UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-KSB/A





|                                                               |                                                                                   
|-------------------------------------------------------------- | ----------------------------------------------------------------------------------
|x                                                              | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|                                                               |                                                                                   
|For the fiscal year ended: December 31, 2007                  
|                                                               |                                                                                   
|                                                               | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                               |                                                                                   
|For the transition period from: _____________ to _____________







Stellar Pharmaceuticals Inc.

(Name of small business issuer in its charter)







|                             |              |                    
|---------------------------- | ------------ | -------------------
|Ontario, Canada              | 0-31198      | Not Applicable     
|(State or Other Jurisdiction | (Commission  | (I.R.S. Employer   
|of Incorporation)            | File Number) | Identification No.)

544 Egerton Street, London, Ontario, Canada, N5W 3Z8

(Address of Principal Executive Office) (Zip Code)

(519) 434-1540

(Registrants telephone number, including area code)

N/A

(Former name or former address, if changed since last report)



|                                                            |                  |                                          
|----------------------------------------------------------- | ---------------- | -----------------------------------------
|Securities registered pursuant to Section 12(b) of the Act:
|                                                            |                  |                                          
|Title of each class                                         |                  | Name of each exchange on which registered
|Not Applicable                                              |                  | Not Applicable                           
|                                                            |                  |                                          
|Securities registered pursuant to Section 12(g) of the Act:
|                                                            |                  |                                          
|Common Shares                                              
|                                                            | (Title of Class) |                                          



|                                                                                                                                                                                                                                                        |   |     |  |   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --- |  | --
|Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and
|(2) has been subject to such filing requirements for the past 90 days.                                                                                                                                                                                  | x | Yes |  | No
|                                                                                                                                                                                                                                                       
|Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements       
|incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.                                                                                                                                                         | x |    
|                                                                                                                                                                                                                                                       



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



---







|                                                                                                                                                                                                                                                                                                            |  |     |   |    | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- | - | -- | 
|                                                                                                                                                                                                                                                                                                            | 
|State issuers revenue for its most recent fiscal year. $2,247,265 (Cdn.)                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                           
|As of March 30, 2008, the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity, as of such date, was $4,599,564(Cdn.).

As of March 30, 2008, 23,822,540 Common Shares were outstanding.
|                                                                                                                                                                                                                                                                                                           
|Transitional Small Business Disclosure Format (Check one):                                                                                                                                                                                                                                                  |  | Yes | x | No









---





EXPLANATORY NOTE

This amendment No. 1 on Form 10-KSB/A is being filed to amend the disclosure under Item 8 Evaluation of Disclosure Controls and Procedures of Part II of the Companys annual report on Form 10-KSB for the fiscal year ended December 31, 2007 filed on April 2, 2008.  The Form 10-KSB filed did not include managements assessment of internal control over financial reporting and its conclusion that our financial reporting was ineffective as of December 31, 2007.  The Company received a comment letter from the SEC Staff alerting us to this error and we are filing this Form 10-KSB to include managements report on its internal control over financial reporting.  This Form 10-KSB/A also revives our conclusions regarding the effectiveness of our disclosure controls and procedures as a result of this omission.  As a result of our failure to include a statement of the internal controls over financial reporting in our Form 10-KSB, the Company has concluded that our disclosure controls and procedures were ineffective as of December 31, 2007.  We have improved our disclosure controls and procedures to ensure that periodic and current reports comply with requirements of the then applicable Form and rules and regulations under the Securities Exchange Act of 1934, as amended.

Except as set forth above, this Form 10-KSB/A does not modify, amend or update in any way any other items or disclosure in the Form 10-KSB.  This Form 10-KSB continues to speak as of the date of the original Form 10-KSB and other than as specifically reflected in the Form 10-KSB does not reflect events occurring after the filing of the original Form 10-KSB.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and reported to senior management, including the Companys Chief Executive Officer and Chief Financial Officer, on a timely basis so that appropriate decisions can be made regarding public disclosure.

As at the end of 2007, management of the Company, with the participation of the Chief Executive Officer and the Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Companys disclosure controls and procedures as required by United States and Canadian securities laws.  Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companys disclosure controls and procedures were ineffective as of the end of the period covered by this report as a result of the failure to include in Item 8A of the original Form 10-KSB filed on April 2, 2008, a statement of its internal control over financial reporting.  In addition to filing this Amendment No. 1 on Form 10-10KSB to remedy this omission, management has taken steps to improve its disclosure controls and procedures to ensure that its reports filed pursuant to the Exchange Act contain the required disclosures specified in the SEC and OSC rules and regulations and the applicable forms then in effect.

Internal Control Over Financial Reporting

The Chief Executive Officer and the Chief Financial Officer of the Company are responsible for establishing and maintaining adequate internal control over financial reporting. The Companys internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Management conducted an evaluation of the effectiveness of its controls over financial reporting on a risk based approach using the elements of the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on managements assessment, the Company concluded that there was a material weakness in internal controls pertaining to adequate controls on access to information technology which were not in place as at December 31, 2007.  The company has formulated a plan to remediate the deficiency noted, which includes the replacement of its computer application with one that has stronger access and internal controls.

This weakness and its related risks are not uncommon in a company the size of Stellar because of limitations in size and number of staff. The Company believes it has taken measures to mitigate the risk associated to this control weakness.  The Company believes that it must take additional steps to further mitigate these risks by consulting outside advisors on a more regular and timely basis.



1



---





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

Item 13.

Exhibits and Reports on Form 8-K.

(a)

Exhibits

|            |  |                                                                                                                   |  |                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------- |  | ----------------------
|Exhibit
No. |  | Description of Exhibit                                                                                            |  | Sequential
Page
Number
|2.1         |  | Articles of Incorporation of the Company                                                                          |  | *                     
|2.2         |  | First Articles of Amendment                                                                                       |  | *                     
|2.3         |  | Second Articles of Amendment                                                                                      |  | *                     
|2.4         |  | By-Laws of the Company                                                                                            |  | *                     
|3.1         |  | Specimen Form of Common Share Certificate                                                                         |  | **                    
|10.1        |  | United States Patent No. 6,083,933                                                                                |  | *                     
|10.2        |  | Canadian Patent No. 2,269,260                                                                                     |  | *                     
|10.3        |  | License Agreement dated December 21, 2001 between the Company and G. Pohl-Boskamp GmbH & Co.                      |  | *                     
|10.4        |  | Consulting agreement dated February 21, 2001 between the Company and LMT Financial Inc.                           |  | *                     
|10.5        |  | Contract Services Agreement Inc. dated October 10, 2003 between the Company and Dalton Chemical Laboratories Inc. |  | **                    
|10.6        |  | Amended Agreement dated January 1, 2004 between the Company and LMT Financial Inc.                                |  | ***                   
|10.7        |  | NeoVisc Licence and Supply Agreements dated March 24, 2004 between the Company and SJ Pharmaceuticals Inc.        |  | ***                   
|10.8        |  | Uracyst Licence and Supply Agreements dated March 24, 2004 the Company and SJ Pharmaceuticals Inc                 |  | ***                   
|10.9        |  | Amending Consulting Agreement dated December 10, 2004 between the Company & LMT Financial Inc.                    |  | ***                   
|10.10       |  | Option Plan                                                                                                       |  | ***                   
|10.11       |  | Amendment to Option Plan  2001                                                                                   |  | ***                   
|10.12       |  | Amendment to Option Plan  2004                                                                                   |  | ***                   
|10.13       |  | Amendment to Option Plan  2005                                                                                   |  | ***                   
|10.14       |  | Uracyst Licence and Supply Agreements dated December 13, 2006 the Company and Watson Pharma, Inc.                 |  | *****                 
|31.1        |  | Certification of Chief Executive Officer                                                                          |  | ****                  
|31.2        |  | Certification of Chief Financial Officer                                                                          |  | ****                  
|32.1        |  | Certification of Chief Executive Officer                                                                          |  | ****                  
|32.2        |  | Certification of Chief Financial Officer                                                                          |  | ****                  



*

Filed as an exhibit to Amendment No. 1 to the Companys Registration Statement on Form 10-SB dated February 4, 2002.



2



---





**

Filed as an exhibit to Amendment No. 2 to the Companys Registration Statement on Form 10-SB dated April 26, 2003.

***

Filed as an exhibit to Amendment No. 2 to the Companys Registration Statement on Form 10-SB dated January 13, 2006

****

Filed as an exhibit Companys 2006 Annual Report Form 10-KSB dated March 30, 2007.

*****

Filed on December 28, 2006 on Form 8-K

(b)

Reports on Form 8-K

Filed May 15, 2007  1st Qtr 2007 Financial Results

Filed August 14, 2007  2nd Qtr 2007 Financial Results

Filed November 14, 2007  3rd Qtr 2007 Financial Results

Filed April 2, 2008  2007 10-KSB Filing





3



---





SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                       |                               |                 
|---------------------- | ----------------------------- | ----------------
|Date: January 12, 2009 | Stellar Pharmaceuticals Inc. 
|                       |                               |                 
|                       | By:                           | /s/ARNOLD TENNEY
|                       | Name: Arnold Tenney          
|                       | Title:  Chairman of the Board

In accordance with the Exchange Act, 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: January 12, 2009 | By:                            | /s/ ARNOLD TENNEY
|                       | Name: Arnold Tenney           
|                       | Title:   Chairman of the Board



|                       |                                  |                
|---------------------- | -------------------------------- | ---------------
|                       |                                 
|                       |                                  |                
|Date: January 12, 2009 | By:                              | /s/ PETER RIEHL
|                       | Name: Peter Riehl               
|                       | Title:   Chief Executive Officer



|                       |                        |                    
|---------------------- | ---------------------- | -------------------
|                       |                       
|                       |                        |                    
|Date: January 12, 2009 | By:                    | /s/ROBERT H. KAYSER
|                       | Name: Robert H. Kayser
|                       | Title:   Director     



|                       |                    |                 
|---------------------- | ------------------ | ----------------
|                       |                   
|                       |                    |                 
|Date: January 12, 2009 | By:                | /s/ JOHN J. KIME
|                       | Name: John J. Kime
|                       | Title:   Director 



|                       |                       |                    
|---------------------- | --------------------- | -------------------
|                       |                      
|                       |                       |                    
|Date: January 12, 2009 | By:                   | /s/ JOHN M. GREGORY
|                       | Name: John M. Gregory
|                       | Title:   Director    



|                       |                                  |                     
|---------------------- | -------------------------------- | --------------------
|                       |                                 
|                       |                                  |                     
|Date: January 12, 2009 | By:                              | /s/ JANICE M. CLARKE
|                       | Name: Janice M. Clarke          
|                       | Title:   Chief Financial Officer





4