----

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|   | Nevada                                                         |   | 36-3207413             |   |
|--------|----------------------------------------------------------------|--------|------------------------|--------|
|   | (State or other jurisdiction of incorporation or organization) |   | (IRS Employer Id. No.) |   |

| Large accelerated filer o Non-accelerated filer o |   | Accelerated filer o Smaller reporting company x |   |
|--------------------------------------------------------|--------|------------------------------------------------------|--------|

----

| PART I  FINANCIAL INFORMATION  |                                                                                                                  | Page   |      |
|-----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|--------|-----------|
| Item 1.                                       | Financial Statements                                                                                                  |   |      |   |
|                                          |                                                                                                                  |   |      |   |   |
|                                          | Condensed Consolidated Balance Sheets as of June 30, 2010 (unaudited) and December 31, 2009                           |   |      | 1 |   |
|                                          |                                                                                                                  |   |      |   |   |
|                                          | Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2010 and 2009 |   |      | 2 |   |
|                                          |                                                                                                                  |   |      |   |   |
|                                          | Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2010 and 2009           |   |      | 3 |   |
|                                          |                                                                                                                  |   |      |   |   |
|                                          | Notes to Condensed Consolidated Financial Statements (unaudited)                                                      |   |      | 4 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 2.                                       | Management’s Discussion and Analysis of Financial Condition and Results of Operations                           |   |      | 11 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 3.                                       | Quantitative and Qualitative Disclosures About Market Risk                                                            |   |      |   18 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 4.                                       | Controls and Procedures                                                                                               |   |      |   18 |   |
|                                          |                                                                                                                  |
| PART II  OTHER INFORMATION          |                                                                                                                  |
|                                          |                                                                                                                  |   |      |   |   |
| Item 1.                                       | Legal Proceedings                                                                                                     |   |      |   19 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 1A.                                      | Risk Factors                                                                                                          |   |      |   19 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 2.                                       | Unregistered Sales of Equity Securities and Use of Proceeds                                                           |   |      |   19 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 3.                                       | Defaults Upon Senior Securities                                                                                       |   |      |   19 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 4.                                       | Submission of Matters to a Vote of Security Holders                                                                   |   |      |   19 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 5.                                       | Other Information                                                                                                     |   |      |   19 |   |
|                                          |                                                                                                                  |   |      |   |   |
| Item 6.                                       | Exhibits                                                                                                              |   |      |   20 |   |
|                                          |                                                                                                                  |   |      |   |
| SIGNATURES                                    |                                                                                                                  |   |   21 |   |

----

| Part I. | Financial Information |
|---------|-----------------------|

| Item 1 | Financial Statements |
|--------|----------------------|

| PHARMOS CORPORATION                                                                       |   |          |         |   |              |   |
|-------------------------------------------------------------------------------------------|--------|---------------|--------------|--------|-------------------|--------|
| Condensed Consolidated Balance Sheets                                                     |   |          |         |   |              |   |
|                                                                                      |   | June 30, 2010 |         |   | December 31, 2009 |   |
| Assets                                                                                    |   | (Unaudited)   |         |   | (Unaudited)       |   |
| Cash and cash equivalents                                                                 |   | $             | 3,554,602    |   |              | $      | 4,629,486 |   |
| Prepaid expenses and other current assets                                                 |   |          | 88,352       |   |              |   | 25,678 |   |
| Total current assets                                                                      |   |          | 3,642,954    |   |              |   | 4,655,164 |   |
|                                                                                      |   |          |         |   |              |   |   |   |
| Fixed assets, net                                                                         |   |          | 2,194        |   |              |   | 1,379 |   |
| Other assets                                                                              |   |          | 26,176       |   |              |   | 32,479 |   |
|                                                                                      |   |          |         |   |              |   |   |   |
| Total assets                                                                              |   | $             | 3,671,324    |   |              | $      | 4,689,022 |   |
|                                                                                      |   |          |         |   |              |   |   |   |
| Liabilities and Shareholders’ Equity                                                |   |          |         |   |              |   |   |   |
| Accounts payable                                                                          |   | $             | 68,560       |   |              | $      | 73,717 |   |
| Accrued expenses                                                                          |   |          | 112,963      |   |              |   | 148,414 |   |
| Accrued wages and other compensation                                                      |   |          | -            |   |              |   | 195,000 |   |
| Total current liabilities                                                                 |   |          | 181,523      |   |              |   | 417,131 |   |
|                                                                                      |   |          |         |   |              |   |   |   |
| Convertible debenture                                                                     |   |          | 1,000,000    |   |              |   | 1,000,000 |   |
| Total liabilities                                                                         |   |          | 1,181,523    |   |              |   | 1,417,131 |   |
|                                                                                      |   |          |         |   |              |   |   |   |
|                                                                                      |   |          |         |   |              |   |   |   |
| Shareholders’ Equity                                                                |   |          |         |   |              |   |   |   |
| Preferred stock, $.03 par value, 1,250,000 shares authorized, none issued and outstanding |   |          | -            |   |              |   | - |   |
| Common stock, $.03 par value; 120,000,000 shares                                          |   |          |         |   |              |   |   |   |
| authorized, 59,438,214 and 59,291,154 issued and outstanding as of                        |   |          |         |   |              |   |   |   |
| June 30, 2010 and December 31, 2009, respectively                                         |   |          | 1,783,146    |   |              |   | 1,778,735 |   |
| Paid-in capital in excess of par                                                          |   |          | 211,438,531  |   |              |   | 211,301,675 |   |
| Accumulated deficit                                                                       |   |          | (210,731,450 | )      |              |   | (209,808,093 | ) |
| Treasury stock, at cost, 2,838 shares                                                     |   |          | (426         | )      |              |   | (426 | ) |
| Total shareholders' equity                                                                |   |          | 2,489,801    |   |              |   | 3,271,891 |   |
|                                                                                      |   |          |         |   |              |   |   |   |
| Total liabilities and shareholders' equity                                                |   | $             | 3,671,324    |   |              | $      | 4,689,022 |   |

| The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements. |
|---------------------------------------------------------------------------------------------------------------------|

----

| PHARMOS CORPORATION(Unaudited)Condensed Consolidated Statements of Operations |
|-------------------------------------------------------------------------------|
|                                                                          |   | Three months endedJune 30, |   | Six months endedJune 30, |
|                                                                          |   |   |

|                                                     |   | 2010   |       |   | 2009   |   |       | 2010   |   |   | 2009       |   |
|----------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|--------|------------|--------|
| Expenses                                                 |   |   |       |   |   |   |       |   |   |   |       |   |
| Research and development                                 |   | $      | 103,362    |   |   | $      | 1,204,657  |   |   | $      | 226,358    |   |   | $ | 3,219,077 |   |
| In–process research and development Vela milestone |   |   | -          |   |   |   | -          |   |   |   | -          |   |   |   | 1,180,000 |   |
| General and administrative                               |   |   | 300,492    |   |   |   | 424,796    |   |   |   | 639,806    |   |   |   | 759,545 |   |
| Depreciation and amortization                            |   |   | 185        |   |   |   | 2,127      |   |   |   | 650        |   |   |   | 4,253 |   |
| Total operating expenses                                 |   |   | 404,039    |   |   |   | 1,631,580  |   |   |   | 866,814    |   |   |   | 5,162,875 |   |
|                                                     |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Loss from operations                                     |   |   | (404,039   | )      |   |   | (1,631,580 | )      |   |   | (866,814   | )      |   |   | (5,162,875 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Other (expense) income                                   |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Debt conversion expense                                  |   |   | -          |   |   |   | (596,104   | )      |   |   | -          |   |   |   | (596,104 | ) |
| Interest income                                          |   |   | 342        |   |   |   | 2,087      |   |   |   | 629        |   |   |   | 7,373 |   |
| Interest expense                                         |   |   | (27,929    | )      |   |   | (47,092    | )      |   |   | (56,303    | )      |   |   | (166,930 | ) |
| Other income (expense)                                   |   |   | (353       | )      |   |   | 22,189     |   |   |   | (869       | )      |   |   | (10,416 | ) |
| Other expense, net                                       |   |   | (27,940    | )      |   |   | (618,920   | )      |   |   | (56,543    | )      |   |   | (766,077 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Net loss                                                 |   | $      | (431,979   | )      |   | $      | (2,250,500 | )      |   | $      | (923,357   | )      |   | $ | (5,928,952 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Net loss per share                                       |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| - basic and diluted                                      |   | $      | (0.01      | )      |   | $      | (0.05      | )      |   | $      | (0.02      | )      |   | $ | (0.16 | ) |
|                                                     |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| Weighted average shares outstanding                      |   |   |       |   |   |   |       |   |   |   |       |   |   |   |   |   |
| - basic and diluted                                      |   |   | 58,400,211 |   |   |   | 49,215,356 |   |   |   | 58,306,062 |   |   |   | 38,018,706 |   |

----

Condensed 

|                                                                        |   | Six months ended June 30, |       |
|-----------------------------------------------------------------------------|--------|---------------------------|------------|
|                                                                        |   | 2010                      |       | 2009 |   |
| Cash flows from operating activities                                        |   |                      |       |   |   |
| Net loss                                                                    |   | $                         | (923,357   | ) | $ | (5,928,952 | )  |
|                                                                        |   |                      |       |   |   |   |   |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                      |       |   |   |   |   |
| Depreciation and amortization                                               |   |                      | 650        |   |   | 4,253 |   |
| Non cash debt conversion expense                                            |   |                      | -          |   |   | 596,104 |   |
| Amortization of deferred financing fees                                     |   |                      | 6,303      |   |   | 24,430 |   |
| Debenture interest paid in common stock                                     |   |                      | 45,833     |   |   | 80,403 |   |
| Stock based compensation                                                    |   |                      | 91,267     |   |   | 65,585 |   |
| Changes in operating assets and liabilities:                                |   |                      |       |   |   |   |   |
| Prepaid expenses and other current assets                                   |   |                      | (62,674    | ) |   | 261,558 |   |
| Accounts payable                                                            |   |                      | (5,157     | ) |   | (491,461 | ) |
| Accrued expenses                                                            |   |                      | (31,284    | ) |   | 442,341 |   |
| Accrued wages and other compensation                                        |   |                      | (195,000   | ) |   | (51,000 | ) |
| Milestone payable                                                           |   |                      | -          |   |   | 1,000,000 |   |
| Other liabilities                                                           |   |                      | -          |   |   | (22,142 | ) |
|                                                                        |   |                      |       |   |   |   |   |
| Net cash used in operating activities                                       |   |                      | (1,073,419 | ) |   | (4,018,881 | ) |
|                                                                        |   |                      |       |   |   |   |   |
| Cash flows from investing activities                                        |   |                      |       |   |   |   |   |
| Purchases of fixed assets                                                   |   |                      | (1,465     | ) |   | - |   |
| Proceeds from disposition of fixed assets                                   |   |                      | -          |   |   | 367,994 |   |
|                                                                        |   |                      |       |   |   |   |   |
| Net cash (used in) provided by investing activities                         |   |                      | (1,465     | ) |   | 367,994 |   |
|                                                                        |   |                      |       |   |   |   |   |
| Cash flows from financing activities                                        |   |                      |       |   |   |   |   |
| Proceeds from issuance of common stock and warrants, net                    | -      |                      |       | 1,779,777 |   |
|                                                                        |   |                      |       |   |   |
| Net cash provided by financing activities                                   |   |                      | -          |   |   | 1,779,777 |   |
|                                                                        |   |                      |       |   |   |   |   |
| Net decrease in cash and cash equivalents                                   |   |                      | (1,074,884 | ) |   | (1,871,110) |   |
|                                                                        |   |                      |       |   |   |   |   |
| Cash and cash equivalents at beginning of year                              |   |                      | 4,629,486  |   |   | 4,730,282 |   |
|                                                                        |   |                      |       |   |   |   |   |
| Cash and cash equivalents at end of period                                  |   | $                         | 3,554,602  |   | $ | 2,859,172 |   |
|                                                                        |   |                      |       |   |   |   |   |
| Supplemental disclosure of non-cash investing and financing activities:     |   |                      |       |   |   |   |   |
| Common shares issued for accrued interest                                   |   | $                         | 50,000     |   | $ | 201,667 |   |
| Write off of deferred financing fees with conversion of debentures          |   | $                         | -          |   | $ | 78,382 |   |
| Conversion of debentures to common stock                                    |   | $                         | -          |   | $ | 3,000,000 |   |

----

Notes 

----

----

----

| Period Ended  |   | Grants Issued |   |    | Weighted Average Exercise Price |   |   | Weighted AverageFair Value |   |
|---------------|--------|---------------|--------|---------|---------------------------------|--------|--------|----------------------------|--------|
| June 30, 2010 |   |          |   | 70,000  |                            |   | $      | 0.08                       |   |   | $ | 0.07 |   |
| June 30, 2009 |   |          |   | 975,000 |                            |   | $      | 0.21                       |   |   | $ | 0.17 |   |

----

----

----

|                                                               |   | June 30, |
|--------------------------------------------------------------------|--------|----------|
|                                                               |   | 2010     |   | 2009 |
|                                                               |   |     |   |   |
| Stock options                                                      |   |     | 3,539,754 |   | 3,572,155 |
| Convertible debenture                                              |   |     | 1,428,571 |   | 1,428,571 |
| Vela milestone                                                     |   |     | - |   | 2,000,000 |
| Restricted stock                                                   |   |     | 900,000 |   | 1,200,000 |
| Warrants                                                           |   |     | 18,000,000 |   | 18,000,000 |
|                                                               |   |     |   |   |   |
| Total potential dilutive securities not included in loss per share |   |     | 23,868,325 |   | 26,200,726 |

|                      |   | Three months ended June 30, |     |   | Six months ended June 30, |   |
|---------------------------|--------|-----------------------------|----------|--------|---------------------------|--------|
|                      |   | 2010                        |     |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Net (loss) income         |   |                        |     |   |                      |   |   |   |   |   |   |   |
|   United States |   | $                           | (431,626 | )      |                      | $      | (2,258,294 | ) |   | $ | (922,488 | ) |   | $ | (5,870,987 | ) |
|   Israel        |   |                        | (353     | )      |                      |   | 7,794 |   |   |   | (869 | ) |   |   | (57,965 | ) |
|                      |   | $                           | (431,979 | )      |                      | $      | (2,250,500 | ) |   | $ | (923,357 | ) |   | $ | (5,928,952 | ) |
|                      |   |                        |     |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Capital Expenditures      |   |                        |     |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|   United States |   | $                           | 1,465    |   |                      | $      | - |   |   | $ | 1,465 |   |   | $ | - |   |
|   Israel        |   |                        | -        |   |                      |   | - |   |   |   | - |   |   |   | - |   |
|                      |   | $                           | 1,465    |   |                      | $      | - |   |   | $ | 1,465 |   |   | $ | - |   |

----

| Total Assets              |   | June 30, 2010 |      |   | December 31, 2009 |                            |
|---------------------------|--------|---------------|-----------|--------|-------------------|---------------------------------|
|   United States |   | $             | 3,671,324 |   |              | $                               | 4,669,681 |   |
|   Israel        |   |          | -         |   |              |                            | 19,341 |   |
|                      |   | $             | 3,671,324 |   |              | $                               | 4,689,022 |   |
|                      |   |          |      |   |              |                            |   |   |
| Long Lived Assets, net    |   |          |      |   |              |                            |   |   |
|   United States |   | $             | 2,194     |   |              | $                               | 1,379 |   |
|   Israel        |   |          | -         |   |              | ­­­­ - |   |
|                      |   | $             | 2,194     |   |              | $                               | 1,379 |   |

|  Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
|---------------|---------------------------------------------------------------------------------------|

----

----

----

----

|                                   |   | June 30, 2010 |      |   | December 31, 2009 |   |
|----------------------------------------|--------|---------------|-----------|--------|-------------------|--------|
|                                   |   |          |      |   |              |   |
| Working capital                        |   | $             | 3,461,431 |   |              | $      | 4,238,033 |   |
|                                   |   |          |      |   |              |   |   |   |
| Cash and cash equivalents              |   | $             | 3,554,602 |   |              | $      | 4,629,486 |   |
|                                   |   |          |      |   |              |   |   |   |
| Convertible Debenture – due 2012 |   | $             | 1,000,000 |   |              | $      | 1,000,000 |   |
|                                   |   |          |      |   |              |   |   |   |

----

|                           |   |   Total |      |   | Less than1 Year |   |    | 1 - 3Years |   |   | 3 - 5Years |   |   | Undetermined |   |
|--------------------------------|--------|--------------|-----------|--------|-----------------|--------|---------|------------|--------|--------|------------|--------|--------|--------------|--------|
| Operating leases               |   | $            | 86,400    |   |            | $      | 86,400  |       |   | $      | -          |   |   | $            | -      |   |   | $ | - |   |
| Convertible debenture          |   |         | 1,000,000 |   |            |   | -       |       |   |   | 1,000,000  |   |   |         | -      |   |   |   | - |   |
| Convertible debenture interest |   |         | 233,333   |   |            |   | 100,000 |       |   |   | 133,333    |   |   |         | -      |   |   |   | - |   |
| Total                          |   | $            | 1,319,733 |   |            | $      | 186,400 |       |   | $      | 1,133,333  |   |   | $            | -      |   |   | $ | - |   |

----

----

| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
|---------|------------------------------------------------------------|

| Item 4. | Controls and Procedures |
|---------|-------------------------|

----

|  Item 1 | Legal Proceedings |  NONE |
|--------------|-------------------|------------|

| Item 1A | Risk Factors |
|---------|--------------|

|  Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds |  NONE |
|--------------|-------------------------------------------------------------|------------|

|  Item 3 | Defaults upon Senior Securities |  NONE |
|--------------|---------------------------------|------------|

|  Item 4 | Submission of Matters to Vote of Security Holders |  NONE |
|--------------|---------------------------------------------------|------------|

|  Item 5 | Other Information |  NONE |
|--------------|-------------------|------------|

----

|  Item 6 |  Exhibits |   |
|--------------|----------------|--------|

| Number |   | Exhibit                                                                                                                                                                                                                           |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                              |
| 3.1    |   | Restated Articles of Incorporation (Incorporated by reference to Appendix E to the Joint Proxy Statement/Prospectus included in the Form S-4 Registration Statement of the Company dated September 28, 1992 (No. 33-52398)        |
|   |   |                                                                                                                                                                                                                              |
| 3.2    |   | Certificate of Amendment of Restated Articles of Incorporation dated January 30, 1995 (Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1994).                                             |
|   |   |                                                                                                                                                                                                                              |
| 3.3    |   | Certificate of Amendment of Restated Articles of Incorporation dated January 16, 1998 (Incorporated by reference to the Company’s Current Report on Form 8-K, dated February 6, 1998).                                      |
|   |   |                                                                                                                                                                                                                              |
| 3.4    |   | Certificate of Amendment of Restated Articles of Incorporation dated October 21, 1999 (Incorporated by reference to exhibit 4(e) to the Form S-3 Registration Statement of the Company filed September 28, 2000 (No. 333-46818)). |
|   |   |                                                                                                                                                                                                                              |
| 3.5    |   | Certificate of Amendment of Restated Articles of Incorporation dated July 19, 2002 (Incorporated by reference to Exhibit 3 to the Company’s Report on Form 10-Q for the quarter ended June 30, 2002).                       |
|   |   |                                                                                                                                                                                                                              |
| 3.6    |   | Certificate of Amendment of Restated Articles of Incorporation dated July 7, 2004 (Incorporated by reference to Exhibit 3.1 to the Company’s Report on Form 10-Q for the quarter ended June 30, 2004).                      |
|   |   |                                                                                                                                                                                                                              |
| 3.7    |   | Certificate of Amendment to Articles of Incorporation dated September 23, 2005 (Incorporated by reference to exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005).          |
|   |   |                                                                                                                                                                                                                              |
| 3.8    |   | Certificate of Amendment to Articles of Incorporation dated August 5, 2009 (Incorporated by reference to exhibit 3.8 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009).                   |
|   |   |                                                                                                                                                                                                                              |
| 3.9    |   | Amended and Restated By-Laws (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007).                                                            |
|   |   |                                                                                                                                                                                                                              |
| 31.1   |   | Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15(d)-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                         |
|   |   |                                                                                                                                                                                                                              |
| 31.2   |   | Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15(d)-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                             |
|   |   |                                                                                                                                                                                                                              |
| 32.1   |   | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                               |
|   |   |                                                                                                                                                                                                                              |
| 32.2   |   | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                   |
|   |   |                                                                                                                                                                                                                              |

----

SIGNATURE

|                 |   | PHARMOS CORPORATION                                           |               |
|----------------------|--------|---------------------------------------------------------------|--------------------|
|                 |   |                                                          |               |   |
|                 |   |                                                          |               |   |
| Date: August 4, 2010 |   |                                                          |               |   |
|                 |   | by:                                                           | /s/ S. Colin Neill |   |
|                 |   |                                                          |               |   |
|                 |   | S. Colin Neill                                                |               |
|                 |   | President, Chief Financial Officer, Secretary & Treasurer |               |
|                 |   | (Principal Accounting and Financial Officer)                  |               |

----