----

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**SECURITIES        AND EXCHANGE COMMISSION**
** **

**Washington,        D.C. 20549**

**FORM        10-QSB**

**September        30, 2006**

**Commission        File Number: **
**000-49670**

**ULURU        INC. **

| **Nevada**                                       | **41-2118656**                                        |
|--------------------------------------------------|-------------------------------------------------------|
| (State                  or other jurisdiction of | (I.R.S.                  Employer Identification No.) |
| incorporation                  or organization)  |                                                  |

**4452        Beltway Drive**

**Addison,        Texas 75001**

**(214)        905-5145**

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*Table            of Contents*

**ULURU        INC.**

**FORM        10-QSB**

**For        the Quarterly Period Ended SEPTEMBER 30, 2006**

**TABLE        OF CONTENTS**

|                         |                                                                                                                                                                                   | Page   |
|------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **PART                  I**  | **FINANCIAL                  INFORMATION**                                                                                                                                             |   |
|                         |                                                                                                                                                                                   |   |
| Item                  1.     | Financial                  Statements                                                                                                                                                  | 3      |
|                         |                                                                                                                                                                                   |   |
|                         | Unaudited                  Condensed Consolidated Balance Sheet, September                  30, 2006                                                                                   | 3      |
|                         | Unaudited                  Condensed Consolidated Statements of                  Operations for three and nine months ended September 30, 2006 and                  September 30, 2005 | 4      |
|                         | Unaudited                  Condensed Consolidated Statements of Cash                  Flows for nine months ended September 30, 2006 and September 30,                  2005           | 5      |
|                         | Notes                  to Unaudited Condensed Consolidated Financial                  Statements                                                                                       | 6      |
|                         |                                                                                                                                                                                   |   |
| Item                  2.     | Management's                  Discussion and Analysis of Financial Condition                  and Results of Operations                                                                | 11     |
|                         |                                                                                                                                                                                   |   |
| Item                  3.     | Controls                  and Procedures                                                                                                                                               | 19     |
|                         |                                                                                                                                                                                   |   |
| **PART                  II** | **OTHER                  INFORMATION**                                                                                                                                                 |   |
|                         |                                                                                                                                                                                   |   |
| Item                  1.     | Legal                  Proceedings                                                                                                                                                     | 19     |
|                         |                                                                                                                                                                                   |   |
| Item                  2.     | Unregistered                  Sales of Equity Securities and Use                  of Proceeds                                                                                          | 20     |
|                         |                                                                                                                                                                                   |   |
| Item                  3.     | Defaults                  Upon Senior Securities                                                                                                                                       | 20     |
|                         |                                                                                                                                                                                   |   |
| Item                  4.     | Submission                  of Matters to a Vote of Security                  Holders                                                                                                  | 20     |
|                         |                                                                                                                                                                                   |   |
| Item                  5.     | Other                  Information                                                                                                                                                     | 20     |
|                         |                                                                                                                                                                                   |   |
| Item                  6.     | Exhibits                                                                                                                                                                               | 20     |
|                         |                                                                                                                                                                                   |   |
|                         | Signatures                                                                                                                                                                             | 21     |
|                         |                                                                                                                                                                                   |   |

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*Table            of Contents*

**PART        1 - FINANCIAL INFORMATION**

**ITEM        1. FINANCIAL STATEMENTS**

**ULURU        INC. **

**UNAUDITED        CONDENSED CONSOLIDATED BALANCE SHEET**

**AS        AT SEPTEMBER 30, 2006**

| **ASSETS**                                                                                                                |   |   |       |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|
|                                                                                                                      |   |   |       |
| **Current                  Assets**                                                                                       |   |   |       |
| Cash                                                                                                                      |   | $      | 1,010,996  |   |
| Accounts                  receivable - trade                                                                              |   |   | 47,395     |   |
| Accounts                  receivable - other                                                                              |   |   | 39,495     |   |
| Inventory                                                                                                                 |   |   | 68,040     |   |
| Prepaid                  expenses and deferred charges                                                                    |   |   | 319,510    |   |
| Total                  Current Assets                                                                                     |   |   | 1,485,435  |   |
|                                                                                                                      |   |   |            |   |
| **Property,                  Plant & Equipment, net**                                                                 |   |   | 436,443    |   |
|                                                                                                                      |   |   |       |   |
| **Other                  Assets**                                                                                         |   |   |            |   |
| Patents,                  net                                                                                             |   |   | 11,770,544 |   |
| Licensing                  rights, net                                                                                    |   |   | 235,845    |   |
| Deferred                  financing costs, net                                                                            |   |   | 448,363    |   |
| Deposits                                                                                                                  |   |   | 47,949     |   |
| Total                  Other Assets                                                                                       |   |   | 12,502,701 |   |
|                                                                                                                      |   |   |       |   |
| **TOTAL                  ASSETS**                                                                                         |   | $      | 14,424,579 |   |
|                                                                                                                      |   |   |            |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY (DEFICIT)**                                                       |
|                                                                                                                      |   |   |       |   |
| **Current                  Liabilities**                                                                                  |   |   |            |   |
| Accounts                  payable                                                                                         |   | $      | 573,511    |   |
| Accrued                  liabilities                                                                                      |   |   | 248,014    |   |
| Accrued                  liabilities - related party                                                                      |   |   | 70,484     |   |
| Royalty                  advance                                                                                          |   |   | 235,533    |   |
| Accrued                  interest                                                                                         |   |   | 33,551     |   |
| Capital                  lease obligation                                                                                 |   |   | 31,468     |   |
| Asset                  purchase obligation, net - current portion                                                         |   |   | 3,689,064  |   |
| Notes                  payable, net - current portion                                                                     |   |   | 11,636,363 |   |
| Total                  Current Liabilities                                                                                |   |   | 16,517,988 |   |
|                                                                                                                      |   |   |            |   |
| **Long                  Term Debt**                                                                                       |   |   |       |   |
| Asset                  purchase obligation, net - less current portion                                                    |   |   | 906,454    |   |
| Liquidated                  damages payable                                                                               |   |   | 1,885,000  |   |
| Notes                  payable, net - less current portion                                                                |   |   | 4,131,144  |   |
| Total                  Long Term Debt                                                                                     |   |   | 6,922,598  |   |
|                                                                                                                      |   |   |            |   |
| **Total                  Liabilities**                                                                                    |   |   | 23,440,586 |   |
|                                                                                                                      |   |   |       |   |
| **COMMITMENTS                  AND CONTINGENCIES**                                                                        |   |   |       |   |
|                                                                                                                      |   |   |       |   |
| **STOCKHOLDERS'                  EQUITY (DEFICIT)**                                                                       |   |   |            |   |
|                                                                                                                      |   |   |       |   |
| Preferred                  stock, $.001 par value, 20,000 shares                                                          |   |   |       |   |
| authorized,                  none issued                                                                                  |   |   | ---        |   |
|                                                                                                                      |   |   |       |   |
| Common                  Stock: $ 0.001 par value, 200,000,000 shares authorized;                                          |   |   |            |   |
| Issued                  and outstanding : 12,844,311 at September 30, 2006                                                |   |   | 12,844     |   |
| Additional                  paid-in capital                                                                               |   |   | 447,384    |   |
| Retained                  earnings (deficit)                                                                              |   |   | (9,476,236 | ) |
| **Total                  Stockholders' Equity (Deficit)**                                                                 |   |   | (9,016,008 | ) |
|                                                                                                                      |   |   |            |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY**                                                           |   | $      | 14,424,579 |   |
|                                                                                                                      |   |   |       |   |
| The                  accompanying notes are an integral part of these consolidated financial                  statements. |

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*Table            of Contents*

**ULURU        INC.**

**UNAUDITED        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS **

|                                                                                                                      |   |                                    |       |                                    |   |                                    |   |                                    |       |
|---------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|------------|-----------------------------------------|--------|-----------------------------------------|--------|-----------------------------------------|------------|
|                                                                                                                      |   | **Uluru                  Inc.**         |       | **Topical                  Component**  |   | **Uluru                  Inc.**         |   | **Topical                  Component**  |       |
|                                                                                                                      |   | **Three                  Months Ended** |       | **Three                  Months Ended** |   | **Nine                  Months Ended**  |   | **Nine                  Months Ended**  |       |
|                                                                                                                      |   | **September                  30, 2006** |       | **September                  30, 2005** |   | **September                  30, 2006** |   | **September                  30, 2005** |       |
|                                                                                                                      |   |                                    |       |                                    |   |                                    |   |                                    |       |
| **REVENUES**                                                                                                              |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| License                  fees                                                                                             |   | $                                       | ---        |                                    | $      | 167,320                                 |   | $                                       | 155,038    |   | $ | 202,389 |   |
| Royalty                  income                                                                                           |   |                                    | 101,258    |                                    |   | 25,026                                  |   |                                    | 353,373    |   |   | 75,676 |   |
| Product                  sales                                                                                            |   |                                    | ---        |                                    |   | 180,841                                 |   |                                    | 75,578     |   |   | 498,699 |   |
| Other                                                                                                                     |   |                                    | 11,668     |                                    |   | ---                                     |   |                                    | 108,324    |   |   | --- |   |
| Total                  Revenues                                                                                           |   |                                    | 112,926    |                                    |   | 373,187                                 |   |                                    | 692,312    |   |   | 776,764 |   |
|                                                                                                                      |   |                                    |       |                                    |   |                                    |   |                                    |       |   |   |   |   |
|                                                                                                                      |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| **COSTS                  AND EXPENSES**                                                                                   |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| Cost                  of goods sold                                                                                       |   |                                    | ---        |                                    |   | 58,191                                  |   |                                    | 96,520     |   |   | 207,161 |   |
| Research                  and development                                                                                 |   |                                    | 388,663    |                                    |   | 406,917                                 |   |                                    | 1,342,784  |   |   | 1,508,448 |   |
| General                  and administrative                                                                               |   |                                    | 350,579    |                                    |   | 269,795                                 |   |                                    | 1,096,486  |   |   | 869,612 |   |
| Amortization                                                                                                              |   |                                    | 265,578    |                                    |   | 43,400                                  |   |                                    | 785,302    |   |   | 130,201 |   |
| Depreciation                                                                                                              |   |                                    | 15,872     |                                    |   | 10,960                                  |   |                                    | 47,770     |   |   | 31,852 |   |
| Total                  Costs and Expenses                                                                                 |   |                                    | 1,020,691  |                                    |   | 789,263                                 |   |                                    | 3,368,861  |   |   | 2,747,274 |   |
|                                                                                                                      |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| **OPERATING                  LOSS**                                                                                       |   |                                    | (907,765   | )                                       |   | (416,076                                | )      |                                    | (2,676,549 | ) |   | (1,970,510 | ) |
|                                                                                                                      |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| **Other                  Income (Expense)**                                                                               |   |                                    |       |                                    |   |                                    |   |                                    |       |   |   |   |   |
| Interest                  income                                                                                          |   |                                    | 3,418      |                                    |   | 2,120                                   |   |                                    | 14,628     |   |   | 91,400 |   |
| Interest                  expense                                                                                         |   |                                    | (616,751   | )                                       |   | (55,410                                 | )      |                                    | (1,601,215 | ) |   | (111,990 | ) |
| Commitment                  fee - Standby equity agreement                                                                |   |                                    | ---        |                                    |   | ---                                     |   |                                    | (1,787,940 | ) |   | --- |   |
| Liquidated                  damages                                                                                       |   |                                    | (1,885,000 | )                                       |   | ---                                     |   |                                    | (1,885,000 | ) |   | --- |   |
| Loss                  on early extinguishment of debenture                                                                |   |                                    | (557,534   | )                                       |   | ---                                     |   |                                    | (557,534   | ) |   | --- |   |
| Loss                  on sale of equipment                                                                                |   |                                    | (30,143    | )                                       |   | ---                                     |   |                                    | (30,143    | ) |   | --- |   |
|                                                                                                                      |   |                                    |       |                                    |   |                                    |   |                                    |       |   |   |   |   |
|                                                                                                                      |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| **NET                  INCOME (LOSS)**                                                                                    |   | $                                       | (3,993,775 | )                                       | $      | (469,366                                | )      | $                                       | (8,523,753 | ) | $ | (1,991,100 | ) |
|                                                                                                                      |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
|                                                                                                                      |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| Basic                  and diluted net (loss) per common share                                                            |   | $                                       | (.31       | )                                       | $      | (.04                                    | )      | $                                       | (.69       | ) | $ | (.18 | ) |
|                                                                                                                      |   |                                    |            |                                    |   |                                         |   |                                    |            |   |   |  |   |
| WEIGHTED                  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                                                     |   |                                    | 12,844,311 |                                    |   | 11,000,000                              |   |                                    | 12,434,464 |   |   | 11,000,000 |   |
|                                                                                                                      |   |                                    |       |                                    |   |                                    |   |                                    |       |   |   |   |   |
|                                                                                                                      |   |                                    |       |                                    |   |                                    |   |                                    |       |   |   |   |   |
| The                  accompanying notes are an integral part of these consolidated financial                  statements. |

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*Table            of Contents*

**ULURU        INC. **

**UNAUDITED        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS **

|                                                                                                                                           |   |                                    |        |                                    |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|-------------|-----------------------------------------|--------|
|                                                                                                                                           |   | **Uluru                  Inc.**         |        | **Topical                  Component**  |   |
|                                                                                                                                           |   | **Nine                  Months Ended**  |        | **Nine                  Months Ended**  |   |
|                                                                                                                                           |   | **September                  30, 2006** |        | **September                  30, 2005** |   |
|                                                                                                                                           |   |                                    |        |                                    |   |
| **OPERATING                  ACTIVITIES :**                                                                                                    |   |                                    |        |                                    |   |
| Net                  (loss) from operations                                                                                                    |   | $                                       | (8,523,753  | )                                       | $      | (1,991,100 | ) |
|                                                                                                                                           |   |                                    |        |                                    |   |   |   |
| **Adjustments                  to reconcile net loss to net cash used in operating                  activities:**                              |   |                                    |             |                                    |   |  |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
| Amortization                                                                                                                                   |   |                                    | 785,302     |                                    |   | 127,195 |   |
| Depreciation                                                                                                                                   |   |                                    | 47,770      |                                    |   | 31,852 |   |
| Commitment                  fee - Standby equity agreement                                                                                     |   |                                    | 1,787,940   |                                    |   | ---- |   |
| Liquidated                  damages                                                                                                            |   |                                    | 1,885,000   |                                    |   | ---- |   |
| Loss                  on early extinguishment of debenture                                                                                     |   |                                    | 557,534     |                                    |   | ---- |   |
| Loss                  on sale of equipment                                                                                                     |   |                                    | 30,143      |                                    |   | ---- |   |
| Amortization                  of restricted stock grants                                                                                       |   |                                    | ----        |                                    |   | 26,137 |   |
| Interest                  expense - Financing costs                                                                                            |   |                                    | 306,705     |                                    |   | ---- |   |
| Interest                  expense - Imputed                                                                                                    |   |                                    | 314,439     |                                    |   | ---- |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
| **Change                  in operating assets and liabilities:**                                                                               |   |                                    |             |                                    |   |  |   |
| Accounts                  receivable                                                                                                           |   |                                    | 56,404      |                                    |   | (98,720 | ) |
| Inventory                                                                                                                                      |   |                                    | 9,671       |                                    |   | 102,086 |   |
| Prepaid                  expenses and deferred charges                                                                                         |   |                                    | (32,446     | )                                       |   | 348,311 |   |
| Deposits                                                                                                                                       |   |                                    | (18,876     | )                                       |   | ---- |   |
| Accounts                  payable                                                                                                              |   |                                    | 248,545     |                                    |   | 165,557 |   |
| Accrued                  liabilities                                                                                                           |   |                                    | (166,965    | )                                       |   | (201,113 | ) |
| Royalty                  advance                                                                                                               |   |                                    | (233,522    | )                                       |   | ---- |   |
| Deferred                  revenue                                                                                                              |   |                                    | ----        |                                    |   | (148,584 | ) |
| Accrued                  interest                                                                                                              |   |                                    | (322,573    | )                                       |   | ---- |   |
| Total                  Adjustments                                                                                                             |   |                                    | 5,255,071   |                                    |   | 352,721 |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
| Net                  Cash (Used) by Operating Activities                                                                                       |   |                                    | (3,268,688  | )                                       |   | (1,638,379 | ) |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
| **INVESTING                  ACTIVITIES :**                                                                                                    |   |                                    |             |                                    |   |  |   |
| Increase                  in property and equipment                                                                                            |   |                                    | (150,952    | )                                       |   | (19,674 | ) |
| Proceeds                  from sale of equipment                                                                                               |   |                                    | 14,500      |                                    |   | ---- |   |
| Cash                  received in recapitalization of the Company                                                                              |   |                                    | 128,045     |                                    |   | ---- |   |
| Restricted                  cash                                                                                                               |   |                                    | ----        |                                    |   | 839,356 |   |
| Net                  Cash (Used in) Provided by Investing Activities                                                                           |   |                                    | (8,407      | )                                       |   | 819,682 |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
| **FINANCING                  ACTIVITIES :**                                                                                                    |   |                                    |             |                                    |   |  |   |
| Repayment                  of capital lease obligations                                                                                        |   |                                    | (22,242     | )                                       |   | (48,634 | ) |
| Proceeds                  from exchange of convertible debentures, net                                                                         |   |                                    | 2,699,975   |                                    |   | ---- |   |
| Receipt                  of deferred revenues                                                                                                  |   |                                    | ----        |                                    |   | 740,000 |   |
| Financing                  provided by Access Pharmaceuticals                                                                                  |   |                                    | ----        |                                    |   | 127,330 |   |
| Net                  Cash Provided by Financing Activities                                                                                     |   |                                    | 2,677,733   |                                    |   | 818,697 |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
| **Net                  (Decrease) in Cash**                                                                                                    |   |                                    | (599,361    | )                                       |   | ---- |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
| Cash,                  beginning of period                                                                                                     |   |                                    | 1,610,357   |                                    |   | ---- |   |
| Cash,                  end of period                                                                                                           |   | $                                       | 1,010,996   |                                    | $      | ---- |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
|                                                                                                                                           |   |                                    |             |                                    |   |  |   |
|                                                                                                                                           |   |                                    |        |                                    |   |   |   |
| **Supplemental                  Schedule of Noncash**                                                                                          |   |                                    |        |                                    |   |   |   |
| **Investing                  and Financing Activities :**                                                                                      |   |                                    |        |                                    |   |   |   |
| Net                  proceeds from exchange of convertible debenture on August 30,                  2006                                       |   |                                    |        |                                    |   |   |   |
| Convertible                  debenture issued                                                                                                  |   | $                                       | 13,000,000  |                                    |   |   |   |
| Less                  : redemption of convertible debenture                                                                                    |   |                                    | (10,000,025 | )                                       |   |   |   |
| Less                  : debenture issuance costs                                                                                               |   |                                    | (300,000    | )                                       |   |   |   |
| Proceeds                  from debenture exchange, net                                                                                         |   | $                                       | 2,699,975   |                                    |   |   |   |
|                                                                                                                                           |   |                                    |        |                                    |   |   |   |
| Non-monetary                  net liabilities assumed in a recapitalization of the Company on                  March 31,                  2006 |   |                                    |        |                                    |   |   |   |
| Liabilities                  assumed                                                                                                           |   | $                                       | 13,694,962  |                                    |   |   |   |
| Less                  : Non-cash assets                                                                                                        |   |                                    | 12,006,690  |                                    |   |   |   |
| Less                  : Cash received in recapitalization                                                                                      |   |                                    | 128,045     |                                    |   |   |   |
| Total                  non-monetary net liabilities assumed                                                                                    |   | $                                       | 1,560,227   |                                    |   |   |   |
|                                                                                                                                           |   |                                    |        |                                    |   |   |   |
| *OTHER                  SUPPLEMENTAL INFORMATION *                                                                                        |   |                                    |             |                                    |   |   |   |
| Cash                  Paid for Interest                                                                                                        |   | $                                       | 1,306,943   |                                    |   |   |   |
|                                                                                                                                           |   |                                    |        |                                    |   |   |   |
| The                  accompanying notes are an integral part of these consolidated financial                  statements.                      |

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*Table            of Contents*

**ULURU        INC. **

**NOTES        TO UNAUDITED CONDENSED CONSOLIDATED **

**FINANCIAL        STATEMENTS **

**FOR        THE NINE MONTHS ENDED SEPTEMBER 30, 2006 **

**NOTE        1. **
**CONDENSED        CONSOLIDATED FINANCIAL STATEMENTS**

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*Table            of Contents*

**NOTE        2. BASIS OF PRESENTATION**

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*Table            of Contents*

**NOTE        3. GOING CONCERN**

**NOTE        4. SEGMENT INFORMATION**

|                                    |   | **Three                  Months Ended September 30,** |    | **Nine                  Months Ended September 30,** |   |
|-----------------------------------------|--------|-------------------------------------------------------|---------|------------------------------------------------------|--------|
|                                    |   | **2006**                                              |    | **2005**                                             |   | **2006** |   | **2005** |   |
|                    ProStrakan      |   | $                                                     | 79,413  |                                                 | $      | 182,346 |   | $ | 274,888 |   | $ | 254,732 |   |
|                    Discus Dental   |   |                                                  | 21,845  |                                                 |   | -0- |   |   | 309,100 |   |   | -0- |   |
|                    ICS Healthcare  |   |                                                  | -0-     |                                                 |   | 180,841 |   |   | -0- |   |   | 498,699 |   |
|                    U.S. Army       |   |                                                  | 11,668  |                                                 |   | -0- |   |   | 58,324 |   |   | -0- |   |
|                    GlaxoSmithKline |   |                                                  | -0-     |                                                 |   | -0- |   |   | 50,000 |   |   | -0- |   |
|                    Wyeth           |   |                                                  | -0-     |                                                 |   | 10,000 |   |   | -0- |   |   | 23,333 |   |
| Total                  Revenues         |   | $                                                     | 112,926 |                                                 | $      | 373,187 |   | $ | 692,312 |   | $ | 776,764 |   |

|                                  |   | **Three                  Months Ended September 30,** |    | **Nine                  Months Ended September 30,** |   |
|---------------------------------------|--------|-------------------------------------------------------|---------|------------------------------------------------------|--------|
|                                  |   | **2006**                                              |    | **2005**                                             |   | **2006** |   | **2005** |   |
|                    Domestic      |   | $                                                     | 33,513  |                                                 | $      | 190,841 |   | $ | 417,424 |   | $ | 522,032 |   |
|                    International |   |                                                  | 79,413  |                                                 |   | 182,346 |   |   | 274,888 |   |   | 254,732 |   |
| Total                  Revenues       |   | $                                                     | 112,926 |                                                 | $      | 373,187 |   | $ | 692,312 |   | $ | 776,764 |   |

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*Table            of Contents*

**NOTE        5. RELATED PARTY TRANSACTIONS**

**NOTE        6. COMMITMENTS AND CONTINGENCIES**

| §    | Prenox                  provided $3,000,000 of funding to the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §    | the                  Company, Prenox, and Cornell acknowledges and agrees that liquidated                  damages owed by the Company as a result of a registration statement                  not                  having been filed by the Company or declared effective pursuant                  to the                  original agreements, in the amount of $1,885,000, may be paid at                  maturity                  or upon a redemption of the Convertible debentures;                                       |
| §    | the                  Company is required to file by no later than November 13, 2006                  a                  registration statement with the Securities and Exchange Commission                  (“SEC”)                  which includes, at least 30,000,000 conversion shares to be issued                  upon                  conversion of and/or default under the convertible debentures and                  6,125,000 warrant shares to be issued upon exercise of the                  warrants; |
| §    | the                  Company shall use best efforts to have the initial registration                  statement                  declared effective by the SEC. It shall be an event of default                  if the                  registration statement is not declared effective by the SEC within                  120                  days after August 30, 2006 or 150 days if the initial registration                  statement is reviewed by the SEC; and                                                         |
| §    | in                  the event that the registration statement is not filed or is not                  declared                  effective, the Company is obligated to pay, as liquidated damages,                  an                  amount equal to 2% per month of the outstanding principal amount                  of the                  outstanding debentures up to a maximum of                  12.5%.                                                                                                                 |

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**NOTE        7. DEBT AND EQUITY FINANCING**

|                                                     |   |                             |   |
|----------------------------------------------------------|--------|----------------------------------|--------|
|                                                     |   | August                  30, 2006 |   |
| Weighted-average                  fair value of warrants |   | $                                | 0.21   |   |
|                                                     |   |                             |   |   |
| Black-Scholes                  Assumptions:              |   |                             |   |   |
|                    Expected volatility              |   |                             | 23     | % |
|                    Risk-fee interest rate           |   |                             | 4.72   | % |
|                    Expected dividends               |   |                             | 0.0    | % |
|                    Expected forfeitures             |   |                             | 0.0    | % |
|                    Expected term (years)            |   |                             | 5.0    |   |

|                                                         |   | **Notes                  Payable** |       |
|--------------------------------------------------------------|--------|------------------------------------|------------|
| Convertible                  Note - Prenox LLC               |   | $                                  | 13,000,000 |   |
| Convertible                  Note - Cornell Capital Partners |   |                               | 3,000,000  |   |
| Sub-total                                                    |   | $                                  | 16,000,000 |   |
|                                                         |   |                               |       |   |
| Debt                  discount                               |   |                               | (232,493   | ) |
| Total                  Notes Payable                         |   | $                                  | 15,767,507 |   |
|                                                         |   |                               |       |   |
| Notes                  Payable Allocation:                   |   |                               |       |   |
| Current                  Portion                             |   | $                                  | 11,636,363 |   |
| Long                  Term                                   |   |                               | 4,131,144  |   |
| Total                  Notes Payable                         |   | $                                  | 15,767,507 |   |

**NOTE        8. LOSS ON EARLY EXTINGUISHMENT OF DEBENTURE**

**NOTE        9. SUBSEQUENT EVENT**

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**ITEM        2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND        PLAN OF OPERATION **

*This        Quarterly Report on Form 10-QSB contains certain statements that are        forward-looking within the meaning of Section 27a of the Securities Act of        1933,        as amended, and Section 21E of the Securities and Exchange Act of 1934, as        amended, and that involve risks and uncertainties, including, but not limited        to        the uncertainties associated with research and development activities, clinical        trials, our ability to raise capital, our ability to continue as a going        concern, our ability to negotiate waivers for our defaults on our convertible        securities, our ability to repay our outstanding debt obligations, the timing        of        and our ability to achieve regulatory approvals, dependence on others to        market        our licensed products, collaborations, future cash flow, the timing and receipt        of licensing and milestone revenues, our ability to achieve licensing and        milestone revenues, the future success of our marketed products and products        in        development, and other risks described below as well as those discussed        elsewhere in this Form 10-QSB, documents incorporated by reference and other        documents and reports that we file periodically with the Securities and Exchange        Commission including our Form 10-KSB for the period ended December 31, 2005.        Forward-looking statements contained in this Form 10-QSB include, but are        not        limited to those relating to anticipated product approvals and timing thereof,        the terms of future licensing arrangements, our ability to secure additional        financing for our operations, our ability to repay our outstanding debt        obligations, our ability to continue as a going concern, our ability to        negotiate waivers for our defaults on our convertible securities, our ability        to        fund our operations through December 31, 2006 with our current cash reserves        and        without accessing our SEDA, and our expected capital        expenditures.*

| §    | Prenox                  is providing $3,000,000 of funding to the Company;                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| §    | the                  Company, Prenox, and Cornell acknowledge and agree that liquidated                  damages                  owed by the Company as a result of a registration statement not                  having                  been filed by the Company or declared effective pursuant to the                  original                  agreements, in the amount of $1,885,000, may be paid at maturity                  or upon a                  redemption of the Convertible debentures;                        |
| §    | the                  Company is required to file by no later than November 13, 2006                  a                  registration statement with the Securities and Exchange Commission                  (“SEC”)                  which includes, at least 30,000,000 conversion shares to be issued                  upon                  conversion of and/or default under the convertible debentures and                  6,125,000 warrant shares to be issued upon exercise of the                  warrants; |
| §    | the                  Company shall use best efforts to have the initial registration                  statement                  declared effective by the SEC. It shall be an event of default                  if the                  registration statement is not declared effective by the SEC within                  120                  days after August 30, 2006 or 150 days if the initial registration                  statement is reviewed by the SEC;                                                             |
| §    | in                  the event that the registration statement is not filed or is not                  declared                  effective, the Company is obligated to pay, as liquidated damages,                  an                  amount equal to 2% per month of the outstanding principal amount                  of the                  outstanding debentures up to a maximum of 12.5%; and                                                                                                                              |
| §    | all                  other terms and conditions of the original Investor Registration                  Rights                  Agreement remain effective.                                                                                                                                                                                                                                                                                                                                                                          |

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| ·   | Our                  ability to raise financing in order to continue our                  operations                                                                                                                                              |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                  ability to successfully commercialize our wound management and                  burn care                  products and the market acceptance of these products                                                              |
| ·   | The                  ability to establish and maintain collaborative arrangements with                  corporate partners for the research, development and commercialization                  of                  certain product opportunities |
| ·   | Continued                  scientific progress in our development programs                                                                                                                                                                        |
| ·   | The                  costs involved in filing, prosecuting and enforcing patent                  claims                                                                                                                                           |
| ·   | Competing                  technological developments                                                                                                                                                                                             |
| ·   | The                  cost of manufacturing and production scale-up                                                                                                                                                                                |
| ·   | Successful                  regulatory filings                                                                                                                                                                                                    |
| ·   | The                  ability to convert, repay or restructure our outstanding convertible                  notes                  and existing obligations to Access.                                                                             |

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| Technology                                                       |   | Three                  Months Ended September                  30, 2006 |    |
|------------------------------------------------------------------|--------|-------------------------------------------------------------------------|---------|
|                    OraDiscTM                           |   | $                                                                       | 74,540  |   |
|                    Wound care & nanoparticle            |   |                                                                    | 76,720  |   |
|                    Aphthasol® & other technologies |   |                                                                    | 7,227   |   |
|                                                             |   | $                                                                       | 158,487 |   |

| ·   | Lower                  salary and benefit expenses of approximately $12,500 as the Company                  decreased levels of staffing to focus only on its OraDiscTM and wound care                  technologies whereas the Topical Component's comparative third                  quarter                  2005 included partial and full allocations of the overall research                  and                  development staff; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Lower                  Food & Drug Administration fees of $46,700;                                                                                                                                                                                                                                                                                                                                                                            |
| ·   | Elimination                  of contract manufacturing costs of $15,000; and                                                                                                                                                                                                                                                                                                                                                                      |
| ·   | Lower                  expenses for travel by scientific personnel of                  $1,300.                                                                                                                                                                                                                                                                                                                                                    |

| ·   | Increased                  laboratory development expenses of $41,000;                           |
|--------------------|--------------------------------------------------------------------------------------------------|
| ·   | Increased                  occupancy costs for laboratory of $15,100; and                        |
| ·   | Increased                  maintenance costs of laboratory equipment of                  $1,200. |

| ·   | Increased                  salary and benefit expenses of approximately $117,000 as the President                  and                  Chief Financial Officer’s compensation in the Topical Component's                  comparative third quarter 2005 were only partially allocated to                  Topical                  Component whereas their compensation is fully allocated for the                  three                  months ended September 30, 2006; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                  expenses for consulting of $13,400;                                                                                                                                                                                                                                                                                                                                                                                                                      |
| ·   | Increased                  corporate travel costs of $11,000;                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ·   | Increased                  costs associated with our insurance programs of                  $10,300;                                                                                                                                                                                                                                                                                                                                                                                |
| ·   | Higher                  occupancy costs for corporate office of $9,000; and                                                                                                                                                                                                                                                                                                                                                                                                         |
| ·   | License                  renewal fees of $1,000.                                                                                                                                                                                                                                                                                                                                                                                                                                    |

| ·   | Lower                  director fee expense of $8,750 as the Company did not incur any                  director                  fees expense in the third quarter 2006 whereas the Topical Component                  incurred director fees expense in third quarter 2005;                                                                                                                                                                                                         |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Lower                  professional fees of $6,000 for accounting and $6,500 for                  consulting;                                                                                                                                                                                                                                                                                                                                                                         |
| ·   | Decreased                  shareholder expense of $14,000 as the Company incurred only minor                  expenses                  for shareholder costs in the third quarter 2006 whereas the Topical                  Component incurred costs of $15,725 comprised of $8,575 for shareholder                  public relations, $5,350 for printed materials, $900 for transfer                  costs,                  and $900 for miscellaneous shareholder expenses; and |
| ·   | Lower                  legal fees of $45,650 for costs associated with patent applications                  and                  SEC filings by the Topical Component in the third quarter of                  2005.                                                                                                                                                                                                                                                                  |

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| Technology                                                       |   | Nine                  Months EndedSeptember                  30, 2006 |    |
|------------------------------------------------------------------|--------|-----------------------------------------------------------------------|---------|
|                    OraDiscTM                           |   | $                                                                     | 360,125 |   |
|                    Wound care & nanoparticle            |   |                                                                  | 254,792 |   |
|                    Aphthasol® & other technologies |   |                                                                  | 36,152  |   |
|                                                             |   | $                                                                     | 651,069 |   |

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| ·   | Lower                  salary and benefit expenses of approximately $167,900 as the Company                  decreased levels of staffing to focus only on its OraDiscTM and wound care                  technologies whereas the Topical Component's comparative nine months                  of                  2005 included partial and full allocations of the overall research                  and                  development staff; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Lower                  Food & Drug Administration fees of $178,100;                                                                                                                                                                                                                                                                                                                                                                             |
| ·   | Elimination                  of contract manufacturing costs of $49,000;                                                                                                                                                                                                                                                                                                                                                                            |
| ·   | Decreased                  costs for training and education of $4,200;                                                                                                                                                                                                                                                                                                                                                                              |
| ·   | Lower                  expenses for laboratory equipment rental of $4,100; and                                                                                                                                                                                                                                                                                                                                                                      |
| ·   | Lower                  expenses for travel by scientific personnel of                  $2,800.                                                                                                                                                                                                                                                                                                                                                      |

| ·   | Increased                  laboratory research and development expenses of                  $193,500;         |
|--------------------|---------------------------------------------------------------------------------------------------------------|
| ·   | Increased                  occupancy costs of $34,500 for laboratory space; and                               |
| ·   | Increased                  costs associated with repairs to laboratory equipment of                  $12,400. |

| ·   | Increased                  salary and benefit expenses of approximately $324,100 as the President                  and                  Chief Financial Officer's compensation in the Topical Component's                  comparative nine months of 2005 was only partially allocated to                  Topical                  Component whereas their compensation is fully allocated for the                  nine                  months ended September 30, 2006; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                  expenses for external consultants of $50,900;                                                                                                                                                                                                                                                                                                                                                                                                     |
| ·   | Higher                  corporate travel costs of $37,600;                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ·   | Relocation                  costs for new office space in Addison, Texas of $11,100;                                                                                                                                                                                                                                                                                                                                                                                         |
| ·   | Increased                  occupancy costs of $4,000; and                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ·   | Costs                  associated with marketing due diligence for potential wound product                  of                  $5,850.                                                                                                                                                                                                                                                                                                                                      |

| ·   | Lower                  legal fees of $84,400 as the Company was not involved in any litigation                  whereas the Topical Component incurred legal expense of $196,203                  in the                  first nine months of 2005 for litigation, general corporate matters,                  and                  for licensing agreements;                                                                                                                                                                |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Lower                  shareholder expense of $42,500 as the Company incurred only minor                  expenses                  for shareholder costs in the first nine months of 2006 whereas                  the Topical                  Component incurred costs of approximately $55,000 for the comparative                  nine                  months of 2005. The 2005 expense includes amounts for shareholder                  public                  relations, shareholder meetings, and transfer costs; |
| ·   | Lower                  legal fees of $20,400 for costs associated with patent applications                  and                  filings;                                                                                                                                                                                                                                                                                                                                                                                     |
| ·   | Lower                  director fee expense of $26,250 as the Company did not incur any                  director                  fees expense in the first nine months of 2006 whereas the Topical                  Component incurred $26,250 in the comparative nine months of                  2005;                                                                                                                                                                                                                     |
| ·   | Lower                  costs of $14,700 for our insurance programs; and                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ·   | Lower                  stock exchange fee expense of $18,500 as the Topical Component                  incurred                  costs for their annual membership with the American Stock Exchange                  in                  January 2005 and expenses associated with a new stock offering                  in March                  2005. The Company did not incur any of these expenses in the first                  nine                  months of 2006.                                                  |

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**ITEM        3: CONTROLS AND PROCEDURES **

**PART        II: OTHER INFORMATION **

**ITEM        1 - LEGAL PROCEEDINGS **

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**ITEM        2 - UNREGISTERED SALE OF EQUITY        SECURITIES**

**ITEM        3 - DEFAULTS UPON SENIOR SECURITIES**

**ITEM        4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY        HOLDERS**

**ITEM        5: OTHER INFORMATION**

**ITEM        6: EXHIBITS **

| Exhibit                  Number | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.34                           | Amended                  and Restated Secured Convertible Debenture                  issued by us to Prenox, LLC, dated August 30, 2006                                                                                                                                                                                                                                                                                                                                  |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.35                           | Amended                  and Restated Secured Convertible Debenture                  issued by us to Cornell Capital Partners, LP, dated August 30,                  2006                                                                                                                                                                                                                                                                                                |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.36                           | Warrant                  to Purchase Common Stock of Uluru Inc. issued                  by us to Prenox, LLC, dated August 30, 2006                                                                                                                                                                                                                                                                                                                                      |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.37                           | Amended                  and Restated Investors Registration Rights                  Agreement dated August 30, 2006 between us and Prenox, LLC and                  Cornell                  Capital Partners, LP                                                                                                                                                                                                                                                       |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.38                           | Amended                  and Restated Guaranty Agreement dated August                  30, 2006 between us and Prenox, LLC and Cornell Capital Partners,                  LP                                                                                                                                                                                                                                                                                             |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.39                           | Reaffirmation                  Agreement dated August 30, 2006 between                  us and Prenox, LLC and Cornell Capital Partners, LP                                                                                                                                                                                                                                                                                                                              |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.40                           | Agreement                  dated August 30, 2006 between Uluru Inc. and                  Uluru Delaware Inc.                                                                                                                                                                                                                                                                                                                                                             |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 31.1                            | Certification                  of Principal Executive Officer of ULURU                  Inc. Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities                  Exchange Act of 1934, as Amended                                                                                                                                                                                                                                                             |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 31.2                            | Certification                  of Principal Accounting Officer of ULURU                  Inc. Pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities                  Exchange Act of 1934, as Amended                                                                                                                                                                                                                                                            |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 32.1*                           | Certification                  of Chief Executive Officer of ULURU Inc.                  pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section                  906 of                  the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                       |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 32.2*                           | Certification                  of Chief Financial Officer of ULURU Inc.                  pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section                  906 of                  the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                       |
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |
|                            | *This                  exhibit shall not be deemed “filed” for purposes of Section 18 of the                  Securities Exchange Act of 1934 or otherwise subject to the liabilities                  of                  that Section nor shall it be deemed incorporated by reference in                  any                  filings under the Securities Act of 1933 or the Securities and                  Exchange                  Act of 1934 |

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**SIGNATURES:**

|                                           | **ULURU                  INC.** |
|------------------------------------------------|---------------------------------|
|                                           |                            |
|  Date:                  November 20, 2006 |                            | By: | /s/                  Kerry P. Gray |   |
|                                           |                            | Kerry                  P. Gray, Chief Executive Officer |
|                                           |                            | Principal                  Executive Officer |
|                                           |                            |
|                                           |                            |
|  Date:                  November 20, 2006 |                            | By: |  /s/                  Terrance K. Wallberg |   |
|                                           |                            | Terrance                  K. Wallberg, Chief Financial Officer |
|                                           |                            | Principal                  Accounting Officer |

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