**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-KSB**





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


1934
      For
      the fiscal year ended December 31, 2005.





[_]
      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 incorporation or organization)
            (I.R.S.
                Employer Identification No.)





**4452
      Beltway Dr.**


**Addison,
      Texas 75001**


(Address
      of principal executive offices) (Zip Code)





Issuer's
      telephone number: **(214)
      905-5145**





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





--------------------





Title
      of
      each class Name of each exchange on which registered


None





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


Common
      Stock, par value $0.001





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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant's knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB.





State
      issuer's revenues for its most recent fiscal year. $-0-























State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of a
      specified date within the past 60 days. (See definition of affiliate in Rule
      12b-2 of the Exchange Act.) :


$5,201,081
      as of May 9, 2006





Number
      of
      shares outstanding of each of the issuer's classes of common equity, as of
      the
      latest practicable date.


12,844,395
      as of May 9, 2006







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          2
          -











**ULURU
                INC.****FORM
                10-KSB****INDEX**
            Page**Part
                I**Item
                1.
            Description
                of Business
            4Item
                1A.
            Risk
              Factors
            12Item
                2.
            Description
                of Property
            20Item
                3.
            Legal
                Proceedings
            21Item
                4.
            Submission
                of Matters to a Vote of Security
                Holders
            21**Part
                II**Item
                5.
            Market
                for Registrant's Common Equity and Related
                Stockholder Matters
            21Item
                6.
            Management's
                Discussion and Analysis or Plan of
                Operation
            21Item
                7.
            Financial
                Statements
            25Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting
                and Financial Disclosure
            39Item
                8A.
            Controls
                and Procedures
            39**Part
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control
                Persons; Compliance with Section 16(a) of the Exchange
                Act
            39Item
                10.
            Executive
                Compensation
            42Item
                11.
            Security
                Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters
            42Item
                12.
            Certain
                Relationships and Related
                Transactions
            43Item
                13.
            Exhibits
            45Item
                14.
            Principal
                Accountant Fees and Services
            46Signatures
            Signatures
            46








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          of Contents*







**Part
      I**








**ITEM
      1. DESCRIPTION OF BUSINESS**





When
      used
      in this Form 10-KSB, the words "expects," "anticipates," "estimates" and similar
      expressions are intended to identify forward-looking statements. Such statements
      are subject to risks and uncertainties, including those set out below under
      “Risk Factors”, that could cause actual results to differ materially from those
      projected. These forward-looking statements speak only as of the date hereof.
      The Company expressly disclaims any obligation or undertaking to release
      publicly any updates or revisions to any forward-looking statements contained
      herein to reflect any change in the Company's expectations with regard thereto
      or any change in events, conditions or circumstances on which any statement
      is
      based. This discussion should be read together with the financial statements
      and
      other financial information included in this Form 10-KSB.





General





ULURU
      Inc. (hereinafter “ULURU”, the " Company" or the “Registrant”), a development
      stage company, was incorporated in September 17, 1987 under the laws of the
      State of Nevada, under the name Casinos of the World, Inc, having the stated
      purpose of engaging in any lawful practice or activity. Its Articles of
      Incorporation provided for authorized capital of twenty five hundred common
      shares of no par value.





On
      December 17, 1990, the shareholders of the Company approved amendment of the
      Articles of Incorporation, changing the authorized capital stock of the Company
      to twenty five million shares of common stock at $0.001 par value. The amended
      Articles also added Rights and Powers to shareholders and directors not
      previously stated in the original Articles.





On
      April
      16, 1993, the shareholders of the Company approved amendment to the Articles
      of
      Incorporation, changing the name of the Company to Clean Way Corporation and
      changing the authorized capital stock of the Company to one hundred million
      common shares at $0.001 par value.





On
      August
      19, 1999, the shareholders of the Company approved an amendment to the Articles
      of Incorporation, changing the name of the Company to Trader Secrets.com,
      Inc.





On
      February 2, 2000, the Company entered into a Stock Acquisition Agreement with
      National Lighting Corp, an Internet company incorporated in British Columbia,
      Canada. National Lighting Corp. became a wholly owned subsidiary of the Company
      and changed its name to VOIP Technology Inc., with the intent of providing
      user
      services in the Internet telephony business.





On
      March
      13, 2000, the shareholders of the Company approved an amendment to the Articles
      of Incorporation, changing the name of the Company to VOIP Technology, Inc.
      The
      Company's name was changed with the intended purpose of developing voice over
      the internet protocol technologies through its wholly owned subsidiary. After
      development of a business plan and efforts to develop the business failed,
      all
      efforts were abandoned in 2001. At that time the Company was unable to obtain
      the necessary customer contracts for its product and was unable to obtain the
      necessary financing, therefore was unable to operate.





On
      February 8, 2002, the Company sold all of the shares the Company held in its
      wholly owned subsidiary. The Company charter was suspended (subject to
      reinstatement) by the State of Nevada in September 2001 for inactivity and
      failure to pay annual fees and costs. Its active status was reinstated on
      January 30, 2002, upon payment of all past due fees and costs.





On
      January 30, 2002, the shareholders of the Company approved an amendment to
      the
      Articles of Incorporation, changing the name of the Company to Oxford Ventures,
      Inc. The Company then began to consider and investigate potential business
      opportunities.





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On
      December 2, 2003, the Company issued 8,625,000 shares pursuant to an Asset
      Purchase Agreement. On December 5, 2003, the Company declared a 2.25 stock
      dividend which increased the issued and outstanding shares from 10,528,276
      common shares to 34,216,897 common shares. Subsequent to the Company's year
      end
      of December 31, 2003, the Company issued 812,500 shares to Ocean Way Investments
      Ltd. as a finder’s fee related to the Asset Purchase Agreement.





On
      March
      1, 2004, the Company affected a 4 to 1 forward split, increasing the Company's
      outstanding shares to 136,867,588. The Company also increased its authorized
      shares to 400 million from 100 million.





On
      May
      25, 2004, 7,099,392 shares were issued to Cornell Capital Partners LP and
      another firm pursuant to a Standby Equity Distribution Agreement (the “2004
      SEDA”) and a Security Agreement, dated May 18, 2004 and a Secured Convertible
      Debenture Agreement June 9, 2004 (the “Cornell Debenture”). These agreements are
      filed as exhibits or incorporated by reference in the SB-2 Registration
      Statement filed by the Company on December 14, 2004.





At
      December 31, 2004, the Company has issued and outstanding 155,267,240 shares
      of
      Common Stock.





In
      2005,
      the Company relocated its principal executive offices from Mesa, Arizona to
      Omaha, NB.





On
      March
      31, 2006, our wholly-owned subsidiary acquired all of the shares, assets and
      liabilities of ULURU Inc., a Delaware corporation (“ULURU Delaware”), in
      exchange for 11,000,000 shares of our common stock. As we had no substantial
      business prior to this event, our business became the business of ULURU
      Delaware. On the same date, we changed our name to ULURU Inc. and moved our
      executive offices to Addison, Texas.





**Business
      of Issuer**





ULURU’s
      goal is to acquire topically applied technologies to improve topical delivery
      and to establish a commercial organization focused on the wound management,
      burn
      care and plastic surgery markets.




We
      are an
      emerging pharmaceutical company focused on advancing topical delivery. ULURU
      is
      a diversified pharmaceutical company engaged in the development of novel
      topically applied therapeutics based primarily on the adaptation of existing
      therapeutic agents using its proprietary drug delivery platforms to improve
      clinical outcomes. ULURU owns three patented and/or licensed drug delivery
      technologies from which three products have been approved for marketing in
      various global markets.




The
      three
      drug delivery technologies are as follows:




OraDiscTM
            *
            A
                mucoadhesive erodible film technology, for the delivery of medication
                into
                the oral cavity, onto the oral mucosal surfaces, onto the surface
                of teeth
                or to deliver drug into the systemic circulation through the mucosal
                tissue.Nanoparticle
                Aggregate
            *
            Nanoparticles
                which aggregate in the presence of body fluids, to form a permanent
                or
                semi-permanent device which can be used as a wound or burn care dressing
                with or without a drug, in plastic surgery as a dermal filler and
                implant
                material and for ocular drug delivery.Residerm
            *
            A
                technology for enhancing the penetration of drug into the skin and
                forming
                a drug reservoir to locally treat skin disorders and reduce the systemic
                absorption and side effects of the
                drug.




The
      three
      drug delivery technologies were purchased from Access Pharmaceuticals Inc.
      in
      October 2005. The Purchase Agreement provided for the assumption of all assets
      of the topical drug delivery business including inventories, capital equipment
      and intellectual property specifically identified with the purchased
      technologies.




ULURU
      plans to establish a sales and marketing organization to commercialize the
      wound
      management, burn care, and plastic surgery products. To achieve this objective,
      ULURU plans on acquiring additional complimentary wound management and plastic
      surgery products. We plan to add additional products to our existing portfolio
      through the addition of numerous wound management compounds to our nanoparticle
      aggregate dressing.




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In
      addition to the three acquired drug delivery technologies, we have also
      purchased the patent for the use of amlexanox for the treatment of oral diseases
      including canker sores, and skin disorders.




We
      are
      currently marketing amlexanox 5% paste in the United States, the first Food
      and
      Drug Administration (FDA) approved product for the treatment of canker sores,
      under the trade name Aphthasol®. In September 2001, ProStrakan Limited, our U.K.
      partner, received marketing authorization to market amlexanox 5% paste in the
      United Kingdom under the trade name Aptheal®. We have received marketing
      approval in 10 European Union countries following completion of the Mutual
      Recognition Procedure (MRP). Approval to market was granted in Austria, Germany,
      Greece, Finland, Ireland, Luxembourg, The Netherlands, Norway, Portugal and
      Sweden. We are developing new formulations and delivery forms for amlexanox,
      including mucoadhesive disc delivery. In 2004, we received approval of our
      new
      drug application for OraDiscTM A from the United States Food and Drug
      Administration (FDA). OraDiscTM A is an improved delivery system for amlexanox.
      The OraDiscTM technology is a proprietary mucoadhesive patch that gradually
      erodes and releases an active ingredient when applied to the inside of the
      mouth.




In
      addition, ProStrakan has used our patented Residerm® technology to develop a
      zinc clindamycin formulation for the treatment of acne. ProStrakan began
      marketing zinc clindamycin in the United Kingdom under the trade name Zindaclin
      in March 20002. The process to achieve marketing authorization for Zindaclin
      throughout Europe has now been completed, with approvals granted in most
      European Union countries including the new member states. Additionally,
      approvals have been granted in numerous international markets and we anticipate
      that in the next twelve months approvals will be obtained in additional
      countries.




**Products**




We
      have
      used our drug delivery technology platforms to develop the following products
      and product candidates:




**Marketed
      Products**




**Aphthasol®
      and Aptheal®(Amlexanox 5% Paste)**




Amlexanox
      5% paste is the first drug approved by the FDA for the treatment of canker
      sores. A Phase IV clinical study conducted in Northern Ireland was completed
      in
      November 2000 to determine if the application of amlexanox 5% paste at the
      first
      sign or symptom of canker sores can abort ulcer formation or further accelerate
      healing. The results confirmed that amlexanox 5% paste was effective in
      preventing the formation of an ulcer when used at the first sign or symptom
      of
      the disease. If this label extension is approved by regulatory authorities,
      it
      would provide a major marketing opportunity to expand use of the product and
      to
      attract sufferers of canker sores to contact medical practitioners to request
      the product.




The
      exclusive United Kingdom and Ireland rights for the sale and marketing of
      amlexanox 5% paste for the treatment of canker sores is licensed to ProStrakan.
      Under the terms of this license, ProStrakan was responsible for and assumed
      all
      costs associated with the regulatory approval process, including product
      registration, for amlexanox in the United Kingdom and the European Union.
      Additionally, ProStrakan will make milestone payments to us on achievement
      of
      performance objectives and we will receive royalties on product sales of
      amlexanox.




An
      international out licensing program for amlexanox is ongoing. In addition to
      our
      license agreement with ProStrakan, licensing agreements have been executed
      with
      Zambon Group for France, Germany, Holland Belgium, Luxembourg, Switzerland,
      Brazil, Columbia and Italy; Meda AB for Scandinavia, the Baltic states and
      Iceland; Laboratories Esteve for Spain, Portugal and Greece; Paladin Labs Inc.
      for Canada, EpiTan, Ltd. for Australia and New Zealand, and Orient Europharma,
      Co., Ltd for Taiwan, Hong-Kong, Philippines, Thailand and Singapore. Contract
      Pharmaceuticals Ltd. Canada is our contract manufacturer for all markets
      including the United States.




ProStrakan
      received marketing authorization for amlexanox 5% paste in the United Kingdom
      in
      September 2001. ProStrakan’s trade name for the product is Aptheal®. Approval to
      market was granted in Austria, Germany, Greece, Finland, Ireland, Luxembourg,
      The Netherlands, Norway, Portugal, and Sweden. We plan to reapply for approvals
      in such countries, where registration has not been received including France,
      Italy and Belgium.




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The
      therapeutic Products Programme, the Canadian equivalent of the FDA, has issued
      a
      notice of compliance permitting the sale of amlexanox 5%paste, called Apthera®,
      in Canada to Paladin Labs Inc., our Canadian partner.




**Residerm®
      A gel - Zindaclin® (Zinc-Clindamycin)**




The
      complexing of zinc to a drug has the effect of enhancing the penetration of
      the
      drug into the skin and the retention to the drug in the skin. This phenomenon
      is
      called the “reservoir effect,” and it makes zinc potentially effective for the
      delivery of dermatological drugs. We have a broad patent covering the use of
      zinc for such purposes. This technology is called ResiDerm®.




We
      have
      developed, in conjunction with ProStrakan, zinc clindamycin for the treatment
      of
      acne which is marketed under the trade name Zindaclin®. Topical acne drugs
      constitute an approximately $750 million per year market and clindamycin is
      a
      widely prescribed drug for the treatment of acne. Clinical studies indicate
      that
      the addition of zinc results in Zindaclin® being as effective applied once daily
      as the market leading clindamycin product applied twice daily. The activity
      of
      zinc and clindamycin, the improved stability of the product and the potential
      for zinc to overcome certain bacterial resistance are other potential product
      benefits.




The
      exclusive worldwide rights for the manufacturing, sales and marketing of zinc
      clindamycin pursuant to a license agreement were granted to ProStrakan. Under
      the terms of the license agreement, ProStrakan agreed to fund the development
      costs of zinc clindamycin and any additional compounds developed utilizing
      our
      zinc patent, including product registrations. We share equally in all milestone
      payments received from the sublicensing of the compound. In addition, we receive
      a royalty on sales of products utilizing this technology.




ProStrakan
      has sub-licensed to Crawford Healthcare Limited the marketing of zinc
      clindamycin in the United Kingdom which is sold under the trade name Zindaclin®.
      The process to achieve marketing authorization for Zindaclin® throughout Europe
      has now been completed, with approvals granted in most European Union countries
      including the new member states and several non-European countries. We
      anticipate that in the next twelve months approvals will be obtained in
      additional countries. In addition, in May 2002 ProStrakan signed a Licensing
      Agreement with Fujisawa GmbH, which granted a license to Fujisawa for rights
      to
      market Zindaclin® in continental Western Europe. Additional licenses and or
      distribution agreements have been signed in other countries with other
      companies.




**OraDisc** TM




Treatment
      of oral conditions generally relies upon the use of medications formulated
      as
      gels and pastes that are applied to lesions in the mouth. The duration of
      effectiveness of these medications is typically short because the applied dose
      is worn away through the mechanical actions of speaking, eating, and tongue
      movement, and is washed away by saliva flow. To address these problems, a novel,
      cost-effective, mucoadhesive film product has been developed that is
      bioerodible. This technology, known as OraDiscTM, comprises a multi-layered film
      having an adhesive layer, a pre-formed film layer, and a coated backing layer.
      Depending upon the intended application, a pharmaceutically active compound
      can
      be formulated within any of these layers, providing for a wide range of
      potential applications. The disc stays in place, eroding over a period of time,
      so that subsequent removal is unnecessary. The disc delivers the drug over
      a
      period of time controlled by the rate of erosion of the disc, which is in turn
      controlled by the formulation of the backing layer.




OraDiscTM
      A was initially developed as a drug delivery system to treat canker sores with
      the same active ingredient (amlexanox) that is used in the Aphthasol®. We
      anticipate that higher amlexanox concentrations will be achieved at the disease
      site, increasing the effectiveness of the product.




OraDiscTM
      A was approved by the FDA in September 2004.




This
      successful development is an important technology milestone which supports
      the
      development of the OraDiscTM range of products. To achieve OraDiscTM A approval,
      in addition to performing the necessary clinical studies to prove efficacy,
      an
      irritation study, a 28-day safety study and drug distribution studies were
      conducted. Additionally, safety in patients down to 12 years of age was
      demonstrated. Patients in the 700 patient clinical study and 28-day safety
      study
      completed a survey which produced very positive results with regard to perceived
      effectiveness, ease of application, ability of the disc to remain in place
      and
      purchase intent. These data give strong support to our overall development
      program. The survey data confirms market research studies which indicate a
      strong patient acceptance of this delivery device.




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Now
      that
      OraDiscTM A is approved as a prescription product, in conjunction with our
      strategic partner Discus Dental Inc., we intend to move this product to market
      as rapidly as possible. Ultimately, it is or objective to move this product
      from
      prescription status to an over-the-counter consumer product. Our license
      agreement with Discus Dental Inc. includes significant milestone payments on
      the
      achievement of commercial milestones as well as royalty payments on product
      sales.




We
      will
      continue to develop the OraDiscTM technology and have generated or are exploring
      additional prototype drug delivery products, including those for pain palliation
      in the oral captivity, gingivitis, cough and cold treatment, breath freshener,
      tooth whitening and other dental applications.




**Drug
      Development Strategy**




Our
      strategy is to initially focus on utilizing our technology in combination with
      approved drug substances to develop novel patentable formulations of existing
      therapeutic products. We believe that this will expedite product development,
      both preclinical and clinical, and ultimately product approval. Where the size
      of the necessary clinical studies and cost associated with the later clinical
      development phases are significant, we plan to out-license to, or co-develop
      with, marketing partners.




We
      will
      continue to expand our internal core capabilities of chemistry, formulation,
      analytical methods development and project management to maximize product
      opportunities in a timely manner. We will, however, contract the manufacturing
      scaleup, certain preclinical testing and product production to research
      organizations, contract manufacturers and strategic partners. There will be
      some
      instances where there may be significant cost savings for us to do some
      manufacturing scaleup (such as OraDiscTM program). We will evaluate those
      instances and may do the work ourselves in order to achieve cost
      savings.




We
      expect
      to form strategic alliances for product development and to out license the
      commercial rights to development partners for a number of our product
      development candidates. By forming strategic alliances with pharmaceutical
      companies, we believe that our technology can be more rapidly developed and
      successfully introduced into the marketplace.




**Core
      Drug Delivery Technology Platforms**




Our
      current drug delivery technology platforms for use in topical and oral disease
      are:


*
            Mucoadhesive
                Disc Technology*
            Hydrogel
                Nanoparticle Aggregate Technology, and*
            Residerm®
                Topical Delivery Technology.


**Mucoadhesive
      Disc Technology**




Treatment
      of oral conditions generally relies upon the use of medications formulated
      as
      gels and pastes, which are applied to lesions in the mouth. The duration of
      effectiveness of these medications is typically short because the applied dose
      is worn away through the mechanical actions of speaking, eating, and tongue
      movement, and is washed away by saliva flow. To address these problems a novel
      erodible mucoadhesive film product was developed. This technology, known as
      OraDiscTM, comprises a multi-layered film having an adhesive layer, a pre-formed
      film layer, and a coated backing layer. Depending upon the intended application,
      a pharmaceutically active compound can be formulated within any of these layers,
      providing for a wide range of potential applications. The disc stays in place
      eroding over a period of time, so that subsequent removal is unnecessary. The
      disc delivers the drug over a period of time pre-determined by the rate of
      erosion of the disc, which is in turn controlled by the formulation of the
      backing layer.




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          of Contents*






OraDiscTM
      was initially developed as a drug delivery system to treat canker sores with
      the
      same active ingredient (amlexanox) that is used in Aphthasol®. We have continued
      to develop the OraDiscTM technology and we have generated or are exploring
      additional prototype drug delivery products, including those for pain palliation
      in the oral cavity, gingivitis, cough and cold treatment, breath freshener,
      tooth whitening and other dental applications. In addition, it is planned to
      develop a range of prescription supportive care products including products
      for
      nausea and vomiting, pain and migraine.




**Hydrogel
      Nanoparticle Aggregate Technology**




Our
      hydrogel nanoparticle aggregate technology proved unique materials with a broad
      range of properties and potential applications. While a conventional bulk
      hydrogel is an “infinite” network of loosely cross-linked hydrophilic polymers
      that swells when placed in polar solvents, we have discovered that a variety
      of
      unique biomaterials can be formed through the aggregation of hydrogel nano
      or
      micro-particles. This concept takes advantage of the inherent biocompatibility
      of hydrogels while overcoming problems with local stress and strain, which
      cause
      bulk hydrogels to shear. Unlike bulk hydrogels, these hydrogel particle
      aggregates are shape retentive, can be extruded or molded **** and
      offer
      properties suitable for use in a variety to in vivo medical devices, and in
      novel drug delivery systems, by providing tailored regions of drug incorporation
      and release. The polymers used in the hydrogel nanoparticle aggregate technology
      have been extensively researched by the academic and scientific community and
      commercialized into several major medical products. They are generally accepted
      as safe, non-toxic and biocompatible.




This
      technology utilizes the inherent physical attractive forces between
      nanoparticles themselves and between nanoparticles and a polar solvent such
      as
      water. These particles form bulk materials that can have the same size as
      infinite bulk networks but allow chemical variability and much greater
      resistance to permanent mechanical deformation. The aggregate demonstrates
      many
      physical properties identical to those of a bulk hydrogel. However, there are
      important differences between aggregates and bulk materials. For example,
“tough” elastomeric hydrogels used in tissue engineering constructs typically
      fail catastrophically when placed under high strain or shear forces. Hydrogel
      nanoparticle aggregates exhibit superior performance compared to bulk materials
      under stress as the nanoparticles can slip past each other allowing local
      deformation and repair.




A
      second
      level of controlled degradation is provided by the ability to tailor the rate
      of
      particle erosion from the physically coalesced aggregate. The hydrogel can
      be
      formulated such that the aggregate is extremely tough and resilient, or
      formulated so that I can slowly erode at controlled rates. This is achieved
      though simple compositional changes during nanoparticle synthesis. The spaces
      between nanoparticles, or holes in the lattice, can be tailored by varying
      the
      nanoparticle size. These spaces have been used to encapsulate proteins during
      aggregate formation. The ability to trap a wide range of bioactive compounds
      between these particles in the presence of water solutions offers another major
      advantage, since this media is less deleterious to many compounds than solvents
      typically used with other drug delivery materials. These aggregates can easily
      be designed to remain together indefinitely in vivo, or break apart at specific
      rates. Pharmaceutically-active compounds trapped in a non-degradable aggregate
      will be released from the hydrogel by diffusion, while release is controlled
      by
      both diffusion and rate of erosion in degradable aggregates.





This
      technology has a variety of potential applications, such as in-dwelling
      medicated catheters, medicated stents, artificial discs, tissue scaffold a
      controlled-release drug delivery systems. We continue to develop the technology
      and specific applications utilizing this technology, while seeking to establish
      collaborations and partnerships to explore other applications.




**Residerm®
      Topical Delivery Technology**




We
      have
      granted a license to ProStrakan for the development of compounds that utilize
      our zinc technology. The use of zinc ions to formulate topical products produces
      a reservoir of drug in the skin to increase the effectiveness of topically
      applied products and to reduce toxicity. There are many localized disease
      conditions, which are effectively treated by topical application of suitable
      pharmaceutical agents. In order for such treatments to be maximally effective,
      it is necessary that as much of the active agent as possible be absorbed into
      the skin where it can make contact with the disease condition in the dermal
      tissue without being lost by rubbing off on clothing or evaporation.




At
      the
      same time, the agent must not penetrate so effectively through the skin that
      it
      is absorbed into the systematic circulation. This latter factor is especially
      important in order to minimize unwanted side effects of the pharmacologically
      active agent. The ideal vehicle for topically applied pharmaceuticals is one
      that can rapidly penetrate the skin and produce a “reservoir effect” in the skin
      or mucous membranes. Such a reservoir effect can be produced by complexing
      of
      suitable pharmaceutical agents with zinc ions, by an as yet unknown mechanism.
      This “reservoir effect” is defined as an enhancement of the skin or membrane’s
      ability to both absorb and retain pharmacological agents that is:


·To
                increase skin or membrane residence time;·To
                decrease drug transit time; and·To
                reduce transdermal flux.




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          of Contenets*






A
      number
      of compounds are known to enhance the ability of pharmacologically active agents
      to penetrate the skin, but have the disadvantage of allowing rapid systemic
      dispersion away from the site of disease. Many topical agents, such as the
      retinoids used in the treatment of acne, and methotrexate, used in the treatment
      of psoriases, are systemically toxic. There is, therefore, a need for a method
      of enhancing the ability of such agents to penetrate the skin so that a lesser
      total dosage may be used, while at the same time their ability to move from
      the
      skin to the systemic circulation is minimized.




**Patents**




We
      believe that the value of technology both to us and to our potential corporate
      partners is established and enhanced by our broad intellectual property
      positions. Consequently, we have already been issued and seek to obtain
      additional U.S. and foreign patent protection for products under development
      and
      for new discoveries. Patent applications are filed with the U.S. Patent and
      Trademark Office and, when appropriate, with the Paris Convention’s Patent
      Cooperation Treaty (PCT) Countries (most major countries in Western Europe
      and
      the Far East) for our inventions and prospective products.




One
      U.S.
      and two European patents have been issued and one European patent is pending
      for
      the use of zinc as a pharmaceutical vehicle for enhancing the penetration and
      retention of drug in the skin. The patents and patent application cover the
      method of inducing a reservoir effect in skin and mucous membranes to enhance
      penetration and retention of topically applied therapeutic and cosmetic
      pharmacologically active agents. The patents and patent application also relate
      to topical treatment methods including such reservoir effect enhancers and
      to
      pharmaceutical compositions containing them.




We
      have
      one U.S. patent and have filed one U.S. and one European patent application
      for
      our OraDiscTM technology. This oral delivery vehicle potentially overcomes the
      difficulties encountered in using conventional past and gel formulations for
      conditions in the mouth. Utilizing this technology, we anticipate that higher
      drug concentrations will be achieved at the disease site increasing the
      effectiveness of the product.




Two
      U.S.
      patent applications and two European patent applications for the hydrogel
      nanoparticle aggregate technology have been filed. The patent applications
      have
      a variety of potential applications, such as wound management, burn care, dermal
      fillers, in-dwelling medicated catheters, medicated stents, artificial discs
      and
      tissue scaffold. We have an exclusive worldwide license for the nanoparticle
      aggregate technology for all applications except intravenous, subcutaneous
      and
      intra muscular drug development.




We
      also
      have a patent for amlexanox and the worldwide rights, excluding Japan, for
      the
      use of amlexanox for oral and dermatological use.




We
      have a
      strategy of maintaining an ongoing line of patent continuation applications
      for
      each major category of patentable carrier and delivery technology. By this
      approach, we are extending the intellectual property protection of our basic
      technology to cover additional specific carriers and agents, some of which
      are
      anticipated to carry the priority dates of the original
      applications.




**Government
      Regulation**




We
      are
      subject to extensive regulation by the federal government, principally by the
      FDA, and, to a lesser extent, by other federal and state agencies as well as
      comparable agencies in foreign countries where registration of products will
      be
      pursued. Although a number of our formulations incorporate extensively tested
      drug substances, because the resulting formulations make claims of enhanced
      efficacy and/or improved side effect profiles, they are expected to be
      classified as new drugs by the FDA.




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The
      Federal Food, Drug and Cosmetic Act and other federal, state and foreign statues
      and regulations govern the testing, manufacturing, safety, labeling, storage,
      shipping, and record keeping of our products. The FDA has the authority to
      approve or not approve new drug applications and inspect research, clinical
      and
      manufacturing records and facilities.




Among
      the
      requirements for drug approval and testing is that the prospective
      manufacturer’s facilities and methods conform to the FDA’s Code of Good
      Manufacturing Practices regulations, which establish the minimum requirements
      for methods to be used in, and the facilities or controls to be used during,
      the
      production process. Such facilities are subject to ongoing FDA inspection to
      insure compliance.




The
      steps
      required before a pharmaceutical product may be produced and marketed in the
      U.S. include preclinical tests, the filing of an Investigational New Drug
      application (“IND”) with the FDA, which must become effective pursuant to FDA
      regulations before human clinical trials may commence numerous phases of
      clinical testing and the FDA approval of a NDA prior to commercial
      sale.




Preclinical
      tests are conducted in the laboratory, usually involving animals, to evaluate
      the safety and efficacy of the potential product. The results of preclinical
      tests are submitted as part of the IND application and are fully reviewed by
      the
      FDA prior to granting the sponsor permission to commence clinical trials in
      humans. All trials are conducted under International Conference on
      Harmonization, or ICH, good clinical practice guidelines. All investigator
      sites
      and sponsor facilities are subject to FDA inspection to insure compliance.
      Clinical trials typically involve a three-phase process. Phase I, the initial
      clinical evaluations, consists of administering the drug and testing for safety
      and tolerated dosages. Phase II, involves a study to evaluate the effectiveness
      of the drug for a particular indication and to determine optimal dosage and
      dose
      interval and to identify possible adverse side effects and risks in a larger
      patient group. When a product is found safe, an initial efficacy is established
      in Phase II, it is then evaluated in Phase III clinical trials. Phase III trials
      consist of expanded multi-location testing for efficacy and safety to evaluate
      the overall benefit to risk index of the investigational drug in relationship
      to
      the disease treated. The results of preclinical and human clinical testing
      are
      submitted to the FDA in the form of an NDA for approval to commence commercial
      sales.




The
      process of performing the requisite testing, data collection, analysis and
      compilation of an IND and an NDA is labor intensive and costly and may take
      a
      protracted time period. In some cases, tests may have to be redone or new tests
      instituted to comply with FDA requests. Review by the FDA may also take
      considerable time and there is no guarantee that an NDA will be approved.
      Therefore, we cannot estimate with any certainty the length of the approval
      cycle.




We
      are
      also governed by other federal, state and local laws of general applicability,
      such as laws regulating working conditions, employment practices, as well as
      environmental protection.




**Competition**




The
      pharmaceutical industry is characterized by intense competition, rapid product
      development and technological change. Competition is intense among manufacturers
      of prescription pharmaceuticals and other product areas where we may develop
      and
      market products in the future. Most of our potential competitors are large,
      well
      established pharmaceutical, chemical or healthcare companies with considerable
      greater financial, marketing, sales and technical resources than are **** available
      to us. Additionally, many of our potential competitors have research and
      development capabilities that may allow such competitors to develop new or
      improved products that may compete with our product lines. Our potential
      products could be rendered obsolete or made uneconomical by the development
      of
      new products to treat the conditions to be addressed by our developments,
      technological advances affecting the cost of production, or marketing or pricing
      actions by one or more of our potential competitors. Our business, financial
      condition and results of operation could be materially adversely affected by
      any
      one or more of such developments. We cannot assure you that we will be able
      to
      compete successfully against current or future competitors or that competition
      will not have a material adverse effect on our business, financial condition
      and
      results of operations. Academic institutions, governmental agencies and other
      public and private research organizations are also conducting research
      activities and seeking patent protection and may commercialize products on
      their
      own or with the assistance of major health care companies in areas where we
      are
      developing product candidates. We are aware of certain developmental projects
      for products to treat or prevent certain disease targeted by us, the existence
      of these potential products or other products or treatments of which we are
      not
      aware, or products or treatments that may be developed in the future, may
      adversely affect the marketability of products developed by us.




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Products
      developed from our Residerm® technology will compete for a share of the existing
      market with numerous products which have become standard treatments recommended
      or prescribed by dermatologists. Zindaclin®, which is the first product
      developed utilizing our Residerm® technology, will compete with products
      including Benzamycin, marketed by a subsidiary of Sanofi-Aventis; Cleocin-T
      and
      a generic topical clindamycin, marketed by Pharmacia; Benzac, marketed by a
      subsidiary of L’Oreal; and Triaz, marketed by Medicis Pharmaceutical
      Corp.




Aphthasol®
      is the only clinically proven product to accelerate the healing of canker sores.
      There are numerous products, including prescription steroids such as Kenalog
      in
      OraBase, and many over-the-counter pain relief formulations that incorporate
      a
      local anesthetic used for the treatment of this condition.




In
      the
      area of wound management, burn care, and dermal fillers, which is the focus
      of
      our development activities, a number of companies are developing or evaluating
      new technology approaches. We expect that technological developments will occur
      at a rapid rate and that competition is likely to intensify as various
      alternative technologies achieve similar if not identical
      advantages.




Even
      if
      our products are fully developed and receive the required regulatory approval,
      of which there can be no assurance. We believe that our products that require
      extensive sales efforts directed both at the consumer and the general
      practitioner can only compete successfully if marketed by a company having
      expertise and a strong presence in the therapeutic area or in direct to consumer
      marketing. Consequently, our business model is to form strategic alliances
      with
      major or regional pharmaceutical companies for products to compete in these
      markets. Management believes that our development risks should be minimized
      and
      that the technology potentially could be more rapidly developed and successfully
      introduced into the marketplace by adopting this strategy.




We
      plan
      to establish a sales and marketing organization to commercialize our product
      developments in the wound management, burn care and plastic surgery market
      segments. Management believes that a small dedicated sales and marketing
      organization can effectively commercialize products in these specialized
      areas.





**Employees**





As
      of
      December 31, 2005, we had no full- or part-time employees. As
      of
      March 15, 2006, we have 10 full-time and 3 part-time employees. Of these
      employees, 8 are directly engaged in or directly support research and
      development activities of which 5 have advanced scientific degrees. 2 directly
      support commercial and business development activities and 3 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.








**ITEM
      1A.RISK FACTORS**





***We
      do not have significant operating revenue, and we may never attain
      profitability.***





Our
      ability to achieve significant revenue or profitability depends upon our ability
      to successfully complete the development of drug candidates, to develop and
      obtain patent protection and regulatory approvals for our drug candidates and
      to
      manufacture and commercialize the resulting drugs. We may not generate
      significant revenues or profits from the sale of these products in the future.
      Furthermore, we may not be able to ever successfully identify, develop,
      commercialize, patent, manufacture, obtain required regulatory approvals and
      market any additional products. Moreover, even if we do identify, develop,
      commercialize, patent, manufacture, and obtain required regulatory approvals
      to
      market additional products, we may not generate revenues or royalties form
      commercial sales of these products for a significant number of years, if at
      all.
      Therefore, our proposed operations are subject to all the risks inherent in
      the
      establishment of a new business enterprise. In the next few years, our revenues
      may be limited to minimal product sales and royalties, any amount that we
      receive under strategic partnerships and research or drug development
      collaborations that we may establish and, as a result, we may be unable to
      achieve or maintain profitability in the future or to achieve significant
      revenues to fund our operations.





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***A
      failure to obtain necessary additional capital in the future could jeopardize
      our operations.***





We
      may
      not be able to obtain additional financing on terms acceptable to us, if at
      all.
      If we raise additional funds by selling equity securities, the relative equity
      ownership of our existing investors would be diluted and the new investors
      could
      obtain terms more favorable than previous investors. A failure to obtain
      additional funding to support our working capital and operating requirements
      could prevent us from making expenditures that are needed to allow us to
      maintain our operations.





***Our
      financial condition and the restrictive covenants in our outstanding convertible
      notes may limit our ability to borrow additional funds or to raise additional
      equity as may be required to fund our future operations.***





The
      terms
      of our outstanding $13,000,000 convertible notes issued to Prenox, LLC and
      Highgate House Funds, Ltd. (the “Convertible Notes”) may limit our ability to,
      among other things:


·incur
                additional debt·pay
                cash dividends, redeem, retire or repurchase our stock or change
                our
                capital structure·enter
                into certain transactions with affiliates·create
                additional liens on our assets·issue
                certain types of preferred stock or issue common stock at below market
                prices


.





Our
      ability to borrow additional funds or raise additional equity may be limited
      by
      our financial condition, in addition to the terms of our outstanding debt.
      Additionally, events such as our inability to continue to reduce our loss from
      continuing operations, could adversely affect our liquidity and our ability
      to
      attract additional funding as required.





***We
      may not be able to pay our debt and other obligations, and our assets may be
      seized as a result*** .





We
      may
      not generate the cash flow required to pay our liabilities as they become due.
      As of December 31, 2005, our outstanding debt included approximately 13.0
      million of our Convertible Notes due in October 2007 plus $283,656 in accrued
      but unpaid interest.





The
      holders of our Convertible Notes may require us to repurchase or prepay all
      of
      the outstanding Convertible Notes under certain circumstances. We may not have
      sufficient cash reserves to repurchase the Convertible Notes at such time.


Our
      obligations under the Convertible Notes are secured by all of our
      assets.





Our
      obligations under the $13,000,000 Convertible Notes are secured by all of our
      assets. As a result, if we default under the terms of the Convertible Notes
      or
      related agreements, including our failure to issue shares of common stock upon
      conversion by the holder, our failure to timely file a registration statement
      or
      have such registration statement declared effective, breach of any covenant,
      representation or warranty in the Securities Purchase Agreement or the
      Convertible Notes or the commencement of a bankruptcy, insolvency,
      reorganization or liquidation proceeding against the Company could require
      the
      early repayment of the Convertible Notes, if the default is not cured with
      the
      specified grace period. In addition we could be required to issue and the
      holders would have the ability to sell up to 45,000,000 shares of our Common
      Stock and/or the holders could foreclose their security interest and liquidate
      some or all of the assets of the Company, and we could cease to
      operate.





***Our
      Standby Equity Distribution Agreement may have a dilutive impact on our
      stockholders.***





We
      are to
      a great extent dependent on external financing to fund our operations. Our
      financial needs may be partially provided from the Standby Equity Distribution
      Agreement (the “SEDA”) that we entered into with Cornell Capital Partners, LP.
      The issuance of shares of our common stock under the SEDA will have a dilutive
      impact on our other stockholders and the issuance of such shares could have
      a
      negative effect on the market price of our common stock. In addition, if we
      access the SEDA, we will issue shares of our common stock to Cornell at a
      discount of 3% of the lowest daily volume weighted average of our common stock
      during a specified period of trading days after we access the SEDA. Issuing
      shares at a discount will further dilute the interests of other
      stockholders.




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To
      the
      extent that Cornell sells shares of our common stock issued under the SEDA
      to
      third parties, our stock price may decrease due to the additional selling
      pressure in the market. The perceived risk of dilution from sales of stock
      to or
      by Cornell may cause holders of our common stock to sell their shares. This
      could contribute to a decline in the stock price of our common
      stock.





***We
      may not successfully commercialize our drug
      candidates.***





Our
      drug
      candidates are subject to the risks of failure inherent in the development
      of
      pharmaceutical based on new technologies and our failure to develop safe,
      commercially viable drugs would severely limit our ability to become profitable
      or to achieve significant revenues. We may be unable to successfully
      commercialize our drug candidates because:


·some
                or all of our drug candidates may be found to be unsafe or ineffective
                or
                otherwise fail to meet applicable regulatory standards or receive
                necessary regulatory clearances·our
                drug candidates, if safe and effective, may be too difficult to develop
                into commercially viable drugs·it
                may be difficult to manufacture or market out drug candidates in
                a large
                scale·proprietary
                rights of third parties may preclude us from marketing our drug
                candidates·third
                parties may market superior or equivalent
                drugs




***The
      success of our research and development activities, upon which we primarily
      focus, is uncertain.***





Our
      primary focus is on our research and development activities and the
      commercialization of compounds covered by proprietary biopharmaceutical patents
      and applications. Research and development activities, by their nature, preclude
      definitive statements as to the time required and costs involved in reaching
      certain objectives. Actual research and development costs, therefore, could
      exceed budgeted amounts and estimated time frames may require extension. Cost
      overruns, unanticipated regulatory delays or demands, unexpected adverse side
      effects or insufficient therapeutic efficacy will prevent or substantially
      slow
      our research and development effort and our business could ultimately suffer.





***We
      may be unable to obtain necessary additional capital to fund operations in
      the
      future.***





We
      require substantial capital for our development programs and operating expenses,
      to pursue regulatory clearances and to prosecute and defend our intellectual
      property rights. We believe that our existing capital resources, interest
      income, product sales, royalties and revenue from possible licensing agreements
      and collaborative agreements will be sufficient to fund our currently expected
      operating expenses (other than debt obligations including the $13,000,000 on
      the
      Convertible Notes which are required to be repaid in October 2007) and capital
      requirements for twelve months. However, unless the Convertible Notes convert
      to
      common stock prior to their maturity or are restructured, we will need to raise
      substantial additional capital to support our ongoing operations and debt
      obligations. Our actual cash requirements may vary materially from those now
      planned and will depend upon numerous factors, including:




·the
                sales levels of our marketed products·the
                results of our research and development programs·the
                timing and results of preclinical and clinical trials·our
                ability to maintain existing and establish new collaborative agreements
                with other companies to provide funding to us·technological
                advances·activities
                of competitors and other factors





If
      we do
      raise additional funds by issuing equity securities, further dilution to
      existing stockholders would result and future investors may be granted rights
      superior to those of existing stockholders. If adequate funds are not available
      to us through additional equity offerings, we may be required to delay, reduce
      the scope of or eliminate one or more of our research and development programs
      or to obtain funds by entering into arrangements with collaborative partners
      or
      others that require us to issue additional equity securities or to relinquish
      rights to certain technologies or drug candidates that we would not otherwise
      issue or relinquish in order to continue independent operations.





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***We
      may be unable to successfully develop, market, or commercialize our products
      or
      our product candidates without establishing new relationships and maintaining
      current relationships.***





Our
      strategy for the research, development and commercialization of our potential
      pharmaceutical products may require us to enter into various arrangements with
      corporate and academic collaborators, licensors, licensees and others, in
      addition to our existing relationships with other parties. Specifically, we
      may
      need to joint venture, sublicense or enter other marketing arrangements with
      parties that have an established marketing capability or we may choose to pursue
      the commercialization of such products on acceptable terms. Furthermore, if
      we
      maintain and establish arrangements or relationships with third parties, our
      business may deem necessary to develop, commercialized and market our potential
      pharmaceutical products on acceptable terms. Furthermore, if we maintain and
      establish arrangements or relationships with third parties, our business may
      depend upon the successful performance by these third parties of their
      responsibilities under those arrangements and relationships. For our
      commercialized products we currently rely upon the following relationships
      in
      the following marketing territories for sales, manufacturing and/or regulatory
      approval efforts:





ProStrakan
                Ltd
            ·United
                Kingdom and Ireland manufacturing marketing rights and regulatory
                approval;Zambon
                Group
            ·France,
                Germany, Holland, Belgium, Luxembourg, Switzerland, Brazil, Colombia
                and
                Italy manufacturing and marketing rights;Laboratories
                Dr. Esteve SA
            ·Spain,
                Portugal, and Greece manufacturing and marketing
                rights;Meda,
                AB
            ·Scandinavia,
                the Baltic states and Iceland marketing rights;Paladin
                Labs, Inc.
            ·Canada
                manufacturing and marketing rights;EpiTan,
                Ltd.
            ·Australia
                and New Zealand for marketing rights;Orient
                Europharma, Co., Ltd.
            ·Taiwan,
                Hong-Kong, Malaysia, Philippines, Thailand and Singapore for marketing
                rights;





Zindaclin®
                and Residerm®ProStrakan
                Ltd.
            ·worldwide
                manufacturing, marketing and regulatory approval
                rights;Fujisawa
                GmbH
            ·sublicensed
                continental Europe marketing rights;Hyundai
            ·sublicensed
                Korea marketing rights;Taro
            ·sublicensed
                Israel marketing rights;Biosintetica
            ·sublicensed
                Brazil marketing rightsSix
                companies for eleven other smaller countries with sublicensed marketing
                rights.





Our
      ability to successfully commercialize, and market our products and product
      candidates could be limited if a number of these existing relationships were
      terminated.





***We
      may be unable to successfully manufacture our products and our product
      candidates in clinical quantities or for commercial purposes without the
      assistance of contract manufacturers, which may be difficult for us to obtain
      and maintain.***





We
      have
      limited experience in the manufacture of pharmaceutical products in clinical
      quantities or for commercial purposes, and we may not be able to manufacture
      any
      new pharmaceutical products that we may develop. As a result, we have
      established, and in the future intend to establish, arrangements with contract
      manufacturers to supply sufficient quantities of products to conduct clinical
      trials and for the manufacture, packaging, labeling, and distribution of
      finished pharmaceutical products. If we are unable to contract for a sufficient
      supply of our pharmaceutical products on acceptable terms, our preclinical
      and
      human clinical testing schedule may be delayed, resulting in the delay of our
      clinical programs and submission of product candidates for regulatory approval,
      which could cause our business to suffer. Our business could suffer if there
      are
      delays or difficulties in establishing relationships with manufacturers to
      produce, package, label and distribute our finished pharmaceutical or other
      medical products, if any, market introduction and subsequent sales of such
      products. Moreover, contract manufacturers that we may use must adhere to
      current Good Manufacturing Practices, as required by FDA. In this regard, the
      FDA will not issue a pre-market approval or product and establishment licenses,
      where applicable, to a manufacturing facility for the products until the
      manufacturing facility passes a pre-approval plant inspection. If we are unable
      to obtain or retain third party manufacturing on commercially acceptable terms,
      we may not be able to commercialize our products as planned. Our potential
      dependence upon third parties for the manufacture of our products may adversely
      affect our ability to generate profits or acceptable profit margins and our
      ability to develop and deliver such products on a timely and competitive
      basis.




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Our
      amlexanox 5% paste is marketed in the United States as Aphthasol®. We selected
      Contract Pharmaceuticals Ltd. Canada as our manufacturer of amlexanox 5% paste
      and they manufactured product for the U.S. market and initial qualifying batches
      of the product for Europe.





Amlexanox
      5% paste was approved by regulatory authorities for sale in the United Kingdom.
      Approval to market was granted in Austria, Germany, Greece, Finland, Ireland,
      Luxumbourg, The Netherlands, Norway, Portugal and Sweden. We licensed
      manufacturing rights to ProStrakan, Zambon, Esteve and Mipharm for specific
      countries in Europe. Contract Pharmaceuticals Ltd. Canada has also been selected
      as our European supplier of amlexanox 5% paste and this facility has been
      approved for European supply.





We
      licensed our patents for worldwide manufacturing and marketing for Zindaclin®
and ResiDerm® technology to ProStrakan Ltd. for the period of the patents. We
      receive a share of the licensing revenues and royalty on the sales of the
      product. Prostrakan has a contract manufacturer for Zindaclin® which is a
      European Union approved facility. Zindaclin® was approved in the United Kingdom
      and throughout Europe in most European Union countries including new member
      states and several non-European markets. Zindaclin® is marketed in UK, France,
      Germany, Ireland, Belgium, Cyprus, Israel and Korea. Zindaclin® is under review
      in other markets including Australia, New Zealand, Brazil and others.





We
      received regulatory approval from the FDA to manufacture and sell OraDiscTM A in
      September 2004 and are proceeding with our manufacturing and marketing plans
      for
      2006.




***We
      are subject to extensive governmental regulation which increases our cost of
      doing business and may affect our ability to commercialize any new products
      that
      we may develop.***





The
      FDA
      and comparable agencies in foreign countries impose substantial requirements
      upon the introduction of pharmaceutical products through lengthy and detailed
      laboratory, preclinical and clinical testing procedures and other costly and
      time-consuming procedures to establish their safety and efficacy. Some of our
      drugs and drug candidates require receipt and maintenance of governmental
      approvals for commercialization. Preclinical and clinical trials and
      manufacturing of our drug candidates will be subject to the rigorous testing
      and
      approval processes of the FDA and corresponding foreign regulatory authorities.
      Satisfaction of these requirements typically takes a significant number of
      years
      and can vary substantially based upon the type, complexity and novelty of the
      product. The status of our principal products is as follows:





·5%
                amlexanox paste is an approved product for sale in the US (Apthasol®);
                approved in the UK and Canada but not yet sold; approved in ten EU
                countries·Zindaclin®
                is an approved product for sale in the UK and extensively throughout
                European Union countries; in the approval process in other
                markets·OraDiscTM
                A is an approved product for sale in the US as of September 2004;
                we are
                completing steps for manufacturing and sale of the product in
                2006·Our
                other OraDiscTM products are currently in the development
                phase·Nanoparticle
                aggregate product candidates are in the preclinical
                phase.





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***Due
      to the time consuming and uncertain nature of the drug candidate development
      process and the governmental approval process described above, we cannot assure
      you when we, independently or with our collaborative partners, might submit
      a
      New Drug Application, or “NDA”, for FDA or other regulatory
      review.***





Government
      regulation also affects the manufacturing and marketing of pharmaceutical
      products. Government regulations may delay marketing of our potential drugs
      for
      a considerable or indefinite period of time, impose costly procedural
      requirements upon our activities and furnish a competitive advantage to larger
      companies or companies more experienced in regulatory affairs. Delays in
      obtaining governmental regulatory approval could adversely affect our marketing
      as well as our ability to generate significant revenues from commercial sales.
      Our drug candidates may not receive FDA or other regulatory approvals on a
      timely basis or at all. Moreover, if regulatory approval of a drug candidate
      is
      granted, such approval may impose limitations on the indicated use for which
      such drug may be marketed. Even if we obtain initial regulatory approvals for
      our drug candidates, our drugs and our manufacturing facilities would be subject
      to continual review and periodic inspection, and later discovery of previously
      unknown problems with a drug, manufacturer or facility may result in
      restrictions on the marketing or manufacture of such drug, including withdrawal
      of the drug from the market. The FDA and other regulatory authorities
      stringently apply regulatory standards and failure to comply with regulatory
      standards can, among other things, result in fines, denial or withdrawal of
      regulatory approvals, product recalls or seizures, operating restrictions and
      criminal prosecution.





***The
      uncertainty associated with preclinical and clinical testing may affect our
      ability to successfully commercialize new
      products.***





Before
      we
      can obtain regulatory approvals for the commercial sale of our potential drugs,
      the drug candidates will be subject to extensive preclinical and clinical trials
      to demonstrate their safety and efficacy in humans. In this regard, for example,
      adverse side effects can occur during the clinical testing of a new drug on
      humans which may delay ultimate FDA approval or even lead us to terminate our
      efforts to develop the drug for commercial use. Companies in the biotechnology
      industry have suffered significant setbacks in advanced clinical trials, even
      after demonstrating promising results in earlier trials. The failure to
      adequately demonstrate the safety and efficacy of a drug candidate under
      development could delay or prevent regulatory approval of the drug candidate.
      A
      delay or failure to receive regulatory approval for any of our drug candidates
      could prevent us from successfully commercializing such candidates and we could
      incur substantial additional expenses in our attempts to further develop such
      candidates and obtain future regulatory approval.





***We
      may incur substantial product liability expenses due to the use or misuse of
      our
      products for which we may be unable to obtain insurance
      coverage.***





Our
      business exposes us to potential liability risks that are inherent in the
      testing, manufacturing and marketing of pharmaceutical products. These risks
      will expand with respect to our drug candidates, if any, that receive regulatory
      approval for commercial sale, and we may face substantial liability for damages
      in the event of adverse side effects or product defects identified with any
      of
      our products that are used in clinical tests or marketed to the public. We
      generally procure product liability insurance for drug candidates that are
      undergoing human clinical trials. Product liability insurance for the
      biotechnology industry is generally expensive, if available at all, and as
      a
      result, we may be unable to obtain insurance coverage at acceptable costs or
      in
      sufficient amount in the future, if at all. We may be unable to satisfy any
      claims for which we may be held liable as a result of the use or misuse of
      products which we have developed, manufactured or sold and any such product
      liability could adversely affect our business, operating results or financial
      condition.





***We
      may incur significant liabilities if we fail to comply with stringent
      environmental regulations.***





Our
      research and development processes involve the controlled use of hazardous
      materials. We are subject to a variety of federal, state and local governmental
      laws and regulations related to the use, manufacture, storage, handling, and
      disposal of such material and certain waste products. Although we believe that
      our activities and our safety procedures for storing, using, handling and
      disposing of such material comply with the standards prescribed by such laws
      and
      regulations, the risk of accidental contamination or injury from these materials
      cannot be completely eliminated. In the event of such accident, we could be
      held
      liable for any damages that result and any such liability could exceed our
      resources.


- Intense
          competition may limit our ability to successfully develop and market
          commercial products.
- The
          biotechnology and pharmaceutical industries are intensely competitive and
          subject to rapid and significant technological change. Our competitors
          in the
          United States and elsewhere are numerous and include, among others, major
          multinational pharmaceutical and chemical companies, specialized biotechnology
          firms and universities and other research institutions.




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The
      following products may compete with Residerm® products:





·Benzamycin,
                marketed by a subsidiary of Sanofi-Aventis;·Cleocin-T
                and a generic topical clindamycin, marketed by Pfizer;·Benzac,
                marketed by Galderma; and·Triaz,
                marketed by Medicis Pharmaceutical
                Corp.





Technology
      and prescription steroids such as Kenalog in OraBase, developed by Bristol-Myers
      Squibb, may compete with our commercialized Aphthasol® product. OTC products
      including Orajel (Del Laboratories) and Anbesol (Wyeth Consumer Healthcare)
      also
      compete in the aphthous ulcer market.





Many
      of
      these competitors have and employ greater financial and other resources,
      including larger research and development, marketing and manufacturing
      organizations. As a result, our competitors may successfully develop
      technologies and drugs that are more effective or less costly than any that
      we
      are developing or which would render our technology and future products obsolete
      and noncompetitive.





In
      addition, some of our competitors have greater experience than we do in
      conducting preclinical and clinical trials and obtaining FDA and other
      regulatory approvals for drug candidates more rapidly than we do. Companies
      that
      complete clinical trials, obtain required regulatory agency approvals and
      commence commercial sale of their drugs before their competitors may achieve
      a
      significant competitive advantage. Drugs resulting from our research and
      development efforts or from our joint efforts with collaborative partners
      therefore may not be commercially competitive with our competitors’ existing
      products or products under development.





***Our
      ability to successfully develop and commercialize our drug candidates will
      substantially depend upon the availability of reimbursement funds for the costs
      of the resulting drugs and related treatments.***





The
      successful commercialization of, and the interest of potential collaborative
      partners to invest in the development of our drug candidates, may depend
      substantially upon the reimbursement of the costs of the resulting drugs and
      related treatments at acceptable levels from government authorities, private
      health insurers and other organizations, including health maintenance
      organizations, or HMOs. To date, the costs of our marketed products Aphthasol®
and Zindaclin® generally have been reimbursed at acceptable levels; however, the
      amount of such reimbursement in the United States or elsewhere may be decreased
      in the future or may be unavailable for any drugs that we may develop in the
      future. Limited reimbursement for the cost of any drugs that we develop may
      reduce the demand for, or price of such drugs, which would hamper our ability
      to
      obtain collaborative partners to commercialize our drugs, or to obtain a
      sufficient financial return on our own manufacture an commercialization of
      any
      future drugs.





***The
      market may not accept any pharmaceutical products that we successfully
      develop.***





The
      drugs
      that we are attempting to develop may compete with a number of well-established
      drugs manufactured and marketed by major pharmaceutical companies. The degree
      of
      market acceptance of any drugs developed by us will depend on a number of
      factors, including the establishment and demonstration of the clinical efficacy
      and safety of our drug candidates, the potential advantage of our drug
      candidates over existing therapies and the reimbursement policies of government
      and third-party payers. Physicians, patients or the medical community in general
      may not accept or use any drugs that we may develop independently or with our
      collaborative partners and if they do not, our business could
      suffer.





***Trends
      toward managed health care and downward price pressured on medical products
      and
      services may limit our ability to profitably sell any drugs that we any
      develop.***





Lower
      prices for pharmaceutical products may result from:


·Third-party
                payers’ increasing challenges to the prices charged for medical products
                and services·The
                trend toward managed health care in the Unites States and the concurrent
                growth of HMOs and similar organizations that can control or significantly
                influence the purchase of healthcare services and
                products·Legislative
                proposals to reform healthcare or reduce government insurance
                programs





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The
      cost
      containment measures that healthcare providers are instituting, including
      practice protocols and guidelines and clinical pathways, and the effect of
      any
      healthcare reform, could limit our ability to profitably sell any drugs that
      we
      may successfully develop. Moreover, any future legislation or regulation, if
      any, relating to the healthcare industry or third-party coverage and
      reimbursement, may cause our business to suffer.





***We
      may not be successful in protecting our intellectual property and proprietary
      rights.***





Our
      success depends, in part, on our ability to obtain U.S. and foreign patent
      protection for our drug candidates and processes, preserve our trade secrets
      and
      operate our business without infringing the proprietary rights of third parties.
      Legal standards relating to the validity of patents covering pharmaceutical
      and
      biotechnology inventions and the scope of claims made under such patents are
      still developing and there is no consistent policy regarding the breadth of
      claims allowed in biotechnology patents. The patent position of a biotechnology
      firm is highly uncertain and involves complex legal and factual questions.
      We
      cannot assure you that any existing or future patens issued to, or licensed
      by,
      us will not subsequently be challenged, infringed upon, invalidated or
      circumvented by others. As a result, although we, together with our
      subsidiaries, are either the owner or licensee to U.S. patents and to U.S.
      patent applications now pending, and European patents and European patent
      applications, we cannot assure you that any additional patents will issue from
      any of the patent applications owned by, or licensed to, us. Furthermore, any
      rights that we may have under issued patents may not provide us with significant
      protection against competitive products or otherwise be commercially
      viable.





Our
      patents for the following technologies expire in the years and during the date
      ranges indicated below:





·5%
                amlexanox paste in 2011·Zindaclin®
                and Residerm® between 2007 and 2011





In
      addition, patents may have been granted to third parties or may be granted
      covering products or processed that are necessary or useful to the development
      of our drug candidates. If our drug candidates or processes are found to
      infringe upon the patents or otherwise impermissibly utilize the intellectual
      property of others, our development, manufacture and sale of such drug
      candidates could be severely restricted or prohibited. In such event, we may
      be
      required to obtain licenses from third parties to utilize the patents or
      proprietary rights of others. We cannot assure you that we will be able to
      obtain such licenses on acceptable terms, if at all. If we become involved
      in
      litigation regarding our intellectual property rights or the intellectual
      property rights of others, the potential cost of such litigation, regardless
      of
      the strength of our legal position, and the potential damages that we could
      be
      required to pay could be substantial.





***Our
      business could suffer if we lose the services of, or fail to attract, key
      personnel.***





We
      are
      highly dependent upon the efforts of our senior management and scientific team,
      including our President and Chief Executive Officer, Kerry P. Gray. The loss
      of
      the services of one or more of these individuals could delay or prevent the
      achievement of our research, development, marketing, or product
      commercialization objectives. While we have an employment agreement with Mr.
      Gray his employment may be terminated at any time. Mr. Gray’s agreement expires
      in five years and is extendable each year thereafter on the anniversary date.
      We
      do not maintain any “key-man” insurance policies on any of our key employees and
      we do not intend to obtain such insurance. In addition, due to the specialized
      scientific nature of or business, we are highly dependent upon our ability
      to
      attract and retain qualified scientific and technical personnel. In view of
      the
      stage of our development and our research and development programs, we have
      restricted our hiring to research scientists and a small administrative staff
      and we have made only limited investments in manufacturing, production, sales
      or
      regulatory compliance resources. There is intense competition among major
      pharmaceutical and chemical companies, specialized biotechnology firms and
      universities and other research institutions for qualified personnel in the
      areas of our activities, however, and we may be unsuccessful in attracting
      and
      retaining these personnel.





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***Ownership
      of our shares is concentrated, to some extent, in the hands of a few investors
      which could limit the ability of our other stockholders to influence the
      direction of the company.***





Kerry
      P.
      Gray beneficially owns approximately 76.1% of our common stock as of the date
      hereof. Accordingly, he has the ability to significantly influence or determine
      the election of all of our directors or the outcome of corporate actions
      requiring stockholder approval. He may exercise this ability in a manner that
      advances his best interests and not necessarily those of our other
      stockholders.





***Provisions
      of our charter documents could discourage an acquisition of our company that
      would benefit our stockholders and may have the effect of entrenching, and
      making it difficult to remove, management.***





Provisions
      of our Certificate Incorporation and By-laws may make it more difficult for
      a
      third party to acquire control of our company, even if a change in control
      would
      benefit our stockholders. In particular, shares of our preferred stock may
      be
      issued in the future without further stockholder approval and upon such terms
      and conditions, and having such rights, privileges and preferences, as our
      Board
      of Directors may determine, including for example, rights to convert into our
      common stock. The rights of the holders of our common stock will be subject
      to,
      and may be adversely affected by, the rights of the holders of any of our
      preferred stock that may be issued in the future. The issuance of our preferred
      stock, while providing desirable flexibility in connection with possible
      acquisitions and other corporate purposes, could have the effect of making
      it
      more difficult for a third party to acquire control of us. This could limit
      the
      price that certain investors might be willing to pay in the future for shares
      of
      our common stock and discourage these investors from acquiring a majority of
      our
      common stock. Further, the existence of these corporate governance provisions
      could have the effect of entrenching management and making it more difficult
      to
      change our management.




***Substantial
      sales of our common stock could lower or stock
      price.***





The
      market price for our common stock could drop as a result of sales of a large
      number of our presently outstanding shares of shares that we may issue or be
      obligated to issue in the future.





***Failure
      to achieve and maintain effective internal controls could have a material
      adverse effect on our business.***





Effective
      internal controls are necessary for us to provide reliable financial reports.
      If
      we cannot provide reliable financial reports, our operating results could be
      harmed. All internal control systems, no matter how well designed, have inherent
      limitations. Therefore, even those systems determined to be effective can
      provide reasonable assurance with respect to financial preparation and
      presentation.





While
      we
      continue to evaluate and improve our internal controls, we cannot be certain
      that these measures will ensure that we implement and maintain adequate controls
      over our financial processes and reporting in the future. Any failure to
      implement required new or improved controls, or difficulties encountered in
      their implantation, could harm or operating results or cause us to fail to
      meet
      our reporting obligations.





If
      we
      fail to maintain the adequacy of our internal controls, as such standards are
      modified, supplemented or amended from time to time, we may not be able to
      ensure that we can conclude on and ongoing basis that we have effective internal
      control over financial reporting in accordance with Section 404 of the
      Sarbanes-Oxley Act. Failure to achieve and maintain an effective internal
      control environment could cause investors to lose confidence in our reported
      financial information, which could have a material adverse effect on our stock
      price.








**ITEM
      2. DESCRIPTION OF PROPERTY**





As
      of
      December 31, 2005, the Company did not own or control any material property.
      Effective April 1, 2006, the Company had entered a lease for approximately
      9,000
      square feet of administrative offices and laboratories in Addison, Texas. The
      Lease Agreement expires in April 2013. Additional space is available in the
      complex for future expansion which we believe would accommodate growth for
      the
      foreseeable future. The
      monthly lease obligation of $9,034.53 continues for eighty four (84)
      months.




We
      believe that our existing property is suitable for the conduct of our business
      and adequate to meet our present needs.





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**ITEM
      3. LEGAL PROCEEDINGS**





We
      are
      aware of neither any pending nor threatened legal proceeding that, if adversely
      determined, would have a material adverse effect on us nor of any proceeding
      that a government agency is initiating against us.





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





No
      matters were submitted during the fiscal year covered by this report to a vote
      of security holders of the Company, through the solicitation of proxies or
      otherwise.





Subsequent
      to the Company's year end, on March 1, 2006, the Company filed a Definitive
      Schedule 14C with the Securities and Exchange Commission, a copy of which was
      distributed to the shareholders. The Schedule 14C related to a shareholders’
meeting held on March 27, 2006 at which the shareholders approved a reverse
      stock split of the Company’s common stock in a ratio of 400:1, a decrease in the
      number of authorized shares of common stock from 400,000,000 shares to
      200,000,000 the adoption of an equity incentive plan, a change of the Company’s
      name from “Oxford Ventures, Inc.” to “ULURU Inc.” and the appointment of Kerry
      P. Gray, William Crouse, Jeffrey B. Davis and Dr. David Reese as the Company’s
      directors. A copy of the Schedule 14C is incorporated herein by reference.





**Part
      II**





**ITEM
      5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS**







Our
      common stock is quoted on the Over-the-Counter Bulletin Board operated by the
      National Association of Securities Dealers, Inc. Our shares are listed under
      the
      symbol "OXFV"






The
      following table sets forth, for the fiscal quarters indicated, the high and
      low
      closing prices per share of our common stock as reported on the Over-the-Counter
      Bulletin Board. The quotations reflect inter dealer prices, without retail
      mark-up, mark-down or commissions and may not represent actual transactions.




Year
                  Ended December 31,
            
            2005
            2004High
            
            
            Low
            
            
            High
            
            
            LowFirst
                Quarter
            
            $
            0.0275
            
            $
            0.014
            
            $
            0.39
            
            $
            0.16Second
                Quarter
            
            $
            0.023
            
            $
            0.008
            
            $
            0.34
            
            $
            0.15Third
                Quarter
            
            $
            0.018
            
            $
            0.007
            
            $
            0.16
            
            $
            0.035Fourth
                Quarter
            
            $
            0.015
            
            $
            0.0066
            
            $
            0.05
            
            $
            0.017






At
      May 9,
      2006, the closing price for our common stock was $1.85.




At
      May 9,
      2006, there were 12,844,395 shares of our common stock issued and outstanding.
      There are approximately 129 shareholders of record at May 9, 2006. During the
      last two fiscal years, no cash dividends have been declared on our common stock
      and management does not anticipate that dividends will be paid in the
      foreseeable future.








**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





*The
      following discussion contains forward-looking statements that are subject to
      significant risks and uncertainties. There are several important factors that
      could cause actual results to differ materially from historical results and
      percentages and results anticipated by the forward-looking statements. The
      Company has sought to identify the most significant risks to its business,
      but
      cannot predict whether or to what extent any of such risks may be realized
      nor
      can there be any assurance that the Company has identified all possible risks
      that might arise. Investors should carefully consider all of such risks before
      making an investment decision with respect to the Company's
      stock.*





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Overview





The
      Company is considered a development stage company that had been in the business
      of developing full-size racecar simulator games. Since our inception, we have
      devoted our resources primarily to fund our product development. The Company
      has sustained operating losses since inception, and has a deficit in stockholders’
equity. Our ability to continue in existence is dependent on a plan to develop
      additional sources of capital and/or achieve profitable operations. Management’s
      plan is to pursue the development of the pharmaceutical business it acquired
      on
      March 31, 2006.








Plan
      of
      Operation





The
      Company has the rights to the Extreme Games' technology. Xtreme Games is a
      NASCAR simulator comprised of a full-size NASCAR racecar body. The Company
      was
      unable to successfully and profitably develop its acquired technology and in
      the
      fall of 2004, terminated its employees, except for its President, abandoned
      its
      leased premises, and moved its limited corporate activities of the Company
      to
      Omaha, Nebraska.





On
      October 12, 2005, the Company entered into a merger agreement with ULURU Inc.,
      a
      Delaware corporation (“ULURU Delaware”) and Uluru Acquisition Corp., the
      Company’s wholly-owned Delaware subsidiary formed on September 29, 2005. Under
      the terms of the agreement, Uluru Delaware would acquire the net assets of
      the
      topical component of Access Pharmaceutical, Inc., and Uluru Acquisition Corp.
      would merge with and into ULURU Delaware under Section 368 (a) (1) (A) of the
      Internal Revenue Code.





As
      a
      result of the merger, the Company would acquire all of the issued and
      outstanding shares of ULURU Delaware under a stock exchange transaction, and
      ULURU Delaware would become a wholly-owned subsidiary of the Company. However,
      for financial accounting and reporting purposes, ULURU Delaware would be the
      accounting acquirer and would be consolidated with its legal parent, similar
      to
      the accounting treatment given in a recapitalization. For accounting
      presentation purposes only, the Company’s net assets would be acquired by ULURU
      Delaware at fair value as of the date of the stock exchange transaction, and
      the
      financial reporting thereafter would not be that of a development stage
      enterprise, since ULURU Delaware had substantial earned revenues from planned
      operations. On March 31, 2006, the Company changed its name to ULURU Inc.





DISCUSSION
      AND ANALYSIS OF FINANCIAL CONDITION





The
      Company has incurred annual operating losses since its inception related
      primarily to general administration costs. During the year ended December 31,
      2005, the Company posted a loss of $782,213, compared to a net loss of $892,245
      for the year ended December 31, 2004.





General
      & Administrative Expenses





General
      and administrative expenses increased by $23,039 to $383,181 during the year
      ended December 31, 2005, compared to $360,142 for the year ended December 31,
      2004. The 2005 expenses are comprised primarily of Executive compensation of
      $169,209, legal fees of $125,872, accounting fees of $32,563, payroll tax
      penalties of $9,664, and Directors compensation of $7,552. Expenses in this
      category were largely incurred during a period when the Company was not
      conducting any further research and development activities since it had
      abandoned its Arizona operations, and was focused on acquiring a business with
      the potential of sustaining the Company through profitable operations.
      Accordingly, it incurred substantial legal fees and deferred financing costs
      during 2005, in connection with arranging for new financing to facilitate the
      subsequent stock exchange transaction with ULURU Delaware.





Bad
      Debt
      Expense





There
      was
      no bad debt expense in 2005.





Gain
      on
      settlement of Debt





As
      a
      result of a settlement with an accounts payable vendor on a discounted basis,
      the Company had a net gain of $17,255.





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Beneficial
      conversion feature





As
      a
      condition of the Cornell Debenture, during 2005 the noteholder elected to
      convert 442,332 shares of stock (176,933,037 shares prior to the 400 to 1 stock
      split on March 31, 2006) with a conversion cost to the Company of $41,684.
      Moreover, under the terms of the 2004 SEDA, during 2005 there were 20,490 shares
      of stock (8,195,804 shares prior to the 400 to 1 stock split on March 31, 2006)
      sold with a conversion cost to the Company of $3,431.





Research
      & Development Expenses





The
      net
      reduction in research and development costs of $1,554 resulted from the
      cancellation of a prior year obligation. There were no research and development
      activities conducted in 2005.





Post
      Judgment costs on lease abandonment





On
      January 31, 2005, a Default Judgment for $57,144 was filed against the Company.
      The judgment was for the benefit of TGR Properties, LLC, for damages incurred
      as
      a result of the premature termination of the operating lease of the facilities
      in Mesa, Arizona. Costs incurred in 2005 were $100,449, which included post
      judgment legal fees, interest and collection costs.





Amortization
      of financing costs





In
      connection with the debt financing with Prenox of $10,000,000 and Highgate
      of
      $3,000,000 on October 12, 2005, the Company incurred total loan costs in 2005
      of
      $1,320,000 which are being amortized ratably over the two year term of the
      notes
      payable. For 2005, the amortization of all loan costs was $208,096 including
      $144,658 for the Prenox/Highgate debt and the remainder for the debt retired
      in
      October 2005.





Liquidity
      and Capital Resources





Since
      inception, the Company has financed its operations from privately arranged
      financing. The current liquidity of the Company is $10,621,266 (current assets
      less current liabilities) although substantially all current assets consist
      of a
      note receivable due October 12, 2006 from ULURU Delaware.





As
      of
      December 31, 2005, a significant portion of the Company’s liquidity was
      comprised of an interest receivable from Uluru, Inc. of $237,778, which was
      based on an interest rate of 10% per annum and a Note Payable from Uluru
      Delaware of $10,700,000 (the “Uluru Debenture”). Pursuant to the terms of the
      Uluru Debenture, Uluru Delaware was obligated to remit interest only payments
      monthly until the expiration of the twenty four (24) month loan
      term.





On
      January 9, 2006 Uluru remitted $230,556 in payment of their interest obligation
      which included payments due as of November 12 and December 12, 2005.





Financing





On
      October 12, 2005, the Company issued a $10,000,000 secured convertible debenture
      to Prenox, LLC and a $3,000,000 secured convertible debenture (together, the
      "Debentures") to Highgate House Funds, Ltd. as well as warrants to purchase
      up
      to 5,000,000 shares of the Company for a period of five years with an exercise
      price of $0.01 (the “Warrants”). The Company used the majority of the proceeds
      from the Debentures to extend a loan, described below, to Uluru Delaware. The
      shares underlying the Warrants shall be included on a registration statement,
      described below, to be filed by the Company with the Securities and Exchange
      Commission. In exchange for the purchase of the Debentures, the Company granted
      Highgate and Prenox a security interest in all of its assets, including any
      assets the Company acquires while the Debentures are outstanding, and has agreed
      to issue shares of common stock in an amount equal to five times the gross
      proceeds of the Debentures to be held in escrow in the event of a default under
      the Debentures (the "Escrow Shares"). The sale of the Debentures and the
      Warrants was made under Section 4(2) of the Securities Act of 1933 (the
“Act”).





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The
      Debentures have a term of two years from the date of issuance and bear an
      interest rate of ten percent per annum, compounded monthly. The Company may
      redeem the Debentures at any time prior to their maturity at a price equal
      to
      120% of the face amount redeemed plus any accrued interest. Highgate and Prenox
      may at their option convert all or some of the Debentures plus any accrued
      and
      unpaid interest into shares of the Company's common stock at the price of $1.50
      per share.





On
      October 12, 2005, the Company entered into a Bridge Loan and Control Share
      and
      Pledge Security Agreement, (the "Bridge Loan Agreement") with Uluru Delaware
      and
      its President. Pursuant to the Bridge Loan Agreement, the Company loaned Uluru
      $10,700,000 in exchange for the Uluru Debenture. In addition to granting the
      Uluru Debenture, Uluru granted a security interest in its assets to the Company
      and the President pledged Uluru shares representing 54.5% of Uluru’s capital
      stock to Oxford. To entice Highgate and Prenox to enter into the Securities
      Purchase Agreement, Oxford assigned the Security Interest and the Pledged Shares
      to Prenox and Highgate pursuant to a Collateral Assignment Agreement entered
      into between Oxford, Highgate and Prenox.





In
      connection with the Debentures, the Company incurred total loan costs of
      $1,320,000 which are being amortized ratably over the two year term of the
      notes
      payable. As of December 31, 2005, amortization of all loan costs was $208,096
      including $144,658 for this debt and the debt retired as further described
      in
      Note 8 of the Notes to consolidated financial statements.





On
      October 12, 2005, the Company entered into a new Standby Equity Distribution
      Agreement ("SEDA") with Cornell Capital Partners, LP. Under the SEDA, Cornell
      committed to purchase over the course of two years from the date of the
      effectiveness of a registration statement described below of up to $30,000,000
      of the Registrant's common stock in increments of up to $1,000,000 (each such
      increment, an "Advance"). The purchase price for this common stock shall be
      97%
      of the lowest daily volume weighted average price of the common stock during
      the
      five consecutive trading days after notice is given requesting an
      Advance.





The
      Company shall file a registration statement with the Securities and Exchange
      Commission to register the resale of its common stock issued to Cornell pursuant
      to the SEDA. The registration statement shall also include the shares of common
      stock underlying the Warrants and the Escrow Shares. The Company shall
      continuously maintain the effectiveness of the registration statement for a
      period of twenty four (24) months after its effective date.





The
      Company agreed to issue at the time of the completion of the recapitalization
      and merger with Uluru, Inc.993,200 shares of its common stock as a commitment
      fee. These shares were issued in April 2006 at a value of
      $1,787,760.





The
      majority of the loan proceeds Uluru Delaware received from the Company were
      applied towards the purchase of the net assets of the topical component of
      Access Pharmaceuticals, Inc. pursuant to the merger agreement of October 2005.
      The balance of the purchase price was paid with a promissory note by Uluru
      Delaware.








-
          24
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          of Contents*










**ITEM
      7. FINANCIAL STATEMENTS**








**ULURU
                INC.****CONSOLIDATED
                FINANCIAL STATEMENTS****DECEMBER
                31, 2005****TABLE
                OF CONTENTS**PAGEREPORT
                OF INDEPENDENT
                REGISTEREDPUBLIC
                ACCOUNTING FIRM
            26CONSOLIDATED
                BALANCE SHEET
            27CONSOLIDATED
                STATEMENTS OF
                OPERATIONS
            28CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS'
                EQUITY
            29CONSOLIDATED
                STATEMENTS OF CASH FLOWS
            30NOTES
                TO FINANCIAL STATEMENTS
            31








-
          25
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          of Contents*










**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
      FIRM**











To
      the
      Board of Directors and Stockholders


ULURU
      INC.


Omaha,
      Nebraska





We
      have
      audited the accompanying consolidated balance sheet of ULURU INC. (formerly
      Oxford Ventures, Inc., a Nevada corporation in the development stage) as of
      December 31, 2005, and the related consolidated statements of operations,
      stockholders’ equity (deficit), and cash flows for each of the years in the two
      year period then ended, and for the period from September 17, 1987 through
      December 31, 2005. These consolidated financial statements are the
      responsibility of the Company’s management. Our responsibility is to express an
      opinion on these consolidated financial statements based on our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the
      consolidated financial statements are free of material misstatement. The Company
      has determined that it is not required to have, nor were we engaged to perform,
      an audit of its internal control over financial reporting. Our audit included
      consideration of internal control over financial reporting as a basis for
      designing audit procedures that are appropriate in the circumstances, but not
      for the purpose of expressing an opinion on the effectiveness of the Company’s
      internal control over financial reporting. Accordingly, we express no such
      opinion. An audit also includes examining, on a test basis, evidence
      supporting the amounts and disclosures in the consolidated financial statements,
      assessing the accounting principles used and significant estimates made by
      management, as well as evaluating the overall financial statement
      presentation.  We believe that our audit provides a reasonable basis for
      our opinion.








In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of ULURU INC. as of December
      31, 2005, and the results of its operations and its cash flows for each of
      the
      years in the two year period then ended, and for the period from September
      17,
      1987 through December 31, 2005, in conformity with accounting principles
      generally accepted in the United States of America.





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern. As discussed in Note 1 to the financial statements,
      the Company was in the development stage as of December 31, 2005, has incurred
      significant losses since inception, and has a deficit in stockholders’ equity.
      Its ability to continue as a going concern is dependent upon its ability to
      develop additional sources of capital, and/or achieve profitable operations.
      These conditions raise substantial doubt about its ability to continue as a
      going concern. The financial statements do not include any adjustments that
      might result from the outcome of this uncertainty.











/s/
      Braverman International, P.C.


Braverman
      International, P.C.


Prescott,
      Arizona


May
      2,
      2006








-
          26
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          of Contents*







**ULURU
                INC.****(
                a Development Stage Enterprise)****CONSOLIDATED
                BALANCE SHEET****As
                of December 31, 2005**All
                assets are pledged as collateral under notes payable**ASSETS****Current
                Assets**Cash
                in escrow account
            
            $
            262,887Accounts
                receivable - related party
            
            
            7,820Accrued
                interest receivable - related party
            
            
            237,777Note
                receivable - related party
            
            
            10,700,000Prepaid
                expenses
            
            
            11,548Total
                Current Assets
            
            
            11,220,032**Other
                Assets**Deferred
                financing costs, net
            
            
            1,175,342Total
                Other Assets
            
            
            1,175,342**TOTAL
                ASSETS**
            
            $
            12,395,374**LIABILITIES
                AND STOCKHOLDERS’ EQUITY (DEFICIT)****Current
                Liabilities**Accounts
                payable
            
            $
            313,626Accrued
                interest
            
            
            283,656Shareholder
                advances
            
            
            1,484Total
                Current Liabilities
            
            
            598,766**Long-Term
                Debt**Notes
                Payable
            
            
            13,000,025TOTAL
                LIABILITIES
            
            
            13,598,791**Stockholders’
                Equity (Deficit)**Common
                Stock, par value $.001 per share200,000,000
                shares authorized, 851,011 issued and outstanding
            
            
            851Paid-in
                Capital
            
            
            632,075Contributed
                Capital
            
            
            70,947(Deficit)
                accumulated during the development stage
            
            
            (1,907,290
            )TOTAL
                STOCKHOLDERS’ EQUITY (DEFICIT)
            
            
            (1,203,417
            )**TOTAL
                LIABILITIES & EQUITY**
            
            $
            12,395,374The
                accompanying notes are an integral part of these consolidated
                statements.





-
          27
          -
 *Table
          of Contents*







**ULURU
                INC.****(
                a Development Stage Enterprise)****CONSOLIDATED
                STATEMENTS OF OPERATIONS**Cumulative
                fromFOR
                THE YEARS ENDED
            
            September
                17, 1987DECEMBER
                31,
            
            (inception)
                to2005
            
            
            2004
            
            
            December
                31, 2005**TOTAL
                REVENUES**
            
            $
            -
            
            $
            -
            
            $
            -**COSTS
                & EXPENSES**General
                & Administrative
            
            
            383,181
            
            
            360,142
            
            
            870,867Bad
                Debts (including $262,002 to a related party)
            
            
            -
            
            
            281,002
            
            
            281,002Gain
                on settlement of debt
            
            
            (17,255
            )
            
            -
            
            
            (17,255
            )Beneficial
                conversion feature
            
            
            45,115
            
            
            -
            
            
            45,115Research
                & Development
            
            
            (1,554
            )
            
            209,505
            
            
            278,933Loss
                on abandonment of assets
            
            
            -
            
            
            2,307
            
            
            2,307Loss
                on value of equipment held for sale
            
            
            -
            
            
            9,684
            
            
            9,684Post
                judgment costs on lease abandonment
            
            
            100,449
            
            
            -
            
            
            100,449Equity
                in (loss) of unconsolidated subsidiary
            
            
            -
            
            
            -
            
            
            34,301Depreciation
            
            
            -
            
            
            2,090
            
            
            2,090Amortization
                of financing costs
            
            
            208,096
            
            
            14,063
            
            
            222,159Total
                Costs and Expenses
            
            
            718,032
            
            
            878,793
            
            
            1,829,652**OPERATING
                (LOSS)**
            
            
            (718,032
            )
            
            (878,793
            )
            
            (1,829,652
            )Other
                Income / (Expense) :Interest
                Income
            
            
            237,778
            
            
            6,202
            
            
            243,980Interest
                Expense
            
            
            (301,958
            )
            
            (19,655
            )
            
            (321,618
            )**NET
                INCOME / (LOSS)**
            
            $
            (782,213
            )
            $
            (892,245
            )
            $
            (1,907,290
            )Basic
                and diluted Net (Loss) per common share
            
            $
            (0.92
            )
            $
            (2.35
            )WEIGHTED
                AVERAGE NUMBER OF COMMONSHARES
                OUTSTANDING
            
            
            851,011
            
            
            378,898The
                accompanying notes are an integral part of these consolidated
                statements.





-
          28
          -
 *Table
          of Contents*







**ULURU
                INC.****(A
                DEVELOPMENT STAGE ENTERPRISE)****CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS' EQUITY****(Deficit)****Accumulated****Stock**
            
            
            **During
                the****Common
                Stock**
            
            **Paid-in**
            
            
            **Contributed**
            
            
            **Subscriptions**
            
            
            **Development****Shares**
              **Issued**
            
            
            **Amount**
            
            
            **Capital**
            
            
            **Capital**
            
            
            **Receivable**
            
            
            **Stage**
            
            
            **Total****Balance,
                at inception**
            
            
            
            
            $
            
            
            $
            
            
            $
            
            
            $
            
            
            $
            
            
            $Net
                (loss) for the year**Balance,
                December 31, 1987**
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                (loss) for the year**Balance,
                December 31, 1988**
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                (loss) for the year**Balance,
                December 31, 1989**
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                (loss) for the year**Balance,
                December 31, 1990**
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                (loss) for the year**Balance,
                December 31, 1991**
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Net
                (loss) for the year**Balance,
                December 31, 1992**
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -Stock
                issued for services at par January 5, April 22, and October
                22
            
            
            3
            
            
            0
            
            
            1
            
            
            
            
            
            
            
            
            
            
            
            1Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (1
            )
            
            (1
            )**Balance,
                December 31, 1993**
            
            
            3
            
            $
            0
            
            $
            1
            
            
            -
            
            
            -
            
            $
            (1
            )
            $
            -Stock
                issued for services at par, January 13, July 5
            
            
            1
            
            
            0
            
            
            (0
            )
            
            
            
            
            
            
            
            
            
            
            -Net
                (loss) for the year**Balance,
                December 31, 1994**
            
            
            4
            
            $
            0
            
            $
            1
            
            
            -
            
            
            -
            
            $
            (1
            )
            $
            -Net
                (loss) for the year**Balance,
                December 31, 1995**
            
            
            4
            
            
            0
            
            
            1
            
            
            -
            
            
            -
            
            
            (1
            )
            
            -Net
                (loss) for the year**Balance,
                December 31, 1996**
            
            
            4
            
            $
            0
            
            $
            4
            
            
            -
            
            
            -
            
            $
            (1
            )
            $
            -Stock
                issued for services @$4,398.00 per share June 27 and July
                31
            
            
            7
            
            
            0
            
            
            30,786
            
            
            
            
            
            
            
            
            
            
            
            30,786Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (30,786
            )
            
            (30,786
            )**Balance,
                December 31, 1997**
            
            
            12
            
            $
            0
            
            $
            30,787
            
            $
            -
            
            
            -
            
            $
            (30,787
            )
            $
            -Stock
                issued in a private placement @ $18.41 per share in August 1998,
                net of
                offering costs of $5,700
            
            
            826
            
            
            1
            
            
            9,509
            
            
            
            
            
            
            
            
            
            
            
            9,510Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (9,510
            )
            
            (9,510
            )**Balance,
                December 31, 1998**
            
            
            838
            
            $
            1
            
            $
            40,296
            
            $
            -
            
            
            -
            
            $
            (40,297
            )
            $
            -Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (12,050
            )
            
            (12,050
            )**Balance,
                December 31, 1999**
            
            
            838
            
            $
            1
            
            $
            40,296
            
            $
            -
            
            
            -
            
            $
            (52,347
            )
            $
            (12,050
            )Stock
                issued at $61.42 per share, October 12, 2000
            
            
            777
            
            
            1
            
            
            47,723
            
            
            
            
            
            
            
            
            
            
            
            47,724Contributed
                capital
            
            
            
            
            
            
            
            
            
            
            
            3,700
            
            
            
            
            
            
            
            
            3,700Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (45,751
            )
            
            (45,751
            )**Balance,
                December 31, 2000**
            
            
            1,614
            
            $
            2
            
            $
            88,019
            
            $
            3,700
            
            
            -
            
            $
            (98,098
            )
            $
            (6,377
            )Stock
                issued November 15, 2001 to acquire subsidiary company
            
            
            82
            
            
            0
            
            
            500
            
            
            
            
            
            
            
            
            
            
            
            500Stock
                issued for services at $59.52 per share on November 15,
                2001
            
            
            42
            
            
            0
            
            
            2,500
            
            
            
            
            
            
            
            
            
            
            
            2,500Contributed
                capital
            
            
            
            
            
            
            
            
            
            
            
            4,950
            
            
            
            
            
            
            
            
            4,950Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (9,828
            )
            
            (9,828
            )**Balance,
                December 31, 2001**
            
            
            1,738
            
            $
            2
            
            $
            91,019
            
            $
            8,650
            
            
            -
            
            $
            (107,926
            )
            $
            (8,255
            )Conversion
                of subordinated convertible debentures on February 8, 2002, at $.31
                per
                share
            
            
            48,750
            
            
            49
            
            
            14,951
            
            
            
            
            
            
            
            
            
            
            
            15,000Stock
                issued for services at $.62 per share on March 4, 2002
            
            
            11,375
            
            
            11
            
            
            6,989
            
            
            
            
            
            
            
            
            
            
            
            7,000Contributed
                capital
            
            
            
            
            
            
            
            
            
            
            
            1,200
            
            
            
            
            
            
            
            
            1,200Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (22,348
            )
            
            (22,348
            )**Balance,
                December 31, 2002**
            
            
            61,863
            
            $
            62
            
            $
            112,959
            
            $
            9,850
            
            
            -
            
            $
            (130,274
            )
            $
            (7,403
            )Stock
                subscriptions @ $12.31 per share on October 31, 2003
            
            
            19,500
            
            
            20
            
            
            239,981
            
            
            
            
            
            (132,185
            )
            
            
            
            
            107,815Acquisition
                of assets @ zero on December 2, 2003
            
            
            288,439
            
            
            288
            
            
            (288
            )
            
            
            
            
            
            
            
            
            
            
            -Contributed
                capital
            
            
            
            
            
            
            
            
            
            
            
            1,100
            
            
            
            
            
            
            
            
            1,100Net
                (loss) for the year-restated
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (102,558
            )
            
            (102,558
            )**Balance,
                December 31, 2003**
            
            
            369,802
            
            $
            370
            
            $
            352,651
            
            $
            10,950
            
            $
            (132,185
            )
            $
            (232,832
            )
            $
            (1,046
            )Collection
                of stock subscriptions
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            132,185
            
            
            
            
            
            132,185Proceeds
                from stock issuance at $137.93 per share net of offering costs of
                $1,000
                on March 23, 2004
            
            
            250
            
            
            0
            
            
            39,500
            
            
            
            
            
            
            
            
            
            
            
            39,500and
                on March 29, 2004
            
            
            375
            
            
            0
            
            
            59,500
            
            
            
            
            
            
            
            
            
            
            
            59,500Stock
                issued for services at $19.72 per share on May 18, 2004
            
            
            17,749
            
            
            18
            
            
            349,982
            
            
            
            
            
            
            
            
            
            
            
            350,000Stock
                offering costs
            
            
            
            
            
            
            
            
            (350,000
            )
            
            
            
            
            
            
            
            
            
            
            (350,000
            )Contributed
                capital
            
            
            
            
            
            
            
            
            
            
            
            59,997
            
            
            
            
            
            
            
            
            59,997Stock
                offering costs
            
            
            
            
            
            
            
            
            (98,722
            )
            
            
            
            
            
            
            
            
            
            
            (98,722
            )Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (892,245
            )
            
            (892,245
            )**Balance,
                December 31, 2004**
            
            
            388,176
            
            $
            388
            
            $
            352,911
            
            $
            70,947
            
            $
            -
            
            $
            (1,125,077
            )
            $
            (700,831
            )Conversion
                of subordinated convertible debentures on February 11, 2005, at $1.52
                per
                share
            
            
            6,580
            
            
            7
            
            
            9,993
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on March 2, 2005, at $3.16
                per
                share
            
            
            3,166
            
            
            3
            
            
            9,997
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on March 8, 2005, at $1.88
                per
                share
            
            
            5,320
            
            
            5
            
            
            9,995
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on March 21, 2005, at $1.60
                per
                share
            
            
            6,250
            
            
            6
            
            
            9,994
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on March 23, 2005, at $1.60
                per
                share
            
            
            6,250
            
            
            6
            
            
            9,994
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on March 31, 2005, at $1.40
                per
                share
            
            
            7,144
            
            
            7
            
            
            9,993
            
            
            
            
            
            
            
            
            
            
            
            10,000Beneficial
                conversion feature for first quarter
            
            
            
            
            
            
            
            
            15,025
            
            
            
            
            
            
            
            
            
            
            
            15,025Stock
                Equity Distribution Agreement draw on April 1, 2005, at $2.08 per
                share
            
            
            4,809
            
            
            5
            
            
            9,995
            
            
            
            
            
            
            
            
            
            
            
            10,000Stock
                Equity Distribution Agreement draw on April 2, 2005, at $1.76 per
                share
            
            
            5,683
            
            
            6
            
            
            9,994
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on April 8, 2005, at $1.20
                per
                share
            
            
            8,334
            
            
            8
            
            
            9,992
            
            
            
            
            
            
            
            
            
            
            
            10,000Stock
                Equity Distribution Agreement draw on April 26, 2005, at $1.00 per
                share
            
            
            10,000
            
            
            10
            
            
            9,990
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on April 27, 2005, at $.77
                per
                share
            
            
            19,532
            
            
            20
            
            
            14,980
            
            
            
            
            
            
            
            
            
            
            
            15,000Conversion
                of subordinated convertible debentures on May 10, 2005, at $.48 per
                share
            
            
            20,834
            
            
            21
            
            
            9,979
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on May 17, 2005, at $.32 per
                share
            
            
            31,250
            
            
            31
            
            
            9,969
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on May 18, 2005, at $.32 per
                share
            
            
            31,250
            
            
            31
            
            
            9,969
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on June 7, 2005, at $.19 per
                share
            
            
            52,084
            
            
            52
            
            
            9,948
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on June 17, 2005, at $.26
                per
                share
            
            
            39,064
            
            
            39
            
            
            9,961
            
            
            
            
            
            
            
            
            
            
            
            10,000Beneficial
                conversion feature for second quarter
            
            
            
            
            
            
            
            
            22,713
            
            
            
            
            
            
            
            
            
            
            
            22,713Conversion
                of subordinated convertible debentures on July 14, 2005, at $.12
                per
                share
            
            
            83,334
            
            
            83
            
            
            9,917
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on September 1, 2005, at $.16
                per
                share
            
            
            62,500
            
            
            63
            
            
            9,938
            
            
            
            
            
            
            
            
            
            
            
            10,000Conversion
                of subordinated convertible debentures on September 8, 2005, at $.16
                per
                share
            
            
            59,450
            
            
            59
            
            
            9,453
            
            
            
            
            
            
            
            
            
            
            
            9,512Beneficial
                conversion feature for third quarter
            
            
            
            
            
            
            
            
            7,378
            
            
            
            
            
            
            
            
            
            
            
            7,378Forgiveness
                of Liquidating Damages in Stock offering costs
            
            
            
            
            
            
            
            
            40,000
            
            
            
            
            
            
            
            
            
            
            
            40,000Net
                (loss) for the year
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (782,213
            )
            
            (782,213
            )**Balance,
                December 31, 2005**
            
            
            851,011
            
            $
            851
            
            $
            632,075
            
            $
            70,947
            
            $
            -
            
            $
            (1,907,290
            )
            $
            (1,203,416
            )The
                accompanying notes are an integral part of these consolidated
                statements.








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**ULURU
                INC.****(
                a Development Stage Enterprise)****CONSOLIDATED
                STATEMENTS OF CASH FLOWS**Cumulative
                fromFOR
                THE YEARS ENDED
            
            September
                17, 1987DECEMBER
                31,
            
            (inception)
                to2005
            
            
            2004
            
            
            December
                31, 2005**Operating
                Activities :**Net
                (loss) from operations
            
            $
            (782,213
            )
            $
            (892,245
            )
            $
            (1,907,290
            )**Adjustments
                to reconcile net (loss) to****net
                cash used by operating activities :**Gain
                on settlement of debt
            
            
            (17,255
            )
            
            -
            
            
            (17,255
            )Contributed
                capital
            
            
            -
            
            
            59,997
            
            
            70,947Impairment
                loss provided by stock issuance
            
            
            -
            
            
            -
            
            
            500Loss
                on value of equipment held for sale
            
            
            -
            
            
            9,684
            
            
            9,684Stock
                issued for services
            
            
            -
            
            
            -
            
            
            40,287Beneficial
                conversion feature
            
            
            45,116
            
            
            -
            
            
            45,116Amortization
                of deferred financing costs
            
            
            208,096
            
            
            14,063
            
            
            222,159Depreciation
                and amortization
            
            
            -
            
            
            2,090
            
            
            2,090**Change
                in operating assets and liabilities:**Prepaid
                expenses
            
            
            -
            
            
            (11,548
            )
            
            (11,548
            )Accounts
                receivable - related party
            
            
            (7,820
            )
            
            -
            
            
            (7,820
            )Deferred
                charge
            
            
            -
            
            
            12,228
            
            
            -Accounts
                payable
            
            
            136,776
            
            
            194,105
            
            
            330,881Accrued
                interest receivable
            
            
            (237,777
            )
            
            -
            
            
            (237,777
            )Accrued
                liabilities
            
            
            206,458
            
            
            112,195
            
            
            323,653Total
                Adjustments
            
            
            333,594
            
            
            392,814
            
            
            770,917Net
                Cash (Used) by Operating Activities
            
            
            (448,619
            )
            
            (499,431
            )
            
            (1,136,373
            )**Investing
                Activities :**Increase
                in note receivable
            
            
            (10,700,000
            )
            
            -
            
            
            (10,700,000
            )Investment
                in fixed assets
            
            
            -
            
            
            (11,774
            )
            
            (11,774
            )Increase
                (decrease) in deposits
            
            
            10,700
            
            
            (100
            )
            
            -Net
                Cash (Used) by Investing Activities
            
            
            (10,689,300
            )
            
            (11,874
            )
            
            (10,711,774
            )**Financing
                Activities :**Proceeds
                from subordinated convertible debentures
            
            
            11,770,025
            
            
            332,500
            
            
            12,117,525Repayment
                of subordinated convertible debentures
            
            
            (335,488
            )
            
            -
            
            
            (335,488
            )Proceeds
                from standby equity agreement
            
            
            30,000
            
            
            -
            
            
            30,000Proceeds
                from common stock, net
            
            
            -
            
            
            132,463
            
            
            297,512Shareholder
                advances
            
            
            (63,742
            )
            
            45,481
            
            
            1,484Net
                Cash from Financing Activities
            
            
            11,400,796
            
            
            510,443
            
            
            12,111,033**Net
                Increase in Cash**
            
            
            262,877
            
            
            (862
            )
            
            262,887CASH,
                beginning of period
            
            
            10
            
            
            872
            
            
            -CASH,
                end of period
            
            $
            262,887
            
            $
            10
            
            $
            262,887**SUPPLEMENTAL
                SCHEDULE OF NONCASH INVESTING AND****FINANCING
                ACTIVITIES**Stock
                issued for loan reductions
            
            
            
            
            
            
            
            $
            34,745Exercise
                of convertible debt to stock
            
            $
            164,512
            
            
            
            
            $
            64,512Stock
                issued for offering costs
            
            
            
            
            
            
            
            $
            350,000Elimination
                of offering costs previously incurred
            
            $
            (40,000
            )
            $
            40,000*OTHER
                SUPPLEMENTAL INFORMATION*Interest
                paid
            
            $
            31,438
            
            
            
            
            $
            34,918The
                accompanying notes are an integral part of these
                consolidated statements.





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**ULURU
      INC.**


**(A
      Development Stage Enterprise)**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**








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





History





ULURU
      Inc. (ULURU, Oxford 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 as of December 31, 2005. It is a Nevada corporation,
      formed on September 17, 1987. From inception through March 31, 2006, it has
      had
      no substantial earned revenues from any planned operations. Its year end is
      December 31.





In
      December 2003, the Company acquired technology in process of development in
      the
      entertainment industry from several persons in exchange for cash which was
      provided through equity financing, and a majority interest in the Company.
      During 2004 the Company obtained additional financing, entered into a standby
      equity distribution agreement, and completed a registration statement on Form
      SB-2 on December 14, 2004. Because of a misdirected effort in pursuing the
      development of its acquired technology followed by the inability to obtain
      additional financing, the Company was unable to finish development of its
      acquired technology and in the fall of 2004, terminated its employees, except
      for its president, abandoned its leased premises, and moved its limited
      corporate activities to the home of the president of the Company in Omaha,
      Nebraska. The Company was considered to be insolvent as of December 31, 2004.





On
      October 12, 2005, the Company entered into a merger agreement with ULURU Inc.,
      a
      Delaware corporation (“ULURU Delaware”) and Uluru Acquisition Corp., a
      wholly-owned Delaware subsidiary of the Company formed by the Company on
      September 29, 2005. Under the terms of the agreement, Uluru Acquisition Corp.
      would merge into ULURU Delaware, after ULURU Delaware acquired the net assets
      of
      the topical component of Access Pharmaceutical, Inc., a reporting company,
      under
      Section 368 (a) (1) (A) of the Internal Revenue Code, “ a statutory merger or
      consolidation”. There were no transactions of Uluru Acquisition Corp. for the
      period from its inception through December 31, 2005.





As
      a
      result of the merger, the Company would acquire all of the issued and
      outstanding shares of ULURU Delaware under a stock exchange transaction, and
      ULURU Delaware would become a wholly-owned subsidiary of the Company, its legal
      parent. However, for financial accounting and reporting purposes, ULURU Delaware
      would be the accounting acquirer and would be consolidated with its legal
      parent, similar to the accounting treatment given in a recapitalization. For
      accounting presentation purposes only, the Company’s net assets would be
      acquired by ULURU Delaware at fair value as of the date of the stock exchange
      transaction, and the financial reporting thereafter would not be that of a
      development stage enterprise, since ULURU Delaware had substantial earned
      revenues from planned operations. On March 31, 2006 the Company changed its
      name
      to ULURU Inc., and the merger finalized.





Reclassifications





Certain
      reclassifications have been made to the prior year’s consolidated statement of
      cash flows to conform to the current year presentation.





Going
      Concern





The
      Company’s consolidated financial statements have been presented on the basis
      that it is a going concern, which contemplates the realization of assets and
      the
      satisfaction of liabilities in the normal course of business. It has sustained
      operating losses since inception and has a deficit in stockholders’ equity. The
      Company’s ability to continue in existence is dependent on its ability to
      develop additional sources of capital and/or achieve profitable operations.
      Management’s plan is to pursue the pharmaceutical business it acquired on March
      31, 2006. The accompanying consolidated financial statements do not include
      any
      adjustments that might result from the outcome of this uncertainty.





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Income
      Taxes





The
      Company uses the liability method of accounting for income taxes pursuant to
      Statement of Financial Accounting Standards Board Opinion 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.





For
      income tax purposes, the majority of expenses incurred through December 2,
      2003,
      were deferred as start up costs as the Company did not commence its business
      activities until then.





Loss
      per
      Common Share





Basic
      loss per common share has been calculated based upon the weighted average number
      of common shares outstanding during the period in accordance with the Statement
      of Financial Accounting Standards Statement No. 128, “Earnings per Share” after
      giving effect to all stock splits including the 400 for 1 reverse stock split
      approved by the Company on March 29, 2006. All shares issued during 2005 were
      considered issued at nominal value, and accordingly have been considered as
      outstanding for the entire year.





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.





Research
      and Development





Research
      and Development (R&D) costs after date of acquisition of the technology the
      Company acquired in 2003 were being expensed as R&D when incurred until
      technological feasibility is established. R&D is a separate component of
      operating expense. Technological feasibility is established upon completion
      of a
      working model, which is typically demonstrated after initial beta testing is
      completed. Software and hardware development costs incurred subsequent to the
      time a product’s technological feasibility has been established, through the
      time the product is available for general release to customers, are capitalized,
      if material. The Company decided during the last quarter of 2004 to suspend
      its
      entire operations including the R&D efforts previously undertaken. During
      2005, the net reduction in R&D costs of $1,554 resulted from the excess of
      costs reversed in 2005 due to settlement of vendor payables over costs incurred
      in 2005.








**NOTE
      2.**  **RELATED
      PARTY TRANSACTIONS**





Shareholder
      Advances





As
      of
      December 31, 2005, the president of the Company advanced a total of $76,484
      of
      which $75,000 was borrowed from an individual who also loaned the Company
      $50,000 during 2005, without interest or collateral. This individual was paid
      back the total of $125,000 on October 12, 2005. The balance of $1,484 remained
      unpaid at December 31, 2005. On November 3, 2005 the company paid a major
      shareholder $18,283 for amounts he had advanced on behalf of the Company during
      2004 and 2005.





Rev’s
      Sports Grille





During
      2004, the Company advanced a total of $255,800 to Rev’s@ 101, LLC, an Arizona
      Limited Liability Company owned by the brother-in-law (a major shareholder
      of
      the Company) and sister of the President of the Company, for the purpose of
      constructing leasehold improvements in a sports grille to enable the Company
      to
      eventually install, beta test and utilize, for revenue generating purposes,
      its
      technology prior to commercial production. The Company concluded in early 2004
      that it would not invest further or acquire the facility, and converted its
      investment to a promissory note receivable from the LLC. The note was not
      collateralized and included interest of $6,202 commencing April 6, 2004 at
      5%
      per annum to be paid monthly starting in 2006, with all unpaid interest and
      principal due March 2009.





As
      of
      December 31, 2004, the Company determined that the note and all accrued interest
      was uncollectible due to the subsequent loss on the disposition of the sports
      grille, and wrote off the note and accrued interest as a bad debt totaling
      $262,002. The Company had insufficient capital to further the completion of
      its
      technology, and therefore abandoned its entire operations in Mesa, Arizona.





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**NOTE
      3.**  **STOCKHOLDERS’
      EQUITY**





Reverse
      Stock Split





On
      March
      29, 2006, the Company amended its articles of incorporation to provide for
      the
      approval by the Shareholders and Board of Directors of a 400 for 1 reverse
      stock
      split, a decrease in the authorized shares of common stock to 200 million from
      400 million, and the authorization of up to 20,000 shares of Preferred stock,
      par value $.001 per share. Accordingly, all shares referred to in the
      accompanying consolidated financial statements and included in these Notes
      give
      retroactive effect to this authorization.








**NOTE
      4.**  **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. Deferred tax assets
      as
      of December 31, 2005, of approximately $787,659 were reduced to zero, after
      considering the valuation allowance of $787,659, since there is no assurance
      of
      future taxable income. The Company has net operating loss carryovers for income
      tax purposes of $2,225,177 as of December 31, 2005, which begin expiring in
      2022, $34,248, 2023, $539,416, 2024, $850,802, and 2025, $800,711. The following
      is an analysis of deferred tax assets as of December 31, 2005:





Deferred
            
            ValuationTax
                Assets
            
            
            Allowance
            
            
            BalanceDeferred
                tax assets at December 31, 2004
            
            $
            515,418
            
            $
            (
                515,418
            )
            $
            -0-Additions
                for the year
            
            $
            272,242
            
            $
            (
                272,242
            )
            $
            -0-Deferred
                tax assets at December 31, 2005
            
            $
            787,659
            
            $
            (
                787,659
            )
            $
            -0-





The
      following is reconciliation from the expected statutory federal income tax
      rate
      to the Company’s actual income tax rate for the year ended December
      31:






2005
              
              2004Expected
                  income tax (benefit) at federal statutory tax rate -34%
              
              $
              (
                  265,952
              )
              $
              (
                  303,363
              )Permanent
                  differences
              
              
              36
              
              
              20,416Amortization
                  of deferred start up costs
              
              
              (6,326
              )
              
              (6,326
              )Valuation
                  allowance
              
              $
              272,242
              
              $
              289,273Income
                  tax expense
              
              $
              -
                  0 -
              
              $
              -
                  0 -








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





Stock-Based
      Compensation





As
      permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the Company
      has elected to follow Accounting Principles Board Opinion (“APB”) No. 25,
      Accounting for Stock Issued to Employees, and related interpretations in
      accounting for its stock-based compensation to employees. Under APB No. 25,
      when
      the exercise price of the Company’s employee stock options is equal to or
      greater than the fair value of the underlying stock on the date of grant, no
      compensation expense is recognized.





In
      December 2004, the FASB issued SFAS 123R, Share Based Payments. SFAS 123R is
      applicable to transactions in which an entity exchanges its equity instruments
      for goods and services. It focuses primarily on transactions in which an entity
      obtains employee services in share-based payment transactions. SFAS No. 123R
      supersedes the intrinsic value method prescribed by APB No. 25, requiring that
      the fair value of such equity instruments be recorded as an expense as services
      are performed. Prior to SFAS 123R, only certain pro forma disclosures of
      accounting for these transactions at fair value were required. SFAS 123R will
      be
      effective for the first quarter 2006 consolidated financial statements, and
      permits varying transition methods including retroactive adjustment of prior
      periods or prospective application beginning in 2006. The Company will adopt
      SFAS 123R using the modified prospective method effective January 1, 2006.
      Under
      this transition method the Company will begin recording stock option expense
      prospectively, starting in first quarter 2006.





For
      stock
      based compensation to non-employees, the Company is required to follow SFAS
      No.
      123, which requires that stock awards granted to directors, consultants and
      other non-employees be recorded at the fair value of the award
      granted.





**NOTE
      6.**  **ACCOUNTS
      PAYABLE**





Substantially
      all of the recorded accounts payable of the Company are past due as of December
      31, 2005, on the basis of their normal payment terms. As a result, some
      previously outstanding obligations were adjusted in settlement for a net of
      $17,255, which amount was included in the account caption, Gain on Settlement
      of
      Debt, in the accompanying consolidated statement of operations for the year
      2005.





Included
      in accounts payable at December 31, 2005, is unpaid payroll taxes and penalties
      of $106,298 relating to the compensation of the President of the Company. No
      payroll reports were filed during 2005 in connection with his compensation
      totaling approximately $212,000.





**NOTE
      7.**  **COMMITMENTS
      AND CONTINGENCIES**





Liquidating
      Damages





As
      of
      December 31, 2004, the Company incurred and recorded a liability of $40,000
      in
      connection with the failure to have its registration statement on Form SB-2
      become effective as required within the terms of the financing arranged for
      on
      May 18, 2004. These fees were forgiven in October 2005, and included as an
      increase in paid-in-capital in the consolidated statement of stockholder’s
      equity, as they had been included as an offering cost when previously incurred.





Legal
      Proceedings





On
      June
      29, 2004, a complaint was filed against the Company in the County Court, Denver
      County, Colorado. The complaint alleges that the Company used a telephone
      facsimile machine, computer or other device to send unsolicited advertisements
      to the facsimile machine of Cache Valley Electric without having obtained the
      prior express permission or invitation to do so. The plaintiff in the action
      seeks recovery of up to $15,000. The Company filed an answer to the complaint
      on
      July 29, 2004, and does not believe that the complaint has merit. No further
      action has been taken by either party as of December 31, 2005.





On
      January 31, 2005, a Default Judgment for $57,144 was filed against the Company
      in the Superior Court of Maricopa County, Arizona. The judgment was for the
      benefit of TGR Properties, LLC, for damages that have been incurred as a result
      of the premature termination of the operating lease of the facilities in Mesa,
      Arizona. As of April 28, 2006, the balance due on this judgment is $122,406,
      which includes post judgment legal fees, interest and collection costs, and
      was
      included for this amount in accounts payable as of December 31, 2005.





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**NOTE
      8.**  **DEBT
      FINANCING AND DEFERRED FINANCING COSTS**





The
      Company had issued a 5%, $500,000 convertible debenture to a private equity
      fund
      on May 18, 2004, and received all of the net proceeds thereof by January 2005.
      Pursuant to the terms of the convertible debenture, the equity fund converted
      $164,512 of the principal amount into 442,342 shares of the Company’s common
      stock, an average of $.37 per share. The principal balance of the debenture
      of
      $335,488 and accrued interest of $31,436 were paid off in October 2005, at
      the
      time the Company entered into a financing arrangement in connection with the
      merger agreement as further described in other Notes to consolidated financial
      statements herein. The $43,459 remaining of deferred financing costs was written
      off in connection with the elimination of this debenture.








**NOTE
      9.**  **STANDBY
      EQUITY DISTRIBUTION AGREEMENT (SEDA)**





On
      May
      18, 2004, the aforementioned private equity fund committed to purchase up to
      10
      million dollars of common stock over the course of 24 months after an effective
      registration statement of the Company’s common stock. The Standby Equity
      Distribution Agreement (SEDA) provided for a purchase price of the common stock
      at 95% of the market price. The Company issued a restricted stock certificate
      for 17,241 common shares valued at $340,000, as compensation for the SEDA.
      It
      also issued in May 2004, a restricted stock certificate to a registered
      broker-dealer for 507 shares valued at $10,000 in connection with their advice
      concerning the SEDA. The restrictions on the total 17,748 shares were removed
      when the Company’s registration statement became effective in December 2004. The
      entire $350,000 of compensation was classified as stock offering costs as of
      May
      18, 2004.





In
      January 2005, the Company tendered certificates to an escrow account for 169,499
      shares of its common stock to be held for purchase by the equity fund’s
      investors. As of the date the SEDA terminated in October 2005, 20,492 shares
      were sold from the escrowed shares held by the equity fund at an average price
      of $1.46, and the 149,007 balance of the unsold shares was returned to the
      Company.








**NOTE
      10.**  **DEBT
      AND EQUITY FINANCING**





Notes
      Payable and Receivable





On
      October 12, 2005, the Company entered in a Securities Purchase Agreement to
      issue secured convertible debentures to Highgate House Funds, Ltd. and Prenox,
      LLC in an amount of up to $15,000,000 and to issue Highgate and Prenox warrants
      for up to 5 million shares (post-split) of the Company’s common stock for a
      period of five years with an exercise price of $.01(post-split).





Also
      on
      October 12, 2005, the Company issued a $10,000,000 secured convertible debenture
      to Prenox and a $3,000,000 secured convertible debenture (together, the
      "Debentures") to Highgate as well as the Warrants. The Company has used the
      majority of the proceeds from the Debentures to extend a loan, described below,
      to Uluru Inc. The shares underlying the Warrants shall be included on a
      registration statement, described below, to be filed by the Company with the
      Securities and Exchange Commission. In exchange for the purchase of the
      Debentures, the Company granted Highgate and Prenox a security interest in
      all
      of its assets, including any assets the Company acquires while the Debentures
      are outstanding, and has agreed to issue shares of common stock in an amount
      equal to five times the gross proceeds of the Debentures to be held in escrow
      in
      the event of a default under the Debentures (the "Escrow Shares").





The
      Debentures have a term of two years from the date of issuance and bear an
      interest rate of ten percent per annum, compounded monthly. The Company may
      redeem the Debentures at any time prior to their maturity at a price equal
      to
      120% of the face amount redeemed plus any accrued interest. Highgate and Prenox
      may at their option convert all or some of the Debentures plus any accrued
      and
      unpaid interest into shares of the Company's common stock at the price of $1.50
      per share which is not considered to be a beneficial conversion
      feature.





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On
      October 12, 2005, the Company entered into a Bridge Loan and Control Share
      and
      Pledge Security Agreement, (the "Bridge Loan Agreement") with ULURU Delaware
      and
      its president. Pursuant to the Bridge Loan Agreement, the Company loaned ULURU
      Delaware $10,700,000 in exchange for a secured debenture. In addition to
      granting the ULURU Delaware Debenture, ULURU Delaware granted a security
      interest in its assets to the Company and the president pledged ULURU Delaware
      shares representing 54.5% of ULURU Delaware’s capital stock to Oxford. To entice
      Highgate and Prenox to enter into the Securities Purchase Agreement, Oxford
      assigned the Security Interest and the Pledged Shares to Prenox and Highgate
      pursuant to a Collateral Assignment Agreement entered into between Oxford,
      Highgate and Prenox.





Warrant
      Valuation





The
      fair
      value of the aforementioned 5 million warrants was nominal on the date of grant
      using the Black-Scholes-Merton option-pricing model, which uses the assumptions
      noted in the following table. These assumptions are based on various factors
      including the expected volatility of the Company’s stock price and expected
      future exercising patterns.





Exercise
                price
            $.01
                per shareDividend
                yield
            NilExpected
                volatility
            106%Risk
                free interest rate
            4.15%Expected
                life of options
            5
                yearsWeighted
                average grant date fair value
            $.0007





Deferred
      Financing Costs





In
      connection with the above debt financing, the Company incurred total loan costs
      of $1,320,000 which are being amortized ratably over the two year term of the
      notes payable. As of December 31, 2005, amortization of all loan costs was
      $208,096 including $144,658 for this debt and the debt retired as further
      described in Note 8 of the Notes to consolidated financial statements.





Standby
      Equity Distribution Agreement





On
      October 12, 2005, the Company entered into a new Standby Equity Distribution
      Agreement ("SEDA") with Cornell Capital Partners, LP (Cornell). Under the SEDA,
      Cornell committed to purchase over the course of two years from the date of
      the
      effectiveness of a registration statement described below up to $30,000,000
      of
      the Registrant's common stock in increments of up to $1,000,000 (each such
      increment, an "Advance"). The purchase price for this common stock shall be
      97%
      of the lowest daily volume weighted average price of the common stock during
      the
      five consecutive trading days after notice is given requesting an
      Advance.





Oxford
      shall file a registration statement with the Securities and Exchange Commission
      to register the resale of Oxford’s common stock issued to Cornell pursuant to
      the SEDA. The registration statement shall also include the shares of common
      stock underlying the Warrants and the Escrow Shares. Oxford shall continuously
      maintain the effectiveness of the registration statement for a period of twenty
      four (24) months after its effective date.





The
      Company has agreed to issue at the time of the completion of the
      recapitalization and merger with ULURU Delaware. 993,200 (post-split) shares
      of
      its common stock as a commitment fee.





Interest
      Receivable - Uluru Inc. (Delaware Corp.)





The
      Interest Receivable at December 31, 2005, from ULURU Delaware was $237,778,
      which was based on an interest rate of 10% per annum and a Note Payable balance
      of $10,700,000 during the period from October 12, 2005 through December 31,
      2005. Pursuant to the terms of the ULURU Delaware Debenture, ULURU Delaware
      is
      obligated to remit interest only payments monthly until the expiration of the
      loan term.





On
      January 9, 2006 ULURU Delaware remitted $230,556 in payment of their interest
      obligation to Oxford as of December 31, 2005, which included payments due as
      of
      November 12 and December 12, 2005. Although the Company incurred loan costs
      in
      connection with the funds it borrowed to facilitate the merger with ULURU
      Delaware, no loan fees were charged to ULURU Delaware for their loan to the
      Company, nor was interest charged to them on a compounded monthly basis, as
      provided for in the loans to the Company by Highgate and Prenox.





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Collectibility
      of the Uluru Note Receivable





The
      majority of the loan proceeds ULURU Delaware received from the Company were
      applied towards the purchase of the net assets of the topical component of
      Access Pharmaceuticals, Inc. pursuant to the merger agreement in October 2005.
      The balance of the purchase price was paid with a promissory note by ULURU
      Delaware. No goodwill was recognized in the allocation of the purchase price
      to
      the net assets acquired by ULURU Delaware. Accordingly, the Company did not
      consider it necessary to impair the collectibility of the note receivable from
      ULURU Delaware of $10,700,000 as of December 31, 2005.





**NOTE
      11.**  **ESCROW
      ACCOUNT**





An
      escrow
      account was established for the net proceeds obtained from the 13 million
      dollars of debt financing provided to the Company on October 12, 2005, most
      of
      which was used as a loan to ULURU Delaware. as further described above. As
      of
      December 31, 2005 there was $262,887 in the account.





**NOTE
      12.**  **SUBSEQUENT
      EVENTS**





Amendments
      to Articles of Incorporation





On
      March
      27, 2006 at a special meeting of Oxford shareholders, the shareholders approved
      and authorized amendments to the Articles of Incorporation.  As a result of
      this approval and authorization, Oxford has filed two Certificates of Amendment
      to their Articles of Incorporation.




On
      March
      29, 2006, Oxford 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, the Company’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, Oxford filed a Certificate of Amendment to the Articles of
      Incorporation in Nevada to change Oxford’s name from “Oxford Ventures, Inc.” to
“ULURU INC.”.





Merger





On
      March
      31, 2006, Oxford acquired, through Oxford’s wholly-owned subsidiary (Uluru
      Acquisition Corporation) a 100% ownership interest in ULURU Delaware through
      a
      merger of ULURU Delaware into Uluru Acquisition Corporation. Oxford acquired
      ULURU Delaware in exchange for 11,000,000 shares of Oxford’s common stock. All
      securities issued pursuant to the merger will be “restricted” stock and are
      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
      Oxford 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 shall represent 92.8% of the issued and
      outstanding shares of Oxford’s common stock. Under the terms of the Agreement
      and Plan of Merger and Reorganization executed on October 11, 2005, the current
      stockholders of Oxford will continue to own an aggregate of 7.2% of the issued
      and outstanding shares of Oxford’s common stock.


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At
      the
      effective time of the Merger, the members of the ULURU Delaware Board of
      Directors holding office immediately prior to the merger became Oxford’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, Oxford’s directors and officers immediately prior to the closing
      of the Merger resigned from all of their respective positions with
      Oxford.





Post
      merger, ULURU is a diversified pharmaceutical company engaged in the development
      of wound management, plastic surgery, and oral care products utilizing
      innovative and proprietary drug delivery platforms to improve the clinical
      outcome of patients and provide a pharmacoeconomic benefit. ULURU owns three
      patented and/or licensed drug delivery technologies from which three products
      have been approved for marketing in various global markets





As
      of
      March 31, 2006 ULURU had 10 full-time and 3 part-time employees. Of these
      employees, 8 are directly engaged in or directly support research and
      development activities of which 5 have advanced scientific degrees. 2 directly
      support commercial and business development activities and 3 are in
      administrative positions. ULURU has assumed the terms and conditions of three
      existing pre-merger employment agreements with management. ULURU’s employees are
      not represented by a labor union and are not covered by a collective bargaining
      agreement. ULURU compliments it’s 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.








2006
      Equity Incentive Plan




On
      March
      31, 2006, ULURU adopted the 2006 Equity Incentive Plan. Under the plan, up
      to
      2,000,000 shares of ULURU common stock may be delivered. Some awards under
      the
      plan may link future payments to the awardee to the future value of a specified
      number of shares of common stock. The number of shares used for reference
      purposes in connection with these awards will be considered "delivered" for
      purposes of computing the maximum number of shares that may be delivered under
      the plan. If an award under the plan terminates without the shares subject
      thereto being delivered, the shares subject to such award will thereafter be
      available for further awards under the plan. All directors, officers, employees
      and non-employee service providers of ULURU are eligible to participate in
      the
      plan.





Employment
      Agreements





The
      Company assumed, on March 31, 2006, three existing employment agreements
      (“Agreements”) between ULURU Delaware and certain key executives. The term of
      the agreement for the Chief Executive Officer is for three years with automatic
      annual renewal unless notice is provided by the Company. The other two
      agreements have an initial term of one year with automatic annual renewals
      unless notice is provided by the Company. The Agreements provide for
      compensation, incentives, and benefits that are commensurate with similar
      positions within the pharmaceutical industry.





Lease
      Obligation





On
      January 31, 2006 the ULURU Delaware entered into a lease agreement for office
      and laboratory space in Addison, Texas. The monthly lease obligation of
      $9,034.53 commenced on April 1, 2006 and continues for eighty four (84)
      months.





Calendar
                Years
            
            
            Future
                Lease Expense2006
            
            $
            81,3112007
            
            
            108,4142008
            
            
            108,4142009
            
            
            108,4142010
            
            
            108,4142011
                & Beyond
            
            
            243,934Total
            
            $
            758,901






Issuance
        of Common Stock for Commitment Fee





On
      April
      18, 2006, the Company issued a certificate for 993,200 shares of common stock
      in
      payment of the commitment fee referred to in Note 10 above, for a value of
      $1,787,760.




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**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE**





In
      connection with the audits of the most recent fiscal years and any interim
      period preceding resignation, no disagreements exist with any former accountant
      on any matter of accounting principles or procedure, which disagreements if
      not
      resolved to the satisfaction of the former accountant would have caused them
      to
      make reference in connection with their report to the subject matter of the
      disagreement(s).





The
      principal accountant's report on the financial statements for any of the past
      two years contained no adverse opinion or a disclaimer of opinion nor was
      qualified as to uncertainty, audit scope or accounting principles.





**ITEM
      8A. CONTROLS AND PROCEDURES**





Evaluation
      of Disclosure Controls





We
      evaluated the effectiveness of our disclosure controls and procedures as of
      the
      end of the 2005 fiscal year. This evaluation was conducted by our chief
      executive officer Mr. Kerry Gray.





Disclosure
      controls are controls and other procedures that are designed to ensure that
      information that we are required to disclose in the reports we file pursuant
      to
      the Securities Exchange Act of 1934 is recorded, processed, summarized and
      reported.





Limitations
      on the Effective of Controls





Our
      management does not expect that our disclosure controls or our internal controls
      over financial reporting will prevent all error and fraud. A control system,
      no
      matter how well conceived and operated, can provide only reasonable, but no
      absolute, assurance that the objectives of a control system are met. Further,
      any control system reflects limitations on resources, and the benefits of a
      control system must be considered relative to its costs. These limitations
      also
      include the realities that judgments in decision-making can be faulty and that
      breakdowns can occur because of simple error or mistake. Additionally, controls
      can be circumvented by the individual acts of some persons, by collusion of
      two
      or more people or by management override of a control. A design of a control
      system is also based upon certain assumptions about potential future conditions;
      over time, controls may become inadequate because of changes in conditions,
      or
      the degree of compliance with the policies or procedures may deteriorate.
      Because of the inherent limitations in a cost-effective control system,
      misstatements due to error or fraud may occur and may not be detected.





Conclusions





Based
      upon his evaluation of our controls, the chief executive officer has concluded
      that, subject to the limitations noted above, the disclosure controls are
      effective in providing reasonable assurance that material information relating
      to us is made known to management on a timely basis during the period when
      our
      reports are being prepared. There were no changes in our internal controls
      that
      occurred during the quarter covered by this report that have materially
      affected, or are reasonably likely to materially affect our internal
      controls.





**Part
      III**







**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE ACT**





The
      Directors and Executive Officers of the Company and their respective ages are
      as
      follows:





Name
            Age
            PositionKerry
                P. Gray (1)
            53
            CEO/DirectorWilliam
                W. Crouse (1)
            63
            Chairman,
                DirectorTerrance
                K. Wallberg (1)
            52
            Chief
                Financial OfficerW.
                Eric Bowditch (1)
            59
            Vice
                President Business Dev.Daniel
                G. Moro (1)
            59
            Vice
                President Polymer Drug DeliveryJohn
                V. St. John (1)
            35
            Vice
                President Material SciencesDavid
                E. Reese PhD. (1)
            34
            DirectorJeffrey
                B. Davis (1)
            42
            DirectorDaniel
                K. Leonard (2)
            45
            President,
                CEO, CFO, Director





(1)
            Assumed
                position as executive officer and/or director on March 31,
                2006.(2)
            Mr.
                Leonard resigned from his positions as President, CEO, CFO and Director
                of
                the Company on March 31, 2006.





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All
      directors hold office until the next annual meeting of stockholders and until
      their successors have been duly elected and qualified. There are no agreements
      with respect to the election of directors. The Company has not compensated
      its
      directors for service on the Board of Directors or any committee thereof. As
      of
      the date hereof, no director has accrued any expenses or compensation. Officers
      are appointed annually by the Board of Directors and each executive officer
      serves at the discretion of the Board of Directors. The Company does not have
      any standing committees at this time.





No
      director, Officer, affiliate or promoter of the Company has, within the past
      five years, filed any bankruptcy petition, been convicted in or been the subject
      of any pending criminal proceedings, or is any such person the subject or any
      order, judgment or decree involving the violation of any state or federal
      securities laws.





The
      following is a brief account of the business experience during the past five
      years of each director and executive officer of the Company, including principal
      occupations and employment during that period and the name and principal
      business of any corporation or other organization in which such occupation
      and
      employment were carried on.





**Kerry
      P. Gray** was the
      President and CEO of Access Pharmaceuticals and a director of Access
      Pharmaceuticals from January 1996 until May 2005. He served as President and
      CEO
      of Access Pharmaceuticals, Inc. Previously, Mr. Gray served as President and
      Chief Financial Officer of PharmaScience, Inc. a company he co-founded to
      acquire technologies in the drug delivery area. From May 1990 to August 1991,
      Mr. Gray was Senior Vice President, Americas, Australia and New Zealand for
      Rhone-Poulenc Rorer, Inc. Prior to the Rhone-Poulenc Rorer merger, he had been
      Area Vice President Americas of Rorer International Pharmaceuticals. From 1986
      to may 1988, he was Vice President, Finance of Rorer International
      Pharmaceuticals, having served the same capacity at Revlon Health Care Group
      of
      companies before the acquisition by Rorer Group. Between 1975 and 1985, he
      held
      various senior financial positions with the Revlon Health Care
      Group.





**William
      W. Crouse** is
      Managing Director and General Partner of HealthCare Ventures LLC, one of the
      world's largest biotech venture capital firms. Mr. Crouse was former Worldwide
      President of Ortho Diagnostic Systems and Vice President of Johnson &
Johnson International. He also served as Division Director of DuPont
      Pharmaceuticals and as President of Revlon Health Care Group's companies in
      Latin America, Canada and Asia/Pacific. Currently, Mr. Crouse serves as a
      Director of The Medicines Company, Imclone Systems and several private
      biotechnology companies. Mr. Crouse formerly served as a Director of
      BioTransplant, Inc., Dendreon Corporation, OraSure Technologies, Inc., Human
      Genome Sciences, Raritan Bancorp, Inc., Allelix Biopharmaceuticals, Inc. and
      several private biotechnology companies. Mr. Crouse currently serves as Trustee
      of Lehigh University and as Trustee of the New York Blood Center. Mr. Crouse
      is
      a graduate of Lehigh University (Finance and Economics) and Pace University
      (M.B.A.).




**Terrance
      K. Wallberg,** a
      Certified Public Accountant, possesses an extensive and diverse background
      with
      over 30 years of experience with entrepreneurial/start-up companies. Prior
      to
      joining ULURU Inc., Mr. Wallberg was Chief Financial officer (CFO) with Alliance
      Hospitality Management and previous to that was CFO for DCB Investments, Inc.,
      a
      Dallas, Texas based real estate holding company. During his five year tenure
      at
      DCB Investments, Mr. Wallberg acquired valuable experience with several
      successful start-up businesses and dealing with the external financial
      community. Prior to DCB Investments, Terry spent 22 years with Metro Hotels,
      Inc., serving in several finance/accounting capacities and culminating his
      tenure as Chief Financial Officer. Mr. Wallberg is a member of the American
      Society and the Texas Society of Certified Public Accountants and is a graduate
      of the University of Arkansas.




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**W.
      Eric Bowditch** is a
      senior international pharmaceutical executive with over 30 years experience
      in
      global business development, licensing, marketing and strategic planning. He
      served as President, IntaPro LLC, a company focused on corporate business
      development, licensing and partnering. Prior to this he was President & CEO,
      Strakan Life Sciences, Inc. between 1998 and 2002. Between 1996 and 1998, he
      was
      Vice President Business Development, Access Pharmaceuticals. From 1992 to 1996,
      he was Head of Worldwide Business Development, Ohmeda Pharmaceuticals before
      the
      acquisition by Baxter International. From 1984-1991, he was Worldwide Director,
      Business Development & Strategic Marketing, Rhone-Poulenc Rorer. W. Eric
      Bowditch has an MBA from the University London, Postgraduate Diploma in
      Marketing, London and Postgraduate Diploma in Management Studies,
      UK.




**Daniel
      G. Moro** was Vice
      President, Polymer Drug Delivery at Access Pharmaceuticals from September 2000
      until October 2005. He managed various drug delivery projects related to
      Hydrogel polymers. He invented and helped to commercialize the mucoadhesive
      erodible drug delivery technology (OraDiscTM) for the controlled administration
      of actives acquired by ULURU Inc. Previously, Mr. Moro served as Vice President,
      Operations for a Division of National Patent Development Corporation (NPDC)
      which developed the soft contact lens. Prior to his operational experience,
      Mr.
      Moro spent 20 years at the NPDC as a senior research scientist and invented
      and
      commercialized several technologies, including a hydrogel burn and wound
      dressing and a subcutaneous retrievable drug delivery implant to treat prostate
      cancer. This latter technology, a one year implant has recently been approved
      by
      the FDA and sold under the trademark Vantas. Mr. Moro has over twenty five
      years
      experience of pharmaceutical development and holds nine patents related to
      drug
      delivery applications, four of which have been commercialized.




**John
      V. St. John** was
      a
      Senior Scientist at Access Pharmaceuticals, Inc. from March 2000 until October
      2005. He served as team leader during the early identification of Access
      Pharmaceuticals’ oncology drug, AP5346. Dr. St. John served as team leader for
      the hydrogel team from January 2002 to October 2005 during the development
      of
      the Hydrogel Nanoparticle Aggregate Technology. He holds one patent. Dr. St.
      John has served as an adjunct faculty member in the Department of Biomedical
      Engineering at the University of Texas Southwestern Medical School while at
      Access Pharmaceuticals. Previously, Dr. St. John served as a Dreyfus Fellow
      and
      Assistant Professor in the Department of Chemistry of Southern Methodist
      University from August 1998 to March 2000. He has earned a graduate certificate
      in Marketing from the SMU Cox School of Business. Dr. St. John serves as the
      elected Chair of the Dallas Fort Worth American Chemical Society Section for
      2005 and is a current member in the American Chemical Society, the Materials
      Research Society, and the Controlled Release Society.




**Dr.
      David E. Reese** is a
      biotechnology consultant for both the healthcare and financial industries.
      The
      founder of Alexea Consulting, Dr. Reese has advised biotechnology companies
      on
      issues of strategic alliances and capital acquisition. As a sell-side analyst,
      Dr. Reese advises hedge funds on drug candidates, scientific due diligence
      and
      pipeline valuations. David’s most recent sell-side position was as Biotech
      Analyst for Saturn DKR Management where he built a 125 million dollar
      biotechnology portfolio. Dr. Reese obtained his Bachelors of Science in
      Microbiology from Arizona State University. He performed his Doctoral research
      at Vanderbilt University in the School of Medicine. David conducted research
      fellowships at the University of Texas Southwestern Medical Center, and Cornell
      University. Dr. Reese has numerous publications and has contributed to multiple
      academic reviews as well as a book chapter in a medical textbook. His specific
      research areas included diabetes, cardiovascular disease, congenital
      abnormalities and cancer **.**




**Jeffrey
      B. Davis** has
      extensive experience in investment banking, and corporate development and
      financing for development stage, life sciences companies. Jeff is currently
      President of SCO Financial Group LLC, and President and Financial Principal
      of
      SCO Securities LLC, SCO's NASD-member broker-dealer. Additionally, Jeff has
      served on many boards of directors for life sciences companies, and currently
      sits on the boards of Virium Pharmaceuticals, Inc., and Somanta Pharmaceuticals,
      Inc. Previously, Jeff served as a Chief Financial Officer of a publicly traded,
      NASDAQ-NM healthcare technology company. Prior to that, Jeff was Vice President,
      Corporate Finance, at Deutsche Bank AG and Deutsche Morgan Grenfell, both in
      the
      U.S. and Europe. Jeff also served in senior marketing and product management
      positions at AT&T Bell Laboratories, where he was also a member of the
      technical staff. Prior to that, Jeff was involved in marketing and product
      management at Philips Medical Systems North America. Jeff Davis has an M.B.A.
      from the Wharton School of Business, University of Pennsylvania, and a B.S.
      in
      Biomedical Engineering from the College of Engineering, Boston
      University.





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**Daniel
      K. Leonard** resigned
      as President, CEO and Director of our company on March 31, 2006. Mr. Leonard
      has
      a background in business management, practical applications of technology,
      marketing and sales. Most recently, from January to November 2003, he served
      as
      president and co-founder of e-Information Systems, LLC, of Elkhorn, Neb. -
      a
      data consolidation company. Leonard also has served as director of business
      development for Data Delivery Services, of Conroe, Tex from January 2002-03;
      as
      a vice president in charge of sales and marketing for Vital Processing Services,
      of Tempe, Arizona from September 1998 to January 2002, and assistant vice
      president of national sales for First National Bank, of Omaha, Neb. He also
      created and managed the bank card operations division for MCI
      Telecommunications, in Denver, CO., where he handled hiring, and budgeting,
      billing, auditing and contract execution for a $750 million portfolio. He
      studied at University of Nebraska, in Omaha from 1980-1983.





As
      our
      board of directors has only recently expanded from one member to four, we do
      not
      yet have an “audit committee” or an “audit committee financial expert” as such
      term is defied under the Exchange Act.





Section
      16(a) of the Securities Exchange Act of 1934, as amended (The "Exchange Act"),
      requires the Registrant's officers and directors, and persons who own more
      than
      10% of a registered class of the Registrant's equity securities, to file reports
      of ownership and changes in ownership of equity securities of the Registrant
      with the Securities and Exchange Commission and NASDAQ. Officers, directors
      and
      greater-than 10% shareholders are required by the Securities and Exchange
      Commission regulation to furnish the Registrant with copies of all Section
      16(a)
      that they file.





**ITEM
      10. EXECUTIVE COMPENSATION**





The
      Company has not had a bonus, profit sharing, or deferred compensation plan
      for
      the benefit of its employees, officers or directors. The Company has not paid
      any other salaries or other compensation above $100,000 to its officers,
      directors or employees since inception.





The
      Company's President, Daniel K. Leonard was paid $212,594.03 in the year ended
      December 31, 2005.





**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS**





The
      following table sets forth information regarding the beneficial ownership of
      our
      common stock as of December 31, 2005. The information in this table provides
      the
      ownership information for:





·each
                person known by us to be the beneficial owner of more than 5% of
                our
                common stock;·each
                of our directors;·each
                of our executive officers; and·our
                executive officers and directors as a
                group.





Beneficial
      ownership has been determined in accordance with the rules and regulations
      of
      the SEC and includes voting or investment power with respect to the shares.
      Unless otherwise indicated, the persons named in the table below have sole
      voting and investment power with respect to the number of shares indicated
      as
      beneficially owned by them.





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NAME
                OF BENEFICIAL OWNER
            TITLE
            BENEFICIALLYOWNED
                (1)
            
            COMMONSTOCK
                (1)Daniel
                K. Leonard
            President,
                CEO, CFO and principal accounting officer
            21,200,000
            (2)
            13.7%21724
                East Stanford CircleElkhorn,
                NE 68022Albert
                B. Plant
            
            26,000,000
            
            16.7%8436
                East Navarro CircleMesa,
                AZ 85208Erin
                C. Hicks
            
            31,230,768
            (3)
            20.1%11754
                E. Virginia Dr.Aurora,
                CO 80012Rosemarie
                Leonard
            
            26,069,232
            
            16.8%8255
                West Portobello Ave.Mesa,
                AZ 85212Cornell
                Capital Partners, L.P.101
                Hudson Street, Suite 3700Jersey
                City, NJ 07303All
                Directors and Executive Officers as a Group (5 persons)
            
            21,200,000
            (2)
            13.7%





(1)
                Applicable percentage ownership is based on 155,267,239 shares of
                common
                stock outstanding as of December 31, 2005, together with securities
                exercisable or convertible into shares of common stock within 60
                days of
                December 31, 2005 for each stockholder. Beneficial ownership is determined
                in accordance with the rules of the Securities and Exchange Commission
                and
                generally includes voting or investment power with respect to securities.
                Shares of common stock that are currently exercisable or exercisable
                within 60 days of November 12, 2004 are deemed to be beneficially
                owned by
                the person holding such securities for the purpose of computing the
                percentage of ownership of such person, but are not treated as outstanding
                for the purpose of computing the percentage ownership of any other
                person.(2)
                Represents 20,405,004 shares held by Daniel K. Leonard as Trustee
                for the
                benefit of his family and 794,996 shares owned by Mr. Leonard's two
                daughters.(3)
                Represents 26,230,768 shares held by Erin C. Hicks as Trustee for
                the
                benefit of her nieces and nephews and 5,000,000 shares owned by Ms.
                Hicks
                individually.








On
      March
      29, 2006, we enacted a 400:1 reverse stock split, and on March 31, 2006, we
      exchanged shares of our common stock for all of the outstanding shares of common
      stock of ULURU Inc., a Delaware corporation. As a result, on May 9, 2006, we
      had
      approximately 12,844,395 issued and outstanding shares of common stock. The
      following table shows as of May 9, 2006 the stockholdings of all of our
      directors and executive officers, principal stockholders who own beneficially
      more than five percent of our issued and outstanding common stock, and all
      of
      our directors and officers as a group after giving effect to the share exchange
      and the reverse stock split.




Title
              of
                Class
            Name
                of beneficial owner of shares
            Position
            Amount
                of shares beneficially held
              by
                owner
            Percentage
                of classCommon
            Kerry
                P. Gray (1)
            CEO
                / Director
            9,775,000
            76.1%Common
            Terrance
                K. Wallberg
            Chief
                Financial Officer
            208,000
            1.6%Common
            William
                W. Crouse
            Chairman
                of the Board
            50,000
            .4%Common
            Jeffrey
                B. Davis
            Director
            -
            -Common
            David
                E. Reese
            Director
            -
            -Total
            
            10,033,000
            78.1%





(1)
                Includes 1,500,000 shares held in trust for Michael J. Gray with
                Sally A.
                Gray as trustee and 1,500,000 shares held in trust for Lindsay K.
                Gray
                with Sally A. Gray as trustee.





**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**





During
      the first and second quarters of 2004, the Company loaned an aggregate of
      $255,800 to Rev's Sports Grille, located in Tempe, Arizona. $255,000 of this
      amount is evidenced by a promissory note, dated April 8, 2004. The note accrued
      simple interest at an annual rate of 5% and matures on March 8, 2009. The
      indebtedness represented by the note is secured by a non-recourse pledge of
      certain membership interests in Rev's Sports Grille by its owners. If Rev's
      Sports Grille (a) fails to pay any principal or interest when due, (b)
      institutes proceedings to have itself adjudged bankrupt or insolvent, or (c)
      becomes subject to an order adjudging it bankrupt or insolvent, then Rev's
      Sports Grille will be in default under the note. In any such event, we may
      at
      our option, by notice in writing to Rev's Sports Grille, declare the entire
      principal amount and any other sums due under the note, to be immediately due
      and payable. The remaining $800 loaned to Rev's Sports Grille is on a non
      interest bearing and unsecured basis, does not have any terms for repayment,
      and
      has not been documented by any sort of written agreement. Rev's Sports Grille
      is
      owned and operated by Albert B. Plant, the Company's former Vice President
      of
      Operations, Secretary and Treasurer, and Erin C. Hicks, who is a sister of
      Daniel K. Leonard, the Company's President, Chief Executive Officer, Chief
      Financial Officer and principal accounting officer. Mr. Plant is also married
      to
      Jane Plant, one of Mr. Leonard's sisters. The terms of this loan arrangement
      were not as favorable to the Company as could have been obtained from
      unaffiliated parties.





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As
      of
      December 31, 2004, the Company determined that the debt and accrued interest
      is
      uncollectible due to the subsequent loss on the disposition of the sports
      grille, and has written off the note and accrued interest as a bad debt in
      the
      accompanying financial statements totaling $281,002.





Al
      Plant,
      a major shareholder of the Company who, together with the sister of the
      Company's president, owned the LLC to which the funds above were loaned,
      provided unsecured, non-interest bearing loans for the benefit of the Company,
      from time to time during 2004. On October 12, 2005, he was paid $18,283 to
      settle the outstanding amount.





The
      president/CEO of the Company provided funds to the Company during 2005, which
      it
      used to pay $50,000 of shareholder advances owed to the Company's legal counsel.
      As a result of this payment, approximately $20,000 of legal fees owing as of
      December 31, 2005 were forgiven.





On
      October 12, 2005, we paid Daniel Leonard, our President, CEO, CFO and Director
      $50,000 as past compensation for his services.





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**ITEM
      13. EXHIBITS**





The
      exhibits listed below are required by Item 601 of Regulation S-K. Each
      management contract or compensatory plan or arrangement required to be filed
      as
      an exhibit to this Form 10-K has been identified.


Exhibit
              Number
            
            Description
                of Document3.1.1
            
            Articles
                of Incorporation dated September 17, 1987 (1)3.1.2
            
            Articles
                of Amendment dated December 17, 1990 (1)3.1.3
            
            Articles
                of Amendment dated April 16, 1993 (1)3.1.4
            
            Articles
                of Amendment dated August 19, 1999 (1)3.1.5
            
            Articles
                of Amendment dated March 13, 2000 (1)3.1.6
            
            Articles
                of Amendment dated January 30, 2002 (1)3.1.7
            
            Articles
                of Amendment dated March 29, 2006 (4)3.1.8
            
            Articles
                of Amendment dated March 31, 2006 (4)3.2
            
            Bylaws
                (1)10.1
            
            Securities
                Purchase Agreement between the Registrant, Highgate and Prenox, dated
                October 12, 2005 (2)10.2
            
            Security
                Agreement between the Registrant, Highgate and Prenox, dated October
                12,
                2005 (2)10.3
            
            Collateral
                Assignment between the Registrant, Highgate and Prenox, dated October
                12,
                2005 (2)10.4
            
            Guaranty
                Agreement between the Registrant, Highgate and Prenox, dated October
                12,
                2005 (2)10.5
            
            Guarantor
                Security Agreement between the Merger Corp., Highgate and Prenox,
                dated
                October 12, 2005 (2)10.6
            
            Escrow
                Agreement between the Registrant, Highgate, Prenox and Gottbetter
&
                Partners, LLP ("Gottbetter"), dated October 12, 2005
                (2)10.7
            
            Escrow
                Shares Escrow Agreement between the Registrant, Highgate, Prenox
                and
                Gottbetter, dated October 12, 2005 (2)10.8
            
            Investor
                Registration Rights Agreement between the Registrant, Highgate and
                Prenox,
                dated October 12, 2005 (2)10.9
            
            OXFV
                Convertible Debenture for $3,000,000 issued by the Registrant and
                Highgate, dated October 12, 2005 (2)10.10
            
            OXFV
                Convertible Debenture for $10,000,000 issued by the Registrant and
                Prenox,
                dated October 12, 2005 (2)10.11
            
            Warrant
                issued by the Registrant to Highgate, dated October 12, 2005
                (2)10.12
            
            Warrant
                issued by the Registrant to Prenox, dated October 12, 2005
                (2)10.13
            
            Bridge
                Loan and Control Share Pledge and Security Agreement between ULURU
                Delaware, the Registrant and Mr. Gray, dated October 12, 2005
                (2)10.14
            
            Security
                Agreement between ULURU Delaware, the Registrant and Mr. Gray, dated
                October 12, 2005 (2)10.15
            
            Pledge
                and Escrow Agreement between the Registrant, ULURU Delaware, Mr.
                Gray, and
                Gottbetter, dated October 12, 2005 (2)10.16
            
            Convertible
                Debenture for $10,700,000 issued by ULURU Delaware to the Registrant,
                dated October 12, 2005 (2)10.17
            
            Merger
                Agreement between the Registrant, Merger Corp., and ULURU Delaware,
                dated
                October 12, 2005 (2)10.18
            
            Indemnification
                Escrow Agreement between the Registrant, Mr. Gray and the Escrow
                Agent,
                dated October 12, 2005 (2)10.19
            
            Standby
                Equity Distribution Agreement between the Registrant and Cornell,
                dated
                October 12, 2005 (2)10.20
            
            SEDA
                Registration Rights Agreement between the Registrant and Cornell,
                dated
                October 12, 2005 (2)10.21
            
            Placement
                Agent Agreement between the Registrant, Cornell and Newbridge Securities
                Corp., dated October 12, 2005 (2)10.22
            
            Asset
                Sale Agreement between ULURU Delaware and Access Pharmaceuticals,
                dated
                October 12, 2005 (4)10.23
            
            Patent
                Assignment Agreement between ULURU Delaware and Access Pharmaceuticals,
                dated October 12, 2005 (4)10.24
            
            License
                Agreement between ULURU Delaware and Access Pharmaceuticals, dated
                October
                12, 2005 (4)10.25
            
            Lease
                Agreement between ULURU and Addison Park Ltd, dated January 31, 2006
                (4)10.26
            
            License
                Agreement with Strakan Ltd., dated August 14, 1998 (4)10.27
            
            License
                and Supply Agreement with Discus Dental, dated April 15, 2005
                (4)10.28
            
            Amendment
                to License and Supply Agreement with Discus Dental, dated November
                18,
                2005 (4)10.29
            
            Employment
                Agreement with Kerry P. Gray, dated January 1, 2006 (4)10.30
            
            Employment
                Agreement with Terrance K. Wallberg, dated January 1, 2006
                (4)10.31
            
            Employment
                Agreement with Daniel G. Moro, dated January 1, 2006
                (4)10.32
            
            Secured
                Convertible Debenture with Cornell Capital Partners, L.P., date June
                9,
                2004 (5)10.33
            
            Standby
                Equity Distribution Agreement, dated May 18, 2004, with Cornell Capital
                Partners, L.P. (5)10.33
            
            Security
                Agreement, Dated May 18, 2004, with Cornell Capital Partners, L.P.
                (5)19
            
            Notice
                to Security Holders, dated February 27, 2006 (3)31.1
            
            Certification
                Pursuant to Rule 13a-14 and 15d-14 under
                the Securities Exchange Act of 1934, as Amended31.2
            
            Certification
                Pursuant to Rule 13a-14 and 15d-14 under
                the Securities Exchange Act of 1934, as Amended32.1
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as
                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                200232.2
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as
                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002----------(1)
            
            Incorporated
                by reference to the Company’s registration statement on Form 10-SB filed
                on March 8, 2002.(2)
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K filed on October
                18, 2005.(3)
            
            Incorporated
                by reference to the Company’s Definitive Schedule 14C filed on March 1,
                2006.(4)
            
            Incorporated
                by reference to the Company’s Form 8-K filed on March 31,
                2006(5)
            
            Incorporated
                by reference to the Company’s registration statement on SB-2 filed on June
                9, 2004.




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          of Contents*







ITEM
      14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES





The
      aggregate fees billed for audit services for the year ended December 31, 2004
      was $30,028 in Audit Related Fees. The aggregate fees billed for audit services
      for the year ended December 31, 2005 was $23,000 in Audit Related Fees. The
      Company was not billed for any assurance or related services, tax fees or any
      other fees during these periods.





Our
      Board's policy is to pre-approve all audit and permissible non-audit services
      performed by the independent accountants. These services may include audit
      services, audit-related services, tax services and other services. Under our
      Board's policy, pre-approval is generally provided for particular services
      or
      categories of services, including planned services, project based services
      and
      routine consultations. In addition, the Board may also pre-approve particular
      services on a case-by-case basis. Our Board approved all services that our
      independent accountants provided to us in the past two fiscal years.





**SIGNATURES**Pursuant
                to the requirements of Section 13 or 15(d) 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 authorizedULURU
                INC.Date: May
                15, 2006
            By
            /s/ Kerry
                P. GrayChief
                Executive Officer














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





Date:
                May 11, 2006
            /s/
                William W. CrouseWilliam
                W. Crouse, DirectorDate:
                May 11, 2006
            /s/
                David E. ReeseDavid
                E. Reese, DirectorDate:
                May 12, 2006
            /s/
                Jeffrey B. DavisJeffrey
                B. Davis, Director








-
          46
          -
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          of Contents*








Exhibit
              Number
            
            Description
                of Document3.1.1
            
            Articles
                of Incorporation dated September 17, 1987 (1)3.1.2
            
            Articles
                of Amendment dated December 17, 1990 (1)3.1.3
            
            Articles
                of Amendment dated April 16, 1993 (1)3.1.4
            
            Articles
                of Amendment dated August 19, 1999 (1)3.1.5
            
            Articles
                of Amendment dated March 13, 2000 (1)3.1.6
            
            Articles
                of Amendment dated January 30, 2002 (1)3.1.7
            
            Articles
                of Amendment dated March 29, 2006 (4)3.1.8
            
            Articles
                of Amendment dated March 31, 2006 (4)3.2
            
            Bylaws
                (1)10.1
            
            Securities
                Purchase Agreement between the Registrant, Highgate and Prenox, dated
                October 12, 2005 (2)10.2
            
            Security
                Agreement between the Registrant, Highgate and Prenox, dated October
                12,
                2005 (2)10.3
            
            Collateral
                Assignment between the Registrant, Highgate and Prenox, dated October
                12,
                2005 (2)10.4
            
            Guaranty
                Agreement between the Registrant, Highgate and Prenox, dated October
                12,
                2005 (2)10.5
            
            Guarantor
                Security Agreement between the Merger Corp., Highgate and Prenox,
                dated
                October 12, 2005 (2)10.6
            
            Escrow
                Agreement between the Registrant, Highgate, Prenox and Gottbetter
&
                Partners, LLP ("Gottbetter"), dated October 12, 2005
                (2)10.7
            
            Escrow
                Shares Escrow Agreement between the Registrant, Highgate, Prenox
                and
                Gottbetter, dated October 12, 2005 (2)10.8
            
            Investor
                Registration Rights Agreement between the Registrant, Highgate and
                Prenox,
                dated October 12, 2005 (2)10.9
            
            OXFV
                Convertible Debenture for $3,000,000 issued by the Registrant and
                Highgate, dated October 12, 2005 (2)10.10
            
            OXFV
                Convertible Debenture for $10,000,000 issued by the Registrant and
                Prenox,
                dated October 12, 2005 (2)10.11
            
            Warrant
                issued by the Registrant to Highgate, dated October 12, 2005
                (2)10.12
            
            Warrant
                issued by the Registrant to Prenox, dated October 12, 2005
                (2)10.13
            
            Bridge
                Loan and Control Share Pledge and Security Agreement between ULURU
                Delaware, the Registrant and Mr. Gray, dated October 12, 2005
                (2)10.14
            
            Security
                Agreement between ULURU Delaware, the Registrant and Mr. Gray, dated
                October 12, 2005 (2)10.15
            
            Pledge
                and Escrow Agreement between the Registrant, ULURU Delaware, Mr.
                Gray, and
                Gottbetter, dated October 12, 2005 (2)10.16
            
            Convertible
                Debenture for $10,700,000 issued by ULURU Delaware to the Registrant,
                dated October 12, 2005 (2)10.17
            
            Merger
                Agreement between the Registrant, Merger Corp., and ULURU Delaware,
                dated
                October 12, 2005 (2)10.18
            
            Indemnification
                Escrow Agreement between the Registrant, Mr. Gray and the Escrow
                Agent,
                dated October 12, 2005 (2)10.19
            
            Standby
                Equity Distribution Agreement between the Registrant and Cornell,
                dated
                October 12, 2005 (2)10.20
            
            SEDA
                Registration Rights Agreement between the Registrant and Cornell,
                dated
                October 12, 2005 (2)10.21
            
            Placement
                Agent Agreement between the Registrant, Cornell and Newbridge Securities
                Corp., dated October 12, 2005 (2)10.22
            
            Asset
                Sale Agreement between ULURU Delaware and Access Pharmaceuticals,
                dated
                October 12, 2005 (4)10.23
            
            Patent
                Assignment Agreement between ULURU Delaware and Access Pharmaceuticals,
                dated October 12, 2005 (4)10.24
            
            License
                Agreement between ULURU Delaware and Access Pharmaceuticals, dated
                October
                12, 2005 (4)10.25
            
            Lease
                Agreement between ULURU and Addison Park Ltd, dated January 31, 2006
                (4)10.26
            
            License
                Agreement with Strakan Ltd., dated August 14, 1998 (4)10.27
            
            License
                and Supply Agreement with Discus Dental, dated April 15, 2005
                (4)10.28
            
            Amendment
                to License and Supply Agreement with Discus Dental, dated November
                18,
                2005 (4)10.29
            
            Employment
                Agreement with Kerry P. Gray, dated January 1, 2006 (4)10.30
            
            Employment
                Agreement with Terrance K. Wallberg, dated January 1, 2006
                (4)10.31
            
            Employment
                Agreement with Daniel G. Moro, dated January 1, 2006
                (4)10.32
            
            Secured
                Convertible Debenture with Cornell Capital Partners, L.P., date June
                9,
                2004 (5)10.33
            
            Standby
                Equity Distribution Agreement, dated May 18, 2004, with Cornell Capital
                Partners, L.P. (5)10.33
            
            Security
                Agreement, Dated May 18, 2004, with Cornell Capital Partners, L.P.
                (5)19
            
            Notice
                to Security Holders, dated February 27, 2006 (3)31.1
            
            Certification
                Pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange
                Act of
                1934, as Amended31.2
            
            Certification
                Pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange
                Act of
                1934, as Amended32.1
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 200232.2
            
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002----------(1)
            
            Incorporated
                by reference to the Company’s registration statement on Form 10-SB filed
                on March 8, 2002.(2)
            
            Incorporated
                by reference to the Company’s Current Report on Form 8-K filed on October
                18, 2005.(3)
            
            Incorporated
                by reference to the Company’s Definitive Schedule 14C filed on March 1,
                2006.(4)
            
            Incorporated
                by reference to the Company’s Form 8-K filed on March 31,
                2006(5)
            
            Incorporated
                by reference to the Company’s registration statement on SB-2 filed on June
                9, 2004.