UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549





FORM 10-QSB





(Mark one)

ýQUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2008

Or

 ̈TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number:  333-23460





MERA PHARMACEUTICALS, INC.

(Exact name of Registrant as specified in its charter)





|                                                               |                                     
|-------------------------------------------------------------- | ------------------------------------
|Delaware                                                       | 04-3683628                          
|(State or other jurisdiction of
incorporation or organization) | (IRS Employer
Identification Number)



73-4460 Queen Ka'ahumanu Highway, Suite 110
Kailua-Kona, Hawaii  96740

(808) 326-9301

(Address and telephone number of principal executive offices)



Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods as the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  ý       NO   ̈

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.    YES  ý       NO   ̈

510,369,915 shares of $0.0001 par value common stock outstanding as of July 31, 2008

80 shares of $0.0001 par value Series A preferred stock outstanding as of July 31, 2008

974 shares of $0.0001 par value Series B preferred stock outstanding as of July 31, 2008











---





MERA PHARMACEUTICALS, INC.





FORM 10-QSB

FOR THE QUARTER ENDED JULY 31, 2008



CONTENTS



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Page                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Part I - Financial Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Item 1.  Financial Statements
3

Condensed Balance Sheets
3

Condensed Statements Of Operations
4

Condensed Statements Of Cash Flows
5

Note To Condensed Financial Statements
6

Item 2.  Management's Discussion and Analysis of Financial Condition
and Results of Operations
8

Item 3.  Controls and Procedures
9

Part II - Other Information

Item 1.  Legal Proceedings
10

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
10

Item 3.  Defaults Upon Senior Securities
10

Item 4.  Submission of Matters to a Vote of Security Holders
10

Item 5.  Other Information
10

Item 6.  Exhibits and Reports on Form 8-K
10

Signatures
11
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

















2



---





PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

MERA PHARMACEUTICALS, INC.

CONDENSED BALANCE SHEETS

|                                                                                                                                                                  |  |               |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | -
|                                                                                                                                                                  |  | July 31,
2008 |           
|                                                                                                                                                                  |  | (Unaudited)   |           
|ASSETS                                                                                                                                                            |  |               |            |  
|                                                                                                                                                                  |  |               |            |  
|CURRENT ASSETS                                                                                                                                                    |  |               |            |  
|Cash and cash equivalents                                                                                                                                         |  | $             | 943        |  
|Accounts receivable, net                                                                                                                                          |  |               | 5,188      |  
|Prepaid expenses and other current assets                                                                                                                         |  |               | 51,363     |  
|                                                                                                                                                                  |  |               |            |  
|TOTAL CURRENT ASSETS                                                                                                                                              |  |               | 57,494     |  
|                                                                                                                                                                  |  |               |            |  
|PROPERTY, PLANT, AND EQUIPMENT, NET                                                                                                                               |  |               | 1,973,737  |  
|                                                                                                                                                                  |  |               |            |  
|TOTAL ASSETS                                                                                                                                                      |  | $             | 2,031,231  |  
|                                                                                                                                                                  |  |               |            |  
|LIABILITIES AND SHARHOLDERS' EQUITY                                                                                                                               |  |               |            |  
|                                                                                                                                                                  |  |               |            |  
|CURRENT LIABILITIES                                                                                                                                               |  |               |            |  
|Accounts payable, accrued expenses and accrued liabilities                                                                                                        |  | $             | 307,062    |  
|Notes payable - related party                                                                                                                                     |  |               | 90,536     |  
|                                                                                                                                                                  |  |               |            |  
|TOTAL CURRENT LIABILITIES                                                                                                                                         |  |               | 397,598    |  
|                                                                                                                                                                  |  |               |            |  
|SHAREHOLDERS' EQUITY                                                                                                                                              |  |               |            |  
|Convertible preffered stock, $.0001 par value, 10,000 shares
authorized, 80 Series A shares issued and outstanding and
974 Series B shares issued and outstanding |  |               | 2          |  
|Common stock, $.0001 par value: 750,000,000 shares authorized,
510,369,915 shares issued and outstanding                                                          |  |               | 51,037     |  
|Additional paid-in capital                                                                                                                                        |  |               | 7,736,743  |  
|Accumulated deficit                                                                                                                                               |  |               | (6,154,149 | )
|                                                                                                                                                                  |  |               |            |  
|TOTAL SHAREHOLDERS' EQUITY                                                                                                                                        |  |               | 1,633,633  |  
|                                                                                                                                                                  |  |               |            |  
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                                        |  | $             | 2,031,231  |  







The accompanying notes are an integral part of these financial statements



3



---





MERA PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF OPERATIONS

|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|----------------------------------- |  | ------------------ | ----------- | ------------------ | - | ----------------- | - | ----------------- | ----------- | - | - | ----------- | -
|                                    |  | Three Months
Ended |             | Three Months
Ended |   | Nine Months
Ended |   | Nine Months
Ended |            
|                                    |  | July 31,
2008      |             | July 31,
2007      |   | July 31,
2008     |   | July 31,
2007     |            
|                                    |  | (Unaudited)        |             | (Unaudited)        |   | (Unaudited)       |   | (Unaudited)       |            
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|NET SALES                           |  | $                  | 173,098     |                    | $ | 131,608           |   | $                 | 455,327     |   | $ | 338,102     |  
|Cost of goods sold                  |  |                    | 3,489       |                    |   | 17,670            |   |                   | 16,285      |   |   | 42,019      |  
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|GROSS PROFIT                        |  |                    | 169,609     |                    |   | 113,938           |   |                   | 439,042     |   |   | 296,083     |  
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Operating Expenses                  |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Selling and administrative expenses |  |                    | 38,970      |                    |   | 83,165            |   |                   | 246,015     |   |   | 252,453     |  
|Research and development costs      |  |                    | 64,714      |                    |   | 45,979            |   |                   | 184,029     |   |   | 145,954     |  
|Depreciation and amortization       |  |                    | 69,037      |                    |   | 70,864            |   |                   | 213,351     |   |   | 212,591     |  
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Total operating expenses            |  |                    | 172,721     |                    |   | 200,008           |   |                   | 643,395     |   |   | 610,998     |  
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Operating loss                      |  |                    | (3,112      | )                  |   | (86,070           | ) |                   | (204,353    | ) |   | (314,915    | )
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Other income (expense)              |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Interest income                     |  |                    | 48          |                    |   | 126               |   |                   | 201         |   |   | 469         |  
|Other income                        |  |                    |            |                    |   |                  |   |                   | 8,783       |   |   |            |  
|Interest expense                    |  |                    | (3,310      | )                  |   | (2,452            | ) |                   | (8,193      | ) |   | (6,857      | )
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Total other income (expense)        |  |                    | (3,262      | )                  |   | (2,326            | ) |                   | 791         |   |   | (6,388      | )
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Net loss before tax provision       |  |                    | (6,374      | )                  |   | (88,396           | ) |                   | (203,562    | ) |   | (321,303    | )
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Provision for income taxes          |  |                    |            |                    |   |                  |   |                   |            |   |   |            |  
|Refundable tax credit               |  |                    | 13,895      |                    |   | 4,473             |   |                   | 23,038      |   |   | 15,069      |  
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|NET INCOME (LOSS)                   |  | $                  | 7,521       |                    | $ | (83,923           | ) | $                 | (180,524    | ) | $ | (306,234    | )
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Net income (loss) per common share  |  | $                  | 0.0000      |                    | $ | (0.0002           | ) | $                 | (0.0004     | ) | $ | (0.0006     | )
|                                    |  |                    |             |                    |   |                   |   |                   |             |   |   |             |  
|Weighted Average Shares Outstanding |  |                    | 510,369,915 |                    |   | 510,369,915       |   |                   | 510,369,915 |   |   | 478,191,349 |  







The accompanying notes are an integral part of these financial statements



4



---





MERA PHARMACEUTICALS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

|                                                                            |  |                   |          |                   |   |          |  
|--------------------------------------------------------------------------- |  | ----------------- | -------- | ----------------- | - | -------- | -
|                                                                            |  | Nine Months
Ended |          | Nine Months
Ended |  
|                                                                            |  | July 31,
2008     |          | July 31,
2007     |  
|                                                                            |  | (Unaudited)       |          | (Unaudited)       |  
|                                                                            |  |                   |          |                   |   |          |  
|Cash Flows from Operating Activities                                        |  |                   |          |                   |   |          |  
|Net loss                                                                    |  | $                 | (180,524 | )                 | $ | (306,234 | )
|Adjustments to reconcile net loss to net
cash used in operating activities: |  |                   |          |                   |   |          |  
|Accumulated depreciation and amortization                                   |  |                   | 213,351  |                   |   | 212,591  |  
|Changes in current assets and liabilities:                                  |  |                   |          |                   |   |          |  
|Accounts receivable                                                         |  |                   | 2,760    |                   |   | (20,502  | )
|Prepaid expenses and other current assets                                   |  |                   | (33,018  | )                 |   | (1,101   | )
|Accounts payable, accrued expenses, and accrued Liabilities                 |  |                   | (39,530  | )                 |   | 63,132   |  
|Net Cash Used in Operating Activities                                       |  |                   | (36,961  | )                 |   | (52,114  | )
|                                                                            |  |                   |          |                   |   |          |  
|Cash Flows from Investing Activities                                        |  |                   |          |                   |   |          |  
|Purchases of fixed assets                                                   |  |                   |         |                   |   | (7,666   | )
|Net Cash Used in Investing Activities                                       |  |                   |         |                   |   | (7,666   | )
|                                                                            |  |                   |          |                   |   |          |  
|Cash flows From Financing Activities                                        |  |                   |          |                   |   |          |  
|Proceeds from issuance of stock                                             |  |                   |         |                   |   | 60,000   |  
|Proceeds from related party notes payable                                   |  |                   | 158,010  |                   |   | 51,000   |  
|Payment of related party notes payable                                      |  |                   | (132,810 | )                 |   | (39,000  | )
|Net Cash Provided by Financing Activities                                   |  |                   | 25,200   |                   |   | 72,000   |  
|                                                                            |  |                   |          |                   |   |          |  
|Net increase (decrease) in cash and cash equivalents                        |  |                   | (11,761  | )                 |   | 12,220   |  
|                                                                            |  |                   |          |                   |   |          |  
|Cash and cash equivalents - beginning of period                             |  |                   | 12,704   |                   |   | 6,559    |  
|                                                                            |  |                   |          |                   |   |          |  
|Cash and cash equivalents - end of period                                   |  | $                 | 943      |                   | $ | 18,779   |  
|                                                                            |  |                   |          |                   |   |          |  
|Non-Cash Investing and Financing Activities                                 |  |                   |          |                   |   |          |  
|Conversion of accounts payable to common stock                              |  | $                 |         |                   | $ | 81,218   |  
|                                                                            |  |                   |          |                   |   |          |  
|Supplemental Cash Flow Information                                          |  |                   |          |                   |   |          |  
|Interest Paid                                                               |  | $                 | 5,339    |                   | $ | 2,107    |  
|Taxes Paid                                                                  |  | $                 |         |                   | $ |         |  









The accompanying notes are an integral part of these financial statements



5



---





MERA PHARMACEUTICALS, INC.

NOTE TO CONDENSED FINANCIAL STATEMENTS

1.

Basis of Presentation of Financial Statements

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-month and nine-month periods ended July 31, 2008 are not necessarily indicative of the results that may be expected for the year ending October 31, 2008. For further information, refer to the consolidated financial statements and footnotes thereto for the year ended October 31, 2007, included in Form 10-KSB filed with the Securities and Exchange Commission

The preparation of the Companys Consolidated Financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related 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 period. The more significant areas requiring the use of managements estimates and assumptions relate to depreciation and amortization calculations; inventory valuations; asset impairments (including impairments of goodwill, long-lived assets, and investments); valuation allowances for deferred tax assets; reserves for contingencies and litigation; and the fair value and  accounting  treatment of financial instruments. The Company bases its estimates on the Company's historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates under different assumptions or conditions.

New Accounting Pronouncements

Disclosure about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, (SFAS 161). This statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. The Company is required to adopt SFAS 161 on January 1, 2009. The Company is currently evaluating the potential impact of SFAS No. 161 on the Companys consolidated financial statements.

Determination of the Useful Life of Intangible Assets

In April 2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of Intangible Assets,, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of intangible assets under FASB 142 Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of the expected cash flows used to measure the fair value of the asset under FASB 141 (revised 2007) Business Combinations and other U.S. generally accepted accounting principles.  The Company is currently evaluating the potential impact of FSP FAS 142-3 on its consolidated financial statements.

The Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted Accounting Principles" (FAS No.162). SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles". The implementation of this standard will not have a material impact on the Company's consolidated financial position and results of operations.





6



---

MERA PHARMACEUTICALS, INC.

NOTE TO CONDENSED FINANCIAL STATEMENTS (CONTINUED)



2.

Related Party Transactions

During the three months ended July 31, 2008, the Company borrowed $47,310 from a director and officer, and made repayments of $58,710 to the same individual. Such repayments included amounts borrowed in prior periods. The amounts borrowed carry a rate of interest of 12% per annum.

Notes payable  related parties consists of the following as of July 31, 2008:

|                                                                                                                                                                                                                      |  |            
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|Unsecured demand notes payable  shareholder notes bearing an annual interest rate of 10% due on March 31, 2004. Notes are currently past maturity. However no demand for payment has been made.                      |  | $    41,936
|Unsecured demand notes payable  shareholder notes bearing an annual interest rate of 8% due on various dates through March 26, 2006. Notes are currently past maturity. However no demand for payment has been made. |  | 10,000     
|Unsecured demand notes payable  shareholder notes bearing an annual interest rate of 12% due on various dates throughout 2008                                                                                        |  | 38,600     
|Total notes payable, related parties                                                                                                                                                                                  |  | $    90,536

3.

Material Agreements

On November 9, 2007, the Company entered into an amended and restated license agreement with HR BioPetroleum Inc., (HRBP), a Delaware corporation. The agreement grants HRPB access to and use of certain of the Companies facilities as they relate to certain BioDiesel microalgae species, and grants HRBP license rights to a patent and other certain intellectual property owned by the Company.  In exchange for the above stated amended license agreement HRBP will pay the Company technical service fees and granted the Company a 5% equity stake in HRPB.



7



---





ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Report contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including statements that include the words "believes," "expects," "estimates," "anticipates" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from those expressed or implied by such forward-looking statements. Risk factors include, but are not limited to, our ability to raise or generate additional capital; our ability to cost-effectively manufacture our products on a commercial scale; the concentration of our current customer base; competition; our ability to comply with applicable regulatory requirements; potential need for expansion of our production facility; the potential loss of a strategic relationship; inability to attract and retain key personnel; management's ability to effectively manage our growth; difficulties and resource constraints in developing new products; protection and enforcement of our intellectual property; compliance with environmental laws; climate uncertainty; currency fluctuations; exposure to product liability lawsuits; and control of our management and affairs by principal stockholders.

The reader should carefully consider, together with the other matters referred to herein, the information contained under the caption "Risk Factors" in our Annual Report on Form 10-KSB for a more detailed description of these significant risks and uncertainties. We caution the reader, however, that these factors may not be exhaustive.

Since inception, our primary operating activities have consisted of basic research and development and production process development, recruiting personnel, purchasing operating assets, raising capital and sales of product. From September 16, 2002, the effective date of our plan of reorganization, through July 31, 2008 we had an accumulated deficit of $6,154,149. Our losses to date have resulted primarily from costs incurred in research and development, production costs and from general and administrative expenses associated with operations. We expect to continue to incur smaller operating losses through the current fiscal year. We also expect to have quarter-to-quarter and year-to-year fluctuations in revenues, expenses and losses, some of which could be significant.

We have a limited operating history. An assessment of our prospects should include the technology risks, market risks, expenses and other difficulties frequently encountered by early-stage operating companies, and particularly companies attempting to enter competitive industries with significant technology risks and barriers to entry. We have attempted to address these risks by, among other things, hiring and retaining highly qualified persons, diversifying our customer base and expanding revenue sources, e.g., by performing other contract services and increasing efforts to sell raw materials to other product formulators. However, our best efforts cannot guarantee that we will overcome these risks in a timely manner, if at all.

Results of Operations

Revenues.Revenue rose 31.5% for the quarter ending July 31, 2008 to $173,098 vs. $131,608 in the year ago quarter ending July 31, 2007. Revenue for the nine month period rose to $455,327 vs. $338,102 for the comparable periods, an increase of 34.7%. Our expectation is that revenue will continue to rise approximately 15% over the last quarter versus last years fiscal fourth quarter as sales on our product line and reimbursed technical service income continues to increase. Our initial projections were for a 10% increase. Full year over year revenue is expected to total 25-30% over last years $470,000 versus earlier projections of 20%. This increase is also partly due to continuation of a revised and newly extended technical service agreement with HRBioPetroleum during December 2007 that is expected to run through Meras first quarter of fiscal year 2009 at which time the contract could be terminated with a 6 month notice by either party. Indications are the both companies will enter into a new technical service contract with terms to be negotiated. Technical service contract revenue was approximately 56% of total revenue and is expected to rise in future quarters as we enter into new agreements to provide additional services with other entities if it makes economic sense for the Company. From a continuing operational basis, Mera had its first operating profit in Company history. Results for the quarter were an operating profit of $65,925 for the three month and $8,998 for the nine month period ending July 31, 2008 versus an operating loss of $102,324 in the same nine month period ending July 31, 2007. Our nine month net loss after depreciation and interest expenses totaled $180,524 versus $306,234 a 41% decrease over the comparable period in the prior fiscal year.



8



---





Cost of Sales.Cost of goods sold was $3,489 for the quarter ending July 31,2008 versus $17,670 in the quarter ending July 31, 2007 which was a 78% decrease as inventories were brought in alignment to better reflect sales rates, and there was a shifting of costs from production of existing product to research and development programs. The cost of goods sold for the nine month period ended July 31, 2008 decreased by 61% to $16,285 from $42,019 in the comparable nine month period in the prior fiscal year. The cost of sales is expected to increase during the fourth quarter due to inflationary pressures and purchases of supplies and materials. Sales increases will also add to the cost of sales with shipping and fuel costs playing a major factor in the expected increase.

Research and Development Costs.Research and development costs increased to $64,714 for the quarter ending July 31, 2008 versus $45,797 for the quarter ending July 31, 2007, an increase of approximately 41.3%.  The increase was due to the costs associated with the Companys technical service agreement and shift of personnel to work on the projects with HRBioPetroleum.

Selling, General and Administrative Expenses.These expenses decreased to $38,970 the quarter ending July 31, 2008 as compared with $83,165 in the quarter ending July 31, 2008. The company was able to contain expenses though the use of part time workers who are available on a call basis when needed. During the third quarter there was a one time reversal of approximately $30,000 in estimated accounting costs expenses that were accrued in the first quarter of fiscal 2008. This reversal had no impact on the Companys nine month results. These costs are expected to increase in the future as the Company has commenced facility upgrades and expansion in August which will allow the Company to grow its future business in 2009. These upgrades will achieve future cost savings and enable production increases to our product lines at cost of goods savings and efficiencies. These expansion and growth plans, will include the hiring of full and part time workers to help upgrade and maintain the facility and to add to our current sales staff.

Interest Expense. For the quarters ended July 31, 2008 versus 2007, interest expense was $3,310 and $2,452. This increase was due to a slightly higher level of borrowing by the Company during the third quarter of 2008 compared to the third quarter of 2007.

ITEM 3.

CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our chief executive officer, we conducted an evaluation of our disclosure controls and procedures, as such terms are defined in Rule 13a-14(c) promulgated under the Exchange Act, within the 90 day period prior to the filing date of this quarterly report. Based on this evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer concluded that our disclosure controls and procedures were effective as of that date.

(b) There have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in paragraph (a) above.



9



---





PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS AND REPORTS ON FORM 8--K

July 23, 2008 reporting the resignation of Daniel Beharry from the Board of Directors, and the appointment of Michael Corcoran and Russell Yamamoto to the Board of Directors.

(a)

EXHIBITS

|            |  |                                                                                                                                                                                                       
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                           
|31.1        |  | Certification of Chief Executive Officer pursuant to Rule 13a  14 (a) of the
Securities Exchange Act of 1934 (filed herewith electronically).                                                        
|31.2        |  | Certification of Principal Financial and Accounting Officer pursuant to Rule 13a  14
(a) of the Securities Exchange Act of 1934 (filed herewith electronically).                                     
|32.1        |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith electronically).                             
|32.2        |  | Certification of Principal Financial and Accounting Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes  Oxley Act of 2002
(filed herewith electronically)



(b)

REPORTS ON FORM 8-K

July 23, 2008 reporting the resignation of Daniel P. Beharry from the Board of Directors, and the appointment of Michael Corcoran and Russell Yamamoto to the Board of Directors.



10



---





SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this Quarterly Report on Form 10-QSB to be signed on its behalf by the undersigned thereunto duly authorized.

|                     |                            |                        
|-------------------- | -------------------------- | -----------------------
|                     | MERA PHARMACEUTICALS, INC.
|                     |                           
|                     |                           
|Dated: Sept. 5, 2008 | By:                        | /s/ GREGORY F. KOWAL   
|                     |                            | Gregory F. Kowal       
|                     |                            | Chief Executive Officer





11