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

FORM 10-K/A

(Amendment No. 1)

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

For the fiscal year
ended December 31, 2006

[__] 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 1-31680

BRADLEY
PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)

|DELAWARE

     
      (State or other jurisdiction of
                                                                          
      incorporation or organization) |  |  |  | 22-2581418
      (I.R.S.
Employer 
                                                                       Identification
Number)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | --------------------------------------------------------------------------------------------------------------------------------

|383
Route 46 W., Fairfield, NJ

 
      (Address of principal executive offices) |  |  |  | 07004 
      (Zip Code)
|-------------------------------------------------------------------------------- |  |  |  | -----------------------

Registrants telephone number,
including area code: 973-882-1505

Securities Registered
Pursuant to Section 12(b) of the Act:

|Title
of each class
      Common Stock, $.01 Par Value Per Share |  |  |  | Name of
each exchange on which registered
      New York Stock Exchange
|---------------------------------------------------------------- |  |  |  | -----------------------------------------------------------------------

Securities Registered
Pursuant to Section 12(g) of the Act: 
                                      None

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes |_| No |X|

Indicate by check mark if the
registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes |_| No |X|

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes |X| No |_|

Indicate by check mark whether
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not 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-K or any amendment to this Form 10-K. |_|

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer |_|    Accelerated filer |X|    Non-accelerated filer |_|



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

The aggregate market value of the
voting common stock held by nonaffiliates of the Registrant as of June 30, 2006 was
approximately $125,159,702 (calculated by excluding all shares held by executive
officers, directors and holders known to the registrant of five percent or more of the
voting power of the registrants common stock, without conceding that such persons
are affiliates of the registrant for purposes of the federal securities
laws). This amount does not include any value for the Class B common stock, for which
there is no established United States public trading market.

As of February 28, 2007, there were
outstanding 16,094,420 shares of common stock, $.01 par value, and 429,752 shares of
Class B common stock, $.01 par value.

DOCUMENTS
INCORPORATED BY REFERENCE 
                                      None

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EXPLANATORY NOTE

This
Amendment No. 1 is being filed solely for the purpose of filing the information required
by Part III of the Annual Report on Form 10-K within 120 days after the fiscal year end,
pursuant to General Instruction G(3). As a result of this Amendment, the Company is also
filing as exhibits to this Form 10-K/A, as required by Rule 12b-15 of the Securities
Exchange Act of 1934, as amended, new Certifications of its principal executive officer
and principal financial officer as Exhibits 31.1, 31.2, 32.1 and 32.2. Unless otherwise
expressly stated, this Form 10-K/A does not modify or update the disclosures in, or
exhibits to, the Annual Report on Form 10-K originally filed with the Securities and
Exchange Commission on March 14, 2007 or reflect events occurring after the filing of the
original Form 10-K.

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| | - | 

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TABLE OF CONTENTS


|PART III   |  |                                                                                                                                       | Page
|---------- |  | ------------------------------------------------------------------------------------------------------------------------------------- | ----
|           |  |                                                                                                                                       |     
|ITEM 10    |  | Directors, Executive Officers and Corporate Governance                                                                                | 1   
|ITEM 11    |  | Executive Compensation                                                                                                                | 3   
|ITEM 12    |  | Security Ownership of Certain Beneficial Owners and Management and
                                      Related Stockholders Matters | 16  
|ITEM 13    |  | Certain Relationships and Related Transactions, and Director
                                      Independence                       | 18  
|ITEM 14    |  | Principal Accountant Fees and Services                                                                                                |     
|           |  |                                                                                                                                       |     
|PART IV    |  |                                                                                                                                       |     
|           |  |                                                                                                                                       |     
|ITEM 15    |  | Index to Exhibits                                                                                                                     | 20  
|           |  |                                                                                                                                       |     
|SIGNATURES |  |                                                                                                                                       |     
|           |  |                                                                                                                                       |     
|Exhibits   |  |                                                                                                                                       |     
|EX-31.1    |  | Chief Executive Officer Section 302 Certification                                                                                     |     
|EX-31.2    |  | Chief Financial Officer Section 302 Certification                                                                                     |     
|EX-32.1    |  | Chief Executive Officer Section 906 Certification                                                                                     |     
|EX-32.2    |  | Chief Financial Officer Section 906 Certification                                                                                     |     

| | ii | 
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PART III

ITEM 10.    DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our current directors and executive
officers are as follows:

|Name                         | Age |  | Position(s)                                                               
|---------------------------- | --- |  | --------------------------------------------------------------------------
|Daniel Glassman              | 64  |  | President and Chief Executive Officer                                     
|Bradley Glassman             | 33  |  | Senior Vice President, Sales and Marketing                                
|Alan Goldstein               | 47  |  | Vice President, Corporate Development                                     
|Ralph Landau, Ph.D           | 46  |  | Vice President, Chief Scientific Officer                                  
|R. Brent Lenczycki           | 35  |  | Vice President, Chief Financial Officer                                   
|Leonard S. Jacob, M.D., Ph.D | 58  |  | Director and Non-Executive Chairman of the Board                          
|Andre Fedida, M.D.(1)(2)(3)  | 52  |  | Director                                                                  
|Michael Fedida, R.Ph.(1)(3)  | 60  |  | Director and Chairman of the Compensation Committee                       
|Seth W.  Hamot(2)(3)         | 45  |  | Director                                                                  
|Steven Kriegsman(2)          | 65  |  | Director                                                                  
|Douglas E.  Linton(3)        | 59  |  | Director and Chairman of the Nominating and Corporate Governance Committee
|William J. Murphy(1)(2)      | 63  |  | Director and Chairman of the Audit Committee                              

---

|(1) |  | Member
of Compensation Committee
|--- |  | --------------------------------

|(2) |  | Member
of Audit Committee
|--- |  | -------------------------

|(3) |  | Member
of Nominating and Corporate Governance Committee
|--- |  | -------------------------------------------------------

Our
executive officers are as follows:

Daniel
Glassmanis our founder and has served as our Chief Executive Officer since the Companys
inception in January 1985, our President since February 1991, and as Chairman of the
Board from January 1985 until January 2007. Mr. Glassman is a registered pharmacist. Mr.
Glassman has had an over 35-year career in the pharmaceutical industry, including
executive managerial positions with companies and major specialty advertising agencies
serving the largest pharmaceutical companies. In 1995, Mr. Glassman was awarded the Ernst
&Young LLP Entrepreneur of the Year in New Jersey, and in 2005, Mr. Glassman was
awarded the degree of Doctor of Humane Letters by the New York College of Podiatric
Medicine in recognition of his contributions to medical education. Mr. Glassman received
his B.S. in Pharmacy from Columbia University and received his M.B.A. from New York
University.

Bradley
Glassmanhas served as our Senior Vice President, Sales and Marketing since January 2004.
From July 2001 to December 2003, Mr. Glassman served as our Vice President, Sales and
Marketing. From April 2000 through June 2001, Mr. Glassman served as our Vice President,
Marketing. In addition, from January 1998 to March 2000, Mr. Glassman served as our
Director of Corporate Development, and from May 1996 to December 1997, he served as a
Corporate Development Analyst. Mr. Glassman received his B.A. and M.B.A. from Tulane
University. Mr. Glassman is the son of Daniel Glassman.

Alan
Goldsteinhas served as our Vice President, Corporate Development since March 2004. Mr.
Goldstein joined us in June 2002 as Director, Corporate Development. From November 2000
to May 2002, Mr. Goldstein served as Counsel in the corporate department of the
international law firm of Kaye Scholer LLP. From March 1998 to October 2000, Mr.
Goldstein was a partner in the New York law firm of Winick & Rich, P.C. specializing
in corporate finance matters. From January 1994 to February 1998, Mr. Goldstein was a
partner in the New York law firm of Reid & Priest LLP, having worked previously as an
associate at that firm and one of its predecessors, Spengler Carlson Gubar Brodsky & Frischling,
since 1987. Mr. Goldstein received his B.A. from the University of Michigan and his J.D.
from the University of Pittsburgh.

Ralph
Landau, Ph.D., has served as our Vice President and Chief Scientific Officer since
January 2003. Dr. Landau joined us in October 2002 as Vice President, Manufacturing. From
2001 to 2002, Dr. Landau served as Director,
Program Management/Business Development for Elan Pharmaceutical Technologies. From 1997
to 2001,

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Dr. Landau held the positions of Associate Director, with responsibilities in
Drug Supply Management, Project Management and Process Technologies for Novartis
Pharmaceuticals. Additionally, Dr. Landau has published articles in 28 peer-reviewed
publications. Dr. Landau received his B.S. from the New Jersey Institute of Technology
and his Ph.D. from the University of Delaware, and serves on the advisory committees for
Rutgers University and the New Jersey Institute of Technology.

R.
Brent Lenczycki, CPA, has served as our Vice President and Chief Financial Officer since
January 2001. Since joining Bradley Pharmaceuticals in 1998, Mr. Lenczycki has held the
positions of Manager of Finance and Purchasing, Director of Finance and since April 2000,
Vice President, Finance. From 1995 to 1998, Mr. Lenczycki held positions in public
accounting at Arthur Andersen LLP, and prior to 1995, as an internal auditor for Harrahs
Hotel and Casino. Mr. Lenczycki received his B.S. from St. Josephs University and his
M.B.A. from Tulane University.

Section 16(a)
Beneficial Ownership Reporting Compliance

Based
solely upon a review of Forms 3, 4, and 5 and amendments thereto furnished to us for 2006
pursuant to Rule 16a-3(e) of the Securities Exchange Act of 1934, as amended, and written
representations from current reporting persons that all required reports had been filed,
we believe that all current reporting persons filed the required reports on a timely
basis, except for (1) Dr. Jacobs grant from us of 15,000 options on February 10, 2006
was reported on February 22, 2006; (2) Mr. Murphys grant from us of 15,000 options on
February 10, 2006 was reported on February 17, 2006; and (3) Mr. D. Glassmans exercise
of 25,000 options on February 21, 2006 was reported on March 2, 2006.

Codes of Ethics and
Corporate Governance Guidelines

Our
Board of Directors has adopted a Code of Business Conduct and Ethics that applies to all
of our directors, officers and employees in addition to a Supplemental Code of Ethics for
the Chief Executive Officer and Senior Financial Officers. Our Board of Directors has
also adopted Corporate Governance Guidelines that address numerous director issues. The
Code of Business Conduct and Ethics, Supplemental Code and Corporate Governance
Guidelines may be found on our website at www.bradpharm.com.

Shareholders
Nominations

No
material changes have been made to the procedures by which security holders may recommend
nominees to our Board of Directors from those set forth in our Proxy Statement for our
2006 Annual Meeting of Stockholders.

Audit Committee

We
have a standing Audit Committee of the Board of Directors. The Audit Committee is
comprised of directors that are independent of the management of the Company and
independent of any relationship that, in the opinion of the Board of Directors, would
interfere with the exercise of their independent judgment as members of the Audit
Committee. Each member of this Committee is independent within the meaning of SEC
regulations, the listing standards of the NYSE and the Companys Corporate Governance
Guidelines. The Audit Committees responsibilities include overseeing the adequacy and
effectiveness of systems and controls in place to reasonably assure the fair presentation
of our financial statements; appointing, dismissing and overseeing the qualifications and
performance of and determining the compensation paid to the external auditors; reviewing
and approving the scope of audits and related fees; interfacing directly with the
external auditors and otherwise; monitoring compliance with legal and regulatory
requirements; and reviewing and setting internal policies and procedures regarding
audits, accounting and other financial controls. The current charter of the Audit
Committee, which is available on our website at www.bradpharm.com, provides a detailed
description of its responsibilities. During 2006, the Audit Committee held 15 meetings.
The current members of the Audit Committee are Mr. Murphy (Chairman), Dr. Fedida, Mr.
Kriegsman and Mr. Hamot. The Board of Directors has determined that Mr. Hamot, Mr. Murphy
and Mr. Kriegsman are each qualified as an audit committee financial expert within the
meaning of SEC regulations. The Board of Directors has also determined that each member
of the Committee is an independent director under applicable standards.

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ITEM 11.    EXECUTIVE
COMPENSATION

Compensation
Discussion and Analysis

Overview of
Compensation Program

The
Compensation Committee (for purposes of this analysis, the Committee) of our Board of
Directors is responsible for establishing, implementing and monitoring our adherence to
our compensation objectives for our executive officers, including Mr. Daniel Glassman,
our president and chief executive officer. The Committee seeks to ensure that the total
compensation paid to our executive officers is fair, reasonable and competitive. The
Committee also administers our 1999 Incentive & Non-Qualified Stock Option Plan (the
Stock Option Plan).

Throughout
this annual report, the individuals who served as our chief executive
officer (CEO) and chief financial officer during 2006, as well as the other individuals
included in the Summary Compensation Table on page 7, are referred to as the named
executive officers.

Compensation
Objectives

The
Committees primary objectives are to:

| |  |  | tie
our executive officers total compensation to the achievement of measurable individual
and                   company-wide performance goals;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | align
our executive officers incentives with the creation of stockholder value; and
| | - |  | ------------------------------------------------------------------------------------

| |  |  | attract
and retain the most talented and dedicated executives possible.
| | - |  | -----------------------------------------------------------------------

The
Committee believes that the most effective executive compensation program is one that (i)
links a substantial portion of an executive officers total compensation to the
achievement of specific individual and company-wide annual, long-term and strategic goals
and (ii) provides such compensation in a mix of both cash and equity-based compensation
such that our executive officers continue to have the creation of short- and long-term
stockholder value as a primary objective. Prior to 2007, neither the Committee nor
management retained any compensation consultants for advice with respect to executive
compensation. The Company currently does not have a formal executive evaluation and
compensation program with specified performance objectives, targets or ranges. The
Committee is in the process of implementing a formal executive evaluation and
compensation program for 2007 and later years. As further described below under Setting
Executive Compensation, for 2007, the Committee expects to evaluate individual
performance in light of pre-set performance objectives and to determine the proper mix of
total compensation with the goal of setting executive total compensation at levels the
Committee believes is appropriately competitive relative to the total compensation paid
to similarly situated executives of our peer companies.

Role of Executive
Officers in Compensation Decisions

Our
CEO is required to provide to the Committee annual reviews of the performance of each
named executive officer other than the CEO, whose performance is reviewed by the
Committee. In the ordinary course, the CEO will evaluate the executive officers who
report directly to him and, with respect to other senior employees, will review their
evaluations by their respective supervising officers. The Committee considers these
evaluations and the recommendations of our CEO in determining the base salaries,
adjustments to base salaries, cash incentive awards and equity-based awards for our named
executive officers, other than the CEO. The Committee may exercise its discretion in
modifying any recommended adjustments or awards to executives. However, for 2006 (and
prior years), one named executive officers compensation was not set or reviewed by the
Committee, and prior to 2006, executive officers compensation was approved by the
Committee solely on the basis of Mr. Glassmans recommendations. Until April 26, 2007,
Mr. Goldberg, a long-time employee of the Company, provided such services to the Company
as may be directed by the CEO and was paid on a per diem basis and received other
benefits as determined by the CEO. Mr. Goldberg advised the Company in the areas of
marketing and creative services, new product launches and trade relations. In 2006, Mr.
Goldbergs primary responsibilities were to provide advice and assistance with respect to
the proxy contest associated with our 2006 Annual Meeting of

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Stockholders, to assist the
marketing and creative services departments with promotional material for our products
and new product launches, and, at the CEOs request, to train and oversee the executive
officers and other employees in our marketing and creative services and Trade
Relations/Managed Care operations.

Setting Executive
Compensation

During
2006, the Committee did not begin its review of compensation for our executives until the
fourth quarter after the Audit Committee of the Board of Directors had completed its
internal investigation that was prompted by the SEC informal inquiry, the proxy contest
associated with our 2006 Annual Meeting of Stockholders was completed and we had filed
all Annual and Quarterly Reports on Forms 10-K and 10-Q necessary for us to once again be
considered a current filer. For 2006, the Committee reviewed individual performance
evaluations of our executive officers and compensation recommendations submitted to it by
our CEO. In setting 2006 compensation, the Committee also reviewed a comparison prepared
by management of the 2005 compensation of our executives to the 2005 compensation paid by
certain reporting public companies comprising our peer group of companies. The peer
group companies consisted of Bentley Pharmaceuticals, Inc., CollaGenex Pharmaceuticals,
Inc., Connetics Corporation, Endo Pharmaceuticals Holdings, Inc., Kos Pharmaceuticals,
Inc. Nabi Biopharmaceuticals, Salix Pharmaceuticals, Ltd. and others. Certain members of
the peer group were considered to be very similar to us in terms of market
capitalization, number of employees, and overall prospects for short- and long-term
growth. The compensation paid by these peer group companies to their executive officers
was given greater weight in setting base salaries for our named executive officers.

The
Committee also took into consideration the overall performance of the Company for 2006 in
which the Companys net sales increased 9%, its net income increased 21% and the closing
price of its common stock increased from $9.50 at December 31, 2005 to $20.58 at December
31, 2006.

On
the basis of the Companys performance, peer group comparisons and the salary
recommendations of our CEO, the Committee, in November 2006, approved increases in base
salaries that ranged from 11.5% to 17% for our named executive officers and a $60,700, or
9.4%, increase in the CEOs base salary. These increases were retroactive to April 1,
2006 to coincide with the employment agreements of certain of our named executive
officers that provide for salary adjustments as of April 1 of each year. The Committee
believes these increases brought our total executive compensation values for 2006 into a
closer relationship with market comparisons. In the process of preparing this
Compensation Discussion and Analysis, we discovered that the compensation determinations
of the Committee were inadvertently not approved and ratified by the full Board of
Directors. By Unanimous Written Consent dated April 30, 2007, the Board of Directors
unanimously (with Mr. Daniel Glassman abstaining as to his own compensation) approved the
increases to Mr. Lenczycki, Mr. B. Glassman, Mr. Goldstein and Dr. Landau and determined
to review the increase to Mr. Daniel Glassman, the CEO, as soon as reasonably possible
after the date of the Consent.

For
2007 and beyond, the Committee intends to structure our annual and long-term
incentive-based cash and non-cash executive compensation to motivate our executives to
achieve specified business goals. In furtherance of achieving these objectives, the
Committee has engaged Towers Perrin, an independent global professional services
consulting firm, to conduct, for fiscal 2007, an annual review of our total compensation
program for our CEO as well as for our named executive officers. Towers Perrin will
provide the Committee with relevant market data and alternatives to consider when making
2007 compensation decisions for our CEO and acting on the CEOs the recommendations for
the other named executive officers. Our Committee has determined that Towers Perrin is
independent of us, our CEO and each of our named executive officers.

For
2007, the Committee does not currently have a policy or target for the allocation between
either cash and non-cash or short-term and long-term incentive compensation. The
Committee currently is reviewing many factors, including information provided by
management and Towers Perrin, to determine the appropriate level and mix of incentive
compensation. Any changes to 2007 base salaries for the named executive officers are
expected to be retroactive to April 1, 2007.

2006 Executive
Compensation Components

The
principal components of potential compensation for our named executive officers are:

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| |  |  | base
salary;
| | - |  | ------------

| |  |  | stock
options;
| | - |  | --------------

| |  |  | bonuses,
including bonuses under the Companys EVA Bonus Plan; and
| | - |  | ------------------------------------------------------------------

| |  |  | other
personal benefits.
| | - |  | ------------------------

Base Salary

A
significant component of our named executive officers compensation is base salary, which
provides our named executive officers with a degree of financial certainty and stability.
In setting base salaries for our named executive officers, the Committee takes into
account a variety of factors, including:

| |  |  | level
of responsibility;
| | - |  | ------------------------

| |  |  | individual
performance;
| | - |  | -----------------------

| |  |  | internal
review of the named executive officers compensation,                  individually and
relative to other officers and relative to                  similarly situated executives
at the peer group companies;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | general
levels of market and peer group salary increases; and
| | - |  | -------------------------------------------------------------

| |  |  | our
overall financial results.
| | - |  | ------------------------------

Stock Options

The
Committee believes that stock option awards provide a valuable tool for aligning the
interests of management with our stockholders and focusing managements attention on our
long-term growth although we do not require our employees to maintain any minimum
ownership interest in our stock. In addition, the Committee believes that stock option
awards are essential to attract and retain the talented professionals and managers needed
for our continued success. Our existing Stock Option Plan provides only for stock
options. As part of the Committees overall review of our compensation program, it is
also considering whether to propose that the Board of Directors and stockholders approve
a new plan that will allow flexibility to offer additional types of equity-based
compensation, including, for example, restricted stock.

The
Committee determines the amounts of long-term incentive awards after considering cost and
dilution impact, market trends relating to long-term incentive compensation, the
individuals position with us, the level of grants awarded by our peers, remaining
availability under our Stock Option Plan and other relevant factors. We believe the term
and vesting schedule of our stock options provide additional incentive to management to
focus on long-term growth and market performance of our stock. The exercise price of
stock options is equal to the closing price of our common stock on the date of grant.

Our
named executive officers generally receive stock options upon hire, upon promotions and
generally thereafter as part of the Compensation Committees determination of the
executive officers annual total compensation on an annual basis. No stock options were
granted to our named executive officers in 2006.

Cash Bonuses

In
1998, we initiated the Stern Stewart EVA®  Financial Management System. EVA®, Economic
Value Added, is defined as essentially net income less a charge for the capital that is
employed in the business. Based upon the change in EVA®  from the current year to the
previous year, a portion of the change in profitability is distributed to all our
employees based upon a specified percentage of each participating employees base salary
multiplied by a percentage set by the Committee. For 2005 and 2006, the bonuses
distributed to the named executive officers were based upon qualitative work performed in
2005 and 2006 and not strictly in accordance with the EVA formula. The EVA formula does
not provide adjustments for investment decisions that are made by management that
adversely affect current year earnings but are in the best interest of the Company for
future earnings potential. Relevant examples of such charges are payments for rights to
market certain prescription drugs in the future, such as the non-capitalized payments
made by the Company in 2006 for marketing rights for

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Elestrin and Veregen. As a
result, for 2006, the Committee concluded that cash bonuses equal to 30% of targeted EVA
bonuses should be awarded even though the EVA plan target was not met. As part of the
Committees overall review of our compensation program, the continuing value of the EVA
Bonus Plan as an incentive program is being reviewed.

Perquisites and
Other Personal Benefits

We
provide our named executive officers with perquisites and other personal benefits that
the Committee and we believe are reasonable and consistent with our overall compensation
program and better enable us to attract and retain superior employees for key positions.
The Committee periodically reviews the levels of perquisites and other personal benefits
provided to our named executive officers. As part of the Committees overall review of
our compensation program, the Committee will also be reviewing the perquisites and other
personal benefits that we currently provide to our named executive officers.

The
named executive officers are provided with an annual car usage or car allowance, and
participation in the plans and programs described below under the heading Other
Benefits. Attributed costs of the personal benefits described above for the named
executive officers for 2006 are included under All Other Compensation in the Summary
Compensation Table on page 7.

Other Benefits

We
provide the following benefits to our named executive officers generally on the same
basis as the benefits provided to all employees:

| |  |  | Health,
dental and vision insurance;
| | - |  | ------------------------------------

| |  |  | Life
insurance;
| | - |  | ---------------

| |  |  | Short-
and long-term disability;
| | - |  | --------------------------------

| |  |  | Select
long-term disability; and
| | - |  | --------------------------------

| |  |  | 401(k)
plan.
| | - |  | ------------

These
benefits are consistent with those offered by our peer companies. Attributed costs of
these benefits described above for the named executive officers for 2006 are included
under All Other Compensation in the Summary Compensation Table on page 7.

Change of Control Provisions

In
December 2005, the Company entered into employment agreements with Messrs. D. Glassman,
B. Glassman, Lenczycki and Goldstein and a change of control agreement with Dr. Landau
that provide for payments upon a change of control. See Potential Payments Upon
Termination or Change of Control below. The change of control provisions in these
agreements are designed to offer protection to these employees to recognize their many
years of commitment to the Company and its continuing growth.

Tax and Accounting
Considerations

Policy on Deductibility of Executive
Compensation

Section
162(m) of the Internal Revenue Code provides a $1,000,000 deduction limit on compensation
paid to the reporting executives of publicly held corporations, unless the compensation
qualifies as performance-based compensation based on certain performance, disclosure,
stockholder approval and other requirements being met. The options granted under the
Stock Option Plan generally comply with these performance-based compensation
requirements. We have not historically designed our cash bonus programs to comply with
the performance-based compensation requirements.

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The
Committee expects to review the potential consequences of Section 162(m) and may
structure the performance-based portion of our executive compensation to comply with
certain exemptions of Section 162(m). However, we reserve the right to use our judgment
to authorize compensation payments that do not comply with the exemptions of Section
162(m) when we believe that such payments are appropriate and in the best interests of
our stockholders.

Change of Control Tax Gross-Ups

Sections
280G and 4999 of the Internal Revenue Code impose certain adverse tax consequences on
compensation treated as excess parachute payments. An executive is treated as having
received excess parachute payments if he receives compensatory payments or benefits that
are contingent on a change in control, and the aggregate amount of such payments and
benefits equal or exceeds three times the executives base amount. The portion of the
payments and benefits in excess of one times base amount are treated as excess parachute
payments and are subject to a 20% excise tax, in addition to any applicable federal
income and employment taxes. Also, our compensation deduction in respect of the
executives excess parachute payments is disallowed. If we were to be subject to a change
of control, certain amounts received by our executives (for example, amounts attributable
to the accelerated vesting of stock options) could be excess parachute payments under
Sections 280G and 4999 of the Internal Revenue Code. As discussed below under Potential
Payments Upon Termination or Change-in-Control, we provide specified executive officers
with tax gross up payments in event of a change of control.

Accounting for Share-Based
Compensation

Beginning
on January 1, 2006, we began accounting for our share-based payments in accordance with
the requirements of Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123 (revised 2004).

Summary Compensation
Table

The
following table shows all of our compensation paid, during the year ended December 31,
2006 to Daniel Glassman, President and Chief Executive Officer, R. Brent Lenczycki, our
Chief Financial Officer, and the Companys four other highest compensated executive
officers in 2006 (collectively, the named executive officers), including their current principal positions. There were no long-term
incentive plan payouts or other compensation paid during 2006 to the executive officers
named in the following table, except as set forth below:

|Name and Principal Position              | Salary ($) | Bonus ($) (1) | All Other 
Compensation 
       ($) | Total 
($)
|---------------------------------------- | ---------- | ------------- | ----------------------------------- | ----------
|Daniel Glassman,                         | $ 691,996  |               | $ 140,941                           |           
|President and Chief                     
|Executive Officer                       
|                                         |            |               |                                     |           
|R. Brent Lenczycki,                      | 278,114    |               | 65,514                              |           
|Chief Financial Officer                 
|                                         |            |               |                                     |           
|Bradley Glassman,                        | 270,417    |               | 33,900                              |           
|Senior Vice President, Sales            
|and Marketing                           
|                                         |            |               |                                     |           
|Alan Goldstein, Vice                     | 253,541    |               | 50,838                              |           
|President, Corporate 
       Development
|                                         |            |               |                                     |           
|Ralph Landau, Vice                       | 237,500    |               | 24,192                              |           
|President, Chief                        
|Scientific Officer                      
|                                         |            |               |                                     |           
|Gene Goldberg                            | 268,132    |               | 77,328                              |           

| | 7 | 
| | - | 

---

---

|(1) |  | All
or a portion of these bonuses were paid in 2007.
|--- |  | ----------------------------------------------------

|(2) |  | Includes
the $25,000 non-accountable expense allowance provided in Mr. D. Glassmans employment
agreement.
|--- |  | ----------------------------------------------------------------------------------------------------------

See
Employment Agreements and Arrangements with Executive Officers for a description of the
compensation payable to the named executive officers. In addition, All Other
Compensation in the table above (other than Mr. D. Glassmans non-accountable expense
allowance) that in the aggregate equaled or exceeded $10,000 for any named executive
officer consisted of the following:

|                   | Holiday
Bonus (1) | Automobile-
Related
Expenses (2) | Premiums
For Benefit
Plans (3) | 401(K)
Company
Match (4)
|------------------ | ----------------- | -------------------------------- | ------------------------------ | ------------------------
|Daniel Glassman    | $ 25,962          |                                  | $  1,260                       |                         
|R. Brent Lenczycki | 5,048             |                                  | 35,664                         |                         
|Bradley Glassman   | 7,500             |                                  | 22,708                         |                         
|Alan Goldstein     | 500               |                                  | 20,145                         |                         
|Ralph Landau       | 500               |                                  | 5,750                          |                         
|Gene Goldberg      | 1,400             |                                  | 4,710                          |                         

---

|(1) |  | Paid
to all employees based on years of employment.
|--- |  | ---------------------------------------------------

|(2) |  | Consists
of expenses related to personal mileage, automobile allowance,        automobile leases,
fuel, and/or insurance.
|--- |  | -------------------------------------------------------------------------------------------------------------------------

|(3) |  | Paid
on a non-discriminatory basis to all employees at 80% of the        premiums for medical,
dental, vision and life insurance, and 100% of the        premium for disability
insurance.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Paid
on a non-discriminatory basis to all participants in the Companys        401(K) plan
that meet eligibility requirements. Mr. B. Glassman and Mr.        Goldstein did not
participate in the Companys 401(K) plan in 2006.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Employment
Agreements and Arrangements with Executive Officers

Daniel
Glassman.Daniel Glassmans employment agreement was entered into on December 6, 2005.
Mr. Glassmans employment agreement has a three year term and is automatically renewed
for additional one year periods, unless terminated by either party, at least 90 days
prior to the end of the term. Mr. Glassman received an annual base salary of
approximately $692,000 for 2006, which is subject to increase according to the policies
and practices we may adopt from time to time and at the discretion of our board of
directors, and an annual non-accountable expense allowance of $25,000. In addition to
providing for an annual base salary, Mr. Glassman is eligible to participate in our bonus
and benefit plans. The employment agreement also provided for a grant of options to
purchase shares of our common stock or other similar securities on terms and conditions
established by the Board of Directors and Compensation Committee.

Brent
Lenczycki.Brent Lenczyckis agreement was entered into on December 6, 2005. Mr.
Lenczyckis employment agreement has a three year term and is automatically renewed for
additional one year periods, unless terminated by either party, at least 90 days prior to
the end of the term. Mr. Lenczycki received an annual base salary of approximately
$278,000 for 2006, which is subject to increase according to the policies and practices
we may adopt from time to time and at the discretion of our board of directors. In
addition to providing for an annual base salary, Mr. Lenczycki is eligible to participate
in our bonus and benefit plans. The employment agreement also provided for a grant of
options to purchase shares of our common stock or other similar securities on terms and
conditions established by the Board of Directors and Compensation Committee.

Bradley
Glassman.Bradley Glassmans agreement was entered into on December 6, 2005. Mr.
Glassmans employment agreement has a three year term and is automatically renewed for
additional one year periods, unless terminated by either party, at least 90 days prior to
the end of the term. Mr. Glassman received an annual base salary of approximately
$270,500 for 2006, which is subject to increase according to the policies and practices
we may adopt from time to time and at the discretion of our board of directors. In
addition to providing for an annual base salary, Mr. Glassman is eligible to participate
in our bonus and benefit plans. The employment

| | 8 | 
| | - | 

---

agreement also provided for a grant
of options to purchase shares of our common stock or other similar securities on terms
and conditions established by the Board of Directors and Compensation Committee.

Alan
Goldstein.Alan Goldsteins agreement was entered into on December 6, 2005. Mr.
Goldsteins employment agreement has a three year term and is automatically renewed for
additional one year periods, unless terminated by either party, at least 90 days prior to
the end of the term. Mr. Goldstein received an annual base salary of approximately
$254,000 for 2006, which is subject to increase according to the policies and practices
we may adopt from time to time and at the discretion of our board of directors. In
addition to providing for an annual base salary, Mr. Goldstein is eligible to participate
in our bonus and benefit plans. The employment agreement also provided for a grant of
options to purchase shares of our common stock or other similar securities on terms and
conditions established by the Board of Directors and Compensation Committee.

Ralph
Landau.Dr. Landau does not have an employment agreement with the Company. In 2006, he
received a base salary of approximately $238,000, which is subject to increase according
to the policies and practices we may adopt from time to time and at the discretion of our
board of directors. In addition to an annual base salary, Dr. Landau is eligible to
participate in our bonus and benefit plans and to receive stock options at the discretion
of our board of directors.

Gene
Goldberg.Since November 2003, Mr. Gene Goldberg, at that time Senior Vice President,
Marketing and Corporate Planning, has been employed by the Company on a per diem basis,
and provides such services to the Company as may be directed by the CEO. Mr. Goldberg has
advised the Company in the areas of marketing and creative services, new product launches
and trade relations. Under the arrangements in effect until April 26, 2007, he was paid
at a rate of $1,200 per day, with a minimum of $3,000 per month, received bonuses under
the EVA plan and a discretionary bonus, was a participant in the Stock Option Plan, had
an automobile allowance, the use of a Company-owned car and was reimbursed for his travel
and other expenses. Mr. Goldberg did not participate in any of the Companys health and
benefit plans. Effective April 26, 2007, Mr. Goldberg is no longer with  the Company.

Grant of Plan-Based
Awards in 2006

There
have been no grants of plan-based awards during the year ended December 31, 2006.

Outstanding Equity
Awards at December 31, 2006

The
following table shows all of our outstanding equity awards during the year ended December
31, 2006 for our named executive officers. To date, the Company has granted only stock
options.

| | 9 | 
| | - | 

---

|Name                                     | Number of 
Securities 
Underlying 
Options (#) 
Exercisable | Number of 
Securities 
Underlying 
Unexercised 
Options(#) 
Unexercisable (1) | Option 
Exercise Price ($) | Option 
Expiration Date
|---------------------------------------- | ----------------------------------------------------------- | ----------------------------------------------------------------------------- | -------------------------- | -----------------------
|Daniel Glassman,                         | 315,000                                                     | (2)                                                                           |                           |                        
|President and Chief                      | 66,666                                                      |                                                                               | 133,334                    |                        
|Executive Office                        
|                                        
|R. Brent Lenczycki,                      | 6,000                                                       |                                                                               |                           |                        
|Chief Financial Officer                  | 60,000                                                      |                                                                               |                           |                        
|                                         | 15,000                                                      |                                                                               |                           |                        
|                                         | 26,666                                                      |                                                                               | 53,334                     |                        
|                                        
|Bradley Glassman,                        | 60,000                                                      | (3)                                                                           |                           |                        
|Senior Vice President, Marketing and     | 33,333                                                      |                                                                               | 66,667                     |                        
|Corporate Planning                      
|                                        
|Alan Goldstein,                          | 10,000                                                      |                                                                               | 20,000                     |                        
|Vice President, Corporate Development   
|                                        
|Ralph Landau,                            | 15,000                                                      |                                                                               |                           |                        
|Vice President, Chief Scientific Officer | 10,000                                                      |                                                                               | 20,000                     |                        
|                                         |                                                             |                                                                               |                            |                        
|Gene Goldberg                            | 18,000                                                      |                                                                               |                           |                        
|                                         | 23,333                                                      |                                                                               | 46,667                     |                        

---

|(1) |  | Options
vest at a rate of 1/3 of the entire grant on the first, second and       third
anniversaries of the original grant date of November 21, 2005;       remaining unvested
options vest on November 21, 2007 and November 21,       2008.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Mr.
D. Glassman exercised these options after December 31, 2006.
|--- |  | ----------------------------------------------------------------

|(3) |  | Mr.
B. Glassman exercised 30,000 of these options after December 31, 2006.
|--- |  | --------------------------------------------------------------------------

Option Exercises and
Stock Vested in 2006

The
following table shows all of our options exercised during the year ended December 31,
2006 for our named executive officers.

| | 10 | 
| | -- | 

---

|                                      | Option Awards                               
|------------------------------------- | --------------------------------------------
|Name                                  | Number of 
Shares 
Acquired on 
Exercise (#)
|Daniel Glassman,                      | 25,000                                      
|President and Chief                  
|Executive Officer                    
|                                      |                                             
|R. Brent Lenczycki,                   |                                            
|Chief Financial Officer              
|                                      |                                             
|Bradley Glassman,                     |                                            
|Senior Vice President,               
|Sales and Marketing                  
|                                      |                                             
|Alan Goldstein,                       |                                            
|Vice President, Corporate Development
|                                      |                                             
|Ralph Landau,Vice                     |                                            
|President, Chief Scientific Officer  
|                                      |                                             
|Gene Goldberg                         |                                            

Nonqualified
Deferred Compensation in 2006

There
was no nonqualified deferred compensation in 2006.

Pension Benefits

The
Company does not have a defined-benefit pension or similar program. It maintains a
Defined Contribution 401(k) program.

Potential Payments
Upon Termination or Change of Control

On
December 6, 2005, upon the approval of our Board of Directors and the Compensation
Committee of our Board of Directors, we entered into employment agreements with each of
Daniel Glassman, our President and Chief Executive Officer, R. Brent Lenczycki, our Vice
President and Chief Financial Officer, Bradley Glassman, our Senior Vice President, Sales
and Marketing, and Alan Goldstein, our Vice President, Corporate Development. We also
entered into a Change of Control Agreement with Ralph Landau, Ph.D., our Vice President,
Chief Scientific Officer, on December 6, 2005. Mr. Goldberg has no termination benefits
or employment or change of control agreement or arrangement.

Under
the employment agreements, upon termination of employment without cause or for good
reason (as such terms are defined in the employment agreements), each of Mr. D.
Glassman, Mr. Lenczycki, Mr. B. Glassman, and Mr. Goldstein will be entitled to: (i) a
lump sum cash payment equal to the sum of (a) any accrued but unpaid salary as of the
date of such termination, (b) any accrued but unpaid annual cash bonus payable under our
EVA Bonus Plan (as described under Compensation Discussion and Analysis above) for any
annual period ended prior to the date of such termination, and (c) all expenses incurred
for which documentation has been or will be provided in accordance with our policies but
not yet reimbursed; (ii) a lump sum cash payment equal to the amount payable under our
EVA Bonus Plan for the annual period in which such termination occurs, prorated through
the date of such termination; (iii) continuation of all perquisites and other
Bradley-related benefits to which he was entitled as of the date of his termination
through the end of the second calendar year following the year in which his employment
terminates; (iv) immediate vesting of all of his stock options or any other equity awards
based on our

| | 11 | 
| | -- | 

---

securities; (v) continued
participation in, and continuation by us of the payment of the relevant premiums
applicable to, the life insurance and health, welfare and medical insurance plans through
the end of the second calendar year following the year in which his employment
terminates; and (vi) continued participation by him and his dependents in all other
Bradley-sponsored health, welfare and benefit plans through the end of the second
calendar year following the year in which his employment terminates. In addition to the
foregoing payments and benefits continuation, upon termination without cause or for
good reason, each of Mr. D. Glassman, Mr. Lenczycki, Mr. B. Glassman, and Mr. Goldstein
will be entitled to a lump sum cash payment equal to two times the sum of his then
current annual salary and the average amount paid to him under our EVA Bonus Plan with
respect to the most recent three calendar years.

If
a change of control (as defined below) of the Company occurs during the term of his
employment agreement, and if, during such term and within twelve months after the date on
which the change of control occurs, his employment is terminated by us without cause
or by him for any reason, then each of Mr. D. Glassman, Mr. Lenczycki, Mr. B. Glassman,
and Mr. Goldstein, as applicable, will be entitled to the payments and benefits described
in the preceding paragraph for a termination without cause or for good reason.

In
the event that any payment under his employment agreement is subject to the excise tax
for golden parachute payments, we will provide Mr. D. Glassman, Mr. Lenczycki, Mr. B.
Glassman, and Mr. Goldstein, as applicable, with a gross-up payment as may be necessary
to put him in the same after-tax position as if the payments had not been subject to the
excise tax.

Each
of Mr. D. Glassman, Mr. Lenczycki, Mr. B. Glassman, and Mr. Goldstein has agreed that he
will not compete with us for a period of twelve months immediately following the term of
his employment agreement; provided, however, that such restriction will not apply if his
employment is terminated without cause or he terminates his employment for good
reason, regardless of whether a change of control has occurred.

Under
Mr. Landaus Change of Control Agreement, if a change of control occurs, and if within
twelve months after the date on which the change of control occurs, his employment is
terminated by either Mr. Landau or us for any reason, except if termination is by us for
cause (as defined in the agreement), then Mr. Landau will be entitled to the same
payments and benefits described in the paragraph above regarding the termination of Mr.
D. Glassman, Mr. Lenczycki, Mr. B. Glassman, or Mr. Goldstein for a termination without
cause or for good reason. Mr. Landau will be entitled to a gross-up payment, if
necessary, as described in the paragraph above regarding gross-up payments to Mr. D.
Glassman, Mr. Lenczycki, Mr. B. Glassman, or Mr. Goldstein. Mr. Landau has also agreed
not to compete with us for a period of twelve months immediately following his
termination of employment; provided, however, that such restriction will not apply if Mr.
Landaus employment is (x) terminated without cause or (y) Mr. Landau terminates his
employment for good reason, in each case within twelve months following the date on
which a change of control occurs.

Change of Control is defined in
each of the Employment Agreements and the Change of Control Agreement as:

|(a) |  | The
acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of          the Securities Exchange Act of 1934, as amended (the Exchange
Act)) (a Person) of beneficial          ownership of any capital stock of the Company
if, after such acquisition, such Person beneficially owns          (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the
         then-outstanding shares of common stock of the Company (the Outstanding Company
Common Stock) or (y)          subject to Section d, the combined voting power of the
then-outstanding securities of the Company          entitled to vote generally in the
election of directors (the Outstanding Company Voting Securities);          provided,
however, that for purposes of this subsection (a), the following acquisitions shall not
         constitute a Change of Control Event: (A) any acquisition directly from the
Company (excluding an          acquisition pursuant to the exercise, conversion or
exchange of any security exercisable for,          convertible into or exchangeable for
common stock or voting securities of the Company, unless the Person          exercising,
converting or exchanging such security acquired such security directly from the Company
or          an underwriter or agent of the Company), (B) any acquisition by any employee
benefit plan (or related          trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) any          acquisition by any corporation
pursuant to a Business Combination (as defined below) which complies with
         clauses (x) and (y) of subsection (c) of this definition; or
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 12 | 
| | -- | 

---

| |  | 
| |  | 

|(b) |  | Subject
to Section (d), such time as the Continuing Directors do not constitute a majority of the
Board of          Directors of the Company, where the term Continuing Director means at
any date a member of the Board          (x) who was a member of the Board on the date
hereof or (y) who was nominated or elected subsequent to          such date by at least a
majority of the directors who were Continuing Directors at the time of such
         nomination or election or whose election to the Board was recommended or
endorsed by at least a majority          of the directors who were Continuing Directors
at the time of such nomination or election; provided,          however, that there shall
be excluded from this clause (y) any individual whose initial assumption of
         office occurred as a result of an actual or threatened election contest with
respect to the election or          removal of directors or other actual or threatened
solicitation of proxies or consents, by or on behalf          of a person other than the
Board; or
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) |  | The
consummation of a merger, consolidation, reorganization, recapitalization or share
exchange          involving the Company or a sale or other disposition of all or
substantially all of the assets of the          Company (a Business Combination),
unless, immediately following such Business Combination, each of the          following
two conditions is satisfied: (x) all or substantially all of the individuals and entities
who          were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting          Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more          than 50% of the
then-outstanding shares of common stock and the combined voting power of the
         then-outstanding securities entitled to vote generally in the election of
directors, respectively, of          the resulting or acquiring corporation in such
Business Combination (which shall include, without          limitation, a corporation
which as a result of such transaction owns the Company or substantially all of
         the Companys assets either directly or through one or more subsidiaries) (such
resulting or acquiring          corporation is referred to herein as the Acquiring
Corporation) in substantially the same proportions          as their ownership of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
         respectively, immediately prior to such Business Combination and (y) no Person
(excluding the Acquiring          Corporation or any employee benefit plan (or related
trust) maintained or sponsored by the Company or by          the Acquiring Corporation)
beneficially owns, directly or indirectly, 50% or more of the          then-outstanding
shares of common stock of the Acquiring Corporation, or of the combined voting power of
         the then-outstanding securities of such corporation entitled to vote generally
in the election of          directors (except to the extent that such ownership existed
prior to the Business Combination).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(d) |  | During
the period in which Daniel Glassman and his affiliates own or          control a majority
of the Companys Class B Common Stock entitled to          elect the majority of the
Companys Board of Directors, a Change of          Control shall not be deemed to have
occurred if Mr. Glassman and his          affiliates caused, either by their action or
inaction, the          circumstances contemplated in either Sections (a) or (b) to occur.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
following table sets forth the potential payments on the terms described above to Mr. D.
Glassman, Mr. Lenczycki, Mr. B. Glassman and Mr. Goldstein upon termination without
cause, for good reason or upon a Change of Control and to Dr. Landau upon a Change of
Control, as if such termination event had occurred as of December 31, 2006:

| | 13 | 
| | -- | 

---

|Name                    |  | Cash 
Severance |  | Vesting of 
Options(1) |  | Health and 
Welfare 
Payments(2) |  | Continuation 
of Perquisites(3) |  | Tax Gross-
Up
Payments(4) |  | Total     
|----------------------- |  | --------------- |  | ---------------------- |  | -------------------------------- |  | ------------------------------- |  | ------------------------- |  | ----------
|Daniel Glassman,        |  | $1,974,331      |  | $777,337               |  | $36,000                          |  | $82,148                         |  | $1,026,608                |  | $3,896,424
|President and Chief     | 
|Executive Office        | 
|                        |  |                 |  |                        |  |                                  |  |                                 |  |                           |  |           
|R. Brent Lenczycki,     |  | 700,946         |  | 382,405                |  | 38,000                           |  | 81,992                          |  | 485,691                   |  | 1,689,034 
|Chief Financial Officer | 
|                        |  |                 |  |                        |  |                                  |  |                                 |  |                           |  |           
|Bradley Glassman,       |  | 696,230         |  | 478,002                |  | 32,000                           |  | 59,532                          |  | 503,326                   |  | 1,769,090 
|Senior Vice President,  | 
|Marketing and Corporate | 
|Planning                | 
|                        |  |                 |  |                        |  |                                  |  |                                 |  |                           |  |           
|Alan Goldstein,         |  | 622,010         |  | 143,400                |  | 32,000                           |  | 42,272                          |  | 327,068                   |  | 1,166,750 
|Vice President,         | 
|Corporate Development   | 
|                        |  |                 |  |                        |  |                                  |  |                                 |  |                           |  |           
|Ralph Landau,           |  | 587,698         |  | 143,400                |  | 32,000                           |  | 13,238                          |  | 299,174                   |  | 1,075,510 
|Vice President, Chief   | 
|Scientific Officer      | 

---

|(1) |  | Represents
the aggregate value of the acceleration of vesting of the       executives unvested
stock options based on the spread between the closing       price of our common stock of
$20.58 on December 31, 2006 and the exercise       price of the stock options.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Represents
continued group health benefits (medical, dental and vision       etc.) for the executive
and his dependents (to the extent provided at the       termination date) for a period of
two years.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Represents
the value of continued perquisites other than those       attributable to Health and
Welfare Benefits as set forth under All       Other Compensation in the Summary
Compensation Table above, for a period       of two years.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Represents an estimate of the payment of an amount sufficient to offset the impact of any excess parachute payment excise tax payable by the executive pursuant to the provisions of the Internal Revenue Code or any comparable provision of state law. An executive is treated as having received excess parachute payments if he receives compensatory payments or benefits that are contingent on a change in control, and the aggregate amount of such payments and benefits equal or exceeds three times the executives base amount.  This estimate does not include any additional amounts that could become due under the employment agreements as a result of the imposition of any penalties or interest associated with the excise tax.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Director Compensation

The
following table sets forth information with respect to all compensation earned by our
directors during fiscal year 2006.

| | 14 | 
| | -- | 

---

|Name              | Fees Earned or 
Paid in Cash 
($) | Option 
Awards ($) 
(1) (2) | Total 
($)
|----------------- | --------------------------------- | --------------------------- | ----------
|Andre Fedida      | $  73,558                         |                             | $  51,700 
|                  |                                   |                             |           
|Michael Fedida    | 57,015                            |                             | 51,700    
|                  |                                   |                             |           
|Daniel Glassman   |                                  |                             |          
|                  |                                   |                             |           
|Seth W. Hamot     |                                  |                             |          
|                  |                                   |                             |           
|Leonard S. Jacob  | 49,659                            |                             | 161,050   
|                  |                                   |                             |           
|Steven Kriegsman  | 53,041                            |                             | 51,700    
|                  |                                   |                             |           
|Douglas E. Linton | 6,986                             |                             | 155,100   
|                  |                                   |                             |           
|William J. Murphy | 57,846                            |                             | 161,050   

---

|(1) |  | Option
awards represent the compensation expense recognized for financial        statement
reporting purposes for the fiscal year ended December 31, 2006        in accordance with
SFAS 123(R)  for stock options granted in and prior to        2006. Upon the
implementation of SFAS 123(R)  on January 1, 2006, we        recognize the expense
associated with the grant date fair value of stock        options granted in and prior to
2006 over the vesting term of those        awards. Fair value is based on the
Black-Scholes option pricing model on        the date of grant. On February 7, 2006, Dr.
Jacob and Mr. Murphy were        each awarded stock options to acquire 15,000 shares with
a per share fair        value of $7.29, representing an overall fair value of $109,350
for each        such director. On November 13, 2006, Dr. Fedida, Mr. Fedida, Dr. Jacob,
       Mr. Kriegsman and Mr. Murphy were each awarded stock options to acquire        5,000
shares with a per share fair value of $18.96, representing an        overall fair value
of $51,700 to each such director, and Mr. Linton was        awarded stock options to
acquire 15,000 shares with a per share fair        value of $18.96, representing an
overall fair value of $155,100.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | The
table below shows the aggregate number of outstanding vested and        unvested options
to acquire common stock held by each director as of        December 31, 2006:
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Name
      
      Vested and 
Unvested 
OptionsAndre Fedida
      
      35,000Michael Fedida
      
      25,000Daniel Glassman
      
      515,000
      (1)Seth W. Hamot
      
      Leonard S. Jacob
      
      20,000Steven Kriegsman
      
      30,000Douglas E. Linton
      
      15,000William J. Murphy
      
      20,000


---

|(1) |  | Mr.
Glassman exercised 315,000 of these options after December 31, 2006.
|--- |  | ------------------------------------------------------------------------

The
Board of Directors has approved the following fees to be paid to its non-employee
directors. Each such director will receive an annual $20,000 cash retainer. The Chairman
of the Audit Committee receives an additional annual retainer of $7,500 and the Chairman
of each of the Compensation Committee and the Nominating and Corporate Governance
Committee receives an additional annual retainer of $3,000. Non-employee directors
receive $1,000 for each Board of Directors meeting or committee meeting attended in
person or by telephone. In addition, non-employee directors receive an initial grant upon
joining the Board of Directors of 15,000 options to purchase shares of our common stock,
which options vest over a period of three years from the date of grant. Each continuing
non-employee director receives an annual grant of 5,000 options to purchase shares of our
common stock. All options are granted pursuant to our Stock Option Plan. The Board of
Directors approved the payment of

| | 15 | 
| | -- | 

---

an additional annual retainer to the
non-Executive Chairman of the Board of $75,000 and the grant of options to purchase
30,000 shares of Common Stock in January and February 2007, respectively.

Compensation Committee
Interlocks and Insider Participation

During
2006, the members of the Compensation Committee were Mr. Michael Fedida (Chairman), Dr.
Andre Fedida and Mr. Murphy. No member of our Compensation Committee or any executive
officer of the Company or any of its subsidiaries has a relationship that would
constitute an interlocking relationship with executive officers or directors of another
entity. No Compensation Committee member is an officer or employee of the Company or any
of its subsidiaries or was formerly an officer of the Company. None of our executive
officers have served as members of a compensation committee or a board of directors of
any other entity that has an executive officer serving on the Compensation Committee of
our Board of Directors or as a member of our Board of Directors.

Compensation Committee
Report

The
following report of the Compensation Committee does not constitute soliciting material
and shall not be deemed filed or incorporated by reference into any other filing by us
under the Securities Act of 1933 or the Securities Exchange Act of 1934.

The
Compensation Committee has reviewed and discussed the Compensation Discussion and
Analysis set forth above with our management. Based on this review and discussion, the
Compensation Committee has recommended to our Board of Directors that the Compensation
Discussion and Analysis be included in this Amendment to Annual Report on Form 10-K/A and
our annual proxy statement on Schedule 14A.

Respectfully
submitted on April 30, 2007, by the members of the Compensation Committee of the Board of
Directors.

| | COMPENSATION COMMITTEE                                                                                                                                                                   
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                          
| | Michael Fedida, Chairman
                                                             
      Dr. Andre Fedida 
                                                            William Murphy

|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDERS MATTERS
|-------- | -----------------------------------------------------------------------------------------------

The
following table sets forth certain information as of March 31, 2007 (except as otherwise
noted in the footnotes to the table) regarding the ownership of our common stock and
Class B common stock by (i) each current director, (ii) the executive officers named in
the Summary Compensation Table set forth elsewhere in this annual report, (iii) each
beneficial owner of more than five percent of common stock and Class B common stock known
by us and (iv) all directors and executive officers, as a group, and the percentage of
outstanding shares of common stock and Class B common stock beneficially held by them on
that date.

As
of March 31, 2007, there were 16,443,417 shares of common stock and 429,752 shares of
Class B common stock outstanding.

Since
each share of Class B common stock may be converted at any time by the holder into one
share of common stock, the beneficial ownership rules promulgated under the Securities
Exchange Act of 1934, as amended, require that all shares of common stock issuable upon
the conversion of Class B common stock by any stockholder be included in determining the
number of shares and percentage of common stock held by such stockholder.

Unless
otherwise indicated, the stockholders identified in this table have sole voting and
investment power with respect to the shares beneficially owned by them, and the address
of each beneficial owner is c/o Bradley Pharmaceuticals, Inc., 383 Route 46 West
Fairfield, New Jersey 07004.

| | 16 | 
| | -- | 

---

Each
named person and all executive officers and directors, as a group, are deemed to be the
beneficial owners of securities that may be acquired within 60 days of March 31, 2007
through the exercise of options, warrants or exchange or conversion rights. Accordingly,
the number of shares and percentage set forth opposite each stockholders name under the
columns common stock includes shares of common stock issuable upon exercise of presently
exercisable warrants and stock options, options that vested within 60 days of March 31,
2007 and shares of common stock issuable upon conversion of shares of Class B common
stock. The shares of common stock so issuable upon such exercise, exchange or conversion
by any such stockholder are not included in calculating the number of shares or
percentage of common stock beneficially owned by any other stockholder.

|                                      | Amount and Nature of 
Beneficial Ownership | Percent of Class     
|------------------------------------- | ------------------------------------------ | ---------------------
|Name and Address of 
Beneficial Owner | Common 
Stock                              | Class B 
Common Stock
|Directors and Executive Officers      |                                            |                      
|Daniel Glassman                       | 1,669,793                                  | (1)                  
|Leonard S. Jacob, M.D., Ph.D          | 6,000                                      | (3)                  
|Andre Fedida, M.D                     | 24,999                                     | (4)                  
|Michael Fedida, R.Ph                  | 16,666                                     | (5)                  
|Seth Hamot                            | 1,660,700                                  | (6)                  
|Steven Kriegsman                      | 19,999                                     | (7)                  
|Douglas E. Linton                     |                                           |                      
|William J. Murphy                     | 5,000                                      | (8)                  
|Bradley Glassman                      | 194,035                                    | (9)                  
|Alan Goldstein                        | 12,123                                     | (10)                 
|Ralph Landau, Ph.D                    | 26,118                                     | (11)                 
|R. Brent Lenczycki                    | 125,798                                    | (12)                 
|Gene Goldberg                         | 46,905                                     | (13)                 
|All current executive officers and   
|directors as a group (12 Persons)     | 3,808,136                                  | (14)                 
|5% Holders                           
|Costa Brava Partnership III L.P.     
|20 Boylston Street                   
|Boston, MA 02116                      | 1,660,700                                  | (15)                 
|Dimensional Fund Advisors LP.        
|1299 Ocean Avenue, Santa             
|Monica, CA 90401                      | 1,240,710                                  | (16)                 
|Barclays Global Investors, NA,       
|Barclays Global Fund Advisors,       
|Barclays Global Investors, Ltd.,     
|Barclays Global Investors Japan      
|Trust and Banking Company Limited,   
|Barclays Global Investors Japan      
|Limited                              
|c/o Barclays Global Investors,       
|NA                                   
|45 Fremont Street,                   
|San Francisco, CA 94105               | 1,319,724                                  | (17)                 

---

|* |  | Represents
less than one percent
|- |  | --------------------------------

|(1) |  | Includes
392,469 shares issuable upon conversion of a like number of        shares of Class B
common stock and 43,693 shares owned indirectly by Mr.        Glassman through affiliates
and 66,666 shares underlying presently
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 17 | 
| | -- | 

---

| |  | exercisable options
or options that vested within 60 days of March 31,        2007. Mr. Glassmans affiliates
have disclaimed beneficial ownership over        all of these shares.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Includes
9,733 shares owned indirectly by Mr. Glassman through        affiliates. Mr. Glassmans
affiliates have disclaimed beneficial        ownership over these shares. Does not
include 16,403 shares beneficially        owned by Iris Glassman, Mr. Glassmans spouse.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Includes 5,000
shares of common stock underlying presently exercisable        options or options that
vested within 60 days of March 31, 2007.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Represents
shares of common stock underlying presently exercisable        options or options that
vest within 60 days of March 31, 2007.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Represents
shares of common stock underlying presently exercisable        options or options that
vest within 60 days of March 31, 2007.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | These
shares are owned by Costa Brava Partnership III L.P., a Delaware        limited
partnership, of which Roark, Rearden and Hamot, LLC, a Delaware        limited liability
company, is the general partner; Mr. Hamot is the        president of Roark, Rearden & Hamot,
LLC. Each of Costa Brava and its        general partner, Roark, Rearden and Hamot, LLC
disclaim beneficial        ownership of 33,000 of such shares that are held by separate
accounts of        which Mr. Hamot is deemed to be the beneficial owner.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) |  | Represents
shares of common stock underlying presently exercisable        options or options that
vest within 60 days of March 31, 2007.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | Represents
shares of common stock underlying presently exercisable        options or options that
vest within 60 days of March 31, 2007.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|(9) |  | Includes
20,880 shares issuable upon conversion of a like number of        shares of Class B
common stock and 63,333 shares of common stock        underlying presently exercisable
options or options that vest within 60        days of March 31, 2007.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) |  | Includes
10,000 shares of common stock underlying presently exercisable        options or options
that vested within 60 days of March 31, 2007.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

|(11) |  | Includes
25,000 shares of common stock underlying presently exercisable        options or options
that vest within 60 days of March 31, 2007.
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

|(12) |  | Includes
107,666 shares of common stock underlying presently exercisable        options or options
that vest within 60 days of March 31, 2007.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------

|(13) |  | Includes
41,333 shares of common stock underlying presently exercisable        options or options
that vest within 60 days of March 31, 2007.
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------

|(14) |  | See        footnotes 1, 2, 3, 4, 5,6, 7,
8, 9, 10, 11 and 12.
|---- |  | -------------------------------------------------------------

|(15) |  | See
footnote 6.
|---- |  | ---------------

|(16) |  | Based
upon the Schedule 13G filed with the SEC with an effective date of February 8, 2007.
|---- |  | ------------------------------------------------------------------------------------------

|(17) |  | Based
upon the Schedule 13G filed with the SEC with an effective date of January 23, 2007.
|---- |  | ------------------------------------------------------------------------------------------

|ITEM 13. | CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|-------- | -------------------------------------------------------------------------

Certain Relationships
and Related Transactions

The
Companys Codes of Ethics and Corporate Governance Guidelines discuss the Companys
policies and procedures with respect to conflicts of interest. In addition, the Company
has an unwritten policy that the Board of Directors is required to pre-approve any
transactions with related parties, as those terms are defined by the New York Stock
Exchange, the Public Company Accounting Oversight Board, the Securities and Exchange
Commission (e.g., Item 404 of Regulation S-K), or any other qualified entity. When in
doubt, all members of the Company are required to disclose the information and the Board
will determine the appropriate course of action, if any. In making this determination the
Board has the authority to engage the Companys counsel or other legal counsel as it
deems appropriate and necessary. Company management is prohibited from engaging in any
related party transaction without the express approval of the Board.

We
currently lease approximately 33,000 square feet of office space at 383 Route 46 West,
Fairfield, New Jersey, under a lease expiring on January 31, 2013. The owner and manager
of this property is a limited liability company (LLC) that is owned and controlled by
the Glassman family. The purpose of the LLC is to own and manage the property at 383
Route 46 West. The lease agreement obligates us to pay 3% increases in annual lease
payments per year. Rent expense, including our proportionate share of real estate taxes,
was approximately $654,000

| | 18 | 
| | -- | 

---

in 2006. As of December 31, 2006,
the estimated assets of the LLC were approximately $1.6 million and the estimated
liabilities were $1.4 million. Daniel and Iris Glassman own 10% and their children,
including Bradley Glassman, Senior Vice President Sales and Marketing of the Company, own
90% of this LLC.

On
October 26, 2006, we entered into a global Settlement Agreement (Settlement Agreement)
with Costa Brava Partnership III L.P., of which Roark, Rearden and Hamot, LLC (RRH) is
its general partner (Seth W. Hamot is the President of RRH) (collectively, Costa
Brava). The Settlement Agreement was executed prior to the close of the Companys 2006
Annual Meeting of Stockholders at which Mr. Hamot was elected a director of the Company.
Costa Brava currently owns approximately 9.8% of the Companys Common Stock. Under the
terms of the Settlement Agreement, we and Costa Brava agreed, among other things, that
Costa Brava would dismiss all pending litigation against us in Delaware with prejudice;
we would pay Costa Brava $1.15 million in full settlement of all litigation claims, which
amount was accrued as of September 30, 2006; and Costa Brava would release us from all
claims arising prior to the Settlement Agreement. We paid Costa Brava the $1.15 million
and on November 2, 2006, Costa Brava dismissed with prejudice all then pending litigation
against us in Delaware.

Independent Directors

Our
Board of Directors adopted the following director independence standards: (i) a director
who is an employee, or whose immediate family member is an executive officer, of the
Company may not be deemed independent until three years after the termination of such
employment relationship; employment as an interim Chairman of the Board or Chief
Executive Officer will not disqualify a director from being considered independent
following that employment; (ii) a director who receives, or whose immediate family member
receives, more than $100,000 per year in direct compensation from the Company, other than
director and committee fees and pension or other forms of deferred compensation for prior
service (provided such compensation is not contingent in any way on continued service),
may not be deemed independent until three years after he or she ceases to receive more
than $100,000 in compensation; compensation received by a director for former service as
an interim Chairman of the Board or Chief Executive Officer and compensation received by
an immediate family member for service as a non-executive employee of the Company will
not be considered in determining independence under this test; (iii) a director who is
affiliated with or employed by, or whose immediate family member is affiliated with or
employed in a professional capacity by, a present or former internal or external auditor
of the Company may not be deemed independent until three years after the end of the
affiliation or the employment or auditing relationship; (iv) a director who is employed,
or whose immediate family member is employed, as an executive officer of another company
where any of the Companys current executive officers serve on that companys
compensation committee may not be deemed independent until three years after the end of
such service or the employment relationship; and (v) a director who is an executive
officer, general partner or employee, or whose immediate family member is an executive
officer or general partner, of an entity that makes payments to, or receives payments
from, the Company for property or services in an amount which, in any single fiscal year,
is the greater of $1 million or 2% of such other entitys consolidated gross revenues,
may not be deemed independent until three years after falling below that threshold. For
purposes of these independence standards, the following terms have the following
meanings: (y) Affiliate means any consolidated subsidiary of the Company and any other
company or entity that controls, is controlled by or is under common control with the
Company, as evidenced by the power to elect a majority of the board of directors or
comparable governing body of such entity; and (z) Immediate Family means spouse,
parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law,
brothers- and sisters-in-law and anyone (other than domestic help) sharing a persons
home, but excluding any person who is no longer an immediate family member as a result of
legal separation or divorce, or death or incapacitation.

These
independence standards meet the listing standards currently adopted by the NYSE with
respect to the determination of director independence. In accordance with these
standards, a director must be determined to have no material relationship with us other
than as a director. The standards specify the criteria by which the independence of our
directors will be determined, including strict guidelines for directors and their
immediate families with respect to past employment or affiliation with us or our
independent registered public accounting firm. The Board of Directors has determined that
every director, with the exception of Mr. Glassman, is currently independent within the
meaning of SEC regulations, the listing standards of the NYSE and our independence
standards. Mr. Glassman is not a member of any committee of the board.

| | 19 | 
| | -- | 

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ITEM 14.    PRINCIPAL
ACCOUNTANT FEES AND SERVICES

Grant
Thornton LLP served as the Companys independent registered public accounting firm for
the fiscal years ended December 31, 2005 and 2006. A representative of Grant Thornton LLP
is expected to be present at the Annual Meeting, will have an opportunity to make a
statement if he desires to do so and is expected to respond to appropriate questions from
the Companys stockholders. For the fiscal years ended December 31, 2005 and 2006,
professional services were performed by Grant Thornton LLP. The following table shows the
fees billed or expected to be billed to the Company for the audit and other services
provided by Grant Thornton LLP for 2005 and 2006:

2006
      2005Audit Fees
      $1,745,000
      
      $2,216,000Audit-Related Fees
      242,000
      
      54,000Total Audit and Audit-Related Fees
      1,987,000
      
      2,270,000Tax Fees
      192,000
      
      115,000Total Fees
      $2,179,000
      
      $2,385,000


Audit
Fees.This category includes the audit of the Companys consolidated financial
statements, and reviews of the financial statements included in the Companys Quarterly
Reports on Form 10-Q. This category also includes advice on accounting matters that arose
during, or as a result of, the audit or the review of interim financial statements and  SEC
registration statements.

Audit-Related
Fees.The services for fees under this category include other accounting advice and
employee benefit plan audits.

Tax
Fees.These fees relate to the preparation and review of tax returns, tax planning and
tax advisory services.

Our
Audit Committee is required to pre-approve the audit and non-audit services performed by
the independent registered public accounting firm. Unless a type of service to be
provided by the independent registered public accounting firm has received general
pre-approval, subject to certain dollar limitations, it will require specific
pre-approval by the Audit Committee. The Audit Committee may delegate pre-approval
authority to one or more of its members. The member or members to whom such authority is
delegated shall report any pre-approval decisions to the Audit Committee at its next
scheduled meeting. Unless otherwise determined by the Audit Committee or otherwise
required by applicable law, the Chair of the Audit Committee has the right to exercise
the pre-approval authority of the Audit Committee. The Audit Committee has determined
that the professional services rendered by Grant Thornton are compatible with maintaining
the principal accountants independence. The Audit Committee gave prior approval to all
audit and non-audit services rendered in 2006.

PART IV

ITEM 15.   EXHIBITS
AND FINANCIAL SCHEDULES

INDEX TO EXHIBITS

|Exhibit
Number |  | Description                                                                                                                                                            
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1           |  | Certification by Daniel Glassman, Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   
|31.2           |  | Certification by R. Brent Lenczycki, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|32.1           |  | Certification by Daniel Glassman, Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.   
|32.2           |  | Certification by R. Brent Lenczycki, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

| | 20 | 
| | -- | 

---

SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to the annual report to be signed on its behalf
by the undersigned, thereunto duly authorized.

|April 30, 2007 |  | BRADLEY PHARMACEUTICALS, INC.                                                                                                 
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                               
|               |  | By: /s/ Daniel Glassman                                                                                                       
|               |  | Daniel Glassman 
                                                                        President and
Chief Executive Officer



| | 21 | 
| | -- | 

---