**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**Form
      10-KSB/A**


**Amendment
      No. 2**




**xANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE FISCAL YEAR ENDED DECEMBER 31,
                2007****p****TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT
                OF 1934 FOR THE TRANSITION PERIOD FROM****TO**





Commission
      file number **001-31608**










**XCORPOREAL,
      INC.**


(Name
      of
      small business issuer in its charter)





**Delaware**
            **75-2242792**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)**12121
                Wilshire Blvd., Suite 350**
            **Los
                Angeles, California 90025**(Address
                of principal executive offices)
            (City,
                State and Zip Code)





Issuer’s
      telephone number **(310)
      923-9990**





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





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





**Common
      stock, $0.0001 par value per share**


(Title
      of
      class)





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





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







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





State
      issuer’s revenues for its most recent fiscal year: **$0**





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, as of a specified date within the past 60 days: **$3,232,273
      as of September 16, 2008**





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: **14,704,687
      shares of common stock as of September 16, 2008**





Transitional
      Small Business Disclosure Format (Check one): Yes  ̈ No x




**EXPLANATORY
      NOTE**





Xcorporeal,
      Inc.("we," "us" or "our") is filing this Amendment No. 2 on Form 10-KSB/A to
      amend our annual report on Form 10-KSB for the fiscal year ended December 31,
      2007, as filed with the Securities and Exchange Commission on March 25, 2008
      (the "Original Report"). The purpose of this Amendment No. 2 is to revise our
      discussion of the effectiveness of our internal control over financial reporting
      as of the end of the period covered by the Original Report. This Amendment
      is
      being filed for the purpose of responding to comments received by us from the
      staff of the Securities and Exchange Commission with respect to Amendment No.
      1
      to Form 10-KSB filed on August 1, 2008.




As
      required by Rule 12b-15 of the Securities Exchange Act of 1934, as amended,
      the
      complete text of Part II, Item 8A has been set forth in this Amendment No.
      2
      including those portions which have not been modified from the Original Report.
      As a result of these modifications, the certifications pursuant to the
      Sarbanes-Oxley Act of 2002, filed as exhibits to the Original Report have been
      re-executed and re-filed as of the date of this Amendment No. 2.




Except
      with respect to our discussion of our conclusion as to the effectiveness of
      our
      internal control over financial reporting as set forth in Part II, Item 8A,
      we
      have not modified or updated any of our prior disclosure from the Original
      Report, and this Amendment No. 2 does not reflect the occurrence of any events
      following the date of the Original Report. Accordingly, this Amendment No.
      2
      should be read in conjunction with our filings made with the Securities and
      Exchange Commission subsequent to the filing of the Original Report, including
      any amendments to those filings.









**PART
      II**


**Item
      8A. Controls and Procedures**





**Disclosure
      Controls and Procedures**





Our
      management, with the participation of our Executive Chairman and Chief Financial
      Officer, conducted an evaluation of the effectiveness of our disclosure controls
      and procedures as of the end of the period covered by this Annual Report
      (December 31, 2007), as is defined in Rule 13a-15(e) promulgated under the
      Securities Exchange Act of 1934, as amended. Our disclosure controls and
      procedures are intended to ensure that the information we are required to
      disclose in the reports that we file or submit under the Securities Exchange
      Act
      of 1934 is (i) recorded, processed, summarized and reported within the time
      periods specified in the Securities and Exchange Commission’s rules and forms
      and (ii) accumulated and communicated to our management, including the Executive
      Chairman and Chief Financial Officer, as the principal executive and financial
      officers, respectively, to allow timely decisions regarding required
      disclosures.




Based
      on
      that evaluation, our Executive Chairman and Chief Financial Officer concluded
      that, as of the end of the period covered by this Annual Report, our disclosure
      controls and procedures were not effective solely due to our failure to
      adequately report such officers' conclusion with respect to disclosure controls
      and procedures.









Our
      management has concluded that the financial statements included in this Form
      10-KSB present fairly, in all material respects our financial position, results
      of operations and cash flows for the periods presented in conformity with
      generally accepted accounting principles.




It
      should
      be noted that any system of controls, however well designed and operated, can
      provide only reasonable, and not absolute, assurance that the objectives of
      the
      system will be met. In addition, the design of any control system is based
      in
      part upon certain assumptions about the likelihood of future
      events.




**Management’s
      Report on Internal Control Over Financial Reporting**





Management
      is responsible for establishing and maintaining adequate internal control over
      our financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the
      Exchange Act). Internal control over financial reporting is a process designed
      to provide reasonable assurance regarding the reliability of financial reporting
      and the preparation of financial statements for external purposes in accordance
      with accounting principles generally accepted in the United States of
      America.




Our
      internal control over financial reporting includes those policies and procedures
      that (i) pertain to the maintenance of records that, in reasonable detail,
      accurately and fairly reflect the transactions and dispositions of our assets,
      (ii) provide reasonable assurance that transactions are recorded as necessary
      to
      permit preparation of financial statements in accordance with accounting
      principles generally accepted in the United States of America, and that our
      receipts and expenditures are being made only in accordance with authorizations
      of our management and directors, and (iii) provide reasonable assurance
      regarding prevention or timely detection of unauthorized acquisition, use or
      disposition of our assets that could have a material effect on the financial
      statements.




Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Also, projections of any evaluation of
      effectiveness to future periods are subject to the risk that controls may become
      inadequate because of changes in conditions, or that the degree of compliance
      with the policies or procedures may deteriorate. Our management, with the
      participation of our Executive Chairman and Chief Financial Officer, conducted
      an evaluation of the effectiveness of our internal control over financial
      reporting based on the framework in Internal Control - Integrated Framework
      issued by the Committee of Sponsoring Organizations of the Treadway Commission.
      Based on this evaluation, our Executive Chairman and Chief Financial Officer
      concluded that, as of the end of the period covered by this Annual Report,
      our
      internal control over financial reporting was effective.




There
      have been no changes in our external controls over financial reporting during
      our most recent fiscal quarter that have materially affected, or are reasonably
      likely to materially affect our internal control over financial
      reporting.




This
      Annual Report does not include an attestation report of our independent
      registered public accounting firm regarding internal control over financial
      reporting. Management’s report was not subject to attestation by our registered
      public accounting firm pursuant to temporary rules of the SEC that permit us
      to
      provide only management’s report in this Annual Report.




***Changes
      in Internal Control Over Financial Reporting***





During
      the year ended December 31, 2007, we made the following changes in our internal
      control over financial reporting:







**•**
            In
                August 2007, we appointed a Chief Financial Officer with education
                and
                background in accounting and finance, substantial experience as CFO
                of
                publicly traded companies, and adequate knowledge of financial accounting,
                internal control, and generally accepted accounting
                principles.





**•**
            Effective
                February 2007, our board of directors formed an Audit Committee composed
                of three independent directors, including a chairman who meets the
                requirements as an audit committee financial expert based on his
                experience and abilities.





**•**
            A
                thorough review of our financial reporting structures, internal control
                structures, and regulatory filings was conducted by our CFO to ensure
                our
                controls and procedures are adequate and
                effective.








**Item
      13: Exhibits**





**No.**
            
            **Description**31.1
            
            Rule
                13a-14(a) Certification of Chief Executive Officer31.2
            
            Rule
                13a-14(a) Certification of Chief Financial Officer32.1
            
            Certification
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                18
                U.S.C. Section 1350, as Pursuant to Section 906 of the Sarbanes-Oxley
                Act
                of 2002




**SIGNATURES**





Pursuant
      to the requirements of the Securities and Exchange Act of 1934, the Registrant
      has duly caused this report to be signed on its behalf by its duly authorized
      representatives.




**XCORPOREAL,
                INC.**By:
            /s/
              Terren S. PeizerTerren
                S. Peizer
              Executive
                ChairmanTitle




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




**Signature**
            
            **Title(s)**
            
            **Date**/s/
Terren
                S. Peizer
              Terren
                S. Peizer
            
            Executive
                Chairman of the Board of Directors
              (Principal
                Executive Officer)
            
            September
                19, 2008/s/
                  Daniel S. Goldberger
              Daniel
                S. Goldberger
            
            Chief
                Executive Officer and Director
            
            September
                19, 2008/s/
                  Robert Weinstein
              Robert
                Weinstein
            
            Chief
                Financial Officer (Principal Financial and Accounting
                Officer)
            
            September
                19, 2008/s/
                  Marc G. Cummins
              Marc
                G. Cummins
            
            Director
            
            September
                19, 2008/s/
                  Victor Gura, M.D.
              Victor
                Gura, M.D.
            
            Chief
                Medical & Scientific Officer and Director
            
            September
                19, 2008/s/
                  Kelly McCrann
              Kelly
                McCrann
            
            Director
            
            September
                19, 2008/s/
                  Hans Polaschegg, Ph.D.
              Hans
                Polaschegg, Ph.D.
            
            Director
            
            September
                19, 2008/s/
                  Jay A. Wolf
              Jay
                A. Wolf
            
            Director
            
            September
                19, 2008