**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**Form
      10-KSB**





(Mark
      One)





**x
      ANNUAL REPORT UNDER
      SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      fiscal year ended December 31, 2006





**oTRANSITION REPORT UNDER SECTION 13 OR
      15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





For
      the
      transition period from ______________ to ______________





*Commission
      File Number* *000-51835*








**Hillstream
      Pharma Inc.**





(Exact
      name of registrant as specified in its charter)







Delaware
              20-4142324(State
                  or other jurisdiction of
              (I.R.S.
                  Employerincorporation
                  or organization)
              Identification
                  No.)




270
                  Presidential DriveWilmington,
                  DE
              19807(Address
                  of principal executive offices)
              (zip
                  code)
 Registrant’s
          telephone number, including area code:
 (302)
          743-2995





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





None.





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





Common
      Stock, $0.0001 par value per share


(Title
      of
      Class)










Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o





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





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B (§229.405 of this chapter) contained herein, 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. o





Check
      whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
      Act). Yes x No. o





The
      Company’s revenues for fiscal year end December 31, 2006 were $0.





As
      of
      March 5, 2007, there were 2,500,000 shares of common stock outstanding.





**DOCUMENTS
      INCORPORATED BY REFERENCE:**




**None**





**FORWARD-LOOKING
      STATEMENTS**





Certain
      statements made in this Annual Report on Form 10-KSB are “forward-looking
      statements” (within the meaning of the Private Securities Litigation Reform Act
      of 1995) regarding the plans and objectives of management for future operations.
      Such statements involve known and unknown risks, uncertainties and other factors
      that may cause actual results, performance or achievements of Hillstream Pharma
      Inc. (the “Company”) to be materially different from any future results,
      performance or achievements expressed or implied by such forward-looking
      statements. The forward-looking statements included herein are based on current
      expectations that involve numerous risks and uncertainties. The Company's plans
      and objectives are based, in part, on assumptions involving the continued
      expansion of business. Assumptions relating to the foregoing involve judgments
      with respect to, among other things, future economic, competitive and market
      conditions and future business decisions, all of which are difficult or
      impossible to predict accurately and many of which are beyond the control of
      the
      Company. Although the Company believes its assumptions underlying the
      forward-looking statements are reasonable, any of the assumptions could prove
      inaccurate and, therefore, there can be no assurance the forward-looking
      statements included in this Report will prove to be accurate. In light of the
      significant uncertainties inherent in the forward-looking statements included
      herein, the inclusion of such information should not be regarded as a
      representation by the Company or any other person that the objectives and plans
      of the Company will be achieved.





Transitional
      Small Business Disclosure Format (check one): Yes o No x









**PART
      I**





**Item
      1. Description of Business.**





**Introduction**





Hillstream
      Pharma Inc. (“we”, “us”, “our”, the “Company” or the “Registrant”) was
      incorporated in the State of Delaware on January 3, 2006 and maintains its
      principal executive offices at 270 Presidential Drive, Wilmington, DE 19807.
      Since inception, the Company has been engaged in organizational efforts and
      obtaining initial financing. The Company was formed as a vehicle to pursue
      a
      business combination. The Company filed a registration statement on Form 10-SB
      with the U.S. Securities and Exchange Commission (the “SEC”) on March 7, 2006,
      and since its effectiveness, the Company has begun efforts to identify a
      possible business combination. However, the Company has not entered into a
      letter of intent or any definitive agreement concerning any target business.
      The
      business purpose of the Company is to seek the acquisition of, or merger with,
      an existing company.





The
      Company, based on proposed business activities, is a "blank check" company.
      The
      SEC defines those companies as "any development stage company that is issuing
      a
      penny stock, within the meaning of Section 3 (a)(51) of the Securities Exchange
      Act of 1934, as amended (the “Exchange Act”), and that has no specific business
      plan or purpose, or has indicated that its business plan is to merge with an
      unidentified company or companies." Many states have enacted statutes, rules
      and
      regulations limiting the sale of securities of "blank check" companies in their
      respective jurisdictions. The Company, as defined in Rule 12b-2 under the
      Exchange Act, also is a “shell company,” defined as a company with no or nominal
      assets (other than cash) and no or nominal operations. Management does not
      intend to undertake any efforts to cause a market to develop in our securities,
      either debt or equity, until we have successfully concluded a business
      combination. The Company intends to comply with the periodic reporting
      requirements of the Exchange Act for so long as we are subject to those
      requirements.





The
      Company was organized as a vehicle to investigate and, if such investigation
      warrants, acquire a target company or business seeking the perceived advantages
      of being a publicly held corporation. The Company’s principal business objective
      for the next 12 months and beyond such time will be to achieve long-term growth
      potential through a combination with a business rather than immediate,
      short-term earnings. The Company will not restrict its potential candidate
      target companies to any specific business, industry or geographical location
      and, thus, may acquire any type of business.





**Competition**





Currently,
      with our primary goal the acquisition of a target company or business seeking
      the perceived advantages of being a publicly held corporation, the Company
      faces
      vast competition from other shell companies with the same objectives. The
      Company is in a highly competitive market for a small number of business
      opportunities which could reduce the likelihood of consummating a successful
      business combination. A large number of established and well-financed entities,
      including small public companies and venture capital firms, are active in
      mergers and acquisitions of companies that may be desirable target candidates
      for us. Nearly all these entities have significantly greater financial
      resources, technical expertise and managerial capabilities than we do;
      consequently, we will be at a competitive disadvantage in identifying possible
      business opportunities and successfully completing a business combination.
      These
      competitive factors may reduce the likelihood of our identifying and
      consummating a successful business combination.




1




**Employees**





The
      Company currently has no employees other than its sole officer.





**Risk
      Factors**





**An
      investment in our securities is highly speculative and subject to numerous
      and
      substantial risks. These risks include those set forth below and elsewhere
      in
      this Form 10-KSB. Readers are encouraged to review these risks carefully before
      making any investment decision.**





**There
      may be conflicts of interest between our management and our non-management
      stockholders.**





Conflicts
      of interest create the risk that management may have an incentive to act
      adversely to the interests of the Company. A conflict of interest may arise
      between our management's personal pecuniary interest and its fiduciary duty
      to
      our stockholders. In addition, our management is currently involved with other
      blank check companies, and in the pursuit of business combinations, conflicts
      with such other blank check companies with which it is, and may in the future
      become, affiliated, may arise. If we and the other blank check companies that
      our management is affiliated with desire to take advantage of the same
      opportunity, then those members of management that are affiliated with both
      companies would abstain from voting upon the opportunity. In the event of
      identical officers and directors, the officers and directors will arbitrarily
      determine the company that will be entitled to proceed with the proposed
      transaction.





**Our
      business is difficult to evaluate because we have no operating
      history.**





As
      the
      Company has no operating history or revenue and only minimal assets, there
      is a
      risk that we will be unable to consummate a business combination. The Company
      has had no recent operating history nor any revenues or earnings from operations
      since inception. We have no significant assets or financial resources. We will,
      in all likelihood, sustain operating expenses without corresponding revenues,
      at
      least until the consummation of a business combination. This may result in
      our
      incurring a net operating loss that will increase continuously until we can
      consummate a business combination with a profitable business opportunity. We
      cannot assure you that we can identify a suitable business opportunity and
      consummate a business combination.





**There
      is competition for those private companies suitable for a merger transaction
      of
      the type contemplated by management.**





The
      Company is in a highly competitive market for a small number of business
      opportunities which could reduce the likelihood of consummating a successful
      business combination. We are and will continue to be an insignificant
      participant in the business of seeking mergers with, joint ventures with and
      acquisitions of small private and public entities. A large number of established
      and well-financed entities, including small public companies and venture capital
      firms, are active in mergers and acquisitions of companies that may be desirable
      target candidates for us. Nearly all these entities have significantly greater
      financial resources, technical expertise and managerial capabilities than we
      do;
      consequently, we will be at a competitive disadvantage in identifying possible
      business opportunities and successfully completing a business combination.
      These
      competitive factors may reduce the likelihood of our identifying and
      consummating a successful business combination.




2




**Future
      success is highly dependent on the ability of management to locate and attract
      a
      suitable acquisition.**





The
      nature of our operations is highly speculative and there is a consequent risk
      of
      loss of your investment. The success of our plan of operation will depend to
      a
      great extent on the operations, financial condition and management of the
      identified business opportunity. While management intends to seek business
      combination(s) with entities having established operating histories, we cannot
      assure you that we will be successful in locating candidates meeting that
      criterion. In the event we complete a business combination, the success of
      our
      operations may be dependent upon management of the successor firm or venture
      partner firm and numerous other factors beyond our control.





**The
      Company has no existing agreement for a business combination or other
      transaction.**





We
      have
      no arrangement, agreement or understanding with respect to engaging in a merger
      with, joint venture with or acquisition of, a private or public entity. No
      assurances can be given that we will successfully identify and evaluate suitable
      business opportunities or that we will conclude a business combination.
      Management has not identified any particular industry or specific business
      within an industry for evaluation. We cannot guarantee that we will be able
      to
      negotiate a business combination on favorable terms, and there is consequently
      a
      risk that funds allocated to the purchase of our shares will not be invested
      in
      a company with active business operations.





**Management
      intends to devote only a limited amount of time to seeking a target company
      which may adversely impact our ability to identify a suitable acquisition
      candidate.**




While
      seeking a business combination, management anticipates devoting very limited
      time to the Company's affairs. Our sole officer has not entered into a written
      employment agreement with us and is not expected to do so in the foreseeable
      future. This limited commitment may adversely impact our ability to identify
      and
      consummate a successful business combination.





**The
      time and cost of preparing a private company to become a public reporting
      company may preclude us from entering into a merger or acquisition with the
      most
      attractive private companies.**





Target
      companies that fail to comply with SEC reporting requirements may delay or
      preclude acquisition. Sections 13 and 15(d) of the Exchange Act require
      reporting companies to provide certain information about significant
      acquisitions, including certified financial statements for the company acquired,
      covering one, two, or three years, depending on the relative size of the
      acquisition. The time and additional costs that may be incurred by some target
      entities to prepare these statements may significantly delay or essentially
      preclude consummation of an acquisition. Otherwise suitable acquisition
      prospects that do not have or are unable to obtain the required audited
      statements may be inappropriate for acquisition so long as the reporting
      requirements of the Exchange Act are applicable.





**The
      Company may be subject to further government regulation which would adversely
      affect our operations.**





Although
      we are subject to the reporting requirements under the Exchange Act, management
      believes we are not subject to regulation under the Investment Company Act
      of
      1940, as amended (the “Investment Company Act”), since we are not engaged in the
      business of investing or trading in securities. If we engage in business
      combinations which result in our holding passive investment interests in a
      number of entities, we could be subject to regulation under the Investment
      Company Act. If so, we would be required to register as an investment company
      and could be expected to incur significant registration and compliance costs.
      We
      have obtained no formal determination from the SEC as to our status under the
      Investment Company Act and, consequently, violation of the Investment Company
      Act could subject us to material adverse consequences.




3





**Any
      potential acquisition or merger with a foreign company may subject us to
      additional risks.**





If
      we
      enter into a business combination with a foreign company, we will be subject
      to
      risks inherent in business operations outside of the United States. These risks
      include, for example, currency fluctuations, regulatory problems, punitive
      tariffs, unstable local tax policies, trade embargoes, risks related to shipment
      of raw materials and finished goods across national borders and cultural and
      language differences. Foreign economies may differ favorably or unfavorably
      from
      the United States economy in growth of gross national product, rate of
      inflation, market development, rate of savings, and capital investment, resource
      self-sufficiency and balance of payments positions, and in other
      respects.





**There
      is currently no trading market for our common stock, and liquidity of shares
      of
      our common stock is limited.**





Our
      shares of common stock are not registered under the securities laws of any
      state
      or other jurisdiction, and accordingly there is no public trading market for
      our
      common stock. Further, no public trading market is expected to develop in the
      foreseeable future unless and until the Company completes a business combination
      with an operating business and the Company thereafter files a registration
      statement under the Securities Act. Therefore, outstanding shares of our common
      stock cannot be offered, sold, pledged or otherwise transferred unless
      subsequently registered pursuant to, or exempt from registration under, the
      Securities Act and any other applicable federal or state securities laws or
      regulations. S hares
      of
      our common stock cannot be sold under the exemptions from registration provided
      by Rule 144 under or Section 4(1) of the Securities Act, in accordance with
      the
      letter from Richard K. Wulff, Chief of the Office of Small Business Policy
      of
      the Securities and Exchange Commission’s Division of Corporation Finance, to Ken
      Worm of NASD Regulation, dated January 21, 2000. This letter provides that
      certain private transfers of the shares of common stock also may be prohibited
      without registration under federal securities laws. Compliance with the criteria
      for securing exemptions under federal securities laws and the securities laws
      of
      the various states is extremely complex, especially in respect of those
      exemptions affording flexibility and the elimination of trading restrictions
      in
      respect of securities received in exempt transactions and subsequently disposed
      of without registration under the Securities Act or state securities laws.





**There
      are issues impacting liquidity of our securities with respect to the SEC’s
      review of a future resale registration statement.**





Since our shares of common stock issued prior to a business combination or
      reverse merger cannot currently, nor will they for a considerable period of
      time
      after we complete a business combination, be available to be offered, sold,
      pledged or otherwise transferred without being registered pursuant to the
      Securities Act, we will likely file a resale registration statement on Form
      SB-2
      or Form S-1, or some other available form, to register for resale such shares
      of
      common stock.  We cannot control this future registration process in all
      respects as some matters are outside our control.  Even if we are
      successful in causing the effectiveness of the resale registration statement,
      there can be no assurances that the occurrence of subsequent events may not
      preclude our ability to maintain the effectiveness of the registration
      statement. Any of the foregoing items could have adverse effects on the
      liquidity of our shares of common stock.




4





In
      addition, the SEC has recently disclosed that it has developed internal
      guidelines concerning the use of a resale registration statement to register
      the
      securities issued to certain investors in private investment in public
      equity (PIPE) transactions, where the issuer has a market capitalization of
      less
      than $75 million and, in general, does not qualify to file a Registration
      Statement on Form S-3 to register its securities.  The SEC has taken the
      position that  these smaller issuers may not be able to rely on Rule 415
      under the Securities Act, which generally permits the offer and sale of
      securities on a continued or delayed basis over a period of time, but instead
      would require that the issuer offer and sell such securities in
      a  direct or "primary" public offering, at a fixed price, if the facts
      and circumstances are such that the SEC believes the investors seeking to
      have their shares registered are underwriters and/or affiliates of the
      issuer.  It appears that the SEC in most cases will permit a
      registration for resale of up to one third of the total number of shares of
      common stock then currently owned by persons who are not affiliates of such
      issuer and, in some cases, a larger percentage depending on the facts and
      circumstances.  Staff members also have indicated that an issuer in most
      cases will have to wait until the later of six months after effectiveness
      of the first registration or such time as substantially all securities
      registered in the first registration are sold before filing a subsequent
      registration on behalf of the same investors.  Since, following a reverse
      merger or business combination, we may have little or no tradable shares of
      common stock, it is unclear as to how many, if any, shares of common stock
      the
      SEC will permit us to register for resale, but SEC staff members have
      indicated a willingness to consider a higher percentage in connection with
      registrations following reverse mergers with shell companies such as the
      Company.  The SEC may require as a condition to the declaration of
      effectiveness of a resale registration statement that we reduce or “cut back”
the number of shares of common stock to be registered in such registration
      statement.   The result of the foregoing is that a stockholder’s
      liquidity in our common stock may be adversely affected in the event the SEC
      requires a cut back of the securities as a condition to allow the Company to
      rely on Rule 415 with respect to a resale registration statement, or, if the
      SEC
      requires us to file a primary registration statement.




**We
      have never paid dividends on our common stock.**





We
      have
      never paid dividends on our common stock and do not presently intend to pay
      any
      dividends in the foreseeable future. We anticipate that any funds available
      for
      payment of dividends will be re-invested into the Company to further its
      business strategy.





**The
      Company may be subject to certain tax consequences in our business, which may
      increase our cost of doing business.**





We
      may
      not be able to structure our acquisition to result in tax-free treatment for
      the
      companies or their stockholders, which could deter third parties from entering
      into certain business combinations with us or result in being taxed on
      consideration received in a transaction. Currently, a transaction may be
      structured so as to result in tax-free treatment to both companies, as
      prescribed by various federal and state tax provisions. We intend to structure
      any business combination so as to minimize the federal and state tax
      consequences to both us and the target entity; however, we cannot guarantee
      that
      the business combination will meet the statutory requirements of a tax-free
      reorganization or that the parties will obtain the intended tax-free treatment
      upon a transfer of stock or assets. A non-qualifying reorganization could result
      in the imposition of both federal and state taxes that may have an adverse
      effect on both parties to the transaction.





**Our
      business will have no revenue unless and until we merge with or acquire an
      operating business.**





We
      are a
      development stage company and have had no revenue from operations. We may not
      realize any revenue unless and until we successfully merge with or acquire
      an
      operating business.




5




**The
      Company intends to issue more shares in a merger or acquisition, which will
      result in substantial dilution.**





Our
      Certificate of Incorporation authorizes the issuance of a maximum of
      150,000,000 shares of common stock and a maximum of 10,000,000 shares of
      preferred stock. Any merger or acquisition effected by us may result in
      substantial dilution in the percentage of our common stock held by our then
      existing stockholders. Moreover, the common stock issued in any such merger or
      acquisition transaction may be valued on an arbitrary or non-arm’s-length basis
      by our management, resulting in an additional reduction in the percentage of
      common stock held by our then existing stockholders. Our Board of Directors
      has
      the power to issue any or all of such authorized but unissued shares without
      stockholder approval. To
      the
      extent that additional shares of common stock or preferred stock are issued
      in
      connection with a business combination or otherwise, dilution to the interests
      of our stockholders will occur and the rights of the holders of common stock
      might be materially adversely affected.





**Our
      principal stockholders may engage in a transaction to cause the Company to
      repurchase their shares of common stock.**





In
      order
      to provide an interest in the Company to a third party, our principal
      stockholders may choose to cause the Company to sell Company securities to
      third
      parties, with the proceeds of such sale being utilized by the Company to
      repurchase shares of common stock held by the stockholders. As a result of
      such
      transaction, our management, principal stockholders and Board of Directors
      may
      change.





**The
      Company has conducted limited market research of business opportunities, which
      may affect our ability to identify a business to merge with or acquire.**





The
      Company has conducted limited market research concerning prospective business
      opportunities. Therefore, we have no assurances that market demand exists for
      a
      merger or acquisition as contemplated by us. Our management has not identified
      any specific business combination or other transactions for formal evaluation
      by
      us, such that it may be expected that any such target business or transaction
      will present such a level of risk that conventional private or public offerings
      of securities or conventional bank financing will not be available. There is
      no
      assurance that we will be able to acquire a business opportunity on terms
      favorable to us. Decisions as to
      which
      business opportunity to participate in will be unilaterally made by our
      management, which may act without the consent, vote or approval of our
      stockholders.





**Because
      we may seek to complete a business combination through a “reverse merger”,
      following such a transaction we may not be able to attract the attention of
      major brokerage firms.**




Additional
      risks may exist since we will assist a privately held business to become public
      through a “reverse merger.” Securities analysts of major brokerage firms may not
      provide coverage of our Company since there is no incentive to brokerage firms
      to recommend the purchase of our common stock. No assurance can be given that
      brokerage firms will want to conduct any secondary offerings on behalf of our
      post-merger company in the future.




**We
      cannot assure you that following a business combination with an operating
      business, our common stock will be listed on NASDAQ or any other securities
      exchange.**




Following
      a business combination, we may seek the listing of our common stock on NASDAQ
      or
      the American Stock Exchange. However, we cannot assure you that following such
      a
      transaction, we will be able to meet the initial listing standards of either
      of
      those or any other stock exchange, or that we will be able to maintain a listing
      of our common stock on either of those or any other stock exchange. After
      completing a business combination, until our common stock is listed on the
      NASDAQ or another stock exchange, we expect that our common stock would be
      eligible to trade on the OTC Bulletin Board, another over-the-counter quotation
      system, or on the “pink sheets,” where our stockholders may find it more
      difficult to dispose of shares or obtain accurate quotations as to the market
      value of our common stock. In addition, we would be subject to an SEC rule
      that,
      if it failed to meet the criteria set forth in such rule, imposes various
      practice requirements on broker-dealers who sell securities governed by the
      rule
      to persons other than established customers and accredited investors.
      Consequently, such rule may deter broker-dealers from recommending or selling
      our common stock, which may further affect its liquidity. This would also make
      it more difficult for us to raise additional capital following a business
      combination.




6




**Authorization
      of preferred stock.**





Our
      Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
      of preferred stock with designations, rights and preferences determined from
      time to time by its Board of Directors. Accordingly, our Board of Directors
      is
      empowered, without stockholder approval, to issue preferred stock with dividend,
      liquidation, conversion, voting, or other rights which could adversely affect
      the voting power or other rights of the holders of the common stock. In the
      event of issuance, the preferred stock could be utilized, under certain
      circumstances, as a method of discouraging, delaying or preventing a change
      in
      control of the Company. Although we have no present intention to issue any
      shares of its authorized preferred stock, there can be no assurance that the
      Company will not do so in the future.





**This
      report on Form 10-KSB contains forward-looking statements and information
      relating to us, our industry and to other businesses.**





These
      forward-looking statements are based on the beliefs of our management, as well
      as assumptions made by and information currently available to our management.
      When used in this prospectus, the words "estimate," "project," "believe,"
      "anticipate," "intend," "expect" and similar expressions are intended to
      identify forward-looking statements. These statements reflect our current views
      with respect to future events and are subject to risks and uncertainties that
      may cause our actual results to differ materially from those contemplated in
      our
      forward-looking statements. We caution you not to place undue reliance on these
      forward-looking statements, which speak only as of the date of this prospectus.
      We do not undertake any obligation to publicly release any revisions to these
      forward-looking statements to reflect events or circumstances after the date
      of
      this prospectus or to reflect the occurrence of unanticipated
      events.





**Item
      2. Description of Property.**





The
      Company neither rents nor owns any properties. The Company utilizes the office
      space and equipment of its management at no cost. Management estimates such
      amounts to be immaterial. The Company currently has no policy with respect
      to
      investments or interests in real estate, real estate mortgages or securities
      of,
      or interests in, persons primarily engaged in real estate
      activities.





**Item
      3. Legal Proceedings.**





Presently,
      there are not any material pending legal proceedings to which the Registrant
      is
      a party or as to which any of its property is subject, and no such proceedings
      are known to the Registrant to be threatened or contemplated against it.




7




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





None.





**PART
      II**





**Item
      5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases
      of
      Equity Securities.**





**Common
      Stock**





Our
      Certificate of Incorporation authorizes the issuance of up to 150,000,000 shares
      of common stock, par value $.0001 per share (the “Common Stock”). The Common
      Stock is not listed on a publicly-traded market. As of March 5, 2007, there
      was
      one holder of record of the Common Stock.





**Preferred
      Stock**





Our
      Certificate of Incorporation authorizes the issuance of up to 10,000,000 shares
      of preferred stock, par value $.0001 per share (the “Preferred Stock”). The
      Company has not yet issued any of its Preferred Stock.




**Dividend
      Policy**





The
      Company has not declared or paid any cash dividends on its Common Stock and
      does
      not intend to declare or pay any cash dividend in the foreseeable future. The
      payment of dividends, if any, is within the discretion of the Board of Directors
      and will depend on the Company’s earnings, if any, its capital requirements and
      financial condition and such other factors as the Board of Directors may
      consider.





**Securities
      Authorized for Issuance Under Equity Compensation Plans.**





None.





**Recent
      Sales of Unregistered Securities**





The
      Registrant sold 2,500,000 shares of Common Stock on January 31, 2006, to Randy
      Milby, the sole officer and director of the Registrant, for an aggregate
      purchase price of $12,500. The Registrant sold these shares of Common Stock
      under the exemption from registration provided by Section 4(2) of the Securities
      Act.





The
      purchaser represented in writing that he acquired the securities for his own
      account. A legend was placed on the stock certificate stating that the
      securities have not been registered under the Securities Act and cannot be
      sold
      or otherwise transferred without an effective registration or an exemption
      therefrom, but may not be sold pursuant to the exemptions provided by Section
      4(1) of the Securities Act or Rule 144 under the Securities Act, in accordance
      with the letter from Richard K. Wulff, Chief
      of
      the Office of Small Business Policy of the Securities and Exchange Commission’s
      Division of Corporation Finance ,
      to Ken
      Worm of NASD Regulation, Inc., dated January 21, 2000.




8




**Item
      6. Management’s Discussion and Analysis or Plan of
      Operation.**





**Plan
      of Operation**





The
      Company has not realized any revenues from operations since inception, and
      its
      plan of operation for the next twelve months is to locate a suitable acquisition
      or merger candidate and consummate a business combination. The Company may
      need
      additional cash advances from stockholders or loans from other parties to pay
      for operating expenses until the Company consummates the merger with a
      privately-held company. Although it is currently anticipated that the Company
      can satisfy its cash requirements with additional cash advances or loans from
      other parties, if needed, for at least the next twelve months, the Company
      can
      provide no assurance that it can continue to satisfy its cash requirements
      for
      such period.





**Results
      of Operations**





The
      Company has not conducted any active operations since inception, except for
      its
      efforts to locate a suitable acquisition or merger transaction. No revenue
      has
      been generated by the Company during such period, and it is unlikely the Company
      will have any revenues unless it is able to consummate or effect an acquisition
      of, or merger with, an operating company, of which there can be no
      assurance.




9




**Item
      7. Financial Statements.**




HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Table
      of
      Contents


December
      31, 2006


Page(s)REPORT
                  OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
              
              
              F-1FINANCIAL
                  STATEMENTSBalance
                  Sheet
              
              
              F-2Statements
                  of Operations
              
              
              F-3Statement
                  of Changes in Stockholder's Deficiency
              
              
              F-4Statement
                  of Cash Flows
              
              
              F-5NOTES
                  TO FINANCIAL STATEMENTS
              
              
              F-6
                  - F-8


REPORT
        OFINDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM


To
      the
      Board of Directors


Hillstream
      Pharma Inc.


A
      Development Stage Company





We
      have
      audited the accompanying balance sheet of Hillstream Pharma Inc. (a development
      stage company) as of December 31, 2006 and the related statements of operations,
      changes in stockholders’ equity (deficiency) and cash flows for the period
      January 3, 2006 (inception) through December 31, 2006. These financial
      statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audit.





We
      conducted our audit in accordance with 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 financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes 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 financial statements referred to above present fairly, in all
      material respects, the financial position of Hillstream Pharma Inc. (a
      development stage company) as of December 31, 2006 and the results of its
      operations and its cash flows for the period January 3, 2006 (inception) through
      December 31, 2006, in conformity with accounting principles generally accepted
      in the United States of America.





As
      discussed in Note 1, certain conditions indicate that the Company may be unable
      to continue as a going concern. The accompanying financial statements do not
      include any adjustments to the financial statements that might be necessary
      should the Company be unable to continue as a going concern.




/s/
      Raich
      Ende Malter & Co. LLP





**RAICH
      ENDE MALTER & CO. LLP**


East
      Meadow, New York


February
      26, 2007




F-1




HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Balance
      Sheet


December
      31, 2006





ASSETSCurrent
                  assetsCash
                  and cash equivalents
              
              $
              2,066Total
                  assets
              
              $
              2,066LIABILITIES
                  AND STOCKHOLDER’S DEFICIENCYCurrent
                  liabilitiesAccounts
                  payable and accrued expenses
              
              $
              4,568Long
                  term liabilitiesLoan
                  payable stockholder
              
              
              17,500Accrued
                  interest payable
              
              
              600Total
                  long term liabilities
              
              
              18,100Total
                  liabilities
              
              
              22,668Stockholder’s
                  deficiencyPreferred
                  stock - $.0001 par value, 10,000,000 shares
                  authorized; -0- shares issued and outstanding
              
              
              -Common
                  stock - $.0001 par value, 150,000,000 shares authorized;
                  2,500,000 shares issued and outstanding
              
              
              250Additional
                  paid-in capital
              
              
              31,500(Deficit)
                  accumulated during the development stage
              
              
              (52,352
              )Total
                  stockholder’s deficiency
              
              
              (20,602
              )TOTAL
                  LIABILITIES AND STOCKHOLDER’S DEFICIENCY
              
              $
              2,066




See
      notes
      to financial statements.




F-2




HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Statement
      of Operations


For
      the
      period January 3, 2006 (Inception) Through December 31, 2006


Revenues
              
              $
              -General
                  and administrative expenses
              
              
              52,352Net
                  (loss)
              
              $
              (52,352
              )Basic
                  and diluted (loss) per share
              
              $
              (.02
              )Weighted
                  average number of common shares outstanding
              
              
              2,307,163




See
      notes
      to financial statements.




F-3




HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Statement
      of Changes in Stockholder’s Deficiency


For
      the
      period January 3, 2006 (Inception) Through December 31, 2006


(Deficit)
                AccumulatedPreferred
                  Stock
              
              Common
                  Stock
              
              Additional
                  Paid-In
              
              During
                  the Development
              
              TotalStockholder’sShares
              
              Amount
              
              Shares
              
              Amount
              
              Capital
              
              Stage
              
              DeficiencyBalance
                    January 32006(inception)
              
              
              -
              
              $
              -
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Issuance
                        ofcommon
                        stockon January
                        31, 2006
              
              
              -
              
              
              -
              
              
              2,500,000
              
              
              250
              
              
              12,250
              
              
              -
              
              
              12,500Capital
                    contributionsfrom
                    stockholder:April
                  20, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              6,000
              
              
              -
              
              
              6,000July
                  17, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              2,400
              
              
              -
              
              
              2,400August
                    14, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              3,200
              
              
              -
              
              
              3,200September
                    5, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              5,150
              
              
              -
              
              
              5,150September
                    25,2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              2,500
              
              
              -
              
              
              2,500Net
                  (loss)
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (52,352
              )
              
              (52,352
              )Balance
                    December31,
                    2006
              
              
              -
              
              $
              -
              
              
              2,500,000
              
              $
              250
              
              $
              31,500
              
              $
              (52,352
              )
              $
              (20,602
              )





See
      notes
      to financial statements.




F-4





HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Statement
      of Cash Flows


For
      the
      period January 3, 2006 (Inception) Through December 31, 2006


Cash
                  flows from operating activities:Net
                  (loss)
              
              $
              (52,352
              )Adjustments
                    to reconcile net loss to net cash used in
                    operations:Accounts
                  Payable and accrued expenses
              
              
              4,568Accrued
                  interest on stockholder loan
              
              
              600Net
                  cash used in operating activities
              
              
              (47,184
              )Cash
                  flows from financing activities:Proceeds
                  from issuance of common stock
              
              
              12,500Additional
                  capital contributions from sole stockholder
              
              
              19,250Proceeds
                  from stockholder’s loan
              
              
              17,500Cash
                  provided by financing activities
              
              
              49,250Net
                  increase in cash and cash equivalents
              
              
              2,066Cash
                  and cash equivalents - beginning
              
              
              -Cash
                  and cash equivalents - ending
              
              $
              2,066


See
      notes
      to financial statements.




F-5




HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Notes
      to
      Financial Statements


December
      31, 2006





1
–
      DEVELOPMENT STAGE
      COMPANY





Hillstream
      Pharma Inc., a development stage company (the "Company"), was incorporated
      in
      the State of Delaware on January 3, 2006. All activities of the company to
      date
      relate to its organization, initial funding and share issuance. The company
      is
      looking to acquire an existing company or acquire the technology to begin
      operations.





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern. At the balance sheet date, the Company has a
      working capital deficiency, a stockholder’s deficiency and a deficit accumulated
      during the development stage. Management plans to raise additional capital
      and
      to seek potential merger candidates.





2
–
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





a.
            Use
                of Estimates - The preparation of the financial statements in conformity
                with accounting principles generally accepted in the United States
                requires management to make estimates and assumptions that affect
                the
                amounts of assets and liabilities and disclosure of contingent assets
                and
                liabilities at the date of the financial statements and reported
                amounts
                of revenues and expenses during the reporting period. Actual results
                could
                differ from those estimates.




b.
            Cash
                and Cash Equivalents - For purposes of the statement of cash flows,
                the
                Company considers highly liquid financial instruments purchased with
                a
                maturity of three months or less to be cash
                equivalents.





c.
            Income
                Taxes - The Company utilizes the liability method of accounting for
                income
                taxes. Under the liability method deferred tax assets and liabilities
                are
                determined based on the differences between the financial reporting
                basis
                and the tax basis of the assets and liabilities and are measured
                using the
                enacted tax rates and laws that will be in effect, when the differences
                are expected to reverse. An allowance against deferred tax assets
                is
                recognized, when it is more likely than not, that such tax benefits
                will
                not be realized. The Company’s gross deferred tax asset related to
                capitalized startup costs totaled approximately $8,000 at December
                31,
                2006, and has been fully offset by a valuation allowance. The difference
                between the statutory tax rate of 15% and the effective rate of 0%
                is due
                to the capitalization of the Company’s start up costs for tax
                purposes,




F-6





HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Notes
      to
      Financial Statements


December
      31, 2006




d.
            Loss
                Per Common Share - Basic loss per share is calculated using the
                weighted-average number of common shares outstanding during each
                reporting
                period. Diluted loss per share includes potentially dilutive securities
                such as outstanding options and warrants, using various methods such
                as
                the treasury stock or modified treasury stock method in the determination
                of dilutive shares outstanding during each reporting period. The
                Company
                does not have any potentially dilutive
                instruments.





e.
            Fair
                Value of Financial Instruments - The carrying value of cash equivalents,
                accounts payable and accrued expenses approximates fair value due
                to the
                short period of time to maturity. The stockholder loan approximates
                fair
                value based on market rates available to the company for financing
                with
                similar terms.





3
–
      RELATED PARTY TRANSACTIONS





The
      Company utilizes the office space and equipment of its sole stockholder at
      no
      cost. Management estimates such amounts to be immaterial.





The
      Company has two notes payable to its sole stockholder aggregating $17,500.
      Interest expense for the period January 3, 2006 (inception) through December
      31,
      2006 totaled $600 and accrues at 4%. The entire amount, principal and interest,
      is due on the earlier of December 31, 2010 or on the date the Company
      consummates a merger or similar transaction with an operating
      business.





4
–
      CAPITAL STOCK





The
      preferred stock of the Company shall be issued by the Board of Directors of
      the
      Company in one or more classes or one or more series within any class and such
      classes or series shall have such voting powers, full or limited, or no voting
      powers, and such designations, preferences, limitations or restrictions as
      the
      Board of Directors of the Company may determine, from time to time.





Holders
      of shares of common stock shall be entitled to cast one vote for each share
      held
      at all stockholders' meetings for all purposes, including the election of
      directors. The common stock does not have cumulative voting rights.




F-7


HILLSTREAM
      PHARMA INC.


A
      Development Stage Company


Notes
      to
      Financial Statements


December
      31, 2006





No
      holder
      of shares of stock of any class shall be entitled as a matter of right to
      subscribe for or purchase or receive any part of any new or additional issue
      of
      shares of stock of any class, or of securities convertible into shares of stock
      of any class, whether now hereafter authorized or whether issued for money,
      for
      consideration other than money, or by way of dividend.




5
–
RECENT
      ACCOUNTING PRONOUNCEMENTS




In
                September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,”
                that defines fair value, establishes a framework for measuring fair
                value
                in generally accepted accounting principles (GAAP), and expands
                disclosures about fair value measurements. This Statement applies
                under
                other accounting pronouncements that require or permit fair value
                measurements. Prior to this Statement, there were different definitions
                of
                fair value and limited guidance for applying those definitions in
                GAAP.
                Moreover, that guidance was dispersed among many accounting pronouncements
                that require fair value measurements. Differences in that guidance
                created
                inconsistencies that added to the complexity in applying GAAP. The
                changes
                to current practice resulting from the application of this Statement
                relate to the definition of fair value, the methods used to measure
                fair
                value, and the expanded disclosures about fair value measurements.
                Statement 157 is effective for financial statements issued for fiscal
                years beginning after November 15, 2007, and interim periods within
                those
                fiscal years. The Company does not expect the adoption of SFAS 157
                to have
                an effect on its financial
                statements.





In
                June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for
                Uncertainty in Income Taxes,” that prescribes a recognition threshold and
                measurement for the financial statement recognition and measurement
                of a
                tax position taken or expected to be taken in a tax return. This
                Interpretation also provides guidance on derecognition, classification,
                interest and penalties, accounting in interim periods, disclosure
                and
                transition. Interpretation 48 is effective for financial statements
                issued
                for fiscal years beginning after December 15, 2006, and interim periods
                within those fiscal years. The Company does not expect the adoption
                of
                Interpretation 48 to have an effect on its financial
                statements.




F-8




**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





None.




**Item
      8A. Controls and Procedures.**





The
        Company’s management is responsible for establishing and maintaining a system of
        disclosure controls and procedures (as defined in Rule 13a-15(e) under the
        Exchange Act) that is designed to ensure that information required to be
        disclosed by the Company in the reports that the Company files or submits
        under
        the Exchange Act is recorded, processed, summarized and reported, within
        the
        time periods specified in the SEC’s rules and forms. Disclosure controls and
        procedures include, without limitation, controls and procedures designed
        to
        ensure that information required to be disclosed by an issuer in the reports
        that it files or submits under the Exchange Act is accumulated and communicated
        to the issuer’s management, including its principal executive officer or
        officers and principal financial officer or officers, or persons performing
        similar functions, as appropriate to allow timely decisions regarding required
        disclosure.
 
 There
        have been no significant changes to the Company’s internal controls over
        financial reporting that occurred during our last fiscal quarter of the year
        ended December 31, 2006, that materially affected, or were reasonably likely
        to
        materially affect, our internal controls over financial reporting. This annual
        report does not include a report of management’s assessment regarding internal
        control over financial reporting or an attestation report of the Company’s
        registered public accounting firm due to a transition period established
        by
        rules of the SEC for newly public companies.





**Item
      8B. Other Information.**





None.





**PART
      III**





**Item
      9. Directors and Executive Officers of the Registrant.**





(a)
      Identification of Directors and Executive Officers. The following table sets
      forth certain information regarding the Company’s directors and executive
      officers for the fiscal year ended December 31, 2006:





**Name**
            
            **Age**
            
            **Position**
            
            **Term**Randy
                Milby
            
            53
            
            President,
                Secretary
              Director
            
            January
                31, 2006 thru Present
              January
                3, 2006 thru Present





The
      Company’s officers and directors are elected annually for a one year term or
      until their respective successors are duly elected and qualified or until their
      earlier resignation or removal.





**Randy
      Milby, President, Secretary and Director.** Randy
      Milby has served as the President and Secretary of the Company since January
      31,
      2006. He has served as Director of the Company since inception. Mr. Milby has
      been the **** Global
      Business Director for Dupont since January 2004. Prior to that position at
      Dupont, he was the Global Marketing Director for Dupont from June 1999 to
      January 2004. Mr. Milby also serves as President, Secretary and Director of
      Verbena Pharmaceuticals Inc., which is also a blank check company, non-trading,
      publicly-reporting shell company. Mr. Milby received a Bachelor of Science
      in
      Pharmacy from the University of Kansas in 1979 and a Masters in Business
      Administration from Washington University in St. Louis in 1985.





(b)
      Significant Employees.





As
      of the
      date hereof, the Company has no significant employees.




(c)
      Family Relationships.





None.




(d)
      Involvement in Certain Legal Proceedings.




There
      have been no events under any bankruptcy act, no criminal proceedings and no
      judgments, injunctions, orders or decrees material to the evaluation of the
      ability and integrity of any director, executive officer, promoter or control
      person of Registrant during the past five years.




10




**Compliance
      with Section 16(a) of the Exchange Act**





Section 16(a)
      of the Exchange Act requires the Company’s directors and officers, and persons
      who beneficially own more than 10% of a registered class of the Company’s equity
      securities, to file reports of beneficial ownership and changes in beneficial
      ownership of the Company’s securities with the SEC on Forms 3, 4 and 5.
      Officers, directors and greater than 10% stockholders are required by SEC
      regulation to furnish the Company with copies of all Section 16(a) forms
      they file.





Based
      solely on the Company’s review of the copies of the forms received by it during
      the fiscal year ended December 31, 2006 and written representations that no
      other reports were required, the Company believes that no person who, at any
      time during such fiscal year, was a director, officer or beneficial owner of
      more than 10% of the Company’s common stock failed to comply with all
      Section 16(a) filing requirements during such fiscal years.





**Code
      of Ethics**





We
      have
      not adopted a Code of Business Conduct and Ethics that applies to our principal
      executive officer, principal financial officer, principal accounting officer
      or
      controller, or persons performing similar functions in that our sole officer
      serves in these capacities.





**Nominating
      Committee**





We
      have
      not adopted any procedures by which security holders may recommend nominees
      to
      our Board of Directors.





**Audit
      Committee**





The
      Board
      of Directors acts as the audit committee. The Company does not have a qualified
      financial expert at this time because it has not been able to hire a qualified
      candidate. Further, the Company believes that it has inadequate financial
      resources at this time to hire such an expert. The Company intends to continue
      to search for a qualified individual for hire.





**Item
      10. Executive Compensation.**





The
      following table sets forth the cash compensation paid by the Company to its
      President and all other executive officers who earned annual compensation
      exceeding $100,000 for services rendered during the fiscal year ended December
      31, 2006.





Name
                and Position
            
            Year
            
            Total
                CompensationRandy
                Milby, President and Secretary
            
            2006
            
            None





**Director
      Compensation**





We
      do not
      currently pay any cash fees to our d irectors,
      nor do we pay directors’ expenses in attending board meetings.




11




**Employment
      Agreements**





The
      Company is not a party to any employment agreements.





**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.**





The
      following tables set forth certain information as of March 5, 2007, regarding
      (i) each person known by the Company to be the beneficial owner of more than
      5%
      of the outstanding shares of Common Stock, (ii) each director, nominee and
      executive officer of the Company and (iii) all officers and directors as a
      group.





Name
                and Address
            
            Amount
                and Nature ofBeneficial
                Ownership
            
            Percentage
              of
                ClassRandy
                Milby (1)
              270
                Presidential Drive
              Wilmington,
                DE 19807
            
            2,500,000
            
            100%All
                Directors and Officers as a Group
              (1
                individual)
            
            2,500,000
            
            100%







(1)
            Mr.
                Milby is President, Secretary and Director of the
                Company.





**Item
      12. Certain Relationships and Related Transactions.**





On
      February 7, 2006, the Company issued a 4% promissory note payable for $12,500,
      to Randy Milby, our sole officer and director (the “February Note”). On June 15,
      2006, the Company issued a 4% promissory note payable for $5,000, to Randy
      Milby
      (the “June Note” and, together with the February Note, the “Notes”). The Notes
      and all accrued interest mature upon completion of a merger, and if no merger
      is
      consummated, then the Notes will reach maturity on December 31, 2010. In the
      event of default under the Notes, Mr. Milby may declare the Notes immediately
      due and payable. Mr. Milby, in connection with a merger, may decide to
      capitalize his loans and add it to his capital, or he may decide to forgive
      the
      loans in their entirety. Given the small amount of the loans, we do not expect
      it to be a concern in our ability to complete a merger or any other business
      combination.





Except
      as
      otherwise indicated herein, there have been no related party transactions,
      or
      any other transactions or relationships required to be disclosed pursuant to
      Item 404 of Regulation S-B.





**Item
      13. Exhibits.**





Index
      to
      Exhibits


Exhibit
              
              Description*3.1
              
              Certificate
                  of Incorporation*3.2
              
              Certificate
                  of Amendment to Certificate of Incorporation*3.3
              
              By-laws31.1
              
              Certification
                  of the Company’s Principal Executive Officer and Principal Financial
                  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
                  with
                  respect to the registrant’s Annual Report on Form 10-KSB for the year
                  ended December 31, 2006.32.1
              
              Certification
                  of the Company’s Principal Executive Officer and Principal Financial
                  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to Section
                  906 of the Sarbanes Oxley Act of 2002.*
              
              Filed
                  as an exhibit to the Company's registration statement on Form 10-SB,
                  as
                  filed with the Securities and Exchange Commission on March 7, 2006,
                  and
                  incorporated herein by this
                  reference.




12




**Item
      14. Principal Accountant Fees and Services**





Raich
      Ende Malter & Co. LLP (“Raich Ende”) is the Company's independent registered
      public accounting firm.





**Audit
      Fees**





The
      aggregate fees billed by Raich Ende for professional services rendered for
      the
      audit of our annual financial statements and review of financial statements
      included in our quarterly reports on Form 10-QSB or services that are normally
      provided in connection with statutory and regulatory filings were $17,000 for
      fiscal year ended December 31, 2006.





**Audit-Related
      Fees**





There
      were no fees billed by Raich Ende for assurance and related services that
      are
      reasonably related
      to the performance of the audit or review of the Company’s financial statements
      for the fiscal year ended December 31, 2006.





**Tax
      Fees**





There
      were no fees billed by Raich Ende for professional services for tax compliance,
      tax advice, and tax planning for the fiscal year ended December 31, 2006.





**All
      Other Fees**





There
      were no fees billed by Raich Ende for other products and services for the fiscal
      year ended December 31, 2006.




13




**SIGNATURES**





In
      accordance with 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 authorized.





**HILLSTREAM
                PHARMA INC.**Dated:
              March 5, 2007
            By:/s/
              Randy
              MilbyName:
                Randy MilbyTitle:
                President, Secretary and Director




14