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


**Washington,
      D.C. 20549**





**FORM
      10-QSB**








[X]
      Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
      1934.





For
      the
      quarterly period ended: **March
      31, 2007**





OR





[_]
      Transition Report Under Section 13 or 15(d) of the Securities Exchange Act
      of
      1934.





For
      the
      transition period from: ___ to ___.





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





**ULURU
      Inc.**


(Name
      of
      Small Business Issuer in its Charter)





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





**4452
      Beltway Drive**


**Addison,
      Texas 75001**


(Address
      of principal executive offices)





Registrant's
      telephone number, including area code: **(214)
      905-5145**





Securities
      registered pursuant to Section 12(b) of the Act: None





Securities
      registered pursuant to Section 12(g) of the Act:


Common
      Stock, $.001 par value





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





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





The
      number of outstanding shares of registrant's Common Stock on May 15, 2007 was
      61,826,809.





Transitional
      Small Business Disclosure Format. Yes [ ] No [X]


*Table
          of Contents*








**ULURU
      Inc.**





**FORM
      10-QSB**





**For
      the Three Months Ended MARCH 31, 2007**











**TABLE
      OF CONTENTS**


Page**PART
                I**
            **FINANCIAL
                INFORMATION**Item
                1.
            Financial
                Statements
            3Condensed Consolidated Balance Sheets as
                of
                March 31, 2007 (unaudited) and December 31, 2006
            3Condensed Consolidated Statements of Operations
                (unaudited) for the three months ended March 31, 2007 and
                2006
            4Condensed Consolidated Statements of Cash
                Flows
                (unaudited) for the three months ended March 31, 2007 and
                2006
            5Notes to Condensed Consolidated Financial
                Statements (unaudited)
            6Item
                2.
            Management's
                Discussion and Analysis of Financial Condition
                and Results of Operations
            26Item
                3.
            Controls
                and Procedures
            31**PART
                II**
            **OTHER
                INFORMATION**Item
                1.
            Legal
                Proceedings
            31Item
                2.
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            31Item
                3.
            Defaults
                Upon Senior Securities
            31Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            31Item
                5.
            Other
                Information
            32Item
                6.
            Exhibits
            33Signatures
            33


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          of Contents*


**PART
      1 - FINANCIAL INFORMATION**





**ITEM
      1. FINANCIAL STATEMENTS**








**ULURU
      Inc.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**


**MARCH
      31, 2007**








**March
                31, 2007**
            
            **December
                31, 2006****(Unaudited)****ASSETS****Current
                Assets**Cash and cash equivalents
            
            $
            16,952,481
            
            $
            16,918,007Accounts receivable - trade
            
            
            340,694
            
            
            672,534Inventory
            
            
            314,791
            
            
            -0-Prepaid expenses and deferred charges
            
            
            164,727
            
            
            265,935Total Current Assets
            
            
            17,772,693
            
            
            17,856,476**Property
                and Equipment, net**
            
            
            911,326
            
            
            691,132**Other
                Assets**Patents, net
            
            
            11,836,166
            
            
            12,098,869Deposits
            
            
            20,749
            
            
            20,749Total Other Assets
            
            
            11,856,915
            
            
            12,119,618**TOTAL
                ASSETS**
            
            $
            30,540,934
            
            $
            30,667,226**LIABILITIES
                AND STOCKHOLDERS' EQUITY****Current
                Liabilities**Accounts payable
            
            $
            574,870
            
            $
            273,534Accrued liabilities
            
            
            283,908
            
            
            475,218Accrued liabilities - related party
            
            
            1,484
            
            
            63,984Deferred revenue - current portion
            
            
            55,147
            
            
            -0-Royalty advance
            
            
            198,150
            
            
            219,268Asset purchase obligation
            
            
            350,000
            
            
            350,000Total Current Liabilities
            
            
            1,463,559
            
            
            1,382,003**Long
                Term Liabilities**Deferred revenue, net - less current portion
            
            
            536,716
            
            
            -0-**TOTAL
                LIABILITIES**
            
            
            2,000,275
            
            
            1,382,003**COMMITMENTS
                AND CONTINGENCIES**
            
            
            ---
            
            
            ---**STOCKHOLDERS'
                EQUITY**Preferred stock, $.001 par value, 20,000 shares authorized, non
                issued
            
            
            ---
            
            
            ---Common Stock: $ 0.001 par value, 200,000,000 shares
                authorized;Issued and outstanding : 61,407,876 at March 31, 2007 and 59,896,939
                at
                December 31, 2006
            
            
            61,408
            
            
            59,897Additional paid-in capital
            
            
            41,987,973
            
            
            41,886,896Accumulated (deficit)
            
            
            (13,508,722
            )
            
            (12,661,571
            )**TOTAL
                STOCKHOLDERS’ EQUITY**
            
            
            28,540,659
            
            
            29,285,223**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY**
            
            $
            30,540,934
            
            $
            30,667,226The
                accompanying notes are an integral part of these consolidated financial
                statements.





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          of Contents*





**ULURU
      Inc.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(Unaudited)**








**Three
                Months Ended**
            
            **Three
                Months Ended****March
                31, 2007**
            
            **March
                31, 2006****REVENUES**License fees
            
            $
            138,050
            
            $
            -0-Royalty income
            
            
            55,461
            
            
            182,172Other
            
            
            190,000
            
            
            84,992Total Revenues
            
            
            383,511
            
            
            267,164**COSTS
                AND EXPENSES**Research and development
            
            
            565,408
            
            
            476,396General and administrative
            
            
            595,239
            
            
            283,029Amortization
            
            
            265,543
            
            
            257,174Depreciation
            
            
            16,703
            
            
            14,725Total Costs and Expenses
            
            
            1,442,893
            
            
            1,031,324**OPERATING
                (LOSS)**
            
            
            (1,059,382
            )
            
            (764,160
            )**Other
                Income (Expense)**Interest and miscellaneous income
            
            
            213,805
            
            
            8,380Interest expense
            
            
            (1,574
            )
            
            (374,003
            )Commitment fee - Standby Equity Agreement
            
            
            -0-
            
            
            (1,787,940
            )**NET
                (LOSS)**
            
            $
            (847,151
            )
            $
            (2,917,723
            )Basic
                and diluted net (loss) per common share
            
            $
            (0.01
            )
            $
            (0.26
            )WEIGHTED
                AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
            
            
            60,729,997
            
            
            11,020,492The
                accompanying notes are an integral part of these consolidated financial
                statements.


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**ULURU
      Inc.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(Unaudited)**








**Three
                Months Ended**
            
            **Three
                Months Ended****March
                31, 2007**
            
            **March
                31, 2006****OPERATING
                ACTIVITIES :**Net (loss)
            
            $
            (847,151
            )
            $
            (2,917,723
            )**Adjustments
                to reconcile net (loss) to net cash used in operating
                activities:**Amortization
            
            
            265,543
            
            
            257,174Depreciation
            
            
            16,703
            
            
            14,725Commitment fee - Standby Equity Agreement
            
            
            -0-
            
            
            1,787,940Imputed interest expense
            
            
            -0-
            
            
            105,783Share based compensation - employees
            
            
            26,238
            
            
            -0-Share based compensation - nonemployees
            
            
            76,350
            
            
            -0-**Change
                in operating assets and liabilities:**Accounts receivable
            
            
            331,840
            
            
            21,976Inventory
            
            
            (314,792
            )
            
            (37,509
            )Prepaid expenses and deferred charges
            
            
            101,208
            
            
            79,177Deposits
            
            
            -0-
            
            
            (17,256
            )Accounts payable
            
            
            301,337
            
            
            12,236Accrued liabilities
            
            
            (253,810
            )
            
            (150,716
            )Deferred revenue
            
            
            591,863
            
            
            -0-Royalty advance
            
            
            (21,118
            )
            
            (159,258
            )Accrued interest
            
            
            -0-
            
            
            36,944Total
            
            
            1,121,362
            
            
            1,951,216Net Cash Provided by (Used in) Operating Activities
            
            
            274,211
            
            
            (966,507
            )**INVESTING
                ACTIVITIES :**Purchase of property, plant, and equipment
            
            
            (239,737
            )
            
            (42,469
            )Recapitalization of the Company
            
            
            -0-
            
            
            128,045Net Cash (Used in) Provided by Investing Activities
            
            
            (239,737
            )
            
            85,576**FINANCING
                ACTIVITIES :**Repayment of capital lease obligation
            
            
            -0-
            
            
            (13,706
            )Net Cash Provided by (Used in) Financing Activities
            
            
            -0-
            
            
            (13,706
            )**Net
                Increase (Decrease) in Cash**
            
            
            34,474
            
            
            (894,637
            )Cash,
                beginning of period
            
            
            16,918,007
            
            
            1,610,357Cash,
                end of period
            
            $
            16,952,481
            
            $
            715,719**Supplemental
                Schedule of Noncash Investing and Financing Activities
                :**Issuance
                of 1,510,937 shares of common stock pursuant to cashless exercise
                of
                warrants to purchase 1,514,400 shares of common stock.
            
            $
            -0-Non-monetary
                net liabilities assumed in a recapitalization of the Company on March
                31,
                2006.Liabilities
                assumed
            
            
            
            
            $
            13,694,962Less
                : Non-cash assets
            
            
            
            
            
            12,006,690Less
                : Cash received in recapitalization
            
            
            
            
            
            128,045Total
                non-monetary net liabilities assumed
            
            
            
            
            $
            1,560,227OTHER
                SUPPLEMENTAL INFORMATION**Cash
                Paid for Interest
            
            $
            1,574
            
            $
            237,777The
                accompanying notes are an integral part of these consolidated financial
                statements.





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          of Contents*


**ULURU
      Inc.**





**NOTES
      TO**


**CONDENSED
      CONSOLIDATED FINANCIAL STATEMENTS**


**(Unaudited)**





**FOR
      THE THREE MONTHS ENDED MARCH 31, 2007**











**NOTE
      1.**  **BASIS
      OF PRESENTATION AND COMPANY OVERVIEW**





In
      the
      opinion of management, the accompanying unaudited condensed consolidated
      financial statements have been prepared in accordance with generally accepted
      accounting principles for interim financial information and with the
      instructions to Form 10-QSB. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements. In the opinion of management, all adjustments
      (consisting of normal recurring accruals) considered necessary for a fair
      presentation of the Company’s financial position as of March 31, 2007 and the
      results of its operations for the three months ended March 31, 2007 and cash
      flows for the three months ended March 31, 2007 have been made.





Operating
      results for the three months ended March 31, 2007 are not necessarily indicative
      of the results that may be expected for the year ended December 31,
      2007.





These
      condensed consolidated financial statements should be read in conjunction with
      the financial statements and notes thereto contained in the Company’s Form
      10-KSB filed with the Securities and Exchange Commission on March 19,
      2007.





Company
      History





ULURU
      Inc. (“ULURU”, “we”, “our”, “us”, or the “Company”), formerly Oxford Ventures,
      Inc, Casinos of The World, Inc., Clean Way Corporation, Trader Secrets.Com,
      and
      VOIP Technology, Inc., was in the development stage as defined in Financial
      Accounting Standards Board Statement No. 7. It ceased being a development stage
      enterprise on March 31, 2006, as a result of the stock exchange transaction
      described below.





On
      October 12, 2005, ULURU entered into a merger agreement with ULURU INC., a
      Delaware corporation ("ULURU Delaware") and Uluru Acquisition Corp., a
      wholly-owned Delaware subsidiary of ULURU formed on September 29, 2005. On
      March
      31, 2006, under the terms of the agreement, Uluru Acquisition Corp. merged
      into
      ULURU Delaware, after ULURU Delaware had acquired the net assets of the topical
      component of Access Pharmaceuticals, Inc., under Section 368 (a) (1) (A) of
      the
      Internal Revenue Code, "a statutory merger or consolidation".





Prior
      to
      the merger ULURU Delaware was a privately held Delaware corporation, formed
      on
      September 7, 2005. It is a diversified emerging pharmaceutical company focused
      on establishing a market leadership position in the development of wound
      management, plastic surgery and oral care products utilizing innovative drug
      delivery solutions to improve the clinical outcome of patients and provide
      a
      pharmacoeconomic benefit to healthcare providers.


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The
      first
      step in achieving this objective was the acquisition of the Topical Business
      Component of Access Pharmaceuticals, Inc. (“Access, Topical Component, or
      Topical Business”) which was completed on October 12, 2005. This acquisition
      (also referred herein as the Business or Predecessor) resulted in ULURU Delaware
      acquiring Aphthasol®, Zindaclin® and the Mucoadhesive Film technology and a
      fully paid exclusive worldwide license to the Nanoparticle Aggregate technology
      for all applications excluding injectable drug delivery devices. Utilizing
      this
      technology, three products have been approved for marketing in various global
      markets. In addition, numerous products are under development utilizing our
      Mucoadhesive Film and Nanoparticle Aggregate technologies.





The
      Topical Business’ customer base consists of numerous strategic alliances with
      partners throughout the world to manufacture and market our products. ULURU
      Delaware’s initial operations include a research and development facility in
      Addison, Texas, a third party distribution arrangement for the sale of a product
      in the United States and a network of strategic partners (licensees and sub
      licensees) globally.





The
      Asset
      Purchase Agreement with Access provided for ULURU Delaware to acquire the assets
      of the Topical Business of Access, consisting mainly of laboratory equipment,
      furniture and fixtures, and intellectual property consisting of three patents,
      a
      license to utilize a patented technology worldwide, and in process research
      and
      development. This acquisition, which was made under purchase accounting
      criteria, also included the assumption of three capital lease obligations
      associated with equipment used in the Topical Business, and the advance royalty
      paid by Discus Dental, effective December 2005 the Company’s sole distributor of
      Aphthasol® in the United States.





As
      a
      result of the merger, ULURU acquired, for 11,000,000 shares of our common stock,
      all of the issued and outstanding shares of ULURU Delaware under a stock
      exchange transaction, and ULURU Delaware became a wholly-owned subsidiary of
      ULURU, its legal parent. However, for financial accounting and reporting
      purposes, ULURU Delaware is treated as the acquirer and is consolidated with
      its
      legal parent, similar to the accounting treatment given in a recapitalization.
      For accounting presentation purposes only, our net assets are treated as being
      acquired by ULURU Delaware at fair value as of the date of the stock exchange
      transaction, and the financial reporting subsequent to March 31, 2006 will
      not
      be that of a development stage enterprise, since ULURU Delaware had substantial
      earned revenues from planned operations when acquired by us.





On
      March
      29, 2006, ULURU filed a Certificate of Amendment to the Articles of
      Incorporation in Nevada. This Certificate of Amendment authorized a 400:1
      reverse stock split to occur so that in exchange for every 400 outstanding
      shares of common stock that each shareholder had at the close of business on
      March 29, 2006, the shareholder would receive one share of common stock. As
      a
      result of this reverse stock split, ULURU's issued and outstanding common stock
      was reduced from 340,396,081 pre-split shares of common stock to 851,011
      post-split shares which includes an additional 21 shares for fractional
      interests. The Certificate of Amendment also authorized a decrease in authorized
      shares of common stock from 400,000,000 shares, par value $.001 each, to
      200,000,000, par value $.001 each, and authorized up to 20,000 shares of
      Preferred Stock, par value $.001.





On
      March
      31, 2006, ULURU filed a Certificate of Amendment to the Articles of
      Incorporation in Nevada to change its name from "Oxford Ventures, Inc." to
      "ULURU Inc.".


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All
      securities issued pursuant to the merger are "restricted" stock and were subject
      to a two year Lock-up Agreement as well as all applicable re-sale restrictions
      specified by federal and state securities laws. The shareholders of ULURU
      immediately prior to the merger retained 851,011 shares of common
      stock.





The
      aggregate amount of shares of common stock issuable to the shareholders of
      ULURU
      Delaware pursuant to the merger represented 92.8% of the issued and outstanding
      shares of ULURU's common stock. Under the terms of the Agreement and Plan of
      Merger and Reorganization executed on October 12, 2005, the pre-merger
      stockholders of ULURU owned an aggregate of 7.2% of the issued and outstanding
      shares of ULURU's common stock immediately after the merger.





At
      the
      effective time of the Merger, the members of the ULURU Delaware Board of
      Directors holding office immediately prior to the merger became ULURU's
      directors, and all persons holding offices of ULURU Delaware at the effective
      time, continue to hold the same offices of the surviving corporation.
      Simultaneously, ULURU's directors and officers immediately prior to the closing
      of the Merger resigned from all of their respective positions with
      ULURU.





On
      May
      31, 2006, our wholly owned subsidiary, ULURU INC., a Delaware corporation,
      filed
      a Certificate of Amendment to the Articles of Incorporation, in Delaware, to
      change its name from "ULURU INC." to "ULURU Delaware Inc.".





On
      December 6, 2006, we entered into a Common Stock Purchase Agreement (“Purchase
      Agreement”) with certain institutional accredited investors (“Investors”).
      Pursuant to the Purchase Agreement, we sold to the Investors an aggregate of
      47,052,628 shares of our common stock, at a per share price of $0.95 for an
      aggregate purchase price of $44,699,999. Of the aggregate purchase price,
      $38,499,999 was paid in cash and $6,200,000 was paid via cancellation of
      existing secured convertible debentures held by Cornell Capital Partners, LP
      and
      Prenox, LLC. On December 5, 2006 the closing price for our common stock was
      $0.90 per share.





We
      relied
      upon Section 4(2) and Rule 506 of Regulation D of the Securities Act of 1933,
      as
      amended (the "Act"), for the issuance of the Shares.





We
      also
      entered into an Investor Rights Agreement with the Investors. Under this
      agreement, we were obligated to register the Shares under the Act for resale
      by
      the Investors. On February 13, 2007, we received notice from the Security and
      Exchange Commission that our registration statement, originally filed December
      15, 2006 and subsequently amended on February 9, 2007, was declared effective,
      thereby fulfilling our initial obligation under the Investor Rights
      Agreement.





In
      connection with the transactions consummated by the Purchase Agreement, we
      also
      entered into a Repayment Agreement with Cornell
      and Prenox (the "Noteholders") .
      Under
      this agreement and in full satisfaction of all obligations owed under our existing
      secured convertible debentures (the "Debentures") held
      by
      the Noteholders and the transaction documents entered into in connection
      therewith, (i) we agreed to pay the Noteholders an aggregate of $13,000,000,
      which includes a redemption premium of $2,600,000, and interest accrued on
      the
      Debentures since December 1, 2006, (ii) we accepted the Noteholders'
      subscriptions for Shares upon cancellation of an aggregate of $6,200,000 original
      principal amount of the Debentures and (iii) the purchase agreement pursuant
      to
      which the Noteholders purchased the Debentures and the security agreement,
      collateral assignment, guarantor security agreement, escrow agreement, transfer
      agent instructions, guaranty agreement and registration rights agreement entered
      into in connection therewith were terminated.


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On
      December 8, 2006, we entered into an Amendment to Asset Sale Agreement (the
      "Amendment") with Access Pharmaceuticals, Inc. (“Access”). Pursuant to the
      Amendment, we agreed to pay Access $5,250,000, in two payments, $4,900,000
      which
      was paid on December 8, 2006 and $350,000 of which was paid on April 9, 2007,
      without interest, in settlement of the following obligations to
      Access:





·
            a
                payment of $3,700,000 that was due on October 11, 2006;·
            a
                payment of $1,000,000 due on October 11, 2007, or on the date of
                the first
                launch of an OraDiscTM product; and·
            certain
                future milestones which total
                $2,625,000.





As
      part
      of the transaction, we agreed to increase a remaining milestone from $750,000
      to
      $875,000 for the achievement of cumulative sales of 100 million dollars for
      the
      product sold from the Topical Business. We also acquired from Access all patent
      rights and all intellectual properties associated with the Nanoparticle
      Aggregate technology. We then licensed to Access certain specific applications
      of the Nanoparticle Aggregate technology which include use in intraperotinial,
      intratumoral, subscutaneous or intramuscular drug delivery implants, excluding
      dermal or facial fillers.








**NOTE
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





The
      following is a summary of significant accounting policies used in the
      preparation of these financial statements.





Principles
      of Consolidation





The
      accompanying consolidated financial statements include the accounts of ULURU
      Inc., a Nevada corporation, and its wholly-owned subsidiary, Uluru Delaware
      Inc., a Delaware corporation. All significant intercompany accounts and
      transactions have been eliminated in consolidation. Both companies have a
      December 31 year end.





Use
      of
      Estimates in the Preparation of Consolidated Financial
      Statements





The
      preparation of consolidated financial statements in conformity with accounting
      principles generally accepted in the United States of America requires
      management to make estimates and assumptions that affect the reported amounts
      of
      assets and liabilities, the disclosure of contingent assets and liabilities
      at
      the date of the consolidated financial statements and the reported amounts
      of
      revenues and expenses during the reporting periods. Actual results could differ
      from those estimates and assumptions. These differences are usually minor and
      are included in our consolidated financial statements as soon as they are known.
      Our estimates, judgments, and assumptions are continually evaluated based on
      available information and experience. Because of the use of estimates inherent
      in the financial reporting process, actual results could differ from those
      estimates.


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Basic
      and Diluted Net Loss Per Share





In
      accordance with SFAS No. 128, *Earnings
      per Share* ,
      basic
      and diluted net loss per share is computed using net loss divided by the
      weighted average number of shares of common stock outstanding for the period
      presented after giving effect to all stock splits including the 400 for 1
      reverse stock split approved by our stockholders on March 29, 2006. Because
      we
      reported a net loss for the three months ended March 31, 2007 and 2006, common
      stock equivalents consisting of options and warrants were anti-dilutive;
      therefore, the basic and diluted net loss per share for each of these periods
      were the same.





Income
      Taxes





We
      use
      the liability method of accounting for income taxes pursuant to Statement of
      Financial Accounting Standards Board Statement No. 109. Under this method,
      deferred income taxes are recorded to reflect the tax consequences in future
      periods of temporary differences between the tax basis of assets and liabilities
      and their financial statement amounts at year-end.





Revenue
      Recognition





We
      recognize revenue from license payments not tied to achieving a specific
      performance milestone ratably over the period over which we are obligated to
      perform services. The period over which we are obligated to perform services
      is
      estimated based on available facts and circumstances. Determination of any
      alteration of the performance period normally indicated by the terms of such
      agreements involves judgment on management's part. License revenues are earned
      when received from foreign sub-licensees as there is no control by us over
      the
      foreign sub-licensees and no performance criteria to which we are
      subject.





We
      recognize revenue ratably from performance payments, when such performance
      is
      substantially in our control and when we believe that completion of such
      performance is reasonably probable, over the period during which we estimate
      that we will complete such performance obligations.





Substantive
      at-risk milestone payments, which are based on achieving a specific performance
      milestone when performance of such milestone is contingent on performance by
      others or for which achievement cannot be reasonably estimated or assured,
      are
      recognized as revenue when the milestone is achieved and the related payment
      is
      due, provided that there is no substantial future service obligation associated
      with the milestone.





Revenue
      in connection with license arrangements is recognized over the term of the
      arrangement and is limited to payments collected or due and reasonably assured
      of collection. In circumstances where the arrangement includes a refund
      provision, we defer revenue recognition until the refund condition is no longer
      applicable unless, in our judgment, the refund circumstances are within our
      operating control and unlikely to occur.





We
      recognize revenue and related costs from the sale of our products at the time
      the products are shipped to the customer.





Sponsorship
      income has no significant associated costs since it is being paid only for
      information pertaining to a specific research and development project in which
      the sponsor may become interested in acquiring products developed thereby.




Payments
      received in advance of being recognized as revenue are deferred. Contract
      amounts are not recognized as revenue until the customer accepts or verifies
      the
      research results.


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Research
      and Development Expenses





Pursuant
      to SFAS No. 2, *"Accounting
      for Research and Development Costs"* ,
      our
      research and development costs are expensed as incurred. Research and
      development expenses include, but are not limited to, payroll and related
      expense, lab supplies, preclinical development cost, clinical trial expense,
      outside manufacturing and consulting expense. The cost of materials and
      equipment or facilities that are acquired for research and development
      activities and that have alternative future uses are capitalized when acquired.
      As of March 31, 2007, there were no such capitalized materials, equipment or
      facilities.





Cash
      Equivalents





For
      purposes of the accompanying financial statements, we consider all highly liquid
      investments with original maturities of three months or less when purchased
      to
      be cash equivalents.





We
      invest
      cash in excess of immediate requirements in money market accounts, certificates
      of deposit, corporate securities with high quality ratings, and U.S. government
      securities taking into consideration the need for liquidity and capital
      preservation. These investments are not held for trading or other speculative
      purposes. We are exposed to credit risk in the event of default by high quality
      corporations and by financial institutions to the extent that cash balances
      with
      financial institutions are in excess of amounts that are insured by the Federal
      Deposit Insurance Corporation, generally $100,000 per account.





Allowance
      for Doubtful Accounts





We
      estimate the collectibility of our trade accounts receivable. In order to assess
      the collectibility of these receivables, we monitor the current creditworthiness
      of each customer and analyze the balances aged beyond the customer's credit
      terms. Theses evaluations may indicate a situation in which a certain customer
      cannot meet its financial obligations due to deterioration of its financial
      viability, credit ratings or bankruptcy. The allowance requirements are based
      on
      current facts and are reevaluated and adjusted as additional information is
      received. Trade accounts receivable are subject to an allowance for collection
      when it is probable that the balance will not be collected. As of March 31,
      2007
      and December 31, 2006, no allowance for collectibility was needed and there
      were
      no accounts written off during the three months ended March 31, 2007 and the
      year ended December 31, 2006 as uncollectible.





Inventory





Inventories
      are stated at the lower of cost or market value. Raw material inventory cost
      is
      determined on the first-in, first-out method. Costs of finished goods are
      determined by an actual cost method. As of March 31, 2007 and December 31,
      2006,
      we did have approximately $49,000 of value associated with our raw materials
      inventory; however, no cost basis was assigned to the inventory as it was
      acquired at no cost.


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Property
      and Equipment





Property
      and equipment are recorded at cost. Depreciation is provided over the estimated
      useful lives of the related assets using the straight-line method. Estimated
      useful lives for property and equipment categories are as follows:





Furniture,
                fixtures, and laboratory equipment
            7
                yearsComputer
                and office equipment
            5
                yearsComputer
                software
            3
                yearsLeasehold
                improvements
            Lease
                term





Deferred
      Charge





From
      time
      to time fees are payable to the Federal Food and Drug Administration in
      connection with new drug applications submitted by the Company and annual user
      drug prescription fees. Such fees are being amortized ratably over the FDA’s
      prescribed fiscal period of 12 months ending September 2007.





Patents
      and Applications





We
      expense internal patent and application costs as incurred because, even though
      we believe the patents and underlying processes have continuing value, the
      amount of future benefits to be derived therefrom are uncertain. Purchased
      patents are capitalized and amortized over the life of the patent.





Impairment
      of Assets





In
      accordance with the provisions of Statement of Financial Accounting Standards
      No. 144, *Accounting
      for the Impairment or Disposal of Long-Lived Assets* ,
      our
      policy is to evaluate whether there has been a permanent impairment in the
      value
      of long-lived assets, certain identifiable intangibles and goodwill when certain
      events have taken place that indicate the remaining unamortized balance may
      not
      be recoverable. When factors indicate that the intangible assets should be
      evaluated for possible impairment, we use an estimate of related undiscounted
      cash flows. There has been no impairment losses determined or recorded for
      the
      year.





Derivatives





We
      occasionally issue financial instruments that contain an embedded instrument.
      At
      inception, we assess whether the economic characteristics of the embedded
      derivative instrument are clearly and closely related to the economic
      characteristics of the financial instrument (host contract), whether the
      financial instrument that embodies both the embedded derivative instrument
      and
      the host contract is currently measured at fair value with changes in fair
      value
      reported in earnings, and whether a separate instrument with the same terms
      as
      the embedded instrument would meet the definition of a derivative
      instrument.





If
      the
      embedded derivative instrument is determined not to be clearly and closely
      related to the host contract, is not currently measured at fair value with
      changes in fair value reported in earnings, and the embedded derivative
      instrument would qualify as a derivative instrument, the embedded derivative
      instrument is recorded apart from the host contract and carried at fair value
      with changes recorded in current-period earnings.


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We
      determined that all embedded items associated with financial instruments during
      2006 which qualify for derivative treatment, were properly separated from their
      host. As of March 31, 2007, we did not have any derivative
      instruments.





Concentrations
      of Credit Risk





Financial
      instruments, consisting primarily of cash and cash equivalents, that potentially
      expose us to concentrations of credit risk due to the use of a limited number
      of
      banking institutions and due to maintaining cash balances in banks, which,
      at
      times, may exceed the limits of amounts insured by the Federal Deposit Insurance
      Corporation (FDIC). At March 31, 2007 and December 31, 2006 our cash and cash
      equivalents totaled $16,952,481 and $16,918,007, respectively. However, because
      deposits are maintained at high quality financial institutions, we do not
      believe that there is a significant risk of loss of uninsured amounts.





We
      also
      invest cash in excess of immediate requirements in corporate securities with
      high quality ratings. These investments are not held for trading or other
      speculative purposes. We are exposed to credit risk in the event of default
      by
      these high quality corporations





Concentration
      of credit risk with respect to trade accounts receivable are customers with
      balances that exceed 5% of total consolidated trade accounts receivable at
      March
      31, 2007 and at December 31, 2006. Two customers exceeded the 5% threshold,
      one
      with 52.8% and the other with 46.5%, at March 31, 2007 and two customers
      exceeded the 5% threshold at December 31, 2006, one with 87.3% and the other
      with 11.8%. We believe that these accounts are collectible as of March 31,
      2007
      and December 31, 2006.








**NOTE
      3.**  **THE
      EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS**





*Recently
      Adopted Accounting Standards*





In
      May 2005, the FASB issued Statement of Financial Accounting Standards
      No. 154, *Accounting
      Changes and Error Corrections* (“SFAS
      No. 154”). SFAS No. 154 requires retrospective application to
      prior-period financial statements of changes in accounting principles, unless
      a
      new accounting pronouncement provides specific transition provisions to the
      contrary or it is impracticable to determine either the period-specific effects
      or the cumulative effect of the change. SFAS No. 154 also redefines
“restatement” as the revising of previously issued financial statements to
      reflect the correction of an error. We adopted the provision of SFAS
      No. 154 in the first fiscal quarter of 2006. The adoption did not have a
      material effect on our consolidated financial statements.





Effective
      January 1, 2006, we adopted the fair value recognition provisions of SFAS 123R, *Share-Based
      Payments* ("SFAS
      No. 123(R)"), which is a revision of SFAS No. 123.





The
      value
      of each employee stock option granted is estimated on the grant date under
      the
      fair value method using the Black-Scholes option pricing model. For options
      granted after January 1, 2006, we amortize the fair value on a straight-line
      basis. All options are amortized over the requisite service period of the
      awards, which are generally the vesting periods. We did not have any unvested
      employee stock options prior to January 1, 2006.


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Stock-based
      awards issued to non-employees are accounted for using the fair value method
      and
      are remeasured to fair value at each period end until the earlier of the date
      that performance by the non-employee is complete or a performance commitment
      has
      been obtained. The fair value of each award to non-employees is estimated using
      the Black-Scholes option pricing model.





In
      February 2006, the FASB issued Statement of Financial Accounting Standards
      No. 155, *Accounting
      for Certain Hybrid Financial Instruments — an amendment of FASB Statements
      No. 133 and 140* (“SFAS
      No. 155”). SFAS No. 155 permits an entity to measure at fair value any
      financial instrument that contains an embedded derivative that otherwise would
      require bifurcation. This statement is effective for all financial instruments
      acquired, issued, or subject to a remeasurement event occurring after the
      beginning of an entity’s first fiscal year that begins after September 15,
      2006. The adoption did not have a material effect on our consolidated financial
      statements.





In
      June 2006, the FASB issued Interpretation No. 48, *Accounting
      for Uncertainty in Income Taxes — An Interpretation of FASB Statement
      No. 109* (“FIN
      48”), which prescribes a recognition threshold and measurement attribute for the
      financial statement recognition and measurement of a tax position taken or
      expected to be taken in a tax return. FIN 48 will be effective for fiscal years
      beginning after December 15, 2006. The adoption did not have a material
      effect on our consolidated financial statements.





In
      September 2006, the FASB issued SFAS 158, *Employers’
      Accounting for Defined Benefit Pension and Other Postretirement Plans—an
      amendment of FASB Statements No. 87, 88, 106, and 132(R)* (“SFAS
      158”). SFAS 158 requires an employer to recognize the overfunded or underfunded
      status of a defined benefit postretirement plan (other than a multiemployer
      plan) as an asset or liability in its statement of financial position and to
      recognize changes in that funded status in the year in which the changes occur
      through comprehensive income. This guidance is effective as of the end of the
      fiscal year for years ending after December 15, 2006. The adoption did not
      have
      a material effect on our consolidated financial statements.





*New
      Accounting Standards Not Yet Adopted*





In
      September 2006, the FASB issued Statement of Financial Accounting Standards
      No. 157, *Fair
      Value Measurements* (“SFAS
      No. 157”), which defines fair value, establishes a framework for measuring
      fair value under GAAP, and expands disclosures about fair value measurements.
      SFAS No. 157 will be effective for fiscal years beginning after
      November 15, 2007, which is the Company’s fiscal year 2008. We have not yet
      evaluated the potential impact of adopting SFAS No. 157 on our consolidated
      financial statements.








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**NOTE
      4.**  **SEGMENT
      INFORMATION**





We
      operate in one business segment, the research, development and commercialization
      of pharmaceutical products that address unmet medical needs. Our entire business
      is managed by a single management team, which reports to the Chief Executive
      Officer.





Our
      revenues are currently derived primarily from one licensee for domestic
      activities and from one licensee for international activities.





Domestic
      revenues represented 55% and 91% for the three months ended March 31, 2007
      and
      2006, respectively. International revenues were 45% and 9% for the three months
      ended March 31, 2007 and 2006, respectively. The following table summarizes
      our
      sources of revenues by geographic area:





**Three
                Months Ended March 31,****Revenues**
            
            **2007**
            
            **2006**Domestic
            
            $
            211,118
            
            $
            244,250International
            
            
            172,393
            
            
            22,914Total
            
            $
            383,511
            
            $
            267,164








**NOTE
      5.**  **INVENTORY**





As
      of
      March 31, 2007, our inventory was comprised of raw material, Amlexanox, the
      active ingredient in Aphthasol®, and work-in-progress costs for the production
      of Aphthasol®. We also have approximately $49,000 of additional value associated
      with our raw materials inventory; however, no cost basis was assigned to this
      portion of the inventory as it was acquired at no cost. A summary of inventory
      as of March 31, 2007 and December 31, 2006 follows:





**Inventory**
            
            **March
                31, 2007**
            
            **December
                31, 2006**Inventory - Amlexanox (Raw material)
            
            $
            137,310
            
            $
            -0-Inventory - Work in Progress (Aphthasol®)
            
            
            177,481
            
            
            -0-Total
            
            $
            314,791
            
            $
            -0-








**NOTE
      6.**  **PROPERTY
      AND EQUIPMENT**





As
      of
      March 31, 2007 and December 31, 2006, a summary of property and equipment is
      as
      follows:





**Property
                and equipment**
            
            **March
                31, 2007**
            
            **December
                31, 2006**Laboratory equipment and furniture
            
            $
            415,393
            
            $
            368,776Manufacturing equipment
            
            
            458,417
            
            
            269,000Computer and office equipment
            
            
            54,925
            
            
            51,979Computer software
            
            
            4,108
            
            
            4,108Leasehold improvements
            
            
            79,002
            
            
            78,2441,011,845
            
            
            772,107Less: accumulated depreciation and amortization
            
            
            100,519
            
            
            80,975Property and equipment, net
            
            $
            911,326
            
            $
            691,132





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**NOTE
      7.**  **PATENTS**





As
      of
      March 31, 2007 and December 31, 2006, a summary of patents is as
      follows:




**Patents**
            
            **March
                31, 2007**
            
            **December
                31, 2006**Zindaclin®
            
            $
            3,729,000
            
            $
            3,729,000Amlexanox (Aphthasol®)
            
            
            2,090,000
            
            
            2,090,000Amlexanox (OraDiscTM A)
            
            
            6,873,080
            
            
            6,873,080OraDiscTM
            
            
            73,000
            
            
            73,000Hydrogel nanoparticle aggregate
            
            
            589,858
            
            
            589,85813,354,938
            
            
            13,354,938Less: accumulated amortization
            
            
            1,518,772
            
            
            1,256,069Patents, net
            
            $
            11,836,166
            
            $
            12,098,869








**NOTE
      8.**  **ACCRUED
      LIABILITIES**





As
      of
      March 31, 2007 and December 31, 2006, a summary of accrued liabilities is as
      follows:





**Accrued
                Liabilities**
            
            **March
                31, 2007**
            
            **December
                31, 2006**Accrued taxes - payroll
            
            $
            106,299
            
            $
            106,302Accrued compensation/benefits
            
            
            123,609
            
            
            298,040Accrued insurance payable
            
            
            -0-
            
            
            70,876Contract research payable
            
            
            54,000
            
            
            -0-Total accrued liabilities
            
            $
            283,908
            
            $
            475,218





The
      accrued taxes- payroll relate to advances obtained by the former president
      of
      the Company, which were treated as the net amount of compensation paid to him
      in
      2005 since applicable withholding taxes were never paid at that time. The
      difference between the advances paid and the gross amount of the compensation
      relates to the unpaid taxes, interest and penalties accrued through March 31,
      2007. Management is of the opinion that the advances and the payroll taxes
      reported as owed may be ultimately settled with the former
      president.








**NOTE
      9.**  **ADVANCED
      ROYALTY**





As
      part
      of the October 12, 2005 asset purchase from Access, we assumed the liability
      associated with an advanced royalty payment of $500,000 to Access by Discus
      Dental, our United States distributor for Aphthasol® paste. Royalties earned
      from the sale of Aphthasol® by the distributor will first be offset against the
      advanced royalty.





Royalty
                Advance, as of December 31, 2006
            
            $
            219,268Royalties
                earned - First Quarter 2007
            
            
            21,118Royalty
                Advance, as of March 31, 2007
            
            $
            198,150





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**NOTE
      10.**  **DEFERRED
      REVENUE**





On
      February 8, 2007, we entered into a ten-year strategic partnership with
      BioProgress PLC to market OraDiscTM B in the European Union, Commonwealth of
      Independent States, and Middle Eastern markets.





OraDiscTM
      B is a product developed from our adhesive film technology which incorporates
      15
      milligrams of benzocaine for the treatment of oral pain. As part of the ten-year
      agreement, BioProgress remitted a $600,000 milestone payment in February 2007,
      and agreed to make future milestone payments, both success and time related,
      which will all be recognized ratably over the life of the
      agreement.





Deferred
                Revenue, February 2007
            
            $
            600,000Revenue amortization - Feb. 2007
            
            
            3,466Revenue amortization - Mar. 2007
            
            
            4,671Deferred
                Revenue, as of March 31, 2007
            
            $
            591,863





Allocation:Current portion
            
            $
            55,147Long-term portion
            
            
            536,716Total Deferred Revenue
            
            $
            591,863








**NOTE
      11.**  **ASSET
      PURCHASE OBLIGATION**





As
      of
      March 31, 2007, the remaining amount due to Access Pharmaceuticals, Inc.
      pursuant to the Amended Asset Purchase Agreement was $350,000. On April 9,
      2007
      we remitted the amount due in full satisfaction of our payment
      obligation.





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**NOTE
      12.**  **STOCKHOLDERS’
      EQUITY**





Warrants





The
      following table summarizes the warrants outstanding and the number of shares
      of
      common stock subject to exercise as of March 31, 2007 and the changes therein
      during the twelve months then ended:





**Number
                of Shares of Common Stock Subject to Exercise**
            
            **Weighted
                - Average**
              **Exercise
                Price**Balance
                - March 31, 2006
            
            
            5,000,000
            
            $
            0.01Warrants issued
            
            
            3,395,000
            
            
            1.05Warrants exercised
            
            
            -0-
            
            
            ---Warrants cancelled
            
            
            -0-
            
            
            --Balance
                - December 31, 2006
            
            
            8,395,000
            
            $
            0.43Warrants issued
            
            
            -0-
            
            
            --Warrants exercised
            
            
            1,514,400
            
            
            0.01Warrants cancelled
            
            
            -0-
            
            
            --Balance
                - March 31, 2007
            
            
            6,880,600
            
            $
            0.52





Of
      warrant shares subject to exercise as of March 31, 2007, expiration of the
      right
      to exercise is as follows:





**Date
                of expiration**
            
            **Number
                of Warrant Shares of Common Stock Subject to
                Expiration**October 12, 2010
            
            
            3,485,600August 30, 2011
            
            
            1,125,000December 6, 2011
            
            
            2,270,000Total
            
            
            6,880,600








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**NOTE
      13.**  **SHARE
      BASED COMPENSATION**





On
      January 1, 2006, we adopted the fair value recognition provisions of SFAS 123R, *Share-Based
      Payments* ("SFAS
      No. 123(R)"), which requires the measurement and recognition of all share-based
      payment awards made to employees and directors including stock options based
      on
      estimated fair values.





SFAS
      123(R) requires companies to estimate the fair value of share-based payment
      awards on the date of grant using an option-pricing model. We use the
      Black-Scholes option-pricing model as our method of valuation under SFAS 123(R)
      and a single option award approach. The fair value is then amortized on a
      straight-line basis over the requisite service periods of the awards, which
      is
      generally the vesting period. Stock-based compensation expense recognized in
      our
      Statement of Operations for the three months ended March 31, 2007 is based
      on
      awards ultimately expected to vest and has been reduced for estimated
      forfeitures, which currently is nil. SFAS 123(R) requires forfeitures to be
      estimated at the time of grant and revised, if necessary, in subsequent periods
      if actual forfeitures differ from those estimates.





The
      fair
      value of share-based payment awards on the date of grant as determined by the
      Black-Scholes model is affected by our stock price as well as other assumptions.
      These assumptions include, but are not limited to the expected stock price
      volatility over the term of the awards, and actual and projected employee stock
      option exercise behaviors.





Incentive
      Stock Options





During
      the first quarter of 2007, the Board of Directors did not grant any incentive
      stock options to directors, executives, or employees.





At
      March
      31, 2007, the balance of unearned stock-based compensation to be expensed in
      future periods related to unvested incentive stock option awards, as adjusted
      for expected forfeitures, is approximately $226,913. The period over which
      the
      unearned stock-based compensation is expected to be recognized is approximately
      four years. We anticipate that we will grant additional incentive stock option
      awards to employees in the future, which will increase our stock-based
      compensation expense by the additional unearned compensation resulting from
      these grants. The fair value of these future grants is not included in the
      amount above, because the impact of these grants cannot be predicted at this
      time due to the dependence on the number of share-based payments granted. In
      addition, if factors change and different assumption are used in the application
      of SFAS 123(R) in future periods, stock-based compensation expense recorded
      under SFAS 123(R) may differ significantly from what has been recorded in the
      current period.





The
      following table summarizes stock-based compensation in accordance with SFAS
      123(R) for the three months ended March 31, 2007, which was allocated as
      follows:





**Three
                Months Ended March 31, 2007**Research
                and development
            
            $
            10,325General
                and administrative
            
            
            4,859Stock-based
                compensation included in operating expenses
            
            
            15,184Total
                stock-based compensation expense
            
            
            15,184Tax
                benefit
            
            
            ---Stock-based
                compensation expense, net of tax
            
            $
            15,184





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Nonstatutory
      Stock Options





Stock-based
      awards issued to non-employees are accounted for using the fair value method
      and
      are remeasured to fair value at each reporting period and adjusted until the
      commitment date is reached; being either the date that a performance commitment
      is reached or the performance of the consultant is complete. The Company
      utilizes a Black-Scholes option pricing model to determine the fair value of
      such awards.





The
      value
      of non-employee stock options granted during the three months ended March 31,
      2007 was estimated using the Black-Scholes model with the following
      assumptions:





**Three
                Months Ended March 31, 2007**Expected
                volatility
            
            
            50.2
            %Risk-fee
                interest rate
            
            
            4.85
            %Expected
                dividends
            
            
            0.0
            %Expected
                forfeitures
            
            
            0.0
            %Expected
                term (in years)
            
            
            1.0








The
      expected volatility assumption was based upon a combination of historical stock
      price volatility measured on a daily basis and an estimate of expected future
      stock price volatility. The risk-free interest rate assumption is based upon
      U.S. Treasury bond interest rates appropriate for the term of the Company’s
      employee stock options. The dividend yield assumption is based on our history
      and expectation of dividend payments.





During
      the first quarter of 2007, the Board of Directors granted the following awards
      to non-employee consultants.





**Quantity**
            
            **Weighted
                Average Fair Value Per Share**
            
            **Fair
                Value**Options
                to Purchase Common Stock
            
            
            75,000
            
            $
            0.87
            
            $
            65,235





At
      March
      31, 2007, the balance of unearned stock-based compensation to be expensed in
      future periods is approximately $243,269.





The
      following table summarizes stock-based compensation to non-employees for the
      three months ended March 31, 2007, which was allocated as follows:





**Three
                Months Ended March 31, 2007**General
                and administrative
            
            $
            76,350Stock-based
                compensation included in operating expenses
            
            $
            76,350





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Stock
      Options (Incentive and Nonstatutory)





The
      following table presents the activity for stock options for the twelve months
      ended March 31, 2007:





**Stock
                Options**
            
            **Weighted
                Average Exercise Price per Share**Outstanding,
                March 31, 2006
            
            
            -0-
            
            $
            -0-Granted
            
            
            1,350,000
            
            
            1.29Forfeited/cancelled
            
            
            -0-
            
            
            ---Exercised
            
            
            -0-
            
            
            ---Outstanding,
                December 31, 2006
            
            
            1,350,000
            
            
            1.29Granted
            
            
            75,000
            
            
            4.00Forfeited/cancelled
            
            
            -0-
            
            
            ---Exercised
            
            
            -0-
            
            
            ---Outstanding,
                March 31, 2007
            
            
            1,425,000
            
            $
            1.43








The
      following table presents the stock option grants outstanding and exercisable
      as
      of March 31, 2007:





**Options
                Outstanding**
            
            **Options
                Exercisable****Exercise
                Prices**
            
            **Stock
                Options Outstanding**
            
            **Weighted
                Average Remaining Contractual Life in Years**
            
            **Weighted
                Average Exercise Price per Share**
            
            **Stock
                Options Exercisable**
            
            **Weighted
                Average Exercise Price per Share**$0.95
            
            
            700,000
            
            
            9.7
            
            $
            0.95
            
            
            -0-
            
            $
            -0-$1.65
            
            
            650,000
            
            
            9.7
            
            
            1.65
            
            
            -0-
            
            
            -0-$4.00
            
            
            75,000
            
            
            9.8
            
            
            4.00
            
            
            -0-
            
            
            -0-Total
            
            
            1,425,000
            
            
            9.7
            
            $
            1.43
            
            
            -0-
            
            $
            -0-








Restricted
      Stock Awards





Restricted
      stock awards, which typically vest over a period of five years, are issued
      to
      certain key employees and are subject to forfeiture until the end of an
      established restriction period. We utilize the market price on the date of
      grant
      as the fair market value of restricted stock awards and expense the fair value
      on a straight-line basis over the vesting period.





A
      summary
      of the non-vested restricted stock awards under the Plan, as of the three months
      ended March 31, 2007 and changes during this period are as
      follows.


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          21
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          of Contents*





During
      the first quarter of 2007, the Board of Directors granted the following
      restricted stock:





**Quantity**
            
            **Weighted
                Average Fair Value Per Share**
            
            **Fair
                Value**Restricted
                Stock Awards
            
            
            56,035
            
            $
            4.00
            
            $
            224,140





At
      March
      31, 2007, the balance of unearned restricted stock-based compensation to be
      expensed in future periods is approximately $213,086.





The
      following table summarizes stock-based compensation related to restricted stock
      awards for the three months ended March 31, 2007, which was allocated as
      follows:





**Three
                Months Ended March 31, 2007**Research
                and development
            
            $
            3,166General
                and administrative
            
            
            7,888Stock-based
                compensation included in operating expenses
            
            $
            11,054








The
      following table presents the activity for nonvested restricted stock awards
      for
      the twelve months ended March 31, 2007:





**Restricted
                stock**
            
            **Weighted
                Average Grant Date Fair Value**Outstanding,
                March 31, 2006
            
            
            -0-
            
            $
            -0-Granted
            
            
            -0-
            
            
            ---Forfeited/cancelled
            
            
            -0-
            
            
            ---Exercised
            
            
            -0-
            
            
            ---Outstanding,
                December 31, 2006
            
            
            -0-
            
            
            -0-Granted
            
            
            56,035
            
            
            4.00Forfeited/cancelled
            
            
            -0-
            
            
            ---Exercised
            
            
            -0-
            
            
            ---Outstanding,
                March 31, 2007
            
            
            56,035
            
            $
            4.00





Summary
      of Plans





*2006
      Equity Incentive Plan*





Our
        board
        of directors (“Board”) adopted and our stockholders approved our 2006 Equity
        Incentive Plan (“Incentive Plan”) in March 2006, which initially provided for
        the issuance of up to 2 million shares of our Common Stock pursuant to stock
        option and other equity awards. At the annual meeting of the stockholders
        held
        on May 8, 2007, our stockholders approved an amendment to the Incentive Plan
        to
        increase from 2 million shares to 6 million shares the total number of shares
        of
        Common Stock issuable under the Incentive Plan pursuant to stock option and
        other equity awards. As of March 31, 2007, we granted options to purchase
        1,350,000 shares of Common Stock which were outstanding at a weighted average
        exercise price of $1.29 per share and 56,035 shares of restricted stock.
        There
        are 4,518,965 shares that remain available for future grant under our Incentive
        Plan.


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          22
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          of Contents*





The
      Board
      administers our Incentive Plan, however, they may delegate this authority to
      a
      committee of one or more Board members. Our Board has delegated such authority
      nonexclusively to our compensation committee and certain grants may also be
      made
      by our special stock option committee. The Board or a committee of the Board
      has
      the authority to construe, interpret, amend and modify our Incentive Plan as
      well as to determine the terms of an award. Our Board may amend or modify our
      Incentive Plan at any time. However, no amendment or modification shall
      adversely affect the rights and obligations with respect to outstanding awards
      unless the holder consents to that amendment or modification.





Our
      Incentive Plan permits us to grant stock options, stock appreciation rights,
      restricted stock and other stock-based awards to our employees, officers,
      directors, and non-employee service providers. A stock option may be an
      incentive stock option within the meaning of Section 422 of the Internal Revenue
      Code (“Code”) or a nonstatutory stock option.





In
      general, the duration of a stock option granted under our Incentive Plan cannot
      exceed ten years. The exercise price of an incentive stock option cannot be
      less
      than 100% of the fair market value of the Common Stock on the date of grant.
      A
      nonstatutory stock option may be granted with an exercise price as determined
      by
      the Board or a committee of the Board. An incentive stock option may not be
      transferred, but a nonstatutory stock option may be transferred as permitted
      in
      an individual stock option agreement and by will or the laws of descent and
      distribution.





Incentive
      stock options may be granted only to our employees. The aggregate fair market
      value, determined at the time of grant, of shares of our Common Stock with
      respect to which incentive stock options are exercisable for the first time
      by
      an optionholder during any calendar year under our Incentive Plans may not
      exceed $100,000 or such other amount permitted under Section 422 of the Code.
      An
      incentive stock option granted to a person who at the time of grant owns or
      is
      deemed to own more than 10% of the total combined voting power of all classes
      of
      our outstanding stock or any of our affiliates must have a term of no more
      than
      five years and an exercise price that is at least 110% of fair market value
      at
      the time of grant.





The
      Incentive Plan administrator determines the term of stock options granted under
      our Incentive Plan, up to a maximum of ten years, except in the case of certain
      incentive stock options, as described above. Unless the terms of an optionee's
      stock option agreement provide otherwise, if an optionee's relationship with
      us,
      or any of our affiliates, ceases for any reason other than disability or death,
      the optionee may exercise any vested options for a period of ninety days
      following the cessation of service. If an optionee's service relationship with
      us, or any of our affiliates, ceases due to disability or death, or an optionee
      dies within a certain period following cessation of service, the optionee or
      a
      beneficiary may exercise any vested options for a period of 12 months in the
      event of disability or death. The option term may be extended in the event
      that
      exercise of the option following termination of service is prohibited by
      applicable securities laws. In no event, however, may an option be exercised
      beyond the expiration of its term.


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          of Contents*





Stock
      appreciation rights ("SARs") granted under our Incentive Plan entitle the holder
      to receive, subject to the provisions of the Incentive Plan and an award
      agreement, a payment having an aggregate value equal to the product of (i)
      the
      excess of (A) the fair market value of a share of our Common Stock on the
      exercise date over (B) the base price per share specified in the award
      agreement, times (ii) the number of shares specified by the SAR, or portion
      thereof, which is exercised. Payment of the amount receivable by a holder upon
      any exercise of a SAR may be made by the delivery of shares of our Common Stock
      or cash, or any combination of shares and cash, as determined by the plan
      administrator. SARs are transferable only as provided for in the award
      agreement. No SARs were granted or are outstanding as of March 31,
      2007.





Restricted
      stock awards and stock unit awards granted under our Incentive Plan entitle
      the
      holder (i) in the case of restricted stock awards, to acquire shares of our
      Common Stock and (ii) in the case of stock unit awards, to be paid the fair
      market value of our Common Stock on the exercise date. Stock unit awards may
      be
      settled in shares of Common Stock, cash or a combination thereof, as determined
      by the plan administrator. Restricted stock awards and stock unit awards may
      be
      subject to vesting periods and other restrictions and conditions as the plan
      administrator may include in an award agreement. Unvested restricted stock
      awards and stock units may not be transferred except as set forth in an award
      agreement.





Award
      agreements for restricted stock awards specify the applicable restrictions
      on
      the shares of Common Stock subject to a given award, the duration of such
      restrictions and the times at which such restrictions lapse with respect to
      all
      or a specified number of shares. Notwithstanding the foregoing, the plan
      administrator may reduce or shorten the duration of any restriction applicable
      to any shares of Common Stock awarded to any holder. A holder's rights as a
      shareholder with respect to the shares of restricted stock awarded are specified
      in an award agreement.





Award
      agreements for stock unit awards specify the number and terms and conditions
      of
      such stock units, as well as the manner in which such stock units may be
      exercised and the holder's rights as a shareholder with respect to such stock
      units.








**NOTE
      14.**  **INCOME
      TAXES**





There
      was
      no current federal tax provision or benefit recorded for any period since
      inception, nor were there any recorded deferred income tax assets, as such
      amounts were completely offset by valuation allowances.








**NOTE
      15.**  **COMMITMENTS
      AND CONTINGENCIES**





Milestone
      Payments





We
      were
      subject to paying Access for up to $4,750,000 in eleven enumerated milestones,
      if we achieved annual net sales volumes of 20 million dollars or 40 million
      dollars on any one product, and 20 million dollars on all products, and at
      levels of 50 million dollars and 100 million dollars for cumulative net sales
      and reached certain defined technology milestones including licensing agreements
      and advancing products to clinical development.


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          24
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          of Contents*





On
      December 8, 2006, we entered into an Amendment to the Asset Sale Agreement
      with
      Access pursuant to which we agreed to a full settlement for six of the eleven
      future milestones, and added an increase to one milestone (cumulative sales
      of
      the products of 100 million dollars) from $750,000 to $875,000. We paid $250,000
      for the settlement of the six future milestones which, if achieved, would have
      totaled $2,625,000.





As
      of
      March 31, 2007, our future milestone obligations, if achieved, now total
      $2,250,000; relating to milestones based on annual sales of 20 and 40 million
      dollars on sales of the products, 20 million dollars on sales of any one
      product, and 50 and 100 million dollars on cumulative sales of the products.





Compensation
      Claim





We
      received written notice from Dan Leonard, former CEO of Oxford Ventures, Inc.,
      the predecessor Company name, claiming he is owed a warrant to purchase 100,000
      shares of our common stock at a per share exercise price equal to
      $1.25.





We
      believe that we are entitled to certain offsets from Mr. Leonard which may
      mitigate his compensation claim. The Company and Mr. Leonard are currently
      negotiating a resolution to each of their claims.








**NOTE
      16.**  **RELATED
      PARTY TRANSACTIONS**





In
      February 2007, we reimbursed $62,500 to Kerry P. Gray, Chief Executive Officer
      of the Company for unpaid compensation from 2005.








**NOTE
      17.**  **LEASE
      OBLIGATION**





On
      January 31, 2006 we entered into a lease agreement for office and laboratory
      space in Addison, Texas. The minimum lease obligation is $9,035 per month,
      which
      is exclusive of monthly operating expenses, commenced on April 1, 2006 and
      continues until April 1, 2013.





**Calendar
                Years**
            
            **Future
                Lease Expense**2007
            
            $
            108,4142008
            
            
            108,4142009
            
            
            108,4142010
            
            
            108,4142011 & Beyond
            
            
            243,934Total
            
            $
            677,590








**NOTE
      18.**  **SUBSEQUENT
      EVENT**





None.





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          25
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          of Contents*








**ITEM
      2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
      RESULTS OF OPERATIONS**





*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, 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, 2006. Forward-looking statements
      contained in this Form 10-QSB include, but are not limited to those relating
      to
      our business strategy, future revenues, anticipated product approvals and timing
      thereof, the terms of future licensing arrangements, and our expected capital
      expenditures.*





Business





ULURU
      Inc. (hereinafter “we”, “our”, “us”, “ULURU”, or the “Company”) is a Nevada
      corporation. We are an emerging pharmaceutical company focused on establishing
      a
      market leadership position in the development of wound management, plastic
      surgery and oral care products utilizing innovative drug delivery solutions
      to
      improve the clinical outcome of patients and provide a pharmacoeconomic benefit
      to healthcare providers. The first step in achieving this objective was the
      acquisition of the topical business component of Access Pharmaceuticals, Inc.
      (“Access”) which was completed on October 12, 2005. This acquisition resulted in
      us acquiring Aphthasol®, Zindaclin® and the Mucoadhesive Film technology and a
      fully paid exclusive worldwide license to the Nanoparticle Aggregate technology
      for all applications excluding injectable drug delivery devices. In December
      2006, we acquired from Access the patent rights to the Nanoparticle Aggregate
      technology. Utilizing these technologies, three products have been approved
      for
      marketing in various global markets. In addition, numerous additional products
      are under development utilizing both of our Mucoadhesive Film and Nanoparticle
      Aggregate technologies.






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          26
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          of Contents*


Recent
        Developments
 
 On
        February 8, 2007, we entered into a ten-year strategic partnership with
        BioProgress PLC to market OraDiscTM B in the European Union, Commonwealth of
        Independent States, and Middle Eastern markets.


OraDiscTM
      B is a product developed from our adhesive film technology which incorporates
      15
      milligrams of benzocaine for the treatment of oral pain. The product is designed
      to adhere to the mucosal surface and selectively deliver pain relief to a
      localized area. Compared with currently marketed gel products, OraDiscTM B is
      designed to provide a significantly greater period of pain relief as the
      adhesive film is designed to erode over a 1 - 1.5 hour period. The market for
      oral pain relief in the United Kingdom alone is estimated at approximately
      $60
      million. Based upon similar product launches, BioProgress expects penetration
      rates in core EU, CIS and Middle Eastern markets to reach approximately 12%
      within the first 3 years of product launch.





As
      part
      of the ten-year agreement, BioProgress made a $600,000 milestone payment, and
      agreed to make future milestone payments, both success and time related, which
      will all be recognized ratably over the life of the agreement. BioProgress
      will
      also purchase the OraDiscTM B product from us.





Employees





As
      of
      March 31, 2007, we have 11 full-time and 1 part-time employees. Of these
      employees, eight are directly engaged in or directly support research and
      development activities of which five have advanced scientific degrees, two
      directly support commercial and business development activities and two are
      in
      administrative positions. Our employees are not represented by a labor union
      and
      are not covered by a collective bargaining agreement. Management believes that
      we maintain good relations with our personnel. We compliment our internal
      expertise with external scientific consultants, university research laboratories
      and contract manufacturing organizations that specialize in various aspects
      of
      drug development including clinical development, regulatory affairs, toxicology,
      preclinical testing and process scale-up.





Web
      Availability





We
      make
      available free of charge through our web site, www.uluruinc.com ,
      our
      annual reports on Form 10-KSB and other reports required under the Securities
      and Exchange Act of 1934, as amended, as soon as reasonably practicable after
      such reports are filed with, or furnished to, the Securities and Exchange
      Commission as well as certain of our corporate governance policies, including
      the charters for the Board of Director's corporate governance committees and
      our
      code of ethics, corporate governance guidelines and whistleblower policy. We
      will provide to any person without charge, upon request, a copy of any of the
      foregoing materials. Any such request must be made in writing to ULURU Inc.,
      4452 Beltway Drive, Addison, TX 75001 Attn: Investor Relations.





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          27
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**LIQUIDITY
      AND CAPITAL RESOURCES**





We
      have
      funded our operations primarily through the private sales of convertible
      debentures and common stock. Our principal source of liquidity is cash and
      cash
      equivalents. Contract research, products sales, royalty payments, licensing
      fees
      and milestone payments from our corporate alliances have, and are expected
      in
      the future to, provide funding for operations. As of March 31, 2007 our
      cash and cash equivalents were $16,952,481 which is an increase of $34,474
      as
      compared to our cash and cash equivalents at December 31, 2006 of $16,918,007.
      Our working capital (current assets less current liabilities) was $16,309,134
      at
      March 31, 2007 as compared to our working capital at December 31, 2006 of
      $16,474,473. The decrease of $165,339 in working capital for the three months
      ended March 31, 2007 is attributed to our operating loss for the first quarter
      of 2007 as we continue to develop our technologies and to the initial purchases
      of manufacturing equipment for the scale-up of our OraDiscTM products. The
      operating loss and equipment purchases were offset by our receipt of a
      $600,000 milestone payment from BioProgress for our OraDiscTM B development
      agreement with BioProgress.





As
      of
      March 31, 2007 our available cash is expected to be sufficient to fund
      operations for the next three years.





We
      continue to expend funds to advance the development of our products, license
      additional products, and establish a sales and marketing operation to
      commercialize our wound care and OraDiscTM products. We believe that our
      financial results for 2007 will be affected positively by our commercialization
      of additional products during the second half of 2007, thereby increasing our
      revenues and improving our working capital.





Our
      future capital requirements and adequacy of available funds will depend on
      many
      factors including:





§
            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








**RESULTS
      OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007**


**COMPARED
      TO THREE MONTHS ENDED MARCH 31, 2006**





**Total
      Revenues**





Revenues
      were $383,511 for the three months ended March 31, 2007, as compared to revenues
      of $267,164 for the three months ended March 31, 2006. Revenues for the first
      quarter 2007 were comprised of licensing fees for Zindaclin® of $133,379,
      licensing fees of $4,671 for the OraDiscTM B development agreement, domestic
      royalties of $21,118 from the sale of Aphthasol®, foreign royalties from the
      sale of Zindaclin® of $34,343, and sponsored research of
      $190,000.


-
          28
          -
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          of Contents*





The
      first
      quarter 2007 revenues represent an overall increase of $116,347 versus the
      comparative first quarter 2006 revenues, primarily due to the receipt of a
      $130,000 licensing fees for the Zindaclin® product launch in Italy and the
      receipt of a $180,000 fee associated with a sponsored research contract for
      the
      development of an OraDiscTM technology. The first quarter 2007 revenues were
      adversely affected by decreased Aphthasol® royalties from our U.S. distributor
      versus the first quarter 2006.





We
      did
      not sell any finished products in the first quarter 2007 as our U.S. distributor
      had sufficient product inventory.





**Costs
      and Expenses**





Cost
      of Goods Sold





We
      did
      not sell any finished goods in the first quarter of 2007, therefore we had
      no
      cost of sales.





Research
      and Development





Research
      and development expenses were $565,408 for the three months ended March 31,
      2007
      as compared to the expenses of $476,396 for the three months ended March 31,
      2006. The first quarter 2007 research and development expenses were comprised
      primarily of compensation and benefit costs of $258,268, operating and occupancy
      costs of $16,678, regulatory fees to the Food and Drug Administration of
      $50,993, and $239,469 of costs associated with the continuing development of
      our
      technologies as follows:





Technology
            
            Three
                Months Ended
              March
                31, 2007
            
            Three
                Months Ended
              March
                31, 2006OraDiscTM
            
            $
            115,560
            
            $
            139,654Wound care & nanoparticle
            
            
            99,867
            
            
            88,643Aphthasol® & other technologies
            
            
            24,042
            
            
            6,042Total
            
            $
            239,469
            
            $
            234,339






The
      first
      quarter 2007 increase in research and development expenses of $89,012 versus
      the
      comparative first quarter 2006 was due primarily to the following:





§
            Increased
                laboratory development expenses of $5,000;§
            Higher
                salary and benefit expenses of approximately $34,000 as we increased
                staffing to focus on our OraDiscTM and wound care
                technologies;§
            Fees
                to the Food & Drug Administration fees of $51,000 for Aphthasol®;
                and§
            Increased
                occupancy costs of $7,000.





The
      increase in research and development expenses was partially offset
      by





§
            Decreased
                maintenance costs of laboratory equipment of
                $8,000.





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          29
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          of Contents*





General
      and Administrative





General
      and administrative expenses were $595,239 for the three months ended March
      31,
      2007 as compared to the expenses of $283,029 for the three months ended March
      31, 2006. The first quarter 2007 increase of $312,210 versus the comparative
      first quarter 2006 was due primarily to the following:





§
            Increased
                salary and benefit expenses of approximately $60,000 due to recognition
                of
                share-based compensation, incentive payouts and associated employer
                costs
                therein, and inflationary increases for medical insurance costs.
                We did
                not incur any share-based compensation or incentive payouts in
                2006;§
            Legal
                expense increase of $76,000 as we did not incur any legal expense
                in
                2006;§
            Director
                fee expense increase of $58,000 as we did not incur any director
                fee
                expense in 2006;§
            Increased
                costs associated with our insurance programs of
                $26,000;§
            Higher
                accounting and audit fees of $22,000;§
            Increased
                legal expense associated with patent applications of
                $17,000;§
            Increased
                expenses for consulting of $13,000;§
            Increased
                corporate travel costs of $12,000;§
            Higher
                occupancy costs for our corporate office of $18,000;
                and§
            Increased
                shareholder expenses of $10,000.





The
      increase in general and administrative expenses was partially offset
      by





§
            Decreased
                operating expenses of $2,000.








Amortization





Amortization
      expense was $265,543 for the three months ended March 31, 2007 as compared
      to
      the expense of $257,174 for the three months ended March 31, 2006. The first
      quarter 2007 increase of $8,369 versus the comparative first quarter 2006 was
      due to our purchase of the Nanoparticle Aggregate patent in December 2006 and
      the related additional amortization expense.





Depreciation





Depreciation
      expense was $16,703 for the three months ended March 31, 2007 as compared to
      the
      expense of $14,725 for the three months ended March 31, 2006. The first quarter
      2007 increase of $1,978 versus the comparative first quarter 2006 was due to
      additional equipment being purchased by us and the related additional
      depreciation expense.





Interest
      Expense





Interest
      expense was $1,574 for the three months ended March 31, 2007 as compared to
      the
      expense of $374,003 for the three months ended March 31, 2006. The decrease
      in
      interest expense relates to our payoff of previously outstanding secured
      convertible debentures in December 2006.


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          30
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          of Contents*


**ITEM
      3: CONTROLS AND PROCEDURES**





Evaluation
      of Disclosure Controls and Procedures.





Our
      chief
      executive officer and our chief financial officer, after evaluating the
      effectiveness of our “disclosure controls and procedures” (as defined in Rules
      13a-14(c) of the Securities and Exchange Act of 1934, as amended (the “Exchange
      Act”)) as of the end of the period covered by this quarterly report, concluded
      that the Company’s disclosure controls and procedures were (1) designed to
      ensure that material information relating to the Company, including its
      consolidated subsidiaries, is made known to the Company’s chief executive
      officer and chief financial officer by others within those entities,
      particularly during the period in which this report was being prepared, and
      (2)
      effective, in that they provide reasonable assurance that information required
      to be disclosed by the Company in the reports that it files or submits under
      the
      Exchange Act is recorded, processed, summarized and reported within the time
      periods specified in the SEC’s rules and forms.





Changes
      in internal controls.





There
      were no changes in our internal controls over financial reporting during the
      quarter ended March 31, 2007 that have materially affected, or are reasonably
      likely to material affect, our internal controls over financial
      reporting.








**PART
      II: OTHER INFORMATION**








**ITEM
      1 - LEGAL PROCEEDINGS**





None.








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





During
      the three month period ended March 31, 2007, we issued 413,342 shares of common
      stock upon the exercise, on a cashless basis, of a warrant to purchase 414,400
      shares of common stock held by HH Advisors, Inc., 351,447 shares of common
      stock
      upon the exercise, on a cashless basis, of a warrant to purchase 352,266 shares
      of common stock held by Highgate House Funds, Ltd. and 746,148 shares of common
      stock upon the exercise, on a cashless basis, of a warrant to purchase 747,734
      shares of common stock held by Cornell Capital Partners, LP. Such shares
      of common stock were issued pursuant to Rule 506 of
      the
      Securities Act of 1933, as amended .
      We did
      not receive any cash proceeds from the exercise of the warrants.








**ITEM
      3 - DEFAULTS UPON SENIOR
      SECURITIES**





None.








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





None.


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**ITEM
      5: OTHER INFORMATION**





On
      February 8, 2007, we entered into a ten-year strategic partnership with
      BioProgress PLC to market OraDiscTM B in the European Union, Commonwealth of
      Independent States, and Middle Eastern markets.





OraDiscTM
      B is a product developed from our adhesive film technology which incorporates
      15
      milligrams of benzocaine for the treatment of oral pain. The product is designed
      to adhere to the mucosal surface and selectively deliver pain relief to a
      localized area. Compared with currently marketed gel products, OraDiscTM B is
      designed to provide a significantly greater period of pain relief as the
      adhesive film is designed to erode over a 1 - 1.5 hour period. The market for
      oral pain relief in the United Kingdom alone is estimated at approximately
      $60
      million. Based upon similar product launches, BioProgress expects penetration
      rates in core EU, CIS and Middle Eastern markets to reach approximately 12%
      within the first 3 years of product launch.





As
      part
      of the ten-year agreement, BioProgress made a $600,000 milestone payment, and
      agreed to make future milestone payments, both success and time related, which
      will all be recognized ratably over the life of the agreement. BioProgress
      will
      also purchase the OraDiscTM B product from us.





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**ITEM
      6: EXHIBITS**





ExhibitNumber
            Description10.43
            License
                and Supply Agreement dated February 6, 2007 by
                and between Dexo Biopharm LTD and ULURU 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 Amended31.2
            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 Amended32.1*
            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 200232.2*
            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.








**SIGNATURES:**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned, thereunto
      duly authorized.





**ULURU
                Inc.**Date:
                May 15, 2007
            
            By:
            /s/
                Kerry P. GrayKerry
                P. GrayChief
                Executive Officer and President(Principal
                Executive Officer)Date:
                May 15, 2007
            
            By:
            /s/
                Terrance K. WallbergTerrance
                K. WallbergChief
                Financial Officer and Vice President(Principal
                Financial and Accounting Officer)









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