 months to complete the
preparation of the NDA for ATPace(TM),  under  Section  505(b)(2)  of  the FDA.
Although  we  have  completed  pre-clinical  trials  on  ATPotentTM and filed a
provisional patent application on February 27, 2007, we are currently designing
a proof of concept study with the drug prototype to be carried out at a leading
US academic center. Upon completion of the latter study with favorable results,
Duska will approach the FDA to discuss the potential pathway  for  the clinical
development  of  ATPotent(TM).  In addition, we continue research on our  other
drug candidates Aspirex(TM),  Vagonixen(TM),  and  Occuprene(TM).   We  do  not
expect  to  make any significant investments in facilities or equipment, nor
hire a significant number of employees until we file our first NDA.

Critical Accounting Policies

         Management's  discussion  and  analysis of our financial condition and
results of operations are based on our consolidated financial statements, which
have been prepared in accordance with accounting  principles generally accepted
in the United States.  The preparation of these financial  statements  requires
management to make estimates and judgments that affect the reported amounts  of
assets,   liabilities,   revenues  and  expenses,  and  related  disclosure  of
contingent assets and liabilities.   On  an ongoing basis, management evaluates
its  estimates, including those related to  impairment  of  long-lived  assets,
including  finite  lived  intangible  assets,  accrued  liabilities and certain
expenses.  We base our estimates on historical experience  and on various other
assumptions  that  we  believe  to  be reasonable under the circumstances,  the
results of which form the basis for making  judgments about the carrying values
of assets and liabilities that are not readily  apparent  from  other  sources.
Actual  results  may  differ  materially  from  these estimates under different
assumptions or conditions.

         Our significant accounting policies are  summarized  in  Note 2 of our
audited financial statements for the year ended December 31, 2006.   We believe
the   following  critical  accounting  policies  affect  our  more  significant
judgments and estimates used in the preparation of our financial statements:


                                      33
<PAGE>



         Development Stage Enterprise

         We  are  a  development  stage  enterprise as defined by the Financial
Accounting  Standards  Board's  ("FASB")  Statement   of  Financial  Accounting
Standards  ("SFAS")  No.  7,  "Accounting  and Reporting by  Development  Stage
Enterprises."  We are devoting substantially  all  of  our  present  efforts to
research  and  development.   All losses accumulated since inception have  been
considered as part of our development stage activities.

         Stock-Based Compensation

      In December 2004, the FASB  issued  SFAS  No.  123 (revised 2004), "Share-
Based Payment." SFAS 123R requires that the compensation cost relating to a wide
range  of  share-based  payment  transactions  (including  stock   options)  be
recognized  in  financial statements. That cost will be measured based  on  the
fair value of the  equity  instruments  issued.  Statement 123(R) replaces FASB
Statement  No.  123  and supersedes APB Opinion No. 25.  As  a  small  business
issuer, we adopted SFAS  123R as of January 1, 2006. The Company has elected to
use the modified prospective transition method.  Under this method, the Company
will not adjust any prior  financial  statements and will recognize expense for
any new stock-based awards and the unvested  portion  of  unvested awards as of
January  1,  2006.   For  non-employee  stock-based compensation,  the  Company
recognizes an expense in accordance with  SFAS  No.  123 and values the related
equity securities based on the fair value based method.

      Notes and Warrants

       As described further in Note 4 to our audited financial  statements, we
 entered note and warrant purchase agreements in the third and fourth quarters
 of  2006.   Because  the  notes  were  issued  with  detachable warrants,  in
 accordance with Accounting Principles Board Opinion No. 14, the fair value of
 the warrants was recorded as a debt discount and additional  paid-in  capital
 on  a  relative  value  basis,  with  the debt discount amortized to interest
 expense over the life of the notes.  The  notes,  which  are convertible into
 common stock, have a beneficial conversion feature, which  has  been recorded
 as a debt discount and additional paid in capital as prescribed in EITF Issue
 No.  98-5.  Debt discount is amortized to interest expense over the  life  of
 the notes,  in  accordance  with  the  guidance  in EITF Issue No. 00-27.  We
 sweetened the  conversion  terms  on  these  notes  to  induce  conversion of
 the notes  to  equity  in the fourth quarter  of 2006 in order to  reduce the
 burden  of  interest  expense on the company.   Half  of the holders of those
 notes  accepted  our offer in December  2006, and the accompanying  financial
 statements include  a  charge  of  $218,575  to  reflect  the  cost  of  that
 inducement.   In  addition,  under EITF Issue 00-27, the unamortized discount
 remaining at the date of conversion is  expensed.  The accompanying financial
 statements  include  as  part  of  interest  expense  the  $85,063  remaining
 unamortized discount  on  those notes at the date the conversion was accepted
 by the holders.  The other half of the holders accepted our offer in January
 2007, so the remaining discount of $57,006 will be expensed in January 2007,
 along with a charge of $136,397  for  the cost of the inducement to convert
 on those notes.


                                      34
<PAGE>


New Accounting Pronouncements

       In June 2006, the Financial Accounting  Standards  Board  (FASB) issued
 FASB Interpretation No. 48, "Accounting for Uncertainty in Income  Taxes - an
 interpretation  of  FASB  Statement  No.  109" (FIN  48), which clarifies the
 accounting for uncertainty in tax positions. This interpretation requires the
 financial statement recognition of a tax position taken  or  expected  to  be
 taken  in  a  tax  return,  if that position is more likely than not of being
 sustained on audit, based on  the  technical  merits  of  the  position.  The
 provisions  of FIN 48 are effective for fiscal years beginning after December
 15, 2006. The  Company  has  evaluated the impact the adoption of FIN 48 will
 have on its financial condition and results of operations and concluded there
 will be no material impact.

      In  July  2006,  the FASB issued  FASB  Statement  No.  157, "Fair Value
Measurements."  This statement  provides  guidance  for  using  fair  value to
measure  assets  and  liabilities,  and   applies  whenever  other   standards
require  (or permit)  assets  or  liabilities to be measured at fair value but
does  not  expand  the  use of  fair value  in  any  new  circumstances.  This
statement  will  become  effective  for the Company as of January 1, 2007, and
while expected to result in  additional disclosures,  is not expected  to have
a  material  effect  on  the  Company's  results  of  operations  or financial
condition.

      In September 2006, the Securities  and  Exchange  Commission staff issued
Staff  Accounting  Bulletin  No. 108, "Considering the Effects  of  Prior  Year
Misstatements  when  Quantifying   Misstatements   in  Current  Year  Financial
Statements." SAB 108 was issued to provide consistency  between how registrants
quantify financial statement misstatements.

      Historically, there have been two widely-used methods for quantifying the
effects of financial statement misstatements. These methods  are referred to as
the "roll-over" and "iron curtain" method. The roll-over method  quantifies the
amount  by  which  the  current  year  income statement is misstated. Exclusive
reliance on an income statement approach  can  result  in  the  accumulation of
errors  on the balance sheet that may not have been material to any  individual
income statement,  but  which  may misstate one or more balance sheet accounts.
The iron curtain method quantifies  the error as the cumulative amount by which
the current year balance sheet is misstated.  Exclusive  reliance  on a balance
sheet approach can result in disregarding the effects of errors in the  current
year income statement that results from the correction of an error existing  in
previously issued financial statements. The Company currently uses the rollover
method for quantifying identified financial statement misstatements.

      SAB 108 established an approach that requires quantification of financial
statement  misstatements  based on the effects of the misstatement on each of a
registrant's  financial  statements   and   the   related  financial  statement
disclosures.  This  approach is commonly referred to  as  the  "dual  approach"
because it requires quantification  of errors under both the roll-over and iron
curtain methods.


                                      35
<PAGE>



      SAB 108 allows registrants to initially apply the dual approach either by
(1) retroactively adjusting prior financial  statements as if the dual approach
had  always  been  used  or (2) recording the cumulative  effect  of  initially
applying the dual approach  as adjustments to the carrying values of assets and
liabilities as of January 1, 2006 with an offsetting adjustment recorded to the
opening  balance  of  retained  earnings.   Use  of  this  "cumulative  effect"
transition method requires detailed disclosure of the nature and amount of each
individual error being corrected through the  cumulative adjustment and how and
when it arose.

      We applied SAB 108 using the retroactive  transition method in connection
with the preparation of our annual financial statements  for  the  year  ending
December 31, 2006, which resulted in no adjustment to our financial statements.

Results of Operations
---------------------

Comparison of Fiscal Year ended December 31, 2006 to Year ended December 31,
2005.

         For  the  year  ended  December  31,  2006  we  reported a net loss of
$2,000,242, as compared to a net loss of $2,759,774 for the year ended December
31, 2005.  We expect our net losses to grow as a result of  higher research and
development expenses, especially if we are successful in advancing  any  of our
products into later stages of development, such as clinical trials.

Revenues
--------

         For the years ended December 31, 2006 and 2005, we generated no
operating revenues.  Interest income was $19,336 and $38,729 during the years
ended December 31, 2006 and 2005, respectively.  The variance generally
reflects fluctuations in our cash balances.

Expenses
--------

         General and administrative expenses were $1,272,426 and $1,282,032 for
the  years  ended  December  31,  2006  and  2005,  respectively, and consisted
principally of officers' and employees' salaries, legal and accounting fees and
facilities costs.  We recorded expense of $301,737 in the first quarter of 2006
and $445,000 in the fourth quarter of 2005 related to  the issuance of warrants
to  purchase  shares  of our common stock to our investor relations  consulting
firm.  This expense was calculated using the Black-Scholes valuation method and
had no effect on our cash  balances.   We  may  issue additional options and/or
warrants to consultants and others in the future which may increase our general
and administrative expenses.


                                       36
<PAGE>



         Research and development expenses were $364,382 and $1,516,471 for the
years ended December 31, 2006 and 2005, respectively.  Research and development
expenses  consisted  mainly of costs directly associated  with  our  activities
related to the development  of ATPace(TM), Vagonixen(TM) and ATPotent(TM).  The
decrease from 2005 to 2006 is  due  primarily  to  the  suspension  of clinical
trials  for  ATPace(TM) in the first quarter of 2006, and to the completion  of
preclinical development  work for ATPotent(TM) being conducted on our behalf at
the University of Pennsylvania.

         During 2004, we entered  into  an  agreement  with  Cato Research Ltd.
("Cato")  under which Cato agreed to provide clinical research  management  and
regulatory  affairs  support  for the Phase II and Phase III clinical trials of
ATPace(TM) (the "Cato Agreement").  Under  the  terms of the Cato Agreement, we
agreed with Cato that up to $500,000 of the compensation  due  to  Cato for its
services  would be paid by us issuing to Cato  (or its designees) 25,000  units
of our securities  (the  "Cato Units"). Each Cato Unit consists of one share of
common stock and one warrant to purchase an additional share of common stock at
an exercise price of $50.00  per  share.   The  warrants  expire in August 2007.
Pursuant  to  the  Cato  Agreement, the parties agreed that 40%  of  each  Cato
invoice (excluding out of pocket expenses and certain other costs) will be paid
with Cato Units, with the  balance  payable  in cash.  During 2006 and 2005, we
recorded $134,811 and $766,327 of expenses associated  with  the Cato Agreement
(included in research and development expense), which amounts  include  $52,886
and $299,675, respectively, which have been, or will be, satisfied through  the
release of Cato Units from escrow.

         Excluding  the $52,886 and $299,675 non-cash expenses recorded in 2006
and  2005, respectively,  pursuant  to  the  Cato  Agreement  discussed  above,
research  and  development  expense  was  $311,946 in 2006 versus $1,216,796 in
2005. We expect our research and development expenses to increase significantly
in the future, especially if we are successful in advancing any of our products
into later stages of development, such as clinical trials.

         Interest expense was $163,746 and  $0 for the years ended December 31,
2006 and 2005, respectively. Of this amount in 2006, $1,398 related to interest
on a premium finance agreement for insurance,  $6,107  related  to  the  coupon
interest  rate  on  the  convertible  notes  issued  in  August, September, and
December 2006, $71,178 was the amortization of discount on convertible notes in
the third and fourth quarters of 2006, and $85,063 resulted from amortizing the
balance of the  discount  on  the convertible notes when their holders accepted
our inducement for conversion.

         Included in expense in  2006  is  $218,575  related  to  the  cost  of
inducing  conversion  on  the convertible notes.  This was the increase in fair
value of the securities to  be  issued  over  the  fair value of the securities
issuable under the original terms of the notes.


                                      37
<PAGE>



Comparison of Fiscal Year ended December 31, 2005 to Year ended December 31,
2004.

         For the year ended December 31, 2005 we reported a net loss of
$2,759,774, as compared to a net loss of $1,560,835 for the year ended December
31, 2004.

Revenues
--------

         For the years ended December 31, 2005 and 2004, we generated no
operating revenues.  Interest income was $38,729 and $18,293 during the years
ended December 31, 2005 and 2004, respectively.  The variance generally
reflects fluctuations in our cash balances.

Expenses
--------

         General and administrative expenses were $1,282,032  and  $915,579 for
the  years  ended  December  31,  2005  and  2004,  respectively, and consisted
principally  of officers' salaries, legal and accounting  fees  and  facilities
costs.  The increase  from  2004  to  2005  is  due  primarily to an expense of
$445,000  recorded in the fourth quarter of 2005 related  to  the  issuance  of
warrants to  purchase  shares  of  our  common  stock to our investor relations
consulting firm.  This expense was calculated using the Black-Scholes valuation
method and had no effect on our cash balances.  We may issue additional options
and/or warrants to consultants and others in the  future which may increase our
general and administrative expenses.

         Research and development expenses were $1,516,471 and $465,580 for the
years ended December 31, 2005 and 2004, respectively.  Research and development
expenses  consisted  mainly of costs directly associated  with  our  activities
related to the development  of ATPace(TM), Vagonixen(TM) and ATPotent(TM).  The
increase  from  2004 to 2005 is  due  primarily  to  our  clinical  development
expenses for ATPace(TM),  and  to preclinical development work for ATPotent(TM)
being conducted on our behalf at the University of Pennsylvania.

         During 2004, we entered  into  an  agreement  with  Cato Research Ltd.
("Cato")  under which Cato agreed to provide clinical research  management  and
regulatory  affairs  support  for the Phase II and Phase III clinical trials of
ATPace(TM) (the "Cato Agreement").  Under  the  terms of the Cato Agreement, we
agreed with Cato that up to $500,000 of the compensation  due  to  Cato for its
services  would be paid by us issuing to Cato (or its designees) 500,000  units
of our securities  (the  "Cato Units"). Each Cato Unit consists of one share of
common stock and one warrant to purchase an additional share of common stock at
an exercise price of $2.50  per  share.   The  warrants  expire in August 2007.


                                      38
<PAGE>



Pursuant  to  the  Cato  Agreement, the parties agreed that 40%  of  each  Cato
invoice (excluding out of pocket expenses and certain other costs) will be paid
with Cato Units, with the balance payable in cash.  In November 2004, we issued
all 500,000 Cato Units, which  are  being  held  in  escrow  by  us and will be
released  as we receive invoices for services actually performed by  Cato.   As
additional  compensation  for  Cato,  in  November  2004  we  issued  to Cato's
designees  additional  warrants  to purchase a total of 99,000 shares of common
stock.  These additional warrants have an exercise price of $1.04 per share and
expire in October 2009.  These warrants  were  immediately  exercisable and not
held in escrow; accordingly, in 2004 we recognized expense of  $43,683 relating
to the warrants, based on the value as calculated in a Black-Scholes  valuation
model.   These  expenses  are included in research and development expense  for
2004.  During 2005 and 2004,  we  recorded  $766,327  and  $274,048 of expenses
associated  with  the  Cato  Agreement  (included  in research and  development
expense), which amounts include $299,675 and $109,619, respectively, which have
been, or will be, satisfied through the release of Cato Units from escrow.

         Excluding the $299,675 and $153,302 non-cash expenses recorded in 2005
and  2004,  respectively,  pursuant  to  the  Cato Agreement  discussed  above,
research and development expense was $1,216,796  in  2005  versus  $312,278  in
2004. We expect our research and development expenses to increase significantly
in the future, especially if we are successful in advancing any of our products
into later stages of development, such as clinical trials.

         Interest  expense was $0 and $197,969 for the years ended December 31,
2005 and 2004, respectively.   Interest expense for the year ended December 31,
2004  relates  to  the  $500,000 of  convertible  subordinated  notes  that  we
previously issued.  The notes  were  converted  into common stock in March 2004
and, upon their conversion, the note holders received  additional  warrants  to
purchase  common  stock.   These  additional  warrants were valued at $190,846,
which was treated as additional interest expense.

Liquidity and Capital Resources
-------------------------------

         On  December 31, 2006, we had cash and  cash  equivalents  of  $8,236,
compared to $553,625  at  December 31, 2005.  Working capital was ($898,263) at
December  31,  2006,  compared  to  $307,169  at  December  31,  2005.   As  of
December 31, 2006, we have  funded  our  operations, including our research and
development activities, through funds derived  from  several private placements
generating an aggregate of approximately $5,500,000 in net proceeds since 1999,
and the issuance of $300,000 in convertible notes.

         In  their  report  on  page  F-2,   our  independent  auditors  stated
that  our  financial  statements  for  the  year  ended December 31, 2006  were
prepared assuming that we would continue as a going  concern.   Our  ability to
continue  as  a  going  concern is an issue raised as a result of our recurring
negative cash flows from  operations  and  accumulated deficit of approximately
$8,425,000.   Our ability to continue as a going  concern  is  subject  to  our
ability to obtain  significant  additional capital to fund our operations.  The
going concern qualification in the  auditor's report could materially limit our
ability to raise additional capital.

                                         39
<PAGE>



         In  August,  September, and December  2006,  we  issued  one-year,  7%
convertible  notes  with  detachable  stock  purchase  warrants  to  accredited
investors for $250,000  in  cash.   The  notes  are  convertible into 5,000,000
shares of our common stock, and the warrants can be exercised to purchase up to
2,583,335 shares of our common stock at a price of $0.15  per share at any time
until  5  years  from the date of issuance.  In order to reduce  the  financial
burden on our company  of  paying  interest  and  principal  on  these notes at
maturity, in December, 2006 our Board of Directors authorized an inducement  to
the  holders  to  convert  their  debt  to  our  common stock for an additional
7,500,000 shares and additional warrants to purchase up to 12,500,000 shares of
our common stock at a price of $0.04 per share.  Half  of  the holders accepted
this offer in December, 2006; the other half accepted in January, 2007.

         In the fourth quarter of 2006, we entered into subscription agreements
with  accredited investors providing for the purchase of an aggregate  $300,000
of our  common  stock  in  connection  with  a  private placement (the "Private
Placement").  Some of the investors are our existing shareholders.  The Private
Placement provides for the sale of up to 15,000,000  shares of our common stock
at $0.02 per share.  The investors placed funds of $267,165  with us in escrow,
and  these funds, together with the interest theron, are shown  as  "Restricted
Cash" in the accompanying Consolidated Balance Sheet.  This subscription closed
in January, 2007, and the funds were released to us.

         The  estimated  costs of completing the development of our current and
proposed product candidates  and of obtaining all required regulatory approvals
to market our current and proposed  product candidates is substantially greater
than the amount of funds we currently  have  available.    We  believe that our
cash  balances  as  of  December 31, 2006, and the closing of our latest  stock
subscription will only be  sufficient  to  fund our planned level of operations
through  approximately  June  2007.   If we are  unsuccessful  or  only  partly
successful in our efforts to secure additional  funding,  some  or  all  of our
research  and  development  activities  related to current and proposed product
candidates could be delayed and we could be forced to reduce the scope of these
activities or otherwise limit or terminate  our  operations altogether.  We may
also seek to sell certain of our assets or sell our company.

         We  will  seek  to  obtain these additional funds  through  additional
financing  sources  and  strategic  alliances  with  larger  pharmaceutical  or
biomedical companies, but  there  can  be  no assurance that we will be able to
obtain any additional funding from any potential  financing  sources  or create
any  such  alliances, or that the terms under which we obtain any funding  will
allow us to  fund  our  operations.   If  we  are  unsuccessful  or only partly
successful  in  our  efforts to secure additional funding, some or all  of  our
research and development  activities  related  to  current and proposed product
candidates could be delayed and we could be forced to reduce the scope of these
activities or otherwise limit or terminate our operations  altogether.   We may
also  seek  to  sell  certain  of  our assets or sell our company.  In order to
facilitate raising additional equity capital, on February 9, 2007, our Board of
Directors authorized a 1 for 20 reverse split of our common stock.


                                      40
<PAGE>



         As of December 31, 2006, we  had  no  long-term  debt  obligations, no
capital   lease  obligations,  no  operating  lease  obligations,  no  purchase
obligations,  or  other similar long-term liabilities, except for those related
to the Cato Agreement.   We  have  the right to terminate the Cato Agreement at
any time, subject to a 90 day notice requirement and the payment to Cato of 20%
of the estimated remaining unbilled  amounts for the work orders covered by the
agreement.   At December 31, 2006, such  obligations  would  have  amounted  to
approximately  $5,000.   By  December  31,  2006,  half  of  the holders of our
convertible  debt  had  agreed  to convert their debt to our common  stock  for
additional stock and warrants, and the other half agreed in January, 2007.

Off-Balance Sheet Arrangements

         We are not a party to any  off-balance  sheet  arrangements, and we do
not engage in trading activities involving non-exchange traded  contracts.   In
addition,  we  have  no financial guarantees, debt or lease agreements or other
arrangements that could  trigger  a  requirement  for  an early payment or that
could change the value of our assets.

         We do not believe that inflation has had a material impact on our
business or operations.

Risks Related To Our Business

We  have  never  generated  any  revenues,  have  a history of  losses,  expect
significant future losses and cannot assure you that  we  will  ever  become or
remain  profitable,  and  as  a  result,  we  may  have to cease operations and
liquidate our business.

      We have not generated any revenues to date and  have  incurred  operating
losses  since  our inception. We do not expect to generate any revenues in  the
foreseeable future  and  therefore  expect  to  continue  to  incur significant
operating losses for the foreseeable future. To date, we have dedicated most of
our   financial   resources  to  research  and  development  and  general   and
administrative expenses.  We have funded all of our activities through sales of
our securities. For the year ended December 31, 2006 and the fiscal years ended
December 31, 2005 and 2004,  we  had  net  losses  of approximately $2,000,242,
$2,759,774, and $1,560,835, respectively. We expect  to  incur  losses  for  at
least the next several years as we continue to spend substantial amounts on the
research  and  development  of  our  current  and  proposed product candidates,
including pre-clinical research and clinical trials.  There can be no assurance
that  we  will  ever  generate any revenues or that any revenues  that  may  be
generated will be sufficient for us to become profitable or thereafter maintain
profitability.  If  we  cannot  generate  any  revenues  or  become  or  remain
profitable, we may have to cease our operations and liquidate our business.

Our independent auditors  have expressed doubt about our ability to continue as
a going concern, which may hinder our ability to obtain future financing.


                                      41
<PAGE>



      In their report for the year ending  December 31, 2006, our  independent
auditors  stated that our financial  statements  for the year  ended  December
31, 2006 were prepared  assuming  that  we would continue as  a going concern.
Our  ability  to  continue as a going concern was an issue arising as a result
of our recurring negative cash flows  from operations and  accumulated deficit
of approximately $8,425,000 as of December 31, 2006.  Our  ability to continue
as a going concern is subject to our ability to obtain significant  additional
capital to fund our operations,  of which  there is no assurance.   The  going
concern qualification in the  auditor's  report  could  materially  limit  our
ability to raise additional capital.   If we fail to raise sufficient capital,
we may have to liquidate our business.

      We continue to need to obtain significant additional capital to fund our
operations, and we may be unable to obtain such financing at all or on
acceptable terms.

      We have used substantial  funds  to  develop  our  technologies  and  our
products  and  will  require  substantial  additional  funds to conduct further
research  and  development.  We  do  not have any bank credit  lines  and  have
financed all of our prior operations through the sale of securities, which have
generated approximately an aggregate $6,100,000 of net proceeds since 1996. The
estimated  cost  of completing the development  of  our  current  and  proposed
product candidates and of obtaining all required regulatory approvals to market
our current and proposed  product  candidates is substantially greater than the
amount of funds we currently have available.  We believe that our cash balances
will  only  be  sufficient  to  fund our planned level  of  operations  through
approximately June 2007. We will  need  substantial additional funding to carry
out our planned development work for our current product candidates, ATPace(TM)
and  ATPotent(TM),  and  to  expand  the scope  of  our  operations  (including
employing senior executives and additional  support  personnel  on  a full-time
basis),  to  develop  our  technologies  and three proposed product candidates,
Vagonixen(TM), Ocuprene(TM), and Aspirex(TM) and to acquire and develop any new
relevant technologies and product candidates  that  may become available to us.
Our actual expenditures needed to complete the development  of ATPace(TM) alone
could  substantially  exceed  our  current  expectations  due to a  variety  of
factors, many of which are difficult to predict or are outside  of our control,
including  revisions  to our current development plan required by the  FDA  and
higher than anticipated clinical research costs. We will also incur substantial
costs to develop ATPotent(TM),  and  our  actual  costs  will  be significantly
higher than presently anticipated if CooperSurgical, Inc. does not  elect under
our  agreement to assist with the funding of our Phase II and Phase III  trials
for ATPotent(TM)  and  acquire  a  marketing license for this product candidate
(see  "Business-Strategic  Alliances-CooperSurgical,   Inc.").   Our  costs  to
commence  even  limited drug candidate discovery and pre-clinical work  on  our
proposed  product   candidates,   Vagonixen(TM)   and   Ocuprene(TM),  will  be
significant. Clinical development expenses for each of these  proposed  product
candidates will be very substantial and will require a strategic alliance  with
a larger pharmaceutical company that has expertise and sufficient resources  to
fund  the  clinical  development costs. If we are successful in our attempts to


                                       42
<PAGE>



obtain a small molecule  from  a  large  pharmaceutical  company  that would be
developed  as  a Vagonixen(TM) drug candidate, we would have to pay significant
upfront fees and  additional  substantial milestone-dependent fees. We may seek
to  obtain  these  additional  funds   through  additional  financing  sources,
including the possible sale of our securities,  and  strategic  alliances  with
other  pharmaceutical  or  biomedical  companies, but there can be no assurance
that  we  will  be able to obtain any additional  funding  from  any  potential
financing sources  or  create any such alliances, or that the terms under which
we obtain any funding will  be  sufficient  to fund our operations. We may also
seek to sell certain assets or our company. If  we  are  unsuccessful  or  only
partly  successful  in our efforts to secure additional funding, some or all of
our current and proposed  product  candidates  could be delayed and we could be
forced  to  reduce  the  scope  of  our  research and development  projects  or
otherwise limit or terminate our operations altogether.

Our current and proposed product candidates remain subject to significant
uncertainty.

      All of our current and proposed product candidates are in early stages of
development,  have  never generated any sales  and  require  extensive  testing
before commercialization.  We  only  have  two  full-time employees and limited
resources and may not possess the ability to successfully  overcome many of the
risks  and  uncertainties  frequently  encountered  by  early  stage  companies
involved in the new and rapidly evolving field of biopharmaceuticals. There can
be no assurance that we will be able to satisfactorily develop our technologies
or market our current or proposed product candidates so that they will generate
revenues.  The successful development of our product candidates is  subject  to
the risk that we may not be able to:

   o   obtain additional  financial  resources  necessary  to  develop,  test,
       manufacture and market our product candidates;

   o   engage   corporate   partners   to   assist   in  developing,  testing,
       manufacturing and marketing our product candidates;

   o   satisfy the requirements of clinical trial protocols,  including timely
       patient enrollment;

   o   establish  and demonstrate or satisfactorily complete the  research  to
       demonstrate the clinical efficacy and safety of our product candidates;

   o   obtain necessary regulatory approvals; and

   o   market our product  candidates  to  achieve  acceptance  and use by the
       medical community and patients in general and produce revenues.


                                       43
<PAGE>



If we obtain additional financing, you may suffer significant dilution.

      Because  we have not generated any revenues since commencing  operations,
we are dependent  on  raising  additional  financing through private and public
financing  sources  and  strategic  alliances  with  larger  pharmaceutical  or
biomedical companies to fund our short and long-term  operations.  As a result,
we  likely  will  be  required to issue securities to obtain such funds,  which
issuances would dilute  the  percentage  ownership  of  our  stockholders. This
dilution could also have an adverse impact on our earnings per share and reduce
the price of our common stock. In addition, the new securities may have rights,
preferences or privileges senior to those of our common stock.  For example, in
connection  with  an  amendment  to  an agreement with  a public relations  and
advertising firm regarding investor and  public  relations  services,  in March
2006, we granted our public relations and advertising firm warrants to purchase
up to 2,150,000 shares of our common stock issuable, of which 900,000 shares at
a price of $0.01 per share were exercised in exchange for the firm providing us
with,  among other services, media, branding and advertising services, investor
relations  services, corporate finance and disclosure consulting services.  The
convertible  notes  issued  in  August,  September,  and  December  2006 may be
converted  into  an  aggregate  of 5,000,000 shares, and the related detachable
warrants may be exercised to purchase  an  additional  2,583,335  shares  at an
exercise  price  of $0.15 per share. In December, 2006 we offered an inducement
to the holders of our convertible debt, which will result, upon issuance, of an
additional  7,500,000   shares  and  additional  warrants  to  purchase  up  to
12,500,000 shares at an exercise price of $0.04 per share.

Before we can market any of our current or proposed product candidates, we must
obtain governmental approval  for  each  of  our  current  and proposed product
candidates, the application and receipt of which is time-consuming,  costly and
uncertain.

      Each  of  the  current  and proposed product candidates we are developing
will require approval of the FDA before it can be marketed in the U.S. Although
our focus at this time is primarily  on  the U.S. market, in the future similar
approvals will need to be obtained from foreign  regulatory  agencies before we
can market our current and proposed product candidates in other  countries. The
process  for  filing  and  obtaining  FDA  approval  to  market therapeutic  or
diagnostic products is both time-consuming and costly, with  no  certainty of a
successful outcome. The historical failure rate for companies seeking to obtain
FDA  approval  of  therapeutic  or  diagnostic  products  is high. This process
includes conducting extensive pre-clinical research and clinical testing, which
may  take  longer and cost more than we initially anticipate  due  to  numerous
factors, including  without  limitation,  difficulty  in  securing  appropriate
centers to conduct trials, difficulty in enrolling patients in conformity  with
required protocols in a timely manner, unexpected adverse reactions by patients
in  the  trials to our product candidates and changes in the FDA's requirements
for our testing during the course of that testing.


                                      44
<PAGE>



      Each  of  our  two  current  product  candidates  is  based  on  either a
diagnostic or therapeutic indication for ATP. Although the FDA has approved two
formulations  of adenosine, the product of ATP's degradation in the body,  that
are currently being  sold  by  other  companies  as  drugs  for  diagnostic and
therapeutic indications, the FDA has not to date approved any product  in which
ATP  is  the  active  ingredient.  Thus,  we  may  encounter unexpected safety,
efficacy,  manufacturing  or other FDA related issues  as  we  seek  to  obtain
marketing approval from the  FDA  for our current ATP-based product candidates,
and there can be no assurance that  we will be able to obtain approval from the
FDA or any foreign governmental agency  for  marketing  of  any  of our product
candidates.

      Regarding  the  development  of ATPotent(TM) as a proposed drug  for  the
treatment of male infertility, we are currently conducting pre-clinical studies
with ATP, which is the active ingredient of ATPotent(TM). There is no assurance
that  these  studies  would yield the desired  data.  Even  if  the  latter  is
obtained, the FDA may not  accept  the data from these studies. In either case,
the development of ATPotent(TM) may be delayed or even abandoned altogether; in
the case of a delay, the cost of development will increase beyond our currently
anticipated costs. In addition, the  FDA ultimately could require us to achieve
an efficacy end point for ATPotent(TM)  in  its  clinical  trials that could be
more difficult, expensive and time-consuming than our planned end point.

      We  may from time to time conduct pre-clinical studies  for  our  product
candidates at medical centers whose facilities do not conform to the FDA's good
laboratory   practice   regulations.  Data  generated  from  studies  at  those
facilities may, under certain circumstances, not be accepted by the FDA for use
in IND or other filings with  that  agency. Our current pre-clinical studies of
ATPotent(TM)  are being conducted at the  University  of  Pennsylvania  without
compliance with  the  FDA's  good  laboratory  practices,  and  there can be no
assurance  that the data generated from these studies will be accepted  by  the
FDA should we seek to include this data in any FDA filings for ATPotent(TM).

Because all  of  our  current  and  proposed product candidates are at an early
stage of development and have never been marketed, we do not know if any of our
current and proposed product candidates  will  ever  be approved for marketing,
and any such approval will take at least several years to obtain.

      We  have not yet commenced clinical trials with any  of  our  current  or
proposed product  candidates  other than ATPace(TM), nor, with the exception of
the Phase I safety trial of ATPace(TM),  have we confirmed any of the safety or
efficacy  claims  made by our licensors or assignees  of  any  of  our  product
candidates. We may  be unable to confirm in our clinical trials with ATPace(TM)
and our pre-clinical studies or clinical trials with ATPotent(TM) the favorable
published clinical data  obtained  by  European  investigators  in  studies  of
similar  product  candidates. Recent pre-clinical experiments conducted by U.S.
scientists have shown  some  variability in the effects of extracellular ATP on
human sperm of healthy donors.  Based  on  the preliminary data obtained in our
pre-clinical studies, we reformulated ATPotent(TM) and redesigned its packaging
to create a user friendly product with a desirable  shelf  life.


                                      45
<PAGE>



There  are no  assurances  that  the  FDA  would  approve  these  changes,  and
therefore,   we  may  encounter  significant  delays  and additional  costs  in
the  development  of  ATPotent(TM)  and may  even abandon  the  development of
this product altogether.  We may encounter  further difficulties in  subsequent
pre-clinical  or  clinical  testing  of  ATPotent(TM)  due  to  the  nature  or
complexity of  the protocol  or for other unanticipated  reasons, and we may be
unable to  achieve the same results with the sperm of infertile  donors  that
have  been  achieved  with  sperm  of fertile  donors.  It  will take at least
several years  to  complete  the  clinical  testing  and  apply  for  marketing
approval for ATPace(TM) and ATPotent(TM), even if we can confirm the previously
published data.

We have not yet identified and may  be  unable  to  identify suitable candidate
compounds   to   serve   as  our  proposed  product  candidates   Vagonixen(TM)
Ocuprene(TM), or Aspirex(TM).

      The  pre-clinical  and   clinical  development  of  any  of  our  product
candidates may be suspended or terminated  for  a variety of reasons, including
our determination that a particular product candidate  is  not viable. With the
exception of a compound owned by a large pharmaceutical company,  we  have  not
yet  identified  and  may be unable to identify suitable candidate compounds to
serve as our proposed product  candidates Vagonixen(TM) or Ocuprene(TM). We are
currently seeking to obtain an exclusive  worldwide license for a molecule that
could serve as a Vagonixen(TM) drug candidate,  but  there  can be no assurance
that we will be able to obtain a license on attractive terms  or at all. We may
need to perform significant pre-clinical studies in addition to the anticipated
significant clinical studies if we obtain the rights to this compound.  Because
of  the  early stage of development of each of our current and proposed product
candidates,  we  do not know if we will be able to generate data to support the
filing of investigational new drug applications (INDs) or new drug applications
(NDAs) for these product  candidates  or the FDA's approval thereof. Even if we
identify and secure the rights to other  available candidates for Vagonixen(TM)
or Ocuprene(TM), we will incur significant  and  costly  pre-clinical  work  in
product  development  and  there  is  no  guarantee  that  we  will  be able to
successfully  complete  the work. If we are delayed in product development,  we
may  not have the financial  resources  to  continue  the  development  of  the
proposed  product  candidates  or  our current product candidates and the delay
could hurt the commercial viability  of  our  current product candidates. Third
parties  may  have proprietary rights to the other  available  candidates,  for
Vagonixen(TM) or  Ocuprene(TM),  and  we  will  need to execute agreements with
third parties to develop proposed product candidates.

      We  may  be  unable to obtain U.S. or  foreign regulatory  approval  and,
as  a result, be unable to  commercialize  our  current  and  proposed  product
candidates.


                                      46
<PAGE>



      We have limited experience in conducting and managing the clinical trials
necessary to obtain  regulatory  approvals,  including  approval by the FDA. We
have  entered  into an agreement with Cato Research Ltd., a  clinical  contract
research service  organization  with  expertise  in  the management of clinical
trials to assist us with the management of the ATPace(TM)  clinical development
work. The time required to obtain FDA and other approvals is  unpredictable but
often  can  exceed  five  years following the commencement of clinical  trials,
depending upon the complexity  of  the product. Any analysis we perform of data
from  preclinical  and  clinical activities  is  subject  to  confirmation  and
interpretation by regulatory  authorities,  which could delay, limit or prevent
regulatory approval. We may also encounter unexpected delays or increased costs
due to a variety of reasons, including new government  regulations  from future
legislation  or administrative action or from changes in FDA policy during  the
period of product development, clinical trials and FDA regulatory review.

      Any delay  or  failure  in  obtaining  required  approvals  would  have a
material adverse effect on our ability to generate revenues from the particular
product.  Furthermore,  any  regulatory  approval  to  market  a product may be
subject  to  limitations  on  the  indicated  uses for which we may market  the
product. These limitations may limit the size of the market for the product.

Because our current and proposed product candidates represent new approaches to
the diagnosis and treatment of disease, there are  many uncertainties regarding
the development, the market acceptance, third party  reimbursement coverage and
the commercial potential of our current and proposed product candidates.

      There can be no assurance that the approaches offered  by our current and
proposed  product  candidates  will  gain  broad  acceptance  among doctors  or
patients or that governmental agencies or third party medical insurers  will be
willing  to provide reimbursement coverage for our current and proposed product
candidates.   Moreover,  we  do  not  have  internal  marketing  data  research
resources, and,  except  in  the  case  of  ATPace(TM),  for  which  we used an
independent firm to prepare a limited marketing potential analysis, we  are not
certain of and have not attempted to independently verify the potential size of
the commercial markets for any of our product candidates. Since our current and
proposed  product  candidates  will  represent  new approaches to diagnosing or
treating various conditions, it may be difficult,  in  any event, to accurately
estimate  the potential revenues from these product candidates.  We  may  spend
large amounts  of money trying to obtain approval for these product candidates,
and never succeed  in  doing  so. In addition, these product candidates may not
demonstrate in large sets of patients  the  pharmacological properties ascribed
to them in the laboratory studies or smaller  groups  of patients, and they may
interact  with  human  biological  systems in unforeseen, ineffective  or  even
harmful ways either before or after  they  are  approved  to  be marketed. As a
result, we may never succeed in developing a marketable product.  If  we do not
successfully  develop  and  commercialize products based upon our approach,  we
will not become profitable, which  could materially, adversely affect the value
of our common stock.


                                      47
<PAGE>



      Other factors that we believe will materially affect market acceptance of
our current and proposed product candidates include:

   o   the timing of our receipt of any marketing  approvals, the terms of any
       approvals and the countries in which approvals are obtained;

   o   the safety, efficacy and ease of administration;

   o   the availability of government and third-party payer reimbursement;

   o   the   pricing   of   our  current  and  proposed  product   candidates,
       particularly as compared to alternative treatments; and

   o   the  availability  of  alternative  effective  forms  of  diagnosis  or
       treatments,  at that time,  for  the  diseases  that  the  current  and
       proposed product  candidates we are developing are intended to diagnose
       or treat.

As an early stage small  company that will be competing against numerous large,
established companies that  have  substantially  greater  financial, technical,
manufacturing, marketing, distribution and other resources  than us, we will be
at a competitive disadvantage.
      The  pharmaceutical  and  biopharmaceutical industry is characterized  by
intense  competition  and  rapid  and  significant  technological  changes  and
advancements. Many companies, research  institutions and universities are doing
research and development work in a number  of  areas  similar  to those that we
focus on that could lead to the development of new products which could compete
with and be superior to our product candidates. Furthermore, many companies are
engaged in the sale of existing medical devices or products that are or will be
competitive with our current and proposed product candidates.

      Most  of  the companies with which we compete have substantially  greater
financial,  technical,   manufacturing,   marketing,   distribution  and  other
resources  than  those of ours. A number of these companies  may  have  or  may
develop technologies  for developing products or diagnosing or treating various
diseases that could prove  to  be  superior  to  ours.  We expect technological
developments in the pharmaceutical and biopharmaceutical  and related fields to
occur at a rapid rate, and we believe competition will intensify as advances in
these fields are made. Accordingly, we will be required to  continue  to devote
substantial  resources  and  efforts to research and development activities  in
order to potentially achieve and maintain a competitive position in this field.
Products that we develop may become  obsolete before we are able to market them
or to recover all or any portion of our  research  and development expenses. We
will  be  competing  with  respect  to our products with  companies  that  have
significantly  more experience in undertaking  preclinical  testing  and  human
clinical trials  with  new  or  improved  therapeutic  products  and  obtaining
regulatory  approvals  of  such  products.  A number of these companies already
market and may be in advanced phases of clinical  testing  of  various drugs or
medical  devices  that  may  compete  with  our  current  and  proposed product
candidates. Our competitors may develop or commercialize products  more rapidly
than  we  do  or with significant advantages over any products we develop.  Our
competitors may  therefore be more successful in commercializing their products
than  we  are, which  could  adversely  affect  our  competitive  position  and
business.

                                         48
<PAGE>

      The head-up tilt table test, or HUT, and implantable loop recorder (ILR),
are established  diagnostic  tools  that  will,  along  with  other  diagnostic
procedures,  compete  with  ATPace(TM). Various existing treatment options  for
male infertility (such as surgical  intervention,  drug  and hormonal therapies
and  assisted  reproductive  technology procedures, including  intracytoplasmic
sperm injection (ICSI)) will compete  with  ATPotent(TM). There are a number of
drugs  currently  used  for  the  treatment  of chronic  obstructive  pulmonary
diseases,  and  chronic  cough;  other  drugs currently  under  development  by
pharmaceutical companies are expected to  compete  in this market by such time,
if ever, that Vagonixen(TM) is approved for marketing.

      Several  large  pharmaceutical  companies  are  intensely   pursuing  the
development  of  new  drugs  for  the  treatment of COPD, which is the clinical
target of our proposed product, Vagonixen(TM).

      There are a number of drugs and surgical  procedures  currently  used for
the  treatment  of  glaucoma. In addition, special mechanical devices aimed  at
reducing intraocular pressure are currently under development that are expected
to compete in this market  by such time, if ever, that Ocuprene(TM) is approved
for marketing.

      Colleges,  universities,  governmental  agencies  and  other  public  and
private research organizations  are  becoming  more  active  in  seeking patent
protection  and  licensing  arrangements  to  collect  royalties  for  use   of
technologies   that  they  have  developed,  some  of  which  may  be  directly
competitive with  our  current  and  proposed  product candidates. In addition,
these  institutions,  along with pharmaceutical and  specialized  biotechnology
companies,  can  be  expected  to  compete  with  us  in  recruiting  qualified
scientific personnel.

We need to outsource and rely on third parties for the clinical development and
manufacture,  sales  and   marketing   of  our  current  and  proposed  product
candidates, and our future success will  be  dependent  on  the  timeliness and
effectiveness of the efforts of these third parties.

      We do not have the required financial and human resources to carry out on
our  own  all  the  pre-clinical  and clinical development for our current  and
proposed product candidates, and do  not  have  the capability and resources to
manufacture, market or sell our current and proposed  product  candidates.  Our
business  model calls for the outsourcing of the clinical and other development
and manufacturing,  sales  and  marketing  of  our current and proposed product
candidates in order to reduce our capital and infrastructure  costs  as a means
of  potentially improving our financial position and the profitability  of  our
proposed  product  candidates.  Accordingly, we must enter into agreements with
other companies that can assist us  and provide certain capabilities that we do
not possess. We have entered into certain agreements with Medtronic, Inc., Cato
Research Ltd. and CooperSurgical, Inc., a subsidiary of Cooper Companies, Inc.,
but we may not be successful in entering  into  additional  such  alliances  on


                                      49
<PAGE>



favorable  terms  or  at  all.  Even  if  we  do succeed in securing additional
alliances, we may not be able to maintain them  if, for example, development or
approval  of  a  product  is  delayed  or  sales  of  an approved  product  are
disappointing. Furthermore, any delay in entering into  agreements  could delay
the  development  and  commercialization  of  our  products  and  reduce  their
competitiveness  even  if  they reach the market. Any such delay related to our
agreements could adversely affect our business.

      We have entered into an  agreement  with  Cato  Research  and may seek to
enter into additional strategic alliances with larger specialized  companies to
manage  the  day-to-day  conduct of our clinical trials and to manufacture  and
market  ATPace(TM). We may  also  utilize  contract  manufacturers  to  produce
clinical or commercial supplies of our product candidates. We may contract with
independent  sales  and marketing firms to use their pharmaceutical sales force
on  a contract basis (as  we  currently  intend  to  do  with  respect  to  the
manufacture  and sale of ATPace(TM)) and our agreement with CooperSurgical will
give that company  the  right  to  acquire  the  exclusive marketing rights for
ATPotent(TM).  We have not yet entered into any strategic  alliances  or  other
licensing or contract arrangements covering the manufacture or marketing of any
of our product candidates  (except for the manufacture of our clinical supplies
of ATPace(TM) with a subsidiary of Boehringer Ingelheim, Ben Venue Laboratories
("BVL") and the agreement with  CooperSurgical which will give that company the
right to acquire the exclusive marketing  rights for ATPotent(TM)). A new batch
of ATPace(TM) must be produced and supplied  to  clinical  sites  to resume the
clinical  trial  associated  with  this  drug.  Presently,  BVL  is capable  of
producing the new batch in its first quarter production schedule.  However,  it
is  unknown  to what extent BVL's future production schedules would accommodate
our needs. Furthermore,  there  can  be  no  assurance that CooperSurgical will
elect to market ATPotent(TM) or that we will otherwise  be  able  to enter into
satisfactory  arrangements  for  the  manufacture  or  marketing of any of  our
product candidates. We will be required to expend substantial amounts (which in
the case of Cato Research will include, in part and in lieu  of cash, equity in
our  company)  to retain and continue to utilize the services of  one  or  more
clinical research  management  organizations  without  any  assurance  that the
product  candidates  covered  by  the  clinical  trials  conducted  under their
management ultimately will generate any revenues for us.

If any party to which we have outsourced certain functions fails to perform its
obligations under agreements with us, the development and commercialization  of
our current and proposed product candidates could be delayed or terminated.

      To  the  extent  that we rely on other companies to manage the day-to-day
conduct of our clinical  trials  and to manufacture, sell or market our current
and proposed product candidates, we  will  be  dependent  on the timeliness and
effectiveness of their efforts. If a clinical research management  organization
that  we  utilize is unable to allocate sufficient qualified personnel  to  our
studies or  if  the  work  performed  by it does not fully satisfy the rigorous
requirements  of the FDA, we may encounter  substantial  delays  and  increased


                                      50
<PAGE>



costs in completing  our clinical trials. If a manufacturer of the raw material
or finished product for  our  clinical  trials  is  unable  to  meet  our  time
schedules or cost parameters, the timing of our clinical trials and development
of  our  current and proposed product candidates may be adversely affected. Any
manufacturer  that  we  select  may  encounter  difficulties  in scaling-up the
manufacture  of  new  products  in  commercial  quantities, including  problems
involving  product yields, product stability or shelf  life,  quality  control,
adequacy of  control  procedures  and policies, compliance with FDA regulations
and the need for further FDA approval  of  any  new manufacturing processes and
facilities. If any of these occur, the development and commercialization of our
current  and  proposed  product  candidates  could  be  delayed,  curtailed  or
terminated  because  we  may  not  have  sufficient  financial   resources   or
capabilities to continue such development and commercialization on our own.

If  we or our manufacturers or service providers fail to comply with regulatory
laws and regulations, we or they could be subject to enforcement actions, which
could  affect  our  ability to market and sell our current and proposed product
candidates and may harm our reputation.

      If we or our collaborators,  manufacturers  or  service providers fail to
comply with applicable federal, state or foreign laws or  regulations, we could
be subject to enforcement actions, which could affect our ability  to  develop,
market  and  sell our current and proposed product candidates under development
successfully and  could  harm  our  reputation  and  lead  to  reduced  or non-
acceptance of our current and proposed product candidates by the market.

Even if we obtain regulatory approvals, our products will be subject to ongoing
regulatory  review.  If  we  fail  to  comply  with continuing U.S. and foreign
regulations, we could lose our approvals to our products and our business would
be seriously harmed.

      Following any initial regulatory approval of any products we may develop,
we will also be subject to continuing regulatory  review,  including the review
of  adverse drug experiences and clinical results that are reported  after  our
products  are  made commercially available. This would include results from any
post-marketing tests  or  vigilance  required  as  a condition of approval. The
manufacturer and manufacturing facilities we use to  make  any  of our products
will  also  be  subject  to  periodic  review  and  inspection by the FDA.  The
discovery of any previously unknown problems with the  product, manufacturer or
facility may result in restrictions on the product or manufacturer or facility,
including  withdrawal  of  the product from the market. We  do  not  have,  and
currently do not intend to develop, the ability to manufacture material for our
clinical trials or on a commercial scale. Reliance on third-party manufacturers
entails  risks,  including  the   continuation   of   a  contractual  or  other
relationship with the third party manufacturer, and reliance on the third-party
manufacturer for regulatory compliance. Our product promotion  and  advertising
is also subject to regulatory requirements and continuing FDA review.

      The   potential   ramifications  are  far-reaching  if  there  are  areas
identified as out of compliance  by  regulatory  agencies  including,  but  not
limited  to,  significant financial penalties, manufacturing and clinical trial
consent decrees,  commercialization  restrictions  or  other  restrictions  and
litigation.

                                      51
<PAGE>

Our patents may not protect the proprietorship of our products.

      Our  ability  to  compete  successfully  will depend significantly on our
ability to defend patents that have been issued,  obtain  new  patents, protect
trade secrets and operate without infringing the proprietary rights  of others.
We  have no product patent protection for the compound ATP, as our patents  and
pending  patent applications are for various methods and processes for treating
or diagnosing various medical conditions.

      Even  where  we  obtain  patent  protection  for our current and proposed
product candidates, there is no guarantee that the coverage  of  these  patents
will  be  sufficiently broad to protect us from competitors or that we will  be
able to enforce  our patents against potential infringement by third parties or
protect us against our infringement of the proprietary rights of third parties.
Patent litigation is expensive, and we may not be able to afford the costs.

      ATP has been  previously marketed by various companies in other countries
for a number of uses,  including  in  fields  outside  of  our primary areas of
diagnostic and therapeutic interest, and we are aware that at least one company
has developed an oral formulation of ATP which is being marketed in the U.S. as
a food supplement without FDA approval. This may make it more  difficult for us
to  obtain patent coverage for our current and proposed product candidates  and
easier for third parties to compete against us in those countries. In addition,
third  parties  may  hold  or  seek  patents  for additional uses of ATP. These
additional uses, whether patented or not, could  limit  the scope of our future
operations  because other ATP products, which would not infringe  our  patents,
might become  available.  These  products  could  compete  with our current and
proposed product candidates, even though they are marketed for a different use.
We may seek to use existing compounds to serve as candidates for Vagonixen(TM).
In  the  event  that  third parties own rights to these compounds,  we  may  be
required to obtain licenses  to  use  these compounds, which could be costly or
impossible to obtain. We may not become  aware  on a timely basis that products
we are developing or marketing infringe the rights  of  others,  nor  may we be
able to detect unauthorized use or take appropriate and timely steps to enforce
our  own  intellectual  property  rights.  Protecting our intellectual property
rights may also consume significant management time and resources.

Nondisclosure agreements with employees and  others  may not adequately prevent
disclosure of trade secrets and other proprietary information.

      In  order to protect our proprietary technology and  processes,  we  also
rely  in  part  on  nondisclosure  agreements  with  our  employees,  licensing
partners, consultants,  agents and other organizations to which we disclose our
proprietary  information.   These   agreements   may  not  effectively  prevent
disclosure of confidential information and may not  provide  an adequate remedy
in  the  event  of  unauthorized  disclosure  of  confidential information.  In
addition,  others  may  independently  discover trade secrets  and  proprietary
information, and in such cases we could  not  assert  any  trade  secret rights
against  such parties. Costly and time-consuming litigation could be  necessary
to enforce  and  determine  the scope of our proprietary rights, and failure to



                                         52
<PAGE>


obtain  or  maintain  trade  secret   protection  could  adversely  affect  our
competitive  business  position.  Because   we   rely   on  trade  secrets  and
nondisclosure  agreements,  in  addition  to patents, to protect  some  of  our
intellectual property (such as our ATPace(TM)  formulation),  there  is  a risk
that   third   parties  may  obtain  and  improperly  utilize  our  proprietary
information to our  competitive  disadvantage.  We  may  not  be able to detect
unauthorized  use  or  take  appropriate  and  timely  steps  to  enforce   our
intellectual property rights.

The manufacture, use or sale of our current and proposed product candidates may
infringe on the patent rights of others, and we may be forced to litigate if an
intellectual property dispute arises.

      If  we  infringe  or are alleged to have infringed another party's patent
rights, we may be required  to seek a license, defend an infringement action or
challenge the validity of the patents in court. If others infringe our patents,
we may be compelled to bring  an  infringement action to challenge the validity
of our patents in court.  Patent litigation  is  costly  and time consuming. We
may  not  have  sufficient  resources  to bring these actions to  a  successful
conclusion. Litigation, regardless of outcome, could result in substantial cost
to, and a diversion of efforts by, us.   In  addition,  if  we  do not obtain a
license,  do  not successfully defend an infringement action or are  unable  to
have infringed patents declared invalid, we may:

   o   incur substantial monetary damages;

   o   encounter significant  delays  in  marketing  our  current and proposed
       product candidates; or

   o   be unable to conduct or participate in the manufacture,  use or sale of
       product candidates or methods of treatment requiring licenses.

If we choose to enforce our patents, we may:

    o   find  our patents are unenforceable, invalid, or have a reduced  scope
        of protection, or

    o   find our patents are not infringed.


      Parties  making  such claims may be able to obtain injunctive relief that
could effectively block  our  ability  to  further develop or commercialize our
current and proposed product candidates in the  United  States  and  abroad and
could result in the award of substantial damages. Our inability to successfully
defend  an  infringement  action by others or enforce our patents would have  a
material adverse effect on our Company and its prospects.

     We are dependent on our key  personnel, and the loss of one or more of our
key personnel would materially and adversely affect our business and prospects.


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<PAGE>



      We are dependent on certain of our officers,  directors and advisors with
scientific  and  managerial  skills,  including  Dr. Amir   Pelleg,  President,
Chairman  of  our  Board  of  Directors,  Chief  Operating  Officer  and  Chief
Scientific Officer, Dr. David Benditt, a director and our consultant,  Dr. Jane
Kinsel,   a  director,  Dr. Donald A.  McAfee,  a  director,  and  Dr. Pasquale
Patrizio, a  member of our Advisory Board. However, these individuals, with the
exception of Dr. Pelleg,  are  not our employees and work for us on a part-time
basis only. In 2005, we experienced  some  director  turnover  with Dr. Manfred
Mosk  resigning  his positions of non-executive chairman and director.  In  the
first quarter of 2006, Sanford J. Hillsberg  and  Dr. Rudolph  Nisi resigned as
directors, and in the second quarter of 2006, John N. Kapoor, Ph.D  resigned as
a director. At March 31, 2007, we had only one full-time employee and two part-
time  employees.   Although  we hold key man life insurance on Dr. Pelleg,  the
loss of Dr. Pelleg's services  would  have  a  material  adverse  effect on our
operations.

We may not be able to attract or retain qualified senior personnel.

      We  believe  we  will  be  able  to manage our current business with  our
existing management team. However, we are in the process of expanding the scope
of our operations, and therefore, we will need to obtain the full-time services
of additional senior scientific and management personnel. Competition for these
personnel is intense, and there can be no  assurance  that  we  will be able to
attract  or  retain qualified senior personnel and our failure to do  so  could
have an adverse  effect  on  our  ability to implement our business plan. As we
retain full-time senior personnel,  our  overhead  expenses  for  salaries  and
related items will increase substantially from current levels.

We have incurred increased costs as a result of being a public company.

      As  a  public company, we have incurred significant legal, accounting and
other expenses  that  we  did  not incur as a private company. In addition, the
Sarbanes-Oxley Act of 2002, as well  as related rules adopted by the Securities
and  Exchange  Commission,  have imposed  substantial  requirements  on  public
companies, including certain  corporate  governance  practices and requirements
relating to internal control over financial reporting  under Section 404 of the
Sarbanes-Oxley Act. We expect these rules and regulations to increase our legal
and financial compliance costs and to make some activities  more time-consuming
and costly. Although we will not be required to evaluate how  to  document  and
test  our  internal  control procedures under Section 404 of the Sarbanes-Oxley
Act and the related rules  of  the Securities and Exchange Commission until our
Form 10-K for the year ended December 31, 2007, effective internal controls are
necessary for us to produce reliable  financial  reports  and  are important in
helping  prevent  financial  fraud.  If  we are unable to achieve and  maintain
adequate internal controls, our business and operating results could be harmed.

     The  market  success of our current and proposed  product  candidates will
be dependent in part  upon  third-party  reimbursement  policies that  have not
yet been established for our product candidates.


                                      54
<PAGE>



      Our ability to successfully commercialize and penetrate  the  market  for
our  current  and proposed product candidates is likely to depend significantly
on the availability  of  reimbursement  for  our  current  and proposed product
candidates  from  third-party  payers,  such as governmental agencies,  private
insurers and private health plans. Even if  we  are  successful  in  bringing a
current  or  proposed product candidate to the market, these product candidates
may  not be considered  cost-effective,  and  the  amount  reimbursed  for  our
products  may  be  insufficient  to  allow  us to sell any of our products on a
competitive basis. We cannot predict whether  levels  of  reimbursement for our
current and proposed product candidates, if any, will be high  enough  to allow
the  price  of  our  current  and  proposed  product  candidates  to  include a
reasonable  profit margin. Even with FDA approval, third-party payers may  deny
reimbursement  if the payer determines that our particular current and proposed
product candidates  are  unnecessary,  inappropriate  or not cost effective. If
patients are not entitled to receive reimbursements similar  to  reimbursements
for  competing  products  (such  as  the  tilt  table test, which currently  is
reimbursable), they may be unwilling to use our current  and  proposed  product
candidates  since  they  will  have to pay amounts that are not reimbursed. The
reimbursement  status  of  newly-approved   health   care  products  is  highly
uncertain. If levels of reimbursement are decreased in  the  future, the demand
for our current and proposed product candidates could diminish  or  our ability
to sell our products on a profitable basis could be adversely affected.

      We  believe  that  the  efforts of governments and third-party payors  to
contain or reduce the cost of healthcare  will  continue to affect the business
and  financial condition of pharmaceutical and biopharmaceutical  companies.  A
number  of legislative and regulatory proposals to change the healthcare system
in the United  States  and other major healthcare markets have been proposed in
recent  years.  These  proposals   have   included  prescription  drug  benefit
legislation  recently  enacted  in  the United  States  and  healthcare  reform
legislation  recently enacted by certain  states.  Further  federal  and  state
legislative and  regulatory  developments  are  possible, and we expect ongoing
initiatives in the United States to increase pressure  on  drug  pricing.  Such
reforms  could have an adverse effect on anticipated revenues from any products
that we may successfully develop.

We may be subject to product liability claims that could have a material
negative effect on our operations and on our financial condition.

      The development  and  sale  of medical products exposes us to the risk of
significant damages from product liability  claims.  Product  liability  claims
could  delay or prevent completion of our clinical development programs. If  we
succeed  in  marketing  our  current  and  proposed products, such claims could
result in an FDA investigation of the safety  and effectiveness of our products
or our marketing programs, and potentially a recall  of  our  products  or more
serious  enforcement  action,  or limitations on the indications for which they
may be used, or suspension or withdrawal  of  approval.  We  plan to obtain and
maintain  product  liability  insurance  for  coverage  of  our clinical  trial
activities.  Although  we obtained clinical insurance for our Phase  I  and  II
clinical trials with ATPace(TM), there can be no assurance that we will be able
to secure such insurance  in  the  amounts  we  are  seeking  or at all for all


                                        55
<PAGE>


subsequent  trials for that product candidate or any of our other  current  and
proposed product candidates. We intend to obtain coverage for our products when
they enter the  marketplace  (as  well  as  requiring  the manufacturers of our
products  to  maintain  insurance),  but  we do not know if insurance  will  be
available to us at acceptable costs or at all.  The  costs  for  many  forms of
liability  insurance  have  risen substantially in recent years, and such costs
may continue to increase in the future, which could materially impact our costs
for clinical or product liability  insurance.  If the cost is too high, we will
have to self-insure, and we may have inadequate  financial resources to pay the
costs  of any claims. A successful claim in excess  of  our  product  liability
coverage  could  have  a  material  adverse  effect  on our business, financial
condition and results of operations.

Changes in stock option accounting rules may adversely affect our reported
operating results, our stock price, and our ability to attract and retain
employees.

      SFAS  123R  requires  companies  such  as  us to record  all  stock-based
employee compensation as an expense. SFAS 123R applies to stock options grants,
as  well  as  a  wide  range  of  other  share-based compensation  arrangements
including restricted share plans, performance-based  awards, share appreciation
rights,  and  employee share purchase plans.  As a small  business  issuer,  we
adopted these new rules as of January 1, 2006.  As a small company with limited
financial  resources,   we   have  depended  upon  compensating  our  officers,
directors, employees and consultants  with such stock based compensation awards
in the past in order to limit our cash  expenditures  and to attract and retain
officers, directors, employees and consultants. Accordingly,  if we continue to
grant stock options or other stock based compensation awards to  our  officers,
directors,  employees,  and  consultants  after the new rules apply to us,  our
future  earnings,  if  any,  will be reduced (or  our  future  losses  will  be
increased)  by  the expenses recorded  for  those  grants.  These  compensation
expenses may be larger  than the compensation expense that we would be required
to record were we able to  compensate  these  persons  with  cash  in  lieu  of
securities. Since we are a small company, the expenses we may have to record as
a  result  of  future  options  grants  may  be  significant and may materially
negatively affect our reported financial results.  The adverse effects that the
new  accounting  rules may have on our future financial  statements  should  we
continue to rely heavily on stock-based compensation may reduce our stock price
and make it more difficult  for  us  to  attract  new  investors.  In addition,
reducing  our  use  of  stock  plans  as  an incentive for and a reward to  our
officers, directors and employees, could result  in  a competitive disadvantage
to us in the employee marketplace.


                                       56
<PAGE>



No Dividend Payments in the Foreseeable Future

The Company has never declared or paid any cash dividends on its common
stock. For the foreseeable future, the Company intends to retain any earnings
to finance the development and expansion of its business, and it does not
anticipate paying any cash dividends on our common stock. Any future
determination to pay dividends will be at the discretion of the Board of
Directors and will be dependent upon then existing conditions, including the
Company's financial condition and results of operations, capital
requirements, contractual restrictions, business prospects, and other factors
that the board of directors consider relevant.

Lack of Liquidity

There is limited public market for the Company's Common Stock.  The Common
Stock is currently quoted on the OTC-Bulletin Board.  The market for the
Company's Common Stock is limited.  There can be no assurance a meaningful
trading market will develop.  Duska makes no representation about the value of
its Common Stock.

The Company's common stock could be subject to wide fluctuations in response to
variations in quarterly results of operations, announcements of technological
innovations or new solutions by the Company or its competitors, general
conditions in pharmaceutical industry, and other events or factors, many of
which are beyond the Company's control.  In addition, the stock market has
experienced price and volume fluctuations, which have affected the market price
for many companies in industries similar or related to that of the Company,
which have been unrelated to the operating performance of these companies.
These market fluctuations may have a material adverse eject on the market price
of the Company's common stock if it ever becomes tradable.

Penny Stock Regulation

Penny Stock Regulation Broker-dealer practices in connection with transactions
in "Penny Stocks" are regulated by certain penny stock rules adopted by the
Securities and Exchange Commission. Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the NASDAQ system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document that provides information about penny stocks and the risk
associated with the penny stock market. The broker-dealer must also provide the
customer with current bid and offer quotations for the penny stock, the
compensation of the broker-dealer and its salesperson in the transaction, and
monthly account statements showing the market value of each penny stock held in
the customer's account.  In addition, the penny stock rules generally require
that prior to a transaction in a penny stock; the broker-dealer must make a
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction.


                                       57
<PAGE>



These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for a stock that becomes subject to
the penny stock rules.  When the Registration Statement becomes effective and
the Company's securities become registered, the stock will likely have a
trading price of less than $5.00 per share and will not be traded on any
exchanges.  Therefore, the Company's stock is initially selling at $0.01 per
share they will become subject to the penny stock rules and investors may find
it more difficult to sell their securities, should they desire to do so.



ITEM 7.  FINANCIAL STATEMENTS.

         The consolidated financial statements and the reports and notes, which
are attached hereto, beginning at page F-1, are incorporated herein by
reference.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

         None.

ITEM 8A.  CONTROLS AND PROCEDURES

         As of the end of the fiscal year ended December  31, 2006, our company
conducted an evaluation under the supervision and with the participation of our
chief executive officer and chief financial officer of our  disclosure controls
and  procedures  (as  defined in Rule 13a-15(e) of the Exchange  Act)  and  our
internal control over financial  reporting (as defined in Rule 13a-15(f) of the
Exchange Act).  Based on this evaluation, our chief executive officer and chief
financial  officer  concluded  that  our   company's  disclosure  controls  and
procedures are effective and are designed to  ensure  that information required
to be disclosed by us in reports that we file or submit  under the Exchange Act
is  recorded,  processed,  summarized  and  reported  within the  time  periods
specified in Securities and Exchange Commission rules and forms.

         There  has  been  no  change  in our internal control  over  financial
reporting during the fiscal quarter ended December 31, 2006 that has materially
affected, or is reasonably likely to materially  affect,  our  internal control
over financial reporting.


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<PAGE>



                                    PART III

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

Directors and Executive Officers

         The following table sets forth the name, age and position held by each
of our executive officers and directors.  Directors are elected for a period of
one year and thereafter serve until the next annual meeting at which their
successors are duly elected by the stockholders.

Name                           Age   Position
-----------------------------  ---   ------------------
Amir Pelleg, Ph.D.(1)          62    President,
                                     Chairman of the
                                     Board, Chief
                                     Operating Officer,
                                     Chief Scientific
                                     Officer
David Benditt, M.D.(2)         58    Director
Jane F. Kinsel, Ph.D.(2).      51    Director
Donald Alan McAfee, Ph.D.(1)   65    Director
Wayne Lorgus                   54    Chief Financial
                                     Officer
____________________

(1)      Member of our Audit Committee.
(2)      Member of our Compensation Committee.

Business Experience and Directorships

         The following describes the backgrounds of current directors  and  the
key  members  of  our  management team.  All of our officers and directors also
currently hold the same offices with Duska Scientific.

         Amir Pelleg, Ph.D.   Dr. Pelleg has served on a full-time basis as our
President, Chief Operating Officer  and Chief Scientific Officer and a director
since the merger with Duska Scientific in August 2004.  Dr. Pelleg served, on a
part-time basis, as President, Chief  Scientific Officer, and director of Duska
Scientific  since  its  inception  in 1996  and  as  Duska  Scientific's  Chief
Operating Officer since January 2004.   Dr.  Pelleg  also was a member of Duska
Scientific's Executive Committee of the Board of Directors  during  2003.   Dr.
Pelleg  was  a  Professor  of  Medicine  and  Pharmacology at Drexel University
College of Medicine, Philadelphia, Pennsylvania  from  1992  until 2004, and is
currently  an  Adjunct  Professor  at  that  institution.  He has an  extensive
background on the physiology and pharmacology  of  ATP and related compounds in
general,  and  their  role  in the cardiovascular system  in  particular.   His
research  work  has  been  supported  by  numerous  grants  from  the  National
Institutes of Health, American  Heart Association and pharmaceutical companies.


                                      59
<PAGE>



Dr. Pelleg has published more than 100 peer-reviewed papers, and edited and co-
authored three textbooks in this  field.  He is a member of the editorial board
of The American Journal of Therapeutics  and  acts  as  an  ad-hoc reviewer for
numerous other leading scientific journals.  His inventions, covered by patents
and  pending  patent  applications,  constitute  a  significant  part   of  our
proprietary  technology  platform.   Dr. Pelleg holds a B.Sc. degree in Biology
from Tel-Aviv University, M.S. in Bioengineering from the Polytechnic Institute
of Brooklyn and a Ph.D. in Human Physiology  from  Louisiana  State University.
He was a NIH post-doctoral fellow at the University of Virginia.

         David  Benditt, M.D.  Dr. Benditt has served as a director  since  the
merger with Duska  Scientific  in  August  2004  and  as  a  director  of Duska
Scientific  since  2003.   Dr. Benditt has been a Professor of Medicine at  the
Cardiovascular Division, Department  of  Medicine,  since  1991 and Director of
Cardiac Electrophysiology Laboratory and Arrhythmia Service  for 25 years, both
at the University of Minnesota Medical School, Minneapolis, Minnesota.   He  is
currently  a  Director  of Advanced Circulatory Systems, Inc., a privately held
company, in Eden Prairie,  Minnesota.   He is a recognized authority on syncope
and  cardiac  pacing,  and serves on the editorial  board  of  several  medical
professional  journals and  the  medical  advisory  board  of  several  leading
American corporations.   Dr.  Benditt has published more than 200 peer-reviewed
papers, editorials and book chapters  and  edited,  co-edited  and  co-authored
three  books.   He  received his B.Sc. and M.D. degrees from the University  of
Manitoba, Manitoba, Canada and did his post graduate training at the Department
of Medicine, Duke University Medical Center, Durham, N.C.

         Jane F. Kinsel,  Ph.D.   Dr.  Kinsel  has  served  as a director since
February 2006.  She previously  served as a director from September  2002 until
May  2005.   Dr.  Kinsel  is  currently  the Director of the Office of Research
Administration at Boston University Medical  Campus.   From  1989  to 2006, Dr.
Kinsel  was employed at the National Institutes of Health ("NIH") in  Bethesda,
Maryland  in various positions.  From 2001 to 2006, she served as the Associate
Director of  Science  Policy  and  Operations  with  the  National  Center  for
Complementary  and  Alternative  Medicine  at  NIH.  Between 1998 and 2001, she
served as Director of the Office of Policy Analysis  and  between 1990 and 1998
she  served as Assistant Director of Microbiology and Infectious  Diseases  for
the National  Institute  of Allergy and Infections Diseases at NIH.  Dr. Kinsel
received her B.S. in Chemistry  from the University of Delaware, her M.B.A from
the  Wharton  School  at the University  of  Pennsylvania,  and  her  Ph.D.  in
Pharmaceutical Chemistry from the University of Kansas.


                                      60
<PAGE>



         Donald Alan McAfee,  Ph.D.   Dr. McAfee joined the Board as a director
in February 2006.  Dr. McAfee is the Vice  President of New Product Development
at Cardiome Pharama, a Canadian cardiovascular drug development public company.
In  1994,  Dr.  McAfee  founded  Discovery  Therapeutics,   Inc.,  now,  Aderis
Pharmaceuticals, a private company, and served as its Chief Technical  Officer,
President,  and  Chief  Executive  Officer.   Between 1998 and 2005, Dr. McAfee
served  as  a Director, Vice Chairman, and member  of  the  Advisory  Board  of
Virginia Biotechnology  Association.   Between 1990 and 2005, Dr. McAfee served
as an Adjunct Professor of Pharmacology  at the Medical College of Virginia and
between 1986 and 2000 he served as an Adjunct  Professor of Pharmacology at the
University  of  California,  Irvine.   Dr.  McAfee  is   also   a  Director  of
Commonwealth Biotechnology, Inc., Richmond VA.  Dr. McAfee received his B.S. in
Biology  and  Chemistry  from  Portland  State  University  and  his  Ph.D.  in
Physiology from the University of Oregon School of Medicine.  Dr. McAfee  was a
Post-doctoral  fellow  in  the  Department  of  Pharmacology at Yale University
School of Medicine.

         Wayne Lorgus.  Mr. Lorgus has served as  our  Chief  Financial Officer
since April, 2006. Since mid-2005, Mr. Lorgus was a partner with B2BCFO, LLP in
West  Chester,  Pennsylvania.  From  2003 to 2005, Mr. Lorgus served  as  Chief
Financial Officer to Prestige International, a jewelry wholesaler company based
in New York, New York. Between 2001 and 2003, he was employed as Controller and
Chief  Accounting  Officer  of  Andin International,  a  jewelry  manufacturing
company based in New York, New York.  In  2001,  he  served  as Chief Financial
Officer  for  AvidLearn,  an  online training and continuing education  company
based in Cherry Hill, New Jersey. Mr. Lorgus is a Major with the U.S. Air Force
Auxiliary Wing, and a graduate  of  the  U.S. Air Force Squadron Officer School
and U.S. Air Force Air Command and Staff College.  He  has previously served as
Director and President of the West Chester Area School Board  and  as  a  Board
Member  of  the  West Chester Area Municipal Authority. Mr. Lorgus received his
Master of Business  Administration from the Wharton School of the University of
Pennsylvania and a Bachelor  of  Business  Administration  from  the College of
William  and Mary in Virginia. He is a licensed Certified Public Accountant  in
New York and Pennsylvania.

Other Key Personnel and Scientific Advisory Board

         Stephen  P.  Kutalek,  M.D.   Dr. Kutalek, age 50, has served as Duska
Scientific's Medical Director on a part  time basis since 2002.  Dr. Kutalek is
a Professor of Medicine, Chief of the Cardiovascular  Division  and Director of
the  Clinical  Cardiac Electrophysiology & Cardiac Pacing at Drexel  University
College  of  Medicine.  Dr.  Kutalek  is  a  member  of  multiple  professional
societies, including  the  American  College  of Cardiology, the American Heart
Association, the North American Society of Pacing and Electrophysiology and the
American Federation for Clinical Research.  He serves on the editorial board of
the  Journal  of Invasive Cardiac Electrophysiology  and  acts  as  an  ad  hoc
reviewer for leading  professional  journals.  Dr. Kutalek has authored and co-
authored more than 120 papers published in peer  reviewed  journals  as well as
numerous  reviews  and book chapters.  Dr. Kutalek has extensive experience  in
clinical trials and  acts  as  a  consultant  for  several device manufacturing
companies.  He holds a BA degree from the Johns Hopkins University and a Doctor
of Medicine from New York University School of Medicine.


                                      61
<PAGE>


         We have established a Scientific Advisory Board  to  assist management
in  the  areas  of  expertise of the members of the Scientific Advisory  Board.
Members have received  options  to  purchase  shares  of  our  common  stock as
compensation for their services.  The following are the current members  of the
Scientific Advisory Board and their respective areas of expertise:

         Geoffrey Burnstock, Ph.D., D.Sc., (Chairman of our Scientific Advisory
Board), Director, Autonomic Neuroscience Institute, Royal Free and University
College Medical School, London, England. Area of expertise-Purinergic
receptors.

         Peter Barnes, M.A., D.M., D.Sc., FRCP, Professor and Head of Thoracic
Medicine, Imperial College of London (U.K.). Area of expertise-Pulmonary
diseases.

         Francesco DiVirgilio, M.D., Professor, Department of Experimental and
Diagnostic Medicine, University of Ferrara, Italy. Area of expertise-P2
receptors in immunology.

         Daniel Flammang, M.D.,  Head of Cardiology, Centre Hospitalier
d'Angouleme, France.  Area of expertise-Uses of ATP in patients with syncope.

         Paquale Patrizio, M.D., Director, Yale Fertility Center; Yale
University School of Medicne. Area of expertise - Human reproduction.

         Riccardo Polosa, M.D., Professor, University of Catania, Italy. Area
of expertise - Asthma, COPD, bronchoprovocation studies.

         Edward Schulman, M.D., Professor, Pulmonary and Critical Care
Medicine, Drexel University College of Medicine, Philadelphia, Pennsylvania.
Area of expertise-Pulmonary disorders, biology of lung mast cells.

         Kathryn Szabat, Ph.D., Associate Professor, La Salle University,
Philadelphia, Pennsylvania.  Area of expertise-Statistics.

Audit Committee

         In August 2004, our Board of Directors established an Audit Committee.
The  Board of Directors has instructed the Audit Committee to meet periodically
with the  company's  management  and  independent  accountants  to, among other
things,  review  the  results  of  the  annual audit and quarterly reviews  and
discuss  the  financial statements, recommend  to  the  Board  the  independent
accountants to  be retained, and receive and consider the accountants' comments
as to controls, adequacy  of staff and management performance and procedures in
connection with audit and financial controls.  The Audit Committee is currently
comprised of Dr. McAfee and Dr. Pelleg.  Dr. McAfee is a non-employee director.
While he has significant knowledge  of  financial  matters,  he  has  not  been
designated  as  an  "audit  committee  financial  expert" as defined under Item
401(e)(2) of Regulation S-B of the Securities Exchange Act of 1934, as amended.
The Audit Committee is seeking someone to serve as such expert.


                                        62
<PAGE>


Compensation Committee

         The   Compensation  Committee  is  responsible   for   reviewing   and
determining  the   salary,   bonus  and  other  individual  elements  of  total
compensation  for our President  and  our  other  executive  officers  and  for
approving and administering  our executive officer compensation plans, policies
and programs.  The Compensation  Committee  also grants stock options and other
discretionary awards under our stock option or  other equity incentive plans to
all other eligible individuals in the company's service.


Code of Ethics

         The Board of Directors adopted a Code of  Ethics  which  covers all of
our  executive  officers  and key employees.  The Code of Ethics requires  that
senior management avoid conflicts  of interest; maintain the confidentiality of
our confidential and proprietary information;  engage  in  transactions  in our
common  stock  only  in compliance with applicable laws and regulations and the
requirements  set  forth   in  the  Code  of  Ethics;  and  comply  with  other
requirements which are intended to ensure that our officers conduct business in
an honest and ethical manner  and  otherwise act with integrity and in the best
interest of this company.

         All of our executive officers  are  required to affirm in writing that
they have reviewed and understand the Code of Ethics.

         The code of ethics is filed as Exhibit  14.1  to this annual report on
Form 10-KSB.  A copy of our Code of Ethics will be furnished to any person upon
written request from any such person.  Requests should be  sent to:  Secretary,
Duska Therapeutics, Inc., Two Bala Plaza, Suite 300, Bala Cynwyd,  Pennsylvania
19004.

Section 16(a) Beneficial Ownership Reporting Compliance

         Our executive officers and directors and any person who owns more than
10% of our outstanding shares of common stock are required by Section  16(a) of
the  Securities  Exchange Act to file with the SEC initial reports of ownership
and reports of changes in  ownership of our common stock and to furnish us with
copies of those reports.  Based  solely  on  our review of copies of reports we
have received and written representations from  certain  reporting  persons, we
believe that all Section 16(a) filing requirements applicable to our  directors
and executive officers and greater than 10% shareholders for 2006 were complied
with.


                                      63
<PAGE>



ITEM 10.  EXECUTIVE COMPENSATION.

         The following  table sets forth the compensation for services paid in
all capacities for the  three fiscal  years  ended  December 31, 2006  to Amir
Pelleg,  Ph.D.  and  Wayne  Lorgus   (the "Named  Executive  Officers").   The
information  set  forth  below  includes  all  compensation  paid to the Named
Executive Officers by Duska Scientific before  the merger in  August 2004.  No
other executive officers of either this company, Shiprock or  Duska Scientific
received an annual salary and bonus that collectively exceeded $100,000 during
the fiscal year ended December 31, 2005.


                          Summary Compensation Table
-------------------------------------------------------------------------------
                                                         Non-
                                              Non-    qualified
                                             equity   Deferred   All
                                            Incentive  Compen-  Other
Name and                     Stock   Option   Plan     sation   Compen-
Principal     Salary  Bonus  Awards  Awards  Compen-  Earnings  sation Total
Position Year   ($)    ($)     ($)     ($)   sation      ($)      ($)   ($)
------- ---- -------- ------ ------- ------- -------- --------- ------ --------
Amir    2006 $120,000 $   -       $-      $-       $0   $55,000     $- $175,000
Pelleg, 2005 $115,000 $20,000(1)                                       $135,000
Ph.D.
President,
Chief
Operating
Officer
and
Chief
Scientific
Officer
------- ---- -------- ------ ------- ------- -------- --------- ------ --------
Wayne   2006  $32,036     $-      $-  $4,744       $-        $-     $-  $36,780
Lorgus,
Chief
Financial
Officer
------- ---- -------- ------ ------- ------- -------- --------- ------ --------
____________________
(1) Dr. Pelleg was granted a bonus of $25,000 for services rendered during
    fiscal year 2005, which is payable in common stock at $0.25 per share.


                                      64
<PAGE>



                 Outstanding Equity Awards at Fiscal Year-End

-------------------------------------------------------------------------------
                                                                      Equity
                                                                     Incentive
                                                                       Plan
                           Equity                                     Awards
        Number    Number  Incentive                                  Number of
          of        of      Plan                    Number  Market   Unearned
      Securities Securities Awards:                   of   Value of  Shares,
        Under-    Under- Number of                  Shares Shares or Units or
        lying     lying  Securities                   of    Units of Other
        Unexer-  Unexer-   Under-                  Units of  Stock   Rights
         cised    cised    lying                     Stock    that    that
        Options  Options  Unexer-  Option            That     Have    Have
          (#)      (#)     cised  Exercise Option  Have not    not    not
         Exer-   Unexer-  Unearned Price Expiration Vested   Vested  Vested
Name    cisable  cisable  Options   ($)     Date      (#)      ($)     (#)
------  -------  -------  -------  ------ --------  -------  ------  -------
Dr.       3,699                    $20.80  6/15/07
Pelleg   18,000                    $20.80   9/1/07
          6,000                    $20.80   9/1/07
         11,250                    $20.80 11/25/08
          1,500                    $20.80 11/25/08
          9,000                    $20.80 12/15/09
          2,250                    $20.80 12/15/09
          3,750                    $20.00   2/9/11
          3,750    7,500    7,500  $20.00   2/9/11    7,500  $4,050    7,500
          2,000                    $44.00  2/27/10
------  -------  -------  -------  ------ --------  -------  ------  -------
Mr.       1,125      375      375  $10.00   3/31/13     375    $202      375
Lorgus
-------------------------------------------------------------------------------



                                      65
<PAGE>




                             Director Compensation
-------------------------------------------------------------------------------

           Fees
          Earned
            or
           Paid                                Non-Qualified
            in    Stock  Option   Non-Equity     Deferred      All Other
           Cash   Awards Awards Incentive Plan Compensation  Compensation Total
Name        ($)    ($)     ($)   Compensation    Earnings         ($)      ($)
---------- -----  ------ ------ -------------- ------------- ----------- ------
Dr.           -       -  $5,290             -             -            - $5,290
Benditt
---------- -----  ------ ------ -------------- ------------- ----------- ------
Dr.           -       -  $5,290             -             -            - $5,290
Kinsel
---------- -----  ------ ------ -------------- ------------- ----------- ------
Dr.           -       -      -              -             -           -      -
McAfee
---------- -----  ------ ------ -------------- ------------- ----------- ------


Employment Agreements

         We  have  entered  into  an employment agreement with Dr. Amir Pelleg,
effective  September 1, 2004,   pursuant  to which  Dr. Pelleg  has  agreed  to
serve as President, Chief Operating Officer and  Chief Scientific Officer.  The
term  of  the  agreement runs until December 31, 2007.   Under  the  employment
agreement, Dr. Pelleg is to receive an annual salary of $115,000 until December
31, 2005 and an  annual  salary  of  $175,000  thereafter  until the end of the
agreement.   Under  the  agreement,  Dr.  Pelleg  received a  bonus  of $20,000
on  December 31, 2004 and will  receive  an  annual  bonus each year thereafter
as  determined  by  our  Board of Directors  and based on the  company  meeting
certain  milestones  established  by  our Board  of  Directors.  Dr. Pelleg  is
eligible  to  receive  stock options as determined  by  our Board of Directors.
We agreed to maintain life insurance for Dr. Pelleg and key  man life insurance
for our benefit.  We agreed to indemnify Dr. Pelleg for all claims  arising out
of performance of Dr. Pelleg's duties as President, Chief Operating Officer and
Chief  Scientific  Officer,  other  than  those arising out of a breach of  the
agreement by Dr. Pelleg or his gross negligence  or  willful  misconduct.   Dr.
Pelleg  may  terminate  his  agreement  with Duska at any time on 30 days prior
written notice.  We have the ability to terminate the agreement in the event of
Dr. Pelleg's disability and for "cause," as defined in the agreement.  Although
Dr. Pelleg is required to work full-time for us, he may continue to serve as an
Adjunct Professor at Drexel University College  of  Medicine, provided that his
affiliation  with  Drexel  does  not interfere with his performance  under  the
employment agreement.


                                      66
<PAGE>



         On  March  22,  2006, Duska  Scientific  entered  into  an  employment
agreement with Wayne Lorgus pursuant to which Mr. Lorgus agreed to serve as our
Chief Financial Officer on  a part time basis.  The agreement may be terminated
by  us  or  by Mr. Lorgus on at  least  30  days  written  notice.   Under  the
agreement, Mr.  Lorgus  receives  an hourly compensation of $175. Mr. Lorgus is
eligible to receive an annual bonus  each  year  as  determined by our Board of
Directors.  In connection with his employment, Mr. Lorgus  was  awarded a stock
option upon commencement of his employment to purchase 30,000 shares  of common
stock  at  an  exercise price of $0.50 per share.  The option vests and becomes
exercisable at the rate of 2,500 shares per month.

Stock Option Plan

         We have  adopted  an  equity incentive plan, the 2004 Equity Incentive
Plan, pursuant to which we are authorized  to  grant  options, restricted stock
and  stock  appreciation rights to purchase up to 6,000,000  shares  of  common
stock to our  key  employees, officers, directors, consultants and other agents
and advisors.  The plan  was  adopted  prior  to the consummation of the August
2004 merger with Duska Scientific, and in connection  with  the merger, options
to  purchase  our  common stock were issued in exchange for all  of  the  stock
options that were outstanding  under  Duska  Scientific's  option  plan. Awards
under  the  plan may consist of stock options (both non- qualified options  and
options intended  to  qualify as "Incentive Stock Options" under Section 422 of
the Internal Revenue Code  of  1986,  as  amended), restricted stock awards and
stock appreciation rights.

         The  2004  Equity  Incentive Plan is  administered  by  our  Board  of
Directors  or a committee of the  Board  of  Directors,  which  determines  the
persons to whom  awards  will  be granted, the type of award to be granted, the
number of awards to be granted and  the specific terms of each grant, including
the vesting thereof, subject to the provisions of the plan.

         The plan provides that the exercise  price  of  each  incentive  stock
option  may  not  be less than the fair market value of our common stock on the
date of grant (or 110%  of  the  fair  market  value  in  the case of a grantee
holding  more  than 10% of our outstanding common stock).  Non-qualified  stock
options may be granted  under  the plan at an exercise price established by the
administrator at the time of grant.   The maximum number of options that may be
granted in any fiscal year to any participant is 400,000.

         The plan also permits the administrator  to  grant  freestanding stock
appreciation rights or in tandem with option awards. The grant price of a stock
appreciation right shall be no less than the fair market value  of  a  share on
the date of grant of the stock appreciation right. No stock appreciation  right
or  option  shall be exercisable later than the tenth anniversary of its grant.
Upon the exercise  of  a  stock  appreciation  right,  a  participant  shall be
entitled to receive common stock at a fair market value equal to the benefit to
be received by the exercise.


                                       67
<PAGE>



         The plan also provides us with the ability to grant or sell shares  of
common   stock   that  are  subject  to  certain  transferability,  forfeiture,
repurchase or other  restrictions.   The  type  of  restriction,  the number of
shares  of  restricted  stock  granted  and  other  such  provisions  shall  be
determined by the administrator.

         Unless otherwise determined by the administrator, awards granted under
the  2004 Equity Incentive Plan are not transferable other than by will  or  by
the laws of descent and distribution.

         The  plan  provides  that,  except as set forth in an individual award
agreement,  upon  the  occurrence  of  a  corporate   transaction:    (1)   the
administrator  shall notify each participant at least thirty (30) days prior to
the consummation  of the corporate transaction or as soon as may be practicable
and (2) all options  and  stock  appreciation  rights  shall  terminate and all
restricted  stock  shall be forfeited immediately prior to the consummation  of
such corporate transaction  unless  the  committee  determines otherwise in its
sole  discretion.   A  "corporate  transaction"  means  (i)  a  liquidation  or
dissolution of our company; (ii) a merger or consolidation  of our company with
or into another corporation or entity (other than a merger with  a wholly-owned
subsidiary);  (iii)  a  sale of all or substantially all of the assets  of  our
company; or (iv) a purchase  or  other  acquisition  of  more  than  50% of the
outstanding  stock  of  our  company  by  one person or by more than one person
acting in concert.

         The  administrator may alter, amend  or  terminate  the  plan  in  any
respect at any time, but no alteration, amendment or termination will adversely
affect in any material way any award previously granted under the plan, without
the written consent of the participant holding such award.

         As of  March 31, 2007, we currently have outstanding options under our
2004 Equity Incentive  Plan  to  purchase approximately 228,400 shares of our
common stock of which 220,900 are  vested,  at  a  weighted- average exercise
price of approximately $21.20 per share.


                                       68
<PAGE>



ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

         The   following   table  sets  forth  certain  information   regarding
beneficial ownership of our  common  stock  as  of  March  27, 2007 (a) by each
person known by us to own beneficially 5% or more of any class  of  our  common
stock, (b) by each of our Named Executive Officers and our directors and (c) by
all  executive officers and directors of this company as a group.  As of March
27, 2007,  there  were  2,492,584  shares  of  our  common  stock  issued  and
outstanding.   Unless  otherwise  noted, (i) the address of each of the persons
shown is c/o Duska Therapeutics, Inc.,  Two Bala Plaza, Suite 300, Bala Cynwyd,
Pennsylvania 19004 and (ii) we believe that all persons named in the table have
sole voting and investment power with respect  to  all  the shares beneficially
owned by them.


                       New shares
Name and Address of    beneficially   Percentage
Beneficial Owner          owned        Class
-------------------- -------------- ------------
Manuel Graiwer             621,268      13.7%
Livorno Latin              540,000      11.9%
  American
  Promotions BV
Amir Pelleg, Ph.D.(2)      267,456       5.9%
John N. Kapoor,            147,194       3.3%
  Ph.D.(3)
Manfred Mosk, Ph.D(4)      234,610       5.2%
Sanford J.                 182,128       4.0%
  Hillsberg(5)
Alexander Angerman         414,460       9.2%
Kleen Consult AG           420,826       9.3%
Anka Capital Ltd.          271,910       6.0%
Philip Sobol               269,568       6.0%
David Benditt,               6,250       0.1%
  M.D.(6)
Wayne Lorgus(6)              1,500       0.0%
Jane F. Kinsel, Ph.D.                      *
Donald Alan                                *
  McAfee, Ph.D.
                     -------------- ------------
All executive              275,206       6.1%
  officers and
  directors as a group
  (five persons)

--------------------------

*  Less than 0.1%.

                                      69
<PAGE>



(1)  Beneficial ownership is determined in accordance with the rules of the
     Securities and Exchange Commission and generally includes voting or
     investment power with respect to securities.  Shares of common stock
     subject to options, warrants and convertible securities currently
     exercisable or convertible, or exercisable or convertible within 60 days
     are deemed outstanding, including for purposes of computing the
     percentage ownership of the person holding such option, warrant or
     convertible security, but not for purposes of computing the percentage
     of any other holder.
(2)  Includes 73,064 shares subject to warrants and options.
(3)  With the exception of 7,000 shares subject to options held by Dr.
     Kapoor, all of the shares shown are held by Dr. Kapoor's trust, of which
     Dr. Kapoor is trustee. Includes 204,790 shares subject to warrants.
(4)  Includes 4,292 shares, including 1,396  shares subject to warrants,
     owned of record by Technomedics Management & Systems, Inc. of which Dr.
     Mosk is the controlling stockholder.  Also includes an additional 57,350
     shares subject to options.  Dr. Mosk's address is P.O. Box 3207, Redondo
     Beach, CA 90227.
(5)  Includes 2,460 shares owned of record by the Hillsberg Family Trust, of
     which Mr. Hillsberg is a co-trustee.  Also includes 29,850 shares
     subject to options.  Excludes16,092 shares, including 14,146 shares
     subject to options and warrants, owned beneficially by Troy & Gould
     Professional Corporation of which Mr. Hillsberg is a member and
     shareholder.  Mr. Hillsberg's address is c/o Troy & Gould Professional
     Corporation, 1801 Century Park East, 16th Fl, Los Angeles, CA
     90067-2367.
(6)  All of the shares shown are subject to options.
(7)  Includes 74,564 shares subject to warrants and options.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         Transactions Between Us and Our Affiliates

         Dr. Manfred Mosk was our non-executive  Chairman  of  the  Board until
December  2005  and  remains  a  member of our Advisory Group and a significant
beneficial owner of our common stock.   He  is  the  controlling shareholder of
Technomedics Management & Systems, Inc. Technomedics Management & Systems, Inc.
has  provided  the  consulting services of Dr. Mosk to Duska  Scientific  since
1999.  Dr. Mosk has served  as  the Chairman of Duska Scientific since 1999, as
the part-time interim Chief Executive  Officer of Duska Scientific during 2003,
and as the non-executive Chairman of Duska Scientific during 2004. During 2005,
Technomedics Management & Systems, Inc.,  was paid $30,000 for the services Dr.
Mosk rendered as interim part-time Chief Executive  Officer and Chairman during
2003.  During 2005, Technomedics Management & Systems, Inc., earned $64,167 for
the services Dr. Mosk rendered as non-executive Chairman  of  the Board.  As of
December 31, 2006, amounts owed to Technomedics Management & Systems,  Inc. for
services rendered during 2005 totaled $5,833.



                                      70
<PAGE>



         Sanford  J.  Hillsberg  was  our  corporate  Secretary  and one of our
directors until February 2006 and is a member and shareholder of Troy  &  Gould
Professional  Corporation.   He  remains  a significant beneficial owner of our
common  stock.   Troy & Gould was our corporate  law  firm  from  1999  through
January 2006.  Troy & Gould Professional Corporation, beneficially owns 321,836
shares of our common  stock.   During  2005,  we paid Troy & Gould $172,998 for
legal services.  Mr. Hillsberg served as a Vice  President and Secretary of the
Company  during  2002  through 2004 and continued to  serve  as  its  corporate
Secretary during 2004 and 2005.  During 2005, Mr. Hillsberg was paid $5,000 for
the  services  he rendered  as  the  Company's  Vice  President  and  Corporate
Secretary during  2003.   During  2005,  Mr.  Hillsberg  earned $25,000 for the
services he rendered as corporate Secretary.  As of December  31, 2006, amounts
owed to Mr. Hillsberg for services rendered during 2005 and 2006 totaled $5,780.



                                      71
<PAGE>



ITEM 13.  EXHIBITS.

         Exhibits

         See Exhibit Index attached to this Annual Report.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Stonefield Josephson, Inc. as our independent accountants audited our financial
statements for the years ending December 31, 2005 and 2006.

         Audit  Fees:   The  aggregate fees we paid Stonefield Josephson,  Inc.
during the fiscal years ended  December  31,  2006  and  December  31, 2005 for
professional  services  for  the  audit  of  the  financial statements of Duska
Therapeutics, Inc. and the review of financial statements included in our Forms
10-QSB were $45,773 and $36,576 respectively.

         Audit-Related Fees:  The aggregate fees we  paid Stonefield Josephson,
Inc. during the fiscal years ended December 31, 2006 and  December 31, 2005 for
audit-related  services  to  us  and to Duska Scientific Co. were  $12,423  and
$18,217, respectively.  These fees  were primarily  for services in  connection
with securities registration statements filed by the Company.

         Tax Fees:  Stonefield Josephson, Inc.  did  not  provide, or bill for,
and  was   not  paid  any  fees  for  tax  compliance,  tax  advice,  and  tax
planning services for the fiscal years ended December 31, 2006 and December 31,
2005.

         All  Other  Fees:   Stonefield Josephson, Inc. did not provide or bill
for,  and was not paid for, any  other  services  in  the  fiscal  years  ended
December 31, 2005 and 2004.

         The  Company's  Audit  Committee  annually  reviews  and  approves the
engagement   of  the  Company's  auditors  and  approves  in  advance  the  fee
arrangements with  regard  to audit services and review of financial statements
included in the  Company's  Forms  10-QSB.   All    such  fees were approved in
advance  for  2006 and 2005.  The Audit Committee did not specifically  approve
Stonefield Josephson's  with  regard to the audit-related fees discussed above.
Those  fees  were  approved on a case-by-case  basis  by  the  Company's  Chief
Financial Officer.


                                      72
<PAGE>



                                  SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                   DUSKA THERAPEUTICS, INC.
                                   ------------------------
                                          Registrant

Date:  April 16, 2007              By:  /s/ Amir Pelleg
                                   -----------------------------
                                            Amir Pelleg, Ph.D
                                            President

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Signature                   Title                             Date
--------------------------  --------------------------------  ----------------

                            President (principal executive
                            officer), Chief Operating
                            Officer and Director, and
/s/  Amir Pelleg            Chairman of the Board
--------------------------                                April 16, 2007
     Amir Pelleg, Ph.D.                                   --------------


                            Chief Financial Officer
                            (principal financial and
/s/  Wayne R. Lorgus        accounting officer)
--------------------------                                April 16, 2007
     Wayne R. Lorgus                                      --------------




                                      73
<PAGE>



                        INDEX TO FINANCIAL STATEMENTS

                              INDEX TO AUDITED
                          FINANCIAL STATEMENTS FOR
                          DUSKA THERAPEUTICS, INC.


Report of Independent Registered Public Accounting Firm              F-2

Audited Financial Statements

     Consolidated Balance Sheet                                      F-3

     Consolidated Statements of Operations                           F-4

     Consolidated Statements of Stockholders' Deficit                F-5

     Consolidated Statements of Cash Flows                           F-7

     Notes to Consolidated Financial Statements                      F-9




                                      F-1
<PAGE>




            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Stockholders
Duska Therapeutics, Inc.
Bala Cynwyd, Pennsylvania


We   have   audited  the  accompanying  consolidated  balance  sheet  of  Duska
Therapeutics,  Inc.  and  Subsidiary  (a  Nevada corporation in the development
stage)  as  of December 31, 2006, and the related  consolidated  statements  of
operations, stockholders'  deficit  and cash flows for the years ended December
31, 2006 and 2005 and for the period  from  inception  on  February  9, 1996 to
December   31,   2006.    These   consolidated  financial  statements  are  the
responsibility of the Company's management.   Our  responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards  of the Public Company
Accounting Oversight Board (United States).  Those standards  require  that  we
plan  and  perform  the audits to obtain reasonable assurance about whether the
consolidated financial  statements  are free of material misstatement.  We were
not  engaged  to  perform  an  audit of the  Company's  internal  control  over
financial reporting.  Our audits  included  consideration  of  internal control
over  financial  reporting as a basis for designing audit procedures  that  are
appropriate in the  circumstances,  but  not  for  the purpose of expressing an
opinion on the effectiveness of the Company's internal  control  over financial
reporting.   Accordingly,  we express no such opinion.  An audit also  includes
examining, on a test basis,  evidence supporting the amounts and disclosures in
the consolidated financial statements, assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
consolidated financial statement  presentation.   We  believe  that  our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Duska Therapeutics,
Inc.  and  Subsidiary  (a  Nevada  corporation in the development stage) as  of
December 31, 2006, and the results of its operations and its cash flows for the
years ended December 31, 2006 and 2005  and  for  the  period from inception on
February 9, 1996 to December 31, 2006, in conformity with accounting principles
generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements,  in  2006  the
Company  adopted  Statement  of Financial Accounting Standards No. 123 (Revised
2004), Share-Based Payments.

The accompanying financial statements  have  been  prepared  assuming  that the
Company  will  continue  as  a  going  concern.   As discussed in Note 1 to the
consolidated financial statements, the Company has  suffered  recurring  losses
and negative cash flows from operations, and has an accumulated deficit, all of
which raise substantial doubt about its ability to continue as a going concern.
Management's  plans  in  regard  to these matters are also described in Note 1.
The consolidated financial statements  do  not include any adjustments relating
to  the recoverability and classification of  recorded  asset  amounts  or  the
amounts and classification of liabilities that might result from the outcome of
this uncertainty.


/s/ STONEFIELD JOSEPHSON, INC.
------------------------------
CERTIFIED PUBLIC ACCOUNTANTS

Los Angeles, California
April 13, 2006


                                        F-2
<PAGE>




                       DUSKA THERAPEUTICS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT-STAGE ENTERPRISE)
                             CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>

Consolidated Balance Sheet

                                                               December 31,
                                                                   2006
                                                             ---------------
<S>                                                          <C>
ASSETS
Current assets:
Cash and cash equivalents                                    $        8,236
Restricted cash                                                     268,859
Prepaid expenses & other current assets                              78,987
                                                             ---------------

     Total current assets                                           356,082

Property and equipment, net                                           2,928

Other assets                                                          1,500
                                                             ---------------

     Total assets                                            $      360,510
                                                             ---------------


LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable                                                  $ 384,937
Accrued officers' salaries                                           66,613
Accrued consulting fees                                              30,800
Accrued clinical expenses and other accrued expenses                 22,954
Accrued stock units issuable                                         22,793
Notes payable                                                        45,689
Convertible notes payable, net of debt discount of $57,007           42,993
Convertible notes payable in process of conversion                  370,401
Escrow obligation                                                   267,165
                                                             ---------------

     Total current liabilities                                    1,254,345

Commitments and Contingencies

Stockholders' deficit:
Preferred Stock, $.001 par value, 5,000,000 shares
   authorized, no shares issued and outstanding                           -
Common stock, $.001 par value, 50,000,000 shares authorized;
   1,050,577 shares outstanding                                       1,051
Additional paid-in capital                                        7,530,197
Deficit accumulated during the development stage                 (8,425,083)
                                                             ---------------

Total stockholders' deficit                                        (893,835)
                                                             ---------------

Total liabilities and stockholders' deficit                  $      360,510
                                                             ---------------
</TABLE>

                             See accompanying notes.

                                     F-3
<PAGE>




                     DUSKA THERAPEUTICS, INC. AND SUBSIDIARY
                        (A DEVELOPMENT-STAGE ENTERPRISE)
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

Consolidated Statements of Operations


                                                               From Inception
                                                                     on
                                                                 February 9,
                                       Year Ended December 31,     1996 to
                                     --------------------------  December 31,
                                          2006           2005         2006
                                     ------------  ------------  ------------
<S>                                  <C>           <C>           <C>
Revenues                             $         -   $         -   $         -

Operating expenses:
  Research and development               364,832     1,516,471     3,385,292
  General and administrative           1,272,426     1,282,032     4,495,927
                                     ------------  ------------  ------------
                                       1,637,258     2,798,503     7,881,219
                                     ------------  ------------  ------------

Loss from operations                  (1,637,258)   (2,798,503)   (7,881,219)

Other income (expense)
  Interest income                         19,337        38,729        84,827
  Interest expense                      (163,746)            -      (410,116)
  Expense associated with induced
    conversion of convertible debt      (218,575)            -      (218,575)
                                     ------------  ------------  ------------
                                        (362,984)       38,729      (543,864)
                                     ------------  ------------  ------------

Net loss                             $(2,000,242)  $(2,759,774)  $(8,425,083)
                                     ============  ============  ============

Net loss per share
  (basic and diluted)                $     (1.81)  $     (2.86)  $    (11.00)
                                     ============  ============  ============

Weighted average of shares
  outstanding (basic and
  diluted)                             1,105,087       965,606       765,989
                                     ============  ============  ============
</TABLE>

                             See accompanying notes.


                                      F-4
<PAGE>



                    DUSKA THERAPEUTICS, INC. AND SUBSIDIARY
                        (A DEVELOPMENT STAGE ENTERPRISE)
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

<TABLE>
<CAPTION>

Consolidated Statements of Stockholders' Deficit


                                                       Deficit
                                                     Accumulated
                           Common Stock   Additional   During        Total
                         ----------------  Paid-In   Development Stockholders'
                          Shares   Amount  Capital      Stage       Deficit
                         --------- ------ ---------- ------------ ------------
<S>                      <C>       <C>    <C>        <C>          <C>
For the period from
February 9, 1996
(inception) to
January 1, 1999
(restated for
1,000:1 stock
split and stock
split up effected
in the form of a
dividend and 3:1
stock split and 1:20
reverse stock split)             - $    - $        - $         -  $         -

Issuance of stock
for services in
October 1999               189,480    189     30,493           -       30,682

Issuance of stock
for cash in October 1999   375,000    375     24,625           -       25,000

Issuance of common
stock for patents
and licenses in
November 1999               11,520     12        756           -          768

Issuance of stock
for patent
assignments
and licenses from
related parties
in November 1999            24,000     24     14,067           -       14,091

Net loss for the
year ended December 31,
1999                             -      -          -     (50,222)     (50,222)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
1999                       600,000    600     69,941     (50,222)      20,319

Issuance of stock
for cash in June 2000        8,400      9    174,991           -      175,000

Issuance of stock
for cash in October 2000     5,250      5    174,995           -      175,000

Net loss for the
year ended December 31, 2000     -      -          -     (46,505)     (46,505)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
2000                       613,650    614    419,927     (96,727)     323,814

Issuance of stock
for cash in November 2001   49,200     49  1,003,263           -    1,003,312

Net loss for the
Year ended December 31, 2001     -      -          -    (337,267)    (337,267)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
2001                       662,850    663  1,423,190    (433,994)     989,859

Net loss for the year
ended December 31, 2002          -      -          -    (871,724)    (871,724)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
2002                       662,850    663  1,423,190  (1,305,718)     118,135

Net loss for the year
ended December 31, 2002          -      -          -    (798,514)    (798,514)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
2003                       662,850    663  1,423,190  (2,104,232)    (680,379)

Issuance of common
stock for cash in
March and
April 2004, net
of offering costs
of $31,850                  13,500     13    238,137           -      238,150

Conversion of
convertible notes
payable and
accrued interest
in March 2004               26,665     27    555,499           -      555,526

Warrant issuance
costs associated
with conversion of
convertible notes
payable                          -      -    190,846           -      190,846

Issuance of common
stock for cash in
August 2004, net of
offering costs of
$304,140                   183,375    183  3,363,177           -    3,363,360

Shares issued to
Shiprock, Inc. in
the reorganization on
August 27, 2004             70,000     70        (70)          -            -

Issuance of warrants
for services in
November 2004                                 43,683           -       43,683

Net loss for the
year ended December 31,
2004                             -      -          -  (1,560,835)  (1,560,835)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
2004                       956,390    956  5,814,462  (3,665,067)   2,150,351


                                     F-4
<PAGE>



                    DUSKA THERAPEUTICS, INC. AND SUBSIDIARY
                        (A DEVELOPMENT STAGE ENTERPRISE)
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                  (continued)


                                                       Deficit
                                                     Accumulated
                           Common Stock   Additional   During        Total
                         ----------------  Paid-In   Development Stockholders'
                          Shares   Amount  Capital      Stage       Deficit
                         --------- ------ ---------- ------------ ------------
Balance at December 31,
2004                       956,390    956  5,814,462  (3,665,067)   2,150,351

Issuance of stock
for services in
March 2005                   6,652      7    133,039           -      133,046

Issuance of stock
for services in
May 2005                     3,514      4     70,277           -       70,281

Issuance stock
for licenses and
patents in June
2005                         1,250      1     31,249           -       31,250

Issuance of stock
for services in
June 2005                    2,342      2     46,852           -       46,854

Issuance of
warrants for
services in
October 2005                     -      -    485,000           -      485,000

Issuance of stock
for services in
December 2005                6,533      7    130,641           -      130,648

Expense
associated with
vesting of stock
options during 2005              -            25,255                   25,255

Net loss for the
year ended
December 31, 2005                -      -          -  (2,759,774)  (2,759,774)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
2005                       976,681    977  6,736,775  (6,424,841)     312,911

Expenses associated with
vesting of stock options
during 2006                             -     80,462           -       80,462

Issuance of warrants for
services in February 2006        -      -    301,737           -      301,737

Issuance of stock in
private placement in
April 2006                  26,000     26    129,974           -      130,000

Issuance of stock for
services in June 2006        2,896      3     57,914           -       57,917

Exercise of warrants in
May 2006                    45,000     45      8,955           -        9,000

Debt discount on note and
warrant purchase agreements
issued in August and
September 2006                               200,000                  200,000

Debt discount on note and
warrant purchase agreements
issued in December 2006                       14,380                   14,380

Net loss for the year ended
December 31, 2006                -      -          -  (2,000,242)  (2,000,242)
                         --------- ------ ---------- ------------ ------------

Balance at December 31,
2006                     1,050,577  1,051  7,530,197  (8,425,083)    (893,835)
                         ========= ====== ========== ============ ============
</TABLE>

                             See accompanying notes.


                                     F-6
<PAGE>



                     DUSKA THERAPEUTICS, INC. AND SUBSIDIARY
                        (A DEVELOPMENT STAGE ENTERPRISE)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

Consolidated Statements of Cash Flows

                                                               From Inception
                                                                     on
                                                                 February 9,
                                       Year Ended December 31,     1996 to
                                     --------------------------  December 31,
                                         2006           2005         2006
                                     ------------  ------------  ------------
<S>                                  <C>           <C>           <C>
Cash flows from operating activities:
Net loss                             $(2,000,242)  $(2,759,774)  $(8,425,083)
Adjustments to reconcile net loss to
net cash
 used in operating activities
   Depreciation                              805           821         7,829
   Issuance of common stock and
     warrants for services                57,916       412,080       500,678
   Issuance of options and warrants
     for services                        382,200       510,254       936,137
   Amortization of debt discount         157,373                     157,373
   Write-off of patent and licenses            -        63,963        63,963
   Warrant issuance costs associated
     with conversion of convertible
     notes payable                             -             -       190,846
   Conversion of debt into equity        218,575                     218,575
   Changes in assets and liabilities
     Prepaid expense & other
       current assets                     22,734        (9,354)      (78,987)
     Other assets                          1,650             -        (3,150)
     Accounts payable and
       accrued expenses                   49,260       (29,026)      384,937
     Accrued officers' salaries           54,113       (57,500)       66,613
     Accrued consulting                   30,800                      30,800
     Accrued clinical                     20,465                      20,485
     Accrued stock units payable          22,793                      22,793
     Accrued interest payable              4,315             -        59,841
                                     ------------  ------------  ------------
  Net cash used in operating activities (977,243)   (1,868,536)   (5,844,720)

Cash flows from investing activities:
   Capital expenditures                   (1,141)         (614)      (10,757)
   Payments to develop patents                 -             -       (49,104)
                                     ------------  ------------  ------------
     Net cash used in investing
       activities                         (1,141)         (614)      (59,861)

Cash flows from financing activities:
   Net proceeds from sale of
     common stock                        130,000             -     5,109,822
   Proceeds from exercise of warrants      9,000                       9,000
   Proceeds from issuance of
     convertible notes                   250,000             -       750,000
   Proceeds from premium finance note     75,000                      75,000
   Payments on premium finance note      (29,311)                    (29,311)
   Restricted cash for equity
     to be issued                       (268,859)            -      (268,859)
   Proceeds from private
     equity offering                     267,165                     267,165
   Proceeds from notes payable,
     related party                             -             -         6,545
   Payments on notes payable,
     related party                             -             -        (6,545)
                                     ------------  ------------  ------------
     Net cash provided by financing
       activities                        432,995             -     5,912,817

Net increase (decrease) in cash and
 cash equivalents                       (545,389)   (1,869,150)        8,236
Cash and cash equivalents at
 beginning of period                     553,625     2,422,775             -
                                     ------------  ------------  ------------
Cash and cash equivalents at end of
 period                              $     8,236   $   553,625   $     8,236
                                     ============  ============  ============

Supplemental disclosure of cash flow
 information:
     Interest paid                   $     1,398   $         -   $     1,398
     Income taxes paid               $       938   $       624   $     4,849

Supplemental disclosure of non-cash
 investing and financing activities:
     Issuance of common stock for
       services                      $    57,916   $   380,829   $   500,678
     Issuance of common stock for
       patents and licenses          $         -   $    31,250   $    46,109
     Issuance of options and warrants
       for services                  $   382,200   $   510,254   $   864,659



                                      F-7
<PAGE>



     Conversion of convertible notes
       payable and accrued interest
       into common stock             $         -   $         -   $   936,137
     Expense associated with
       induced conversion of
       convertible debt              $   218,575   $         -   $   218,575
</TABLE>

                              See accompanying notes.

                                      F-8
<PAGE>




                    DUSKA THERAPEUTICS, INC. AND SUBSIDIARY
                    ---------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------

               Years Ended December 31, 2006 and 2005, and Period
               --------------------------------------------------
             From Inception on February 9, 1996 to December 31, 2006
             -------------------------------------------------------


1.       Description of Company and Nature of Business

Duska    Therapeutics,    Inc.    ("Duska   Therapeutics")   is   an   emerging
biopharmaceutical company incorporated  in  Nevada  and  based  in Bala Cynwyd,
Pennsylvania.   Through  its wholly owned subsidiary, Duska Scientific  Co.,  a
Delaware corporation ("Duska  Scientific"),  Duska  Therapeutics focuses on the
development  of  diagnostic  and therapeutic products based  on  adenosine  5'-
triphosphate (ATP), and ATP receptors related technologies. ATP is a biological
compound found in every cell of the human body, where it constitutes the source
of energy that helps to fuel all  bodily  functions.  ATP is released from many
types of cells under normal and disease conditions. Extracellular ATP regulates
the functions of different cell types in various tissues  and organs, including
the  heart,  lungs and kidney, by activating cell surface receptors  called  P2
receptors (P2R).  The  pharmacological  activation  of P2R by agonists, and the
inhibition of P2R by antagonists, have recently become  recognized  by a number
of  scientists  as  providing  a possible rationale for the development of  new
drugs  for  the  diagnosis  and  treatment   of   human   disorders,  including
cardiovascular, pulmonary, neural and renal diseases. Reference  herein to "the
Company"  includes  both  Duska  Therapeutics and Duska Scientific, unless  the
context indicates otherwise.

Duska Therapeutics was originally  incorporated  under  the  laws  of Nevada as
Shiprock, Inc. ("Shiprock"). Prior to August 2004, Shiprock was engaged in very
limited  operations  unrelated  to  the pharmaceutical industry. On August  30,
2004,   Shiprock   completed  the  acquisition   of   Duska   Scientific   (the
"Reorganization") through a reverse triangular merger in which Duska Scientific
merged with Shiprock  Subsidiary,  Inc.,  a wholly owned subsidiary of Shiprock
with no assets or liabilities formed solely for the purpose of facilitating the
merger. Duska Scientific was the surviving corporation in the merger and became
a  wholly  owned  subsidiary  of  Shiprock.  For   accounting  purposes,  Duska
Scientific is deemed to be the acquiring corporation.  In  connection  with the
Reorganization,  Shiprock  changed  its  name  to  "Duska  Therapeutics, Inc.,"
replaced its officers and directors with those of Duska Scientific,  ceased its
landscaping  and  irrigation  business,  and  moved its offices to Bala Cynwyd,
Pennsylvania.  Duska  Therapeutics  currently does  not  plan  to  conduct  any
business other than Duska Scientific's  business of developing new products for
the diagnosis or treatment of human diseases.  All amounts in  the accompanying
financial  statements have  been restated  to give  effect to the 3-for-1 stock
split described in  Note 5 and the  1-for-20  reverse stock  split described in
Note 9.

The accompanying financial statements have  been  prepared  on  a going concern
basis,  which  contemplates  the realization of assets and the satisfaction  of
liabilities and commitments in  the normal course of business.  The Company has
experienced negative cash flows from  operations  since  inception  and  had an
accumulated  deficit  at  December 31, 2006 of approximately $8.4 million.  The
Company has funded its activities  to  date  almost  exclusively  from debt and
equity financings.  The Company will continue to require substantial  funds  to
continue  research  and development, including preclinical studies and clinical
trials of its product  candidates, and to commence sales and marketing efforts,
if the FDA or other regulatory approvals are obtained.

Management's plans in order  to  meet  its  operating  cash  flow  requirements
include the private placement financing event described in Note 9.  The Company
expects this funding, in addition to the cash and cash equivalents at  December
31, 2006, to be sufficient to fund its current planned operations through  June
2007,  but  additional  capital  will  still  be required to fund the Company's
operations  until  such  time,  if ever, as the Company's  income  can  sustain
operations.  The Company intends  to  seek  additional capital through sales of
equity securities and, if appropriate, to consider  strategic collaborations in
its drug development activities for sharing development  and  commercialization


                                        F-9
<PAGE>



costs.  The Company may also consider the sale of certain assets,  or  the sale
or merger of the business.

While  the  Company  believes  that  it  will  be  successful  in obtaining the
necessary financing to fund its operations, there are no assurances  that  such
additional  funding  will  be  achieved  and that it will 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
of liabilities that might be necessary should the Company be unable to continue
in existence.

2.       Summary of Significant Accounting Policies

Development Stage Enterprise - The Company is a development stage enterprise as
defined  by  Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  7,
"Accounting  and  Reporting  by Development Stage Enterprises."  The Company is
devoting substantially all of  its present efforts to research and development.
All losses accumulated since inception  have  been  considered  as  part of the
Company's development stage activities.

Use  of Estimates - The preparation of financial statements in conformity  with
accounting  principles  generally  accepted  in  the  United  States of America
requires management to make estimates and assumptions that affect  the reported
amounts  of  assets  and  liabilities  and disclosure of contingent assets  and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting  period. Actual results could differ
from those estimates.

Fair Value of Financial Instruments - Unless  otherwise indicated, the carrying
value  of financial instruments as reported in the  balance  sheet  approximate
their fair values.

Cash and  Cash  Equivalents - For purposes of the statement of cash flows, cash
equivalents include all highly liquid debt instruments with original maturities
of three months or less which are not securing any corporate obligations.

Cash Concentration  -  The  Company maintains its cash in bank deposit accounts
which, at times, may exceed federally  insured  limits.  The  Company  has  not
experienced any losses in such accounts.

Property   and   Equipment  -  Property  and  equipment  are  stated  at  cost.
Expenditures for maintenance and repairs are charged to operations as incurred,
while additions, renewals,  and  betterments  are  capitalized. Depreciation is
being  provided by use of the straight-line method over  the  estimated  useful
lives of the assets, ranging from three to seven years.

Patents  and  Patent Application Costs - Although the Company believes that its
patents and underlying  technology  have continuing value, the amount of future
benefits  to be derived therefrom is uncertain.   Patent  costs  are  therefore
expensed as  incurred  rather  than  capitalized.   During  2005,  the  Company
recorded  an  expense  of  $63,963  related  to  the  write-off  of  previously
capitalized patents which is included in research and development expense.

Research and Development - Research and development costs related to future and
present products are charged to expense as incurred.

Comprehensive  Loss  - For the years ended December 31, 2006 and 2005, and  for
the period from inception on February 9, 1996 to December 31, 2006, the Company
has no items that represent  other  comprehensive  loss and, therefore, has not
included a Statement of Comprehensive Loss in the financial statements.


                                      F-10
<PAGE>



Restatement  for  Stock  Split  -  All  amounts  in the accompanying  financial
statements  have  been  restated  to  give effect to the  3-for-1  stock  split
described in Note 5, and, the stock split described in Note 9.

Net Income (Loss) Per Share - Basic and diluted income (loss) per common share
are computed based on the weighted average number of common shares outstanding.
Common  share  equivalents  (which  may consist  of options  and warrants) are
excluded from  the computation  of diluted  income (loss)  per share since the
effect would be antidilutive. Common share equivalents which could potentially
dilute basic earning per share in the future, and which were excluded from the
computation of diluted loss per share totaled approximately 652,893 and 799,778
shares at December 31, 2006 and 2005, respectively.

Income Taxes - Deferred income  taxes  are reported using the liability method.
Deferred  tax assets are recognized for deductible  temporary  differences  and
deferred tax  liabilities  are  recognized  for  taxable temporary differences.
Temporary  differences  are the differences between  the  reported  amounts  of
assets and liabilities and  their tax bases. Deferred tax assets are reduced by
a valuation allowance when, in  the  opinion  of  management, it is more likely
than  not  that  some portion or all of the deferred tax  assets  will  not  be
realized. Deferred  tax  assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.

Stock-Based Compensation - Through the end of 2005, the Company measured
compensation for stock-based incentive programs utilizing the intrinsic value
method prescribed by Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations.  Under
this method, the Company did not record compensation expense when stock options
were granted to eligible participants as long as the exercise price was not
less than the fair market value of the stock when the option was granted. In
accordance with Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, (SFAS 123) and SFAS No. 148,
Accounting for Stock-Based Compensation - Transition and Disclosure, the
Company disclosed the pro forma net loss per share as if the fair value-based
method had been applied in measuring compensation expense for stock-based
incentive awards.

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS
123R, Share Based Payment: An Amendment of FASB Statements No. 123 and 95 (SFAS
123R). This statement requires that the cost resulting from all share-based
payment transactions be recognized in the Company's consolidated financial
statements. In addition, in March 2005 the SEC released SEC Staff Accounting
Bulletin No. 107, Share-Based Payment (SAB 107). SAB 107 provides the SEC's
staff's position regarding the application of SFAS 123R and certain SEC rules
and regulations, and also provides the staff's views regarding the valuation of
share-based payment arrangements for public companies.  Generally, the approach
in SFAS 123R is similar to the approach described in SFAS 123.  However, SFAS
123R requires all share-based payments to employees, including grants of
employee stock options, to be recognized in the statement of operations based
on their fair values.  Pro forma disclosure of fair value recognition, as
prescribed under SFAS 123, is no longer an alternative.

In the first quarter of 2006, the Company adopted the fair value recognition
provisions of SFAS 123R utilizing the modified-prospective-transition method,
as prescribed by SFAS 123R.  Under the transition method, compensation cost
recognized during the year ended December 31, 2006 includes: (a) compensation
cost for all share-based payments granted prior to, but not yet vested as of
January 1, 2006, based on the grant date fair value estimated in accordance
with SFAS 123, and (b) compensation expense for all share-based payments
granted subsequent to January 1, 2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS 123R.  Under the modified-
prospective-transition method, results for the prior periods have not been
restated.


                                      F-11
<PAGE>



During the year ended December 31, 2006, 5,500 options were granted.  For the
year ended December 31, 2006, the Company recognized expense of $80,462 as a
result of the adoption SFAS 123R.

The effect of the change in applying the original provisions of SFAS 123
resulted in increasing the operating loss, loss before taxes, and net loss by
$80,462, with the resulting basic and diluted net loss per share of $1.81.

The options were valued using a Black-Scholes model.  Under SFAS 123R, the
Company will continue to utilize the Black-Scholes model to estimate the fair
market value related to employee stock options after January 1, 2006. The
Company's assessment of the estimated compensation charges for these other
options is affected by its stock price as well as assumptions regarding a
number of complex and subjective variables and the related tax impact.  These
variables include, but are not limited to the Company's stock price volatility
and expected employee stock option behavior.

Under SFAS 123R, forfeitures  are estimated at the time of valuation and reduce
expense  ratably  over  the  vesting   period.    This   estimate  is  adjusted
periodically  based on the extent to which actual forfeitures  differ,  or  are
expected to differ,  from  the  previous  estimate.   The Company utilized a 0%
forfeiture rate based upon historical forfeitures.  Under  SFAS 123 and APB 25,
the  Company  elected  to  account  for  forfeitures when awards were  actually
forfeited, at which time all previous pro  forma expense was reversed to reduce
pro forma expense for the period in which the forfeiture occurred

The Black-Scholes option pricing model is used  by the Company to determine the
weighted average fair value of options. The fair  value  of  options at date of
grant  and the assumptions utilized to determine such values are  indicated  in
the following table:

                                                              Year Ended
                                                             December 31,
-------------------------------------------------------------------------------
                                                            2006      2005
-------------------------------------------------------------------------------
 Weighted average fair value at date of grant for          $  4.60 $   43.60
 options granted during the period

 Risk-free interest rates                                     4.0%     4.00%
 Expected stock price volatility                              80%      50.0%
 Expected dividend yield                                      0.0%     0.0%

New Accounting Pronouncements -
       In June 2006, the Financial Accounting Standards Board (FASB) issued
 FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
 interpretation of FASB Statement No. 109" (FIN 48), which clarifies the
 accounting for uncertainty in tax positions. This interpretation requires the
 financial statement recognition of a tax position taken or expected to be
 taken in a tax return, if that position is more likely than not of being


                                    F-12
<PAGE>



 sustained on audit, based on the technical merits of the position. The
 provisions of FIN 48 are effective for fiscal years beginning after December
 15, 2006. The Company has evaluated the impact that the adoption of FIN 48
 will have on its financial condition and results of operations and concluded
 there will be no material adjustment as a result of the magnitude of the net
 operating loss carryforwards in relation to any uncertain tax positions.

      In July 2006, the FASB issued FASB Statement No. 157, "Fair Value
Measurements." This statement provides guidance for using fair value to measure
assets and liabilities, and applies whenever other standards require (or
permit) assets or liabilities to be measured at fair value but does not expand
the use of fair value in any new circumstances. This statement will become
effective for the Company as of January 1, 2007, and while expected to result
in additional disclosures, is not expected to have a material effect on the
Company's results of operations or financial condition.

      In September 2006, the Securities and Exchange Commission staff issued
Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements." SAB 108 was issued to provide consistency between how registrants
quantify financial statement misstatements.

      Historically, there have been two widely-used methods for quantifying the
effects of financial statement misstatements. These methods are referred to as
the "roll-over" and "iron curtain" method. The roll-over method quantifies the
amount by which the current year income statement is misstated. Exclusive
reliance on an income statement approach can result in the accumulation of
errors on the balance sheet that may not have been material to any individual
income statement, but which may misstate one or more balance sheet accounts.
The iron curtain method quantifies the error as the cumulative amount by which
the current year balance sheet is misstated. Exclusive reliance on a balance
sheet approach can result in disregarding the effects of errors in the current
year income statement that results from the correction of an error existing in
previously issued financial statements. The Company currently uses the rollover
method for quantifying identified financial statement misstatements.

      SAB 108 established an approach that requires quantification of financial
statement misstatements based on the effects of the misstatement on each of a
registrant's financial statements and the related financial statement
disclosures. This approach is commonly referred to as the "dual approach"
because it requires quantification of errors under both the roll-over and iron
curtain methods.

      SAB 108 allows registrants to initially apply the dual approach either by
(1) retroactively adjusting prior financial statements as if the dual approach
had always been used or (2) recording the cumulative effect of initially
applying the dual approach as adjustments to the carrying values of assets and
liabilities as of January 1, 2006 with an offsetting adjustment recorded to the
opening balance of retained earnings. Use of this "cumulative effect"
transition method requires detailed disclosure of the nature and amount of each
individual error being corrected through the cumulative adjustment and how and
when it arose.

      The Company applied SAB 108 using the retroactive transition method in
connection with the preparation of the Company's annual financial statements
for the year ending December 31, 2006, and did not record any adjustments as a
result.

      In December 2006, the FASB issued FASB Staff Position ("FSP") EITF 00-19-
2, "Accounting for Registration Payment Arrangements." This FSP addresses how
to account for registration payment arrangements and clarifies that a financial
instrument subject to a registration payment arrangement should be accounted
for in accordance with other generally accepted accounting principles without
regard to the contingent obligation to transfer consideration pursuant to the
registration payment arrangement. This accounting pronouncement further
clarifies that a liability for liquidated damages resulting from registration
statement obligations should be recorded in accordance with SFAS No. 5,


                                     F-13
<PAGE>



"Accounting for Contingencies," when the payment of liquidated damages becomes
probable and can be reasonably estimated. This FSP is effective immediately for
registration payment arrangements and the financial instruments subject to
those arrangements that are entered into or modified subsequent to the date of
issuance of this FSP. For registration payment arrangements and financial
instruments subject to those arrangements that were entered into prior to the
issuance of this FSP, this guidance is effective for financial statements
issued for fiscal years beginning after December 15, 2006, and interim periods
within those fiscal years. The Company is currently assessing the impact that
this FSP may have in its financial statements.

      In February 2007, the FASB issued Financial Accounting Standards No. 159,
"The Fair Value Option for Financial Assets and Financial Liabilities-Including
an amendment of FASB Statement No. 115" ("SFAS 159"). SFAS 159 permits
companies to measure many financial instruments and certain other items at fair
value at specified election dates. SFAS 159 is effective beginning January 1,
2008.  The Company is currently assessing the impact of SFAS 159 on its
financial statements.

3.       Property and Equipment

Property and equipment at December 31 consist of the following:

                                            2006
                                            ----

        Computer equipment                 $9,390
        Furniture and equipment             1,367
                                           ------
                                           10,757
        Less accumulated depreciation      (7,829)
                                           ------
                                           $2,928
                                           ======

Depreciation expense amounted to $805 and $821 for the years ended December 31,
2006  and  2005,  respectively.   Depreciation  expense  for  the  period  from
inception on February 9, 1996 to December 31, 2005 amounted to $7,829.

4.       Convertible Notes Payable and Premium Finance Agreement

In August,  September  and  December  2006,  the  Company issued 8 one-year, 7%
convertible  notes  with  detachable  stock  purchase  warrants  to  accredited
investors  for  a  total of $250,000 in cash.  The notes are  convertible  into
250,000 shares of our  common  stock,  and  the  warrants  can  be exercised to
purchase up to 129,167 shares of our common stock at a price of $3.00 per share
at any time until 5 years from the date of issuance.  Because the  terms of the
convertible  notes  included  both  detachable  stock  purchase warrants and  a
beneficial conversion feature, the relative fair values of the warrants and the
debt were calculated, and debt discount was recorded for  the  warrants  in the
amount of $76,628.  Additional debt discount for the beneficial conversion  was
recorded  in  the amount of $137,752.  The debt discount was amortized over the
life of the notes.   Interest  expense  of $163,746 for 2006 includes $6,107 of
coupon interest and $71,178 of debt discount amortization.

In December 2006 the Company offered an inducement  to  the  holders to convert
their debt to our common stock for an additional 375,000 shares  and additional
warrants  to  purchase up to 625,000 shares of our common stock at a  price  of
$0.80 per share.   As  a  result,  four  of  the holders accepted this offer in
December 2006.  The Company has agreed to issue  225,000  additional  shares of
its common stock to these holders in addition to the 150,000 shares called  for
in  the  original  terms  of the notes.  In addition, the Company issued 5 year
warrants to purchase up to an additional 375,000 shares at an exercise price of
$0.80 per share.  In conjunction  with the conversion, the company expensed the
$85,063 of unamortized debt discount  on  the  notes  that  were  tendered  for


                                      F-14
<PAGE>



conversion, and recognized $218,575 of expense for the excess of the fair value
of  the  securities issued as a result of the inducement over the fair value of
the securities  which  would have been issuable under the original terms of the
notes in accordance with SFAS 84.

In August 2006, the Company  entered  a premium finance agreement for insurance
premiums.  The premium finance agreement  calls  for 10 payments of $7,822, and
bears an effective interest rate of 9.25%.  $1,398 of interest was recorded for
the premium finance agreement in 2006.

5.       Stockholders' Equity

The information included in this Note 5 is with respect  to equity transactions
by  Duska  Scientific prior to the Reorganization and is with  respect  to  the
Company commencing with the Reorganization.

Preferred Stock
The Company  has  5,000,000 shares of preferred stock authorized.  There are no
shares of preferred stock issued or outstanding.

Common Stock - Restatement for Stock Splits, Dividends and Recapitalization
All amounts in the  Company's  financial  statements  and  footnotes  have been
retroactively restated to give effect to the following:

    --   a 1000:1 stock split in June 2000
    --   a  300%  stock  split up effected in the form of a dividend in October
         2001
    --   a 3:1 stock split in August 2004
    --   a recapitalization  in  August  2004,  resulting  in  the par value of
         common stock changing from $.01 per share to $.001 per share
    --   a 1 for 20 reverse stock split in February 2007

Common Stock Transactions

In  October  1999,  the Company issued 189,480 shares of its common  stock  for
services valued at $30,682.

In October 1999, the  Company  issued  375,000  shares  of its common stock for
$25,000 in cash.

In  November  1999, the Company issued 35,520 shares of its  common  stock  for
$14,859 in patents and licenses.

In June 2000, the  Company issued 8,400 shares of its common stock for $175,000
in cash.

In October 2000, the  Company  issued  5,250  shares  of  its  common stock for
$175,000 in cash.

In  November  2001,  the Company issued 49,200 shares of its common  stock  and
warrants to purchase 135,000  shares of common stock at exercise prices ranging
from  $20.80 to $40.00 per share  in  exchange  for  $1,003,312  in  cash.  The
warrants expired in October 2006.

In March  2004,  the  Company  issued  26,665  shares  of  its common stock and
warrants to purchase 2,665 shares of common stock in exchange  for cancellation
of  outstanding convertible notes payable.  The warrants expire in  March  2009
and have an exercise price of $20.00 per share.


                                       F-15
<PAGE>



In March and April 2004, the Company sold 13,500 units at $20.00 per unit, with
each unit consisting of one share of the Company's common stock and one warrant
to purchase  an  additional two shares of common stock at $50.00 per share. The
warrants expire in March 2009.

During May, June and  July 2004, the Company received subscriptions for 183,375
units at $20.00 per unit,  with  each  unit  consisting  of  one  share  of the
Company's  common  stock  and  one  warrant  to purchase an additional share of
common stock at $50.00 per share.  The units were  issued  in August 2004 prior
to the Reorganization.

In August 2004, in connection with the Reorganization (see Note 1), the Company
issued 886,390 shares of its common stock to the holders of  Duska Scientific's
capital  stock  in  exchange for all of the 886,390 shares of Duska  Scientific
common stock outstanding  on  the  date  of  the  Reorganization.  In addition,
outstanding  common  stock  purchase  warrants and stock options to purchase  a
total of 672,065 shares of Duska Scientific's  common  stock  were cancelled in
exchange for warrants and stock options to purchase the same number  of  shares
of the Company's common stock at the same exercise prices and otherwise on  the
same  terms  as  the  Duska  Scientific  stock  options  and warrants that were
cancelled.

As  more  fully  described  in Note 7, in November 2004 the Company  issued  to
designees of Cato Research Ltd. ("Cato") 25,000 shares  of its common stock and
warrants to purchase 25,000 shares  of  its  common  stock  at $50.00 per share
pursuant  to  an  agreement  whereby  Cato is providing certain services.   The
warrants expire in August 2007.  During  2006  and  2005  a  total of 2,896 and
19,041 shares and warrants, respectively, were released from escrow  in payment
for  services  performed  by  Cato.  As of December 31, 2006, 3,063 shares  and
warrants remained in escrow pending  receipt of invoices for services performed
by  Cato  (see  Note  7) and such shares are  not  included  in  the  financial
statements as outstanding  as of December 31, 2006.  As additional compensation
for Cato, in November 2004 the  Company  issued  to Cato's designees additional
warrants  to  purchase  a  total of 4,950 shares of its  common  stock.   These
additional warrants have an  exercise  price  of $20.80 per share and expire in
October 2009.  These warrants were immediately  exercisable  and  not  held  in
escrow;  the Company recorded an expense of $43,683 in 2004 associated with the
issuance of these warrants.

In June 2005,  the  Company  entered  into  an  agreement  whereby  it acquired
exclusive rights to proprietary technology aimed at development of a  potential
new therapeutic treatment of glaucoma.  The Company issued 1,250 shares  of its
common  stock to the owners of the technology in connection with the agreement.
Such  shares  were  valued  at  $31,250  and  were  recorded  as  research  and
development expense.

In October  2005,  the Company recorded $485,000 of expense associated with the
vesting  of  a  stock  purchase  warrant  issued  to  a  public  relations  and
advertising firm for services associated with the Company's public and investor
relations program.

During 2005, the Company  recorded  $25,255  of  expense  associated  with  the
vesting of stock options issued to members of its Scientific Advisory Board and
other consultants for services rendered during the period.

On March 6, 2006, the Company entered into subscription agreements with certain
accredited investors providing for the purchase of 400,000 shares of its common
stock  at  an  aggregate purchase price of $2,000,000, or $5.00 per share.  The
investors placed  $550,000 on deposit with the escrow agent and sent checks for
$1,450,000, for a total of $2,000,000, with the funds and checks to be released
to the Company if and when a registration statement covering the resale of such
shares was declared effective.

On  April  19, 2006,  the  Securities  and  Exchange  Commission  declared  the
registration statement covering the resale of such shares effective.


                                      F-16
<PAGE>



In June 2006, the Company learned that certain of the investors would not honor
their commitments under the subscription agreements after a total of $1 million
in funds had cleared.  As a result, the Company offered those investors who had
sent funds to  the  Company the option to rescind their subscriptions.  A small
number of the investors decided to reaffirm their commitment to purchase 26,000
shares for $130,000, and the Company refunded $870,000 in July 2006.

Stock Option Plan

In  2004, the Board of  Directors  of  the  Company  adopted  the  2004  Equity
Incentive  Plan  for  the  grant of qualified incentive stock options (ISO) and
non-qualified stock options.  The exercise price for any option granted may not
be less than fair value (110%  of  fair  value  for  ISOs  granted  to  certain
employees). Under the Plan, 300,000 shares are reserved for issuance.

The following summarizes the activity of the Company's stock options for the
year ended December 31, 2006:


                                                   Weighted
                                  Weighted          Average
                                   Average         Remaining     Aggregate
                                  Exercise        Contractual    Intrinsic
                        Shares      Price            Term          Value
Number of shares
 under option:
 Outstanding at         262,250   $    22,00
 January 1, 2006
 Granted                  5,500         4.60
 Exercised                    -          -
 Canceled or expired    (39,350)        20.80
                      ----------  -----------      ---------     ----------
 Outstanding at
 December 31, 2006      228,400   $    $21.20           2.24     $     $0.0
                      ----------  -----------      ---------     ----------
 Exercisable at         220,525   $    $21.40           2.24     $     $0.0
 December 31, 2006

The following summarizes the activity of the Company's stock options that have
not vested for the year ended December 31, 2006:

                                   Shares    Weighted Average Fair Value
                                -------------------------------------------
 Nonvested at December 31, 2005     11,675   $                    $26.40
 Granted                             5,500                          4.60
 Vested                              9,300                         16.60
                                -------------------------------------------
 Nonvested at December 31,2006       7,875   $                     22.20
                                -------------------------------------------
The  fair  value  of  non-vested options to be recognized in future periods was
$82,292.

Warrants Outstanding

As of December 31, 2006,  warrants to purchase 1,831,694 shares of common stock
at prices ranging from $0.80  to  $50.00  were outstanding.  As of December 31,
2006, all of such warrants were exercisable and expire at various dates through
2011.

                                       F-17
<PAGE>



6.       Income Taxes

For income tax purposes, the Company and its  subsidiary  have  an aggregate of
approximately  $7,671,000  of  net  operating  loss carryforwards available  to
offset against future federal taxable income, subject  to  certain limitations.
Such losses begin to expire in 2019.  State income tax loss carryforwards start
to expire in the year 2009.

Deferred  income taxes reflect the net effect of temporary differences  between
the  financial  reporting  and  income  tax  carrying  amounts  of  assets  and
liabilities.    The  components  of  the  Company's  deferred  tax  assets  and
liabilities are as follows:

                                                         December 31,
                                              --------------------------------
                                                    2006            2005
                                              --------------------------------
 Deferred tax assets:
  Net operating loss carryforward                $2,924,414      $2,153,270
  Research and development credit carryforward       53,489          53,489
  Depreciation and other                            (16,169)          4,746
  Total deferred tax assets                       2,961,734       2,211,505

 Deferred tax liabilities                                -                -

 Net deferred tax assets                          2,961,734       2,211,505
 Valuation allowance                             (2,961,734)     (2,211,505)
                                              --------------------------------
                                              $           -    $          -
                                              --------------------------------

The Company's net  deferred tax asset is fully offset by a valuation allowance.
Management will continue to assess the valuation allowance and to the extent it
is determined that such allowance is no longer required; the tax benefit of the
remaining net deferred tax assets will be recognized in the future.

The reconciliation of  the  effective  income tax rate to the Federal statutory
rate is as follows:

                     Federal income tax rate    34.0%
                     Current year losses       (34.0)
                                               ------
                     Effective income tax rate   0.0%
                                               ======

7.       Commitments and Contingencies

Leases - The Company leases the office used  for  its  operations under a lease
agreement  on  a month-to-month basis. As of December 31,  2006,  monthly  rent
expense amounted  to  $1,700.  Rent  expense  amounted  to  $20,857, $24,647and
$87,516 for the years ended December 31, 2006 and 2005, and for the period from
inception on February 9, 1996 to December 31, 2006, respectively.

Clinical  Research  Agreement * In February 2004, the Company entered  into  an
agreement with Cato Research  Ltd.  ("Cato") under which Cato agreed to provide
clinical research management and regulatory  affairs  support  for the Phase II
and Phase III clinical trials of ATPace(TM) (the "Cato Agreement").  Under  the
terms  of  the Cato Agreement, which was amended and restated in November 2004,
the Company and Cato agreed that up to $500,000 of the compensation due to Cato
for its services  would  be  paid  by  the  Company  issuing  to  Cato  (or its
designees)  25,000  units  of the Company's securities (the "Cato Units"). Each
Cato Unit consists of one share  of common stock and one warrant to purchase an
additional share of common stock at  an  exercise  price of $50 per share.  The
warrants expire in August 2007.


                                       F-18
<PAGE>



Pursuant to the Cato Agreement, the Company and Cato  agreed  that  40% of each
Cato  invoice  for the Phase II clinical trial of ATPace(TM) will be paid  with
Cato Units, with  the  balance  payable in cash.  In November 2004, the Company
issued all 25,000 Cato Units, which are being held in escrow by the Company and
will be released as the Company receives  invoices  for  services  performed by
Cato.  During 2006 and 2005 a total of 21,937 shares and warrants were released
from  escrow  in  payment for services performed by Cato during 2004, 2005  and
2006.  As of December  31,  2006,  3,063 shares and warrants remained in escrow
pending receipt of invoices for services performed by Cato.

8.       Related Party Transactions

During 2005, Sanford J. Hillsberg served  as  the Company's corporate Secretary
and  a  member  of  its  Board of Directors.  Mr. Hillsberg  is  a  member  and
shareholder of Troy & Gould  Professional  Corporation, the Company's corporate
law  firm  during that period.  During 2005, the  Company  paid  Troy  &  Gould
$172,998 for  legal  services.  Mr. Hillsberg served as the Company's corporate
Secretary during 2005.   During  2005,  Mr.  Hillsberg  was paid $5,000 for the
services  he rendered as the Company's Vice President and  Corporate  Secretary
during 2003.   During  2005,  Mr.  Hillsberg earned $25,000 for the services he
rendered as corporate Secretary.  As  of December 31, 2006, amounts owed to Mr.
Hillsberg for services rendered during 2005 and 2006 totaled $5,780.

From the beginning of January through December 5, 2005, Dr. Manfred Mosk served
as  the  Company's non-executive Chairman  of  the  Board.   Dr.  Mosk  is  the
controlling  shareholder  of  Technomedics  Management  &  Systems,  Inc, which
provides  the  consulting  services  of  Dr. Mosk to the Company.  During 2005,
Technomedics Management & Systems, Inc., was  paid $30,000 for the services Dr.
Mosk rendered as interim part-time Chief Executive  Officer and Chairman during
2003.  During 2005, Technomedics Management & Systems, Inc., earned $64,167 for
the services Dr. Mosk rendered as non-executive Chairman  of  the Board.  As of
December 31, 2006, amounts owed to Technomedics Management & Systems,  Inc. for
services rendered during 2005 totaled $5,833.

In  2005  and  2006,  Dr.  David  Benditt,  one  of  our directors, served as a
consultant to the Company for which he was paid a fee of $700 per month.  As of
December 31, 2006, amounts owed to Dr. Benditt for consulting  services totaled
$9,800.

9.       Subsequent Events

Effective January 25, 2007, Duska Therapeutics, Inc. (the "Company") entered
into Letter Agreements (the "Agreements") with certain investors (the
"Investors"). The Agreements set forth the Company's agreement to sell to the
Investors and the Investors' agreement to purchase from the Company an
aggregate of 750,000 Units (each Unit consisting of one share of common stock
and one warrant to purchase a share of common stock at an exercise price $0.80
per warrant) at a purchase price of $0.40 per Unit (the "Units"). The sale and
issuance of the securities underlying the Units resulted in $300,000 in
aggregate consideration to the Company.

At the time of the issuance of the securities underlying the Units, the shares
of common stock and the shares of common stock reserved for issuance in the
event of the exercise of the warrants were unregistered. The Company, however,
has agreed with the Investors to use its commercially reasonable best efforts
to registers the securities underlying the Units, all in accordance with the
terms set forth in the Agreements.

On January 15 and 25, 2007, the remaining holders of the Company's  convertible
debt  tendered  their  notes  for  conversion under the terms of the inducement
offered by the Company in December.   As  a result, the Company agreed to issue
150,000 shares of its common stock, in addition to the 100,000 shares specified


                                      F-19
<PAGE>



in  the  original  terms  of the notes, and additional  five-year  warrants  to
purchase up to 250,000 shares  at  an  exercise price of $0.80 per share.  As a
result of this conversion, the Company will  expense  the  remaining $57,007 of
unamortized  debt discount, and recognize $136,397 of expense  related  to  the
fair value of  the  securities  issuable  over the fair value of the securities
originally issuable under the original terms of the notes.

On  February  12,  2007,  the  Company entered a  Legal  Administrative  option
agreement with the Law Offices of  Thomas  C. Cook, Ltd under which the Company
obtained  legal  advice  and  counsel with respect  to  matters  pertaining  to
securities law for a period of  six  months in return for a retainer of $10,000
per month, to be funded through the issuance of options at $0.001 per share.

Effective February 28, 2007, the Company  agreed  to  effect a 1 for 20 reverse
split of the Company's stock.  The split was completed  on  March 26, 2007, and
the Company's stock began to trade that day under the ticker symbol "DSKA." The
share amounts in the accompanying financial statements have been  retroactively
restated to reflect this split.

Under a letter agreement with Dr. Daniel Flamming, the Company agreed to pay
$50 per patient for data used by its CRO upon notification to the Company that
the compilation of the data provided by Dr. Flammang has been completed.
That notification was received on April 3, 2007, which created a liability for
$9,350.



                                     F-20
<PAGE>



 Exhibit Number Description
 -------------- -----------
      2.1       Agreement and Plan of Reorganization, dated as of February 2,
                2003, by and among Shiprock, Inc., Shiprock Subsidiary, Inc.,
                Tommy J. Gropp and Duska Scientific Co., Incorporated by
                reference to the Company's definitive Information Statement on
                Schedule 14-C filed with the Securities and Exchange
                Commission on July 28, 2004.
      2.2       Amendment to Agreement and Plan of Reorganization, dated as of
                June 30, 2004, by and among Shiprock, Inc., Shiprock
                Subsidiary, Inc., Tommy J. Gropp, Michael Artis and Duska
                Scientific Co., Incorporated by reference to the Company's
                definitive Information Statement on Schedule 14-C filed with
                the Securities and Exchange Commission on July 28, 2004.
      3.1       Articles of Incorporation, filed on Form 10SB July 26, 2001.
      3.2       Certificate of Amendment to the Articles of Incorporation,
                filed in Current Report on Form 8-K on August 26, 2004.
      3.3       Amended and Restated Bylaws, filed in Current Report on Form
                8-K on September 3, 2004.
      4.1       Form of Common Stock certificate filed in Registration
                Statement on Form SB-2 (File No. 333-12067) on November 19,
                2004.
      4.2       Form of Warrant, dated August 30, 2004, for the purchase of
                common stock issued to the purchasers of the units in Duska
                Scientific's August 2004 private placement exchanged for
                warrants of Duska Therapeutics filed in Current Report on Form
                8-K on September 3, 2004.
      4.3       Form of Warrant, dated August 30, 2004 for the purchase of
                common stock issued to the purchasers of the units in Duska
                Scientific's April 2004 private placement exchanged for
                warrants of Duska Therapeutics filed in Registration Statement
                on Form SB-2 (File No. 333-12067) on November 19, 2004.
      4.4       Form of Warrant for the purchase of common stock issued in
                Duska Scientific's 2004 note conversion exchanged for warrants
                of Duska Therapeutics filed in Registration Statement on Form
                SB-2 (File No. 333-12067) on November 19, 2004.
      4.5       "A" Warrant to purchase common stock issued to the John N.
                Kapoor Trust filed in Registration Statement on Form SB-2
                (File No. 333-12067) on November 19, 2004.
      4.6       "B" Warrant to purchase common issued to the John N. Kapoor
                Trust, filed in Registration Statement on Form SB-2 (File No.
                333-12067) on November 19, 2004.
      4.7       Form of Warrant for the purchase of common stock issued to
                Cato Holding Company and affiliates, filed in Registration
                Statement on Form SB-2 (File No. 333-12067) on November 19,
                2004.
      4.8       Form of Registration Rights Agreement, filed in Registration
                Statement on Form SB-2 (File No. 333-12067) on November 19,
                2004.


                                      74
<PAGE>



      4.9       Form of Warrant for the purchase of common stock issued to the
                purchasers of the units in Duska Scientific's 2002 private
                placement exchanged for warrants of Duska Therapeutics filed
                in Registration Statement on Form SB-2 (File No. 333-12067) on
                November 19, 2004.
      4.10      Form of Warrant for the purchase of common stock issued to the
                placement agents for Duska Scientific's bridge financing
                exchanged for warrants of Duska Therapeutics, filed in
                Registration Statement on Form SB-2 (File No. 333-12067) on
                November 19, 2004.
      4.11      Form of Warrant for the purchase of common stock issued to the
                placement agents for Duska Scientific's August 2004 private
                placement exchanged for warrants of Duska Therapeutics, filed
                in Registration Statement on Form SB-2 (File No. 333-12067) on
                November 19, 2004.
      4.12      Form of Warrant for the purchase of common stock issued to
                affiliates of Cato Holding Company,  filed in Registration
                Statement on Form SB-2 (File No. 333-12067) on November 19,
                2004.
      4.13      Form of Warrant for the purchase of common stock issued to
                Fountainhead Holdings, Inc. filed in Registration Statement on
                Form SB-2 (File No. 333-12067) on November 19, 2004.
     10.1       Amended and Restated Master Services Agreement effective
                February 10, 2004  between Duska Scientific Co. and Cato
                Research Ltd., and letter amendment effective February 10,
                2004 between Duska Scientific Co. and Cato Research Ltd. filed
                in Registration Statement on Form SB-2 (File No. 333-12067) on
                November 19, 2004.
     10.2       Agreement, dated April 30, 2004, between Duska Scientific Co.
                and CooperSurgical Inc. filed in Registration Statement on
                Form SB-2 (File No. 333-12067) on November 19, 2004.
     10.3       Collaboration Agreement, dated April 22, 2003, between Duska
                Scientific Co. and Medtronic, Inc. filed in Registration
                Statement on Form SB-2 (File No. 333-12067) on November 19,
                2004.
     10.4       Agreement, dated September 1, 2004, between Duska
                Therapeutics, Inc. and Amir Pelleg, Ph.D., filed in
                Registration Statement on Form SB-2 (File No. 333-12067) on
                November 19, 2004.
     10.5       Agreement, dated February 16, 2004, between Duska Scientific
                Co. and Mark Reynolds filed in Registration Statement on Form
                SB-2 (File No. 333-12067) on November 19, 2004.
     10.6       Lease and Service Agreement, dated November 27, 2001, between
                Duska Scientific Co. and American Executive Centers, Inc. and
                extensions thereof.  filed in Registration Statement on Form
                SB-2 (File No. 333-12067) on November 19, 2004.
     10.7       License and Assignment  Agreement, dated November 15, 1999,
                among Duska Scientific Co., Dr. Amir Pelleg and Dr. Edward S.
                Schulman,  filed in Registration Statement on Form SB-2 (File
                No. 333-12067) on November 19, 2004.


                                      75
<PAGE>



     10.8       License Agreement dated as of November 15, 1999, among Duska
                Scientific Co., Dr. Francesco DiVirgilio and Dr. Carlo
                Foresta, filed in Registration Statement on Form SB-2 (File
                No. 333-12067) on November 19, 2004.
     10.9       Development and Assignment Agreement, dated as of August 23,
                2003 among Duska Scientific Co., Dr. Francesco DiVirgilio, Dr.
                Davide Ferrari and Dr. Roberto Baricodi, filed in Registration
                Statement on Form SB-2 (File No. 333-12067) on November 19,
                2004.
    10.10       Assignment Agreement, dated as of December 18, 2003, between
                Duska Scientific Co. and Dr. Amir Pelleg, filed in
                Registration Statement on Form SB-2 (File No. 333-12067) on
                November 19, 2004.
    10.11       Assignment, dated as of  December 14, 2001, among Duska
                Scientific Co., Dr. Amir Pelleg and Dr. Edward S.  Schulman,
                filed in Registration Statement on Form SB-2 (File No. 333-
                12067) on November 19, 2004.
    10.12       Form of Agreement entered into between Duska Scientific Co.
                and Sanford J. Hillsberg effective September 1, 2004, filed in
                Registration Statement on Form SB-2 (File No. 333-12067) on
                November 19, 2004.
    10.13       Agreement between Duska Therapeutics, Inc. and Marie
                Sciocchetti effective January 1, filed on Form 10-QSB filed on
                May 16, 2005.
    10.14       Development and Assignment Agreement by and between Drs.
                Francesco DiVirgilio, Lucia Galli and Valentina Resta, and
                Duska Scientific Co., dated March 8, 2005, on Form 10-QSB
                filed on August 15, 2005.
    10.15       Amendment to Letter of Engagement and Work Authorization by
                and between Duska Therapeutics, Inc. and Investor Relations
                International, dated February 3, 2006, filed in Current Report
                on Form 8-K on February 13, 2006.
    10.16       Form of Agreement entered into between Duska Scientific Co.
                and Technomedics Management & Systems, Inc. effective
                September 1, 2004.
    10.17       Form of Incentive Stock Option Agreement under 2004 Equity
                Incentive Plan  filed in Registration Statement on Form SB-2
                (File No. 333-12067) on November 19, 2004.
    10.18       Form of Non-Qualified Stock Option Agreement under 2004 Equity
                Incentive Plan  filed in Registration Statement on Form SB-2
                (File No. 333-12067) on November 19, 2004.
    10.19       2004 Equity Incentive Plan, filed on Form S-8 (File No. 333-
                15063) on May 19, 2005.
    10.20       Option issued to Triax Capital Management, Inc. on August 23,
                2004,  filed in Registration Statement on Form SB-2 (File No.
                333-12067) on November 19, 2004.
    10.21       Agreement between Duska Therapeutics, Inc. and Technomedics
                Management & Systems, Inc. effective September 1, 2004.
    21.1        List of Subsidiaries,  filed in Registration Statement on Form
                SB-2 (File No. 333-12067) on November 19, 2004.
    31.1*       Certifications of the President pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.

                                         76
<PAGE>


    31.1*       Certifications of the Chief Financial Officer pursuant to
                Section 302 of the Sarbanes-Oxley Act of 2002.
    32.1*       Certifications of President pursuant to 18 U.S.C. Section 1350
                as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                of 2002.
    32.2*       Certifications of Chief Financial Officer pursuant to 18
                U.S.C. Section 1350 as adopted pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002.
____________________

* this filing


                                      77
<PAGE>