**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**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**

**OR**

**[      ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES      EXCHANGE**

**ACT      OF 1934 for the transition period from __________ to      __________**

**Commission      file number 0-22872**

**SYMBOLLON      PHARMACEUTICALS, INC.**

| **Delaware**** **(State                of incorporation)                                                                                                            | **36-3463683**(I.R.S.                employer identification no.) |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------|
|    **37                Loring Drive** **Framingham,                Massachusetts**** **                (Address of principal executive offices) |  **01702**(Zip                Code)                          |

**(508)      620-7676**

**None**

**Class      A Common Stock, $.001 par value per share**

** **

**DOCUMENTS      INCORPORATED BY REFERENCE**

----

**Special      Note Regarding Forward Looking Statements**

**PART      I**

**Item      1. Description of Business**

**General      Background**

**The      Company's Technology**

----

**Bovine      Teat Sanitizer Product**

**Product      Development**

**Women’s      Healthcare**

----

**Other      Potential Applications**

**Manufacturing      and Supplies**

----

**Marketing      and Distribution**

**Government      Regulation**

----

----

**Patents      and Proprietary Rights**

**7**

----

| **Listing                of United States Patents** |
|-----------------------------------------------------|
|                                                |   |   |
|  **Patent****Number**                          |   **Title** |  **Issue                Date** |
| 4,937,072                                           | “In                Situ Sporicidal Disinfectant” | June                26, 1990 |
|                                                |   |   |
| 4,996,146                                           | “Rapid                Sterilization Enzymatic Process with Persistence” | February                26, 1991 |
|                                                |   |   |
| 5,055,287                                      | “Methods                to Control Color During Disinfecting Peroxidase Reactions” | October                8, 1991 |
| 5,227,161                                           | “Method                to Clean and Disinfect Pathogens on the Epidermis by Applying a                Composition Containing Peroxidase, Iodide Compound and                Surfactant” | July                13, 1993  |
| 5,370,815                                      | “Viscous                Epidermal Cleaner and Disinfectant” | December                6, 1994 |
| 5,389,385                                      | “Treatment                of Iodine Deficiency Diseases” | February                14, 1995 |
| 5,419,902                                      | “Method                for Inactivating Pathogens” | May                30, 1995 |
| 5,589,198                                      | “Treatment                of Iodine Deficiency Diseases” | December                31, 1996 |
| 5,629,024                                           | “Method                of Forming an Iodine Based Germicide Composition” | May                13, 1997 |
|                                                |   |   |
| 5,639,481                                           | “Method                for the Therapeutic Treatment of a Mammalian Eye” | June                17, 1997 |
|                                                |   |   |
| 5,648,075                                           | “Iodine                Based Germicidal Composition” | July                15, 1997 |
|                                                |   |   |
| 5,772,971                                           | “Iodine-Based                Microbial Decontamination System” | June                30, 1998 |
|                                                |   |   |
| 5,849,291                                           | “Ophthalmic                Non-Irritating Iodine Medicament” | December                15, 1998 |
|                                                |   |   |
| 5,885,592                                           | “Method                & Pharmaceutical Compositions for Oral Administration of Molecular                Iodine” | March                23, 1999  |
| 5,910,318                                      | “Treatment                of Iodine Deficiency Diseases” | June                8, 1999 |
| 5,955,101                                      | “Dry                Starch-Iodine Pharmaceutical Formulations” | September                21, 1999 |
| 5,962,029                                      | “Iodine                Germicides that Continuously Generate Free Molecular                Iodine” | November                5, 1999 |
| 6,019,970                                      | “Treatment                of Iodine Deficiency Diseases” | February                1, 2000 |
| Re                36,605                       | “Reissue                of 08/963,900 Method to Clean and Disinfect Pathogens” | March                7, 2000 |
| 6,248,335                                      | “Stabilized                Oral Pharmaceutical Composition Containing Iodide and                Iodate” | June                19, 2001 |
| 6,261,577                                      | “Non-Staining                Topical Iodine Composition” | July                17, 2001 |
| 6,432,426                                           | “Non-Staining                Topical Iodine Composition and Method” | August                13, 2002 |

----

**Competition**

**Employees**

**9**

----

**Executive      Officers**

| Name                             | Age    | Position                with the Company           |
|---------------------------------------|--------|----------------------------------------------------|
|                                  |   |                                               |
| Paul                C. Desjourdy      | 45     | President,                Chief Executive Officer, |
|                                  |   | Chief                Financial Officer, General    |
|                                  |   | Counsel,                Treasurer and Director     |
|                                  |   |                                               |
| Jack                H. Kessler, Ph.D. | 56     | Executive                Vice President, Chief     |
|                                  |   | Scientific                Officer, Secretary and   |
|                                  |   | Chairman                of the Board of Directors  |

**Risk      Factors**

**RISKS      ABOUT OUR BUSINESS**

**Our      ability to continue as a “going concern” is uncertain**

----

**We      expect to incur additional losses in the future that will require us to raise      funding**

**Sales      from our only product has ceased as our marketing partner has decided to      discontinue offering it for sale**

**We      could go out of business and you may lose your investment if we are unable      to      commercialize a new product**

**We      have terminated our relationship with our corporate partner, Bioaccelerate,      and      if we are not able to enter into a new corporate licensing relationship covering      IoGen, it will be difficult to commercialize IoGen**

----

**We      have limited data that IoGen will effectively treat fibrocystic breast      disease**

**If      we cannot establish a new corporate relationship or we cannot raise additional      funds, then we will have to limit or cease our future      activities**

----

**We      lack the resources to conduct the necessary clinical trials required prior      to      commercial sales of our potential drugs**

**We      may lose control over development and commercialization of drugs after we      license them**

| ·   | conducting                preclinical and clinical trials; |
|--------------------|------------------------------------------------------------|

| ·   | obtaining                required regulatory approvals of drug                candidates; |
|--------------------|-------------------------------------------------------------------------------------------|

| ·   | manufacturing                any resulting products; and |
|--------------------|----------------------------------------------------------|

| ·   | commercializing                any resulting products. |
|--------------------|--------------------------------------------------------|

**If      a competitive drug is marketed to treat fibrocystic breast disease prior to      IoGen, then the potential market opportunity for IoGen will be adversely      affected**

**If      the FDA does not allow us to use the Mimetix patient data, then the cost of      the      IoGen clinical development will increase significantly**

----

**We      may be sued for product liability in the future and our liability insurance      may      not be adequate to cover the situation**

**We      have no marketing experience within our company**

**We      depend on two of our employees for our future success; the loss of either of      them could adversely effect our ability to succeed**

**Because      our iodine-based products may stain or corrode some surfaces, potential      applications for our products may not be possible**

----

**Our      use of hazardous materials in our development and commercial efforts exposes      us      to material potential liability**

**We      may never receive a benefit from our net operating losses**

**RISKS      RELATED TO OUR STOCK**

**"Penny      Stock" rules may make buying or selling our securities      difficult**

**Our      securities have been thinly traded on the over-the-counter bulletin board,      which      may not provide liquidity for our investors**

----

**Investors      must contact a broker-dealer to trade over-the-counter bulletin board      securities. As a result, you may not be able to buy or sell our securities      at      the times that you may wish**

**We      do not intend to pay dividends in the foreseeable future, therefore, you may      never see a return on your investment**

**We      may sell additional shares in the future, which could cause the price of our      securities to decline**

**We      may sell additional shares in the future, which may cause existing stockholders      significant dilution**

----

**Resales      of our shares in the public market could adversely affect the market price      for      our stock**

**Item      2. Description of Property**

**Item      3. Legal Proceedings**

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

**PART      II**

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

**Price      Range of Securities**

|                          | **Fiscal                2006** |                  | **Fiscal                2005** |
|-------------------------------|--------------------------------|-----------------------|--------------------------------|
|                          | High                           | Low                   |                           | High | Low |
|                          |                           |                  |                           |   |   |
| First                quarter  | $                1.50          | $                0.77 |                           | $                1.70 | $                0.95 |
| Second                quarter | 2.50                           | 1.35                  |                           | 1.95 | 1.15 |
| Third                quarter  | 1.80                           | 0.75                  |                           | 1.80 | 0.80 |
| Fourth                quarter | 1.25                           | 0.75                  |                           | 1.58 | 0.65 |
|                          |                           |                  |                           |   |   |

----

**Approximate      Number of Equity Security Holders**

**Dividends**

**Recent      Sales of Unregistered Securities**

----

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

**Overview**

**Going      Concern**

----

**Critical      Accounting Policies and Estimates**

*Estimates*

*Revenue      recognition*

*Valuation      of Compensatory Stock Option Grants*

*Long-lived      assets*

**Results      of Operations**

**Fiscal      2006 versus Fiscal 2005**

----

**Financial      Condition, Liquidity and Capital Resources**

----

**Off      Balance Sheet Arrangements**

**22**

----

**Item      7.**
**Financial      Statements**

**Report      of Independent Registered Public Accounting Firm**

**23**

----

**Symbollon                Pharmaceuticals, Inc.**

**Balance                Sheets**

|                                                                               |   |                                                           |
|------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|
|                                                                               |   | Year                  EndedDecember                  31,  |
|                                                                               |   |                                                           | **2006** |   |   | 2005 |   |
|                                                                               |   |                                                           |   |   |   |   |   |
| **Assets**                                                                         |   |                                                           |   |   |   |   |   |
|                                                                               |   |                                                           |   |   |   |   |   |
| **Current                  assets:**                                               |   |                                                           |   |   |   |   |   |
|    Cash                and cash equivalents                         |   | **$**                                                          | **2,521,981** |   | $ | 312,617 |   |
| Accounts                  receivable                                               |   |                                                           | **-** |   |   | 234,583 |   |
| Inventory                                                                          |   |                                                           | **-** |   |   | 39,833 |   |
| Prepaid                  expenses                                                  |   |                                                           | **39,519** |   |   | 95,446 |   |
|                                                                               |   |                                                           |   |   |   |   |   |
|                      Total current assets                           |   |                                                           | **2,561,500** |   |   | 682,479 |   |
|                                                                               |   |                                                           |   |   |   |   |   |
| **Equipment                  and leasehold improvements**,                  net of |   |                                                           |   |   |   |   |   |
|                     accumulated depreciation                             |   |                                                           | **9,465** |   |   | 24,021 |   |
|                                                                               |   |                                                           |   |   |   |   |   |
| **Other                  assets:**                                                 |   |                                                           |   |   |   |   |   |
| Patent                  and trademark costs, net of accumulated                    |   |                                                           |   |   |   |   |   |
|                    amortization                                               |   |                                                           | **302,241** |   |   | 365,068 |   |
| Deposit                                                                            |   |                                                           | **2,364** |   |   | 2,364 |   |
|                                                                               |   |                                                           |   |   |   |   |   |
|                                                                               |   | **$**                                                          | **2,875,570** |   | $ | 1,073,932 |   |

**24**

----

**Symbollon                Pharmaceuticals, Inc.**

**Balance                Sheets**

*(Continued)*

|                                                                                                        |   |                                                              |                 |   |   |        |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------|-----------------|--------|--------|-------------|--------|
|                                                                                                        |   | Year                  Ended December                    31,  |
|                                                                                                        |   |                                                              | **2006**        |   |   | 2005        |   |
|                                                                                                        |   |                                                              |            |   |   |        |   |
|  **Liabilities                and Stockholders’ Equity**                                         |   |                                                              |            |
|                                                                                                        |   |                                                              |            |   |   |        |   |
| **Current                  liabilities:**                                                                   |   |                                                              |            |   |   |        |   |
| Accounts                  payable                                                                           |   | **$**                                                             | **34,720**      |   | $      | 16,999      |   |
| Accrued                  clinical development expenses                                                      |   |                                                              | **242,493**     |   |   | 119,492     |   |
| Deferred                  research and development collaboration revenue                                    |   |                                                              | **-**           |   |   | 84,583      |   |
| Other                  current liabilities                                                                  |   |                                                              | **24,637**      |   |   | 24,455      |   |
|                                                                                                        |   |                                                              |            |   |   |        |   |
|                      Total current liabilities                                               |   |                                                              | **301,850**     |   |   | 245,529     |   |
|                                                                                                        |   |                                                              |            |   |   |        |   |
| **Commitments**(Notes                  6, 7 and 10)                                                         |   |                                                              |            |   |   |        |   |
|                                                                                                        |   |                                                              |            |   |   |        |   |
| **Stockholders’                  equity**:                                                            |   |                                                              |            |   |   |        |   |
| Common                  stock, Class A, par value $.001 per share, 93,750,000                  shares       |   |                                                              |            |   |   |        |   |
|                    authorized, 12,476,041 and 7,323,661 shares issued and                  outstanding |   |                                                              |            |   |   |        |   |
|                    as of December 31, 2006 and 2005, respectively                                      |   |                                                              | **12,476**      |   |   | 7,324       |   |
| Convertible                  common stock, Class B, par value $.001                                         |   |                                                              |            |   |   |        |   |
|                    per share, 1,250,000 shares authorized and unissued                                 |   |                                                              | -               |   |   | -           |   |
| Preferred                  stock, par value $.001 per share, 5,000,000 shares                               |   |                                                              |            |   |   |        |   |
|                    authorized and unissued                                                             |   |                                                              | **-**           |   |   | -           |   |
| Additional                  paid-in capital                                                                 |   |                                                              | **18,419,779**  |   |   | 13,632,830  |   |
| Accumulated                  deficit                                                                        |   |                                                              | **(15,858,535** | **)**  |   | (12,811,751 | )      |
|                                                                                                        |   |                                                              |            |   |   |        |   |
|                      Total stockholders' equity                                              |   |                                                              | **2,573,720**   |   |   | 828,403     |   |
|                                                                                                        |   |                                                              |            |   |   |        |   |
|                                                                                                        |   | **$**                                                             | **2,875,570**   |   | $      | 1,073,932   |   |

*See        accompanying notes to financial statements.*

**25**

----

**Symbollon                Pharmaceuticals, Inc.**

**Statements                of Operations**

|                                                                                       |   |   |                                                               |   |   |      |    |
|---------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|--------|-----------|---------|
|                                                                                       |   |   | Year                    EndedDecember                    31,  |   |
|                                                                                  |   |   | **2006**                                                           |   |   | 2005      |    |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **Revenue**:                                                                          |   |   |                                                               |   |   |      |    |
| Net                    product sales                                                  |   | **$**  | **39,833**                                                         |   | $      | 49,627    |    |
| Research                    and development collaboration revenue                     |   |   | **-**                                                              |   |   | 400,000   |    |
|                                                                                  |   |   |                                                               |   |   |      |    |
|                      Total revenue                                               |   |   | **39,833**                                                         |   |   | 449,627   |    |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **Operating                    expenses**:                                            |   |   |                                                               |   |   |      |    |
| Cost                    of goods sold                                                 |   | **$**  | **39,833**                                                         |   | $      | 48,459    |    |
| Research                    and development costs                                     |   |   | **1,748,501**                                                      |   |   | 716,238   |    |
| General                    and administrative expenses                                |   |   | **1,316,395**                                                      |   |   | 633,734   |    |
| Stock-based                    compensation from repriced options (1)                 |   |   | **-**                                                              |   |   | (296,749  | )  |
|                                                                                  |   |   |                                                               |   |   |      |    |
|                      Total operating expenses                                    |   |   | **3,104,729**                                                      |   |   | 1,101,682 |    |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **Loss                    from operations**                                           |   |   | **(3,064,896**                                                     | **)**  |   | (652,055  | )       |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **Interest                    income**                                                |   |   | **18,112**                                                         |   |   | 6,082     |    |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **Net                    loss**                                                       |   | **$**  | **(3,046,784**                                                     | **)**  | $      | (645,973  | )       |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **Basic                    and diluted net loss per share of**                        |   |   |                                                               |   |   |      |    |
| **                     common stock**                                            |   | **$**  | **(0.36**                                                          | **)**  | $      | (0.09     | )       |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **Weighted                    average number of common shares**                       |   |   |                                                               |   |   |      |    |
| **                     outstanding - basic and diluted**                         |   |   | **8,545,304**                                                      |   |   | 7,081,907 |    |
|                                                                                  |   |   |                                                               |   |   |      |    |
| **(1)                    The following summarizes the allocation of**                 |   |   |                                                               |   |   |      |    |
| **                          stock-based compensation:** |   |   |                                                               |   |   |      |    |
|    Cost                    of goods sold                               |   | **$**  | **-**                                                              |   | $      | (125,513  |    |
|                       Research and development costs                        |   |   | **-**                                                              |   |   | (58,173   | )  |
|                       General and administrative expenses                   |   |   | **-**                                                              |   |   | (113,063  |    |
|                                                                                  |   |   |                                                               |   |   |      |    |
| Total                                                                                 |   | **$**  | **-**                                                              |   | $      | (296,749  | )       |

*See        accompanying notes to financial statements.*

**26**

----

**Symbollon                Pharmaceuticals, Inc.**

**Statements                of Stockholders’ Equity**

|                                                                                                                                            |   |   | Common                  Stock     |    |    |       |    |   |          |    |   | Common        |   |   |       |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------|---------|---------|------------|---------|--------|---------------|---------|--------|---------------|--------|--------|------------|--------|
|                                                                                                                                                 |   |   | $.001                  Par Value  |    |    | Additional |    |   |          |    |   | Stock         |   |   |       |   |
|                                                                                                                                                 |   |   | Class                  A          |    |    | Paid-in    |    |   | Accumulated   |    |   | Subscriptions |   |   |       |   |
|                                                                                                                                                 |   |   | Shares                            |    |    | Amount     |    |   | Capital       |    |   | Deficit       |   |   | Receivable |   |   | Total |   |
|                                                                                                                                            |   |   |                                   |    |    |       |    |   |          |    |   |          |   |   |       |   |   |   |   |
| **Balance**,                  December 31, 2004                                                                                                 |   |   | 6,114,761                              |    |  $ | 6,115      |    | $      | 13,942,565    |    | $      | (12,165,778   | )      | $      | (834,560   | )      | $ | 948,342 |   |
|                      Issuance of Shares – Warrant Exercise                                                                 |   |   | 4,000                                  |    |    | 4          |    |   | 2,596         |    |   | -             |   |   | -          |   |   | 2,600 |   |
|                      Issuance of Shares – Foreign Stock Sale                                                               |   |   | 1,642,795                              |    |    | 1,643      |    |   | 798,942       |    |   | -             |   |   | -          |   |   | 800,585 |   |
|                      Issuance of Shares – Consultants                                                                      |   |   | 25,000                                 |    |    | 25         |    |   | 19,573        |    |   | -             |   |   | -          |   |   | 19,598 |   |
|                      Return of Shares -- Executive Loans                                                                         |   |   | (462,895                               | )  |    | (463       | )  |   | (834,097      | )  |   | -             |   |   | 834,560    |   |   | - |   |
|                      Stock Based Compensation                                                                                    |   |   | -                                      |    |    |  -    |    |   | (296,749      | )  |   | -             |   |   | -          |   |   | (296,749 | )  |
|                      Net loss                                                                                                    |   |   | -                                      |    |    | -          |    |   | -             |    |   | (645,973      | )      |   | -          |   |   | (645,973 | ) |
|                                                                                                                                            |   |   |                                   |    |    |       |    |   |          |    |   |          |   |   |       |   |   |   |   |
| **Balance**,                  December 31, 2005                                                                                                 |   |   | 7,323,661                              |    |    | 7,324      |    | $      | 13,632,830    |    | $      | (12,811,751   | )      | $      | -          |   | $ | 828,403 |   |
|                      Issuance of Shares – Warrant Exercise                                                                 |   |   | 626,076                                |    |    | 626        |    |   | 339,048       |    |   | -             |   |   | -          |   |   | 339,674 |   |
|                      Issuance of Shares – Sale of Stock and Warrants                                                  |   |   | 4,536,304                              |    |    | 4,536      |    |   | 3,663,279     |    |   | -             |   |   | -          |   |   | 3,667,815 |   |
|                      Issuance of Shares – Consultants                                                                      |   |   | 67,000                                 |    |    | 67         |    |   | 69,158        |    |   | -             |   |   | -          |   |   | 69,225 |   |
|                      Return of Shares – Consultants                                                                        |   |   | (77,000                                | )       |    | (77        | )       |   | (23,280       | )       |   | -             |   |   | -          |   |   | (23,357 | )  |
|                     Reclassification of Stock and Warrants Issued                       for Prepaid Services |   |   | -                                 |    |    | -     |    |   | (30,074  | )  |   | -        |   |   | -     |   |   | (30,074  | )  |
|                      Stock Based Compensation                                                                                    |   |   | -                                      |    |    | -          |    |   | 768,818       |    |   | -             |   |   | -          |   |   | 768,818 |   |
|                      Net loss                                                                                                    |   |   | -                                      |    |    | -          |    |   | -             |    |   | (3,046,784    | )      |   | -          |   |   | (3,046,784 | ) |
|                                                                                                                                            |   |   |                                   |    |    |       |    |   |          |    |   |          |   |   |       |   |   |   |   |
| **Balance**,                  December 31, 2006                                                                                                 |   |   | 12,476,041                             |    |  $ | 12,476     |    | $      | 18,419,779    |    | $      | (15,858,535   | )      | $      | -          |   | $ | 2,573,720 |   |

*See        accompanying notes to financial statements.*

----

**Symbollon                Pharmaceuticals, Inc.**

**Statements                of Cash Flows**

|                                                                                                                                        |   |    |                                                           |    |    |     |    |
|----------------------------------------------------------------------------------------------------------------------------------------|--------|---------|----------------------------------------------------------------|---------|---------|----------|---------|
|                                                                                                                                        |   |    | Year                  EndedDecember                  31,  |    |
|                                                                                                                                   |   |    | **2006**                                                       |    |    | 2005     |    |
| **Cash                  flows from operating activities:**                                                                             |   |    |                                                           |    |    |     |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| Net                  loss                                                                                                              |   | **$**   | **(3,046,784**                                                 | **)**   | $       | (645,973 | )       |
| Adjustments                  to reconcile net loss to net cash used in                                                                 |   |    |                                                           |    |    |     |    |
|                    operating activities:                                                                                          |   |    |                                                           |    |    |     |    |
|                      Stock-based compensation                                                                           |   |    | **768,818**                                                    |    |    | (296,749 | )  |
|                      Issuance of securities for services rendered                                                       |   |    | **69,225**                                                     |    |    | 19,598   |    |
|                      Depreciation and amortization                                                                      |   |    | **52,982**                                                     |    |    | 54,216   |    |
|                        Loss on disposition of assets                                                |   |    |  **455**                                                  |    |    |  -  |    |
|                      Loss                on impairment of patents                                             |   |    |  42,541                                                   |    |    |  -  |    |
|                      Changes in operating assets and liabilities:                                                       |   |    |                                                           |    |    |     |    |
|                        Accounts receivable                                                                    |   |    | **234,583**                                                    |    |    | (234,583 | )  |
|                        Inventory                                                                              |   |    | **39,833**                                                     |    |    | 32,950   |    |
|                        Prepaid expenses                                                                       |   |    | **2,496**                                                      |    |    | 93,023   |    |
|                        Accounts payable and other current liabilities                                         |   |    | **56,321**                                                     |    |    | 79,053   |    |
|                          Net cash used in operating activities                                      |   |    | **(1,779,530**                                                 | **)**   |    | (898,465 | )       |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| **Cash                  flows from investing activities:**                                                                             |   |    |                                                           |    |    |     |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| Purchase                  of equipment and leasehold improvements                                                                      |   |    | **(745**                                                       | **)**   |    | (4,005   | )       |
| Patent                  and trademark cost additions                                                                                   |   |    | **(17,850**                                                    | **)**   |    | (15,222  | )       |
|                         Net cash used in investing activities                                            |   |    | **(18,595**                                                    | **)**   |    | (19,227  | )       |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| **Cash                  flows from financing activities:**                                                                             |   |    |                                                           |    |    |     |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| Issuance                  of common stock and warrants                                                                                 |   |    | **4,007,489**                                                  |    |    | 803,185  |    |
|                         Net cash provided by financing activities                                   |   |    | **4,007,489**                                                  |    |    | 803,185  |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| **Net                  decrease in cash and cash equivalents**                                                                         |   |    | **2,209,364**                                                  |    |    | (114,507 | )       |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| **Cash                  and cash equivalents**,                  beginning of period                                                   |   |    | **312,617**                                                    |    |    | 427,124  |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| **Cash                  and cash equivalents**,                  end of period                                                         |   | **$**   | **2,521,981**                                                  |    | $       | 312,617  |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
|  **Supplemental                disclosure of** n**on cash activities:**                                                           |   |    |                                                           |    |    |     |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
|                      Return of Shares - Consultant                                                            |   |  $ | (23,357                                                   | )  |  $ | -   |    |
|                      Reclassification of stock and warrants issued for prepaid                services        |   |    | (30,074                                                   | )  |    | -   |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
|  **Supplemental                disclosure of non cash activities**                                                                |   |  $ | (53,431                                                   | )  |  $ | -   |    |
|                                                                                                                                   |   |    |                                                           |    |    |     |    |
| There                  were no payments made for interest or income taxes during 2006                  or                  2005.  |   |    |                                                           |    |    |     |    |

*See        accompanying notes to financial statements.*

**28**

----

**Symbollon            Pharmaceuticals, Inc.**

**Notes            to Financial Statements**

| **1.                         Description of****Business                and****Basis                of****Presentation** | Symbollon                Pharmaceuticals, Inc. (formerly Symbollon Corporation) was formed                to                develop and commercialize proprietary iodine-based products for infection                control and treatment in biomedical and bioagricultural                industries. The                success of future operations is subject to a number of risks similar                to                those of other companies in the same stage of development. Principal                among                these risks are the Company’s cumulative operating losses, no assurance of                profitable future operations, early state of market development,                competition from substitute products or larger companies, dependence                on                key personnel and the uncertainty of additional future financing                as                needed. The                accompanying financial statements have been prepared in conformity                with                accounting principles generally accepted in the United States of                America,                which contemplate continuation of our company as a going concern.                We had                net losses of $3,046,784 and $645,973 and negative cash flows from                operations of $1,782,555 and $898,465 for the years ended December                31,                2006 and 2005, respectively. At December 31, 2006, we had an accumulated                deficit of $15,858,535. These factors raise substantial doubt as                to our                ability to continue as a going concern. The                application of the going concern concept is dependent upon the Company’s                ability to receive continued financial support from the Company’s                creditors, stockholders and external investors. In August 2006, our                licensing agreement covering IoGen was mutually terminated. Without                a                licensing partner, the Company will need to secure a new partner                to help                complete the development and commercialization of IoGen (See Note                13).                These financial statements do not include any adjustments relating                to the                recoverability and classification of recorded asset amounts, or amounts                and classification of liabilities that might be necessary should                the                Company be unable to continue as a going concern and, therefore,                be                required to realize the Company’s assets and discharge our liabilities in                other than the normal course of operations. In                June and August 2006, Symbollon raised net aggregate proceeds of                $1,342,340 in a private placement of 1,366,500 shares of its Class                A                common stock and a like number of warrants.                In                December 2006 and January 2007, Symbollon raised net aggregate proceeds                of                $2,368,038 in a private placement of 3,213,632 shares of its Class                A                common stock and 2,410,224 warrants. Management plans to obtain equity                and                debt financing from external investors, and to actively pursue a                new                partner to help complete the development and commercialization of                IoGen.                 Management                believes the plan described above will be sufficient to meet the                Company’s                liabilities and commitments as they become payable over the next                twelve                months. There can be no assurance that management's plan will be                successful. Failure to obtain the support of additional external                investors                to finance the Company’s operations will cause us to curtail operations                and impair the Company’s ability to continue as a going                concern. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**29**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **2.** **Summary                of****Significant****Accounting                Policies**      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Use                of Estimates*                                                                        | The                preparation of financial statements in conformity with generally                accepted                accounting principles requires management to make estimates and                assumptions that affect the reported amounts of assets and liabilities                and                disclosure of contingent assets and liabilities at the date of the                financial statements and the reported amounts of revenues and expenses                during the reporting period. Actual results could differ from those                estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| *Cash                and Cash**Equivalents*                                                         | Cash                and cash equivalents include short-term, highly liquid investments                with                maturities of less than three months when acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| *Concentration                of**Credit                Risks*                                           | The                Company had one customer for its IodoZyme® product and a commercialization                partner for its IoGen program. The customer’s and partner’s financial                condition were reviewed on an ongoing basis, and collateral was not                required. The Company believes a reserve for potential credit losses                was                not necessary as of December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *Accounts                Receivable**and                Allowance for**Doubtful                Accounts* | Accounts                receivable are customer obligations due under normal trade terms.                The                Company performs continuing credit evaluations of its customer’s financial                condition and generally does not require collateral. Senior management                reviews accounts receivable on a periodic basis to determine if any                receivables will potentially be uncollectible. The Company includes                any                accounts receivable balances that are determined to be uncollectible,                if                any, in its overall allowance for doubtful accounts. After all attempts                to                collect a receivable have failed, the receivable is written off against                the allowance. Based on the information available to the Company,                it                believes an allowance for doubtful accounts was not necessary as                of                December 31, 2005. There are no accounts receivable at December 31,                2006.                  |
| *Inventory*                                                                                              | Inventory                was stated at the lower of cost (determined on a first-in, first-out                basis) or market and consisted entirely of finished goods at December                31,                2005. There was no inventory on hand at December 31,                2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *Long-Lived                Assets*                                                                       | Long-lived                assets, such as intangible assets and property and equipment are                evaluated                for impairment when events or changes in circumstances indicate that                the                carrying amount of the assets may not be recoverable through the                estimated                undiscounted future cash flows from the use of these assets. When                any such                impairment exists, the related assets are written down to fair value.                In                2006, the Company wrote off $42,541 of impaired patent costs. The                Company                does not believe that any of its other long-lived assets are impaired                at                December 31, 2006 or 2005.                                                                                                                                                                                                                                                                                                                          |

**30**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **2.** **Summary                of****Significant****Accounting                Policies**(Continued)  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Depreciation                and**Amortization*                                                                 | Equipment                is stated at cost and is depreciated over its estimated useful life                (ranging from 5-7 years) using the straight-line method. Leasehold                improvements are stated at cost and are being amortized by the                straight-line method over the 10 year term of the lease which is                less than                their estimated useful lives.                                                                                                                                                                                                                                                                                                                                                                           |
| *Intangible                Assets*                                                                              | Intangible                assets subject to amortization consist of patents and trademarks                that have                estimated useful lives ranging from 11-17 years and a weighted average                useful life of 9.5 years. Costs related to patent applications are                capitalized as incurred and are amortized once the patent application                is                accepted or are expensed if the application is rejected or there                are other                circumstances that indicate that the asset is impaired (as described                above).                                                                                                                                                                            |
|                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| *Income                Taxes*                                                                                   | The                Company follows the liability method of accounting for income taxes,                as                set forth in Statement of Financial Accounting Standard SFAS No.                109,                “Accounting For Income Taxes.” Under this method, deferred tax liabilities                and assets are recognized for the expected future tax consequences                of                temporary differences between the carrying amount and the tax basis                of                assets and liabilities. The Company records a valuation allowance                against                deferred tax assets unless it is more likely than not that such asset                will                be realized in future periods.  |
| *Fair                value of**Financial**Instruments*                                                     | The                carrying amounts of cash and cash equivalents, accounts receivable,                other                current assets and accounts payable approximate fair value based                on their                short-term maturities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| *Revenue**Recognition*                                                                                          | The                Company recognizes revenue from its product sales and licensing                arrangements in accordance with SEC Staff Accounting Bulletin No.                104,                “Revenue Recognition.” Under these guidelines, revenue is recognized when                persuasive evidence of an arrangement exists, delivery has occurred                or                services rendered, the price is fixed or determinable and payment                is                reasonably assured.                                                                                                                                                                                                                                                           |
|                                                                                                            |
| *Research                and**Development*                                                                      | Research                and development costs are expensed as                incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

**31**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **2.** **Summary                of****Significant****Accounting                Policies**(Continued)  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Stock-Based**Compensation*                                                                                     | The                Company issued stock options to its employees and outside directors                pursuant to stockholder approved stock option plans. Option awards                are                generally granted with an exercise price equal to the market price                of the                Company’s stock at the date of grant. Employee option awards generally                vest over three years from the date of grant, and outside directors                option                awards generally vest over two years from the date of grant. All                option                awards generally have 10-year contractual terms. The Company attributes                stock-based compensation cost to operations using the straight-line                method                over the applicable vesting period. Effective                January 1, 2006, the Company adopted the provisions of SFAS No. 123(R),                “Share Based Payment”, using the statement’s modified prospective                application method. Under this method, compensation cost is recognized                for                all share-based equity payments granted, modified or settled after                January                1, 2006, as well as for any unvested equity awards that were granted                prior                thereto. Compensation cost for unvested awards granted prior to January                1,                2006 is recognized using the same estimate of the grant-date fair                value                and the same attribution method used to determine the pro forma                disclosures under SFAS No. 123, “Accounting for Stock-Based Compensation.”                Prior to January 1, 2006, the Company accounted for its stock-based                compensation plan using the intrinsic value method allowed under                SFAS No.                123, “Accounting for Stock-Based Compensation” and Accounting Principles                Board Opinion No. 25, “Accounting for Stock Issued to Employees” and                related interpretations.  Under                the provisions of SFAS No. 123(R), the Company recorded $527,474                of                stock-based compensation for the year ended December 31, 2006, with                $313,270 included in general and administrative expenses and $214,204                included in research and development costs. On January 1, 2006, upon                the                adoption of SFAS No. 123(R) the Company ceased recording the variable                compensation charges on repriced options, as was required under APB                No.                25. As of December 31, 2006 the unrecognized stock-based compensation                cost                related to non-vested stock awards was $637,808. This amount will                be                recognized in operations over a weighted average period of 26                months. |

**32**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **2.** **Summary                of****Significant****Accounting                Policies**(Continued)  |                                                                                                                                                                            |
|-----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Stock-Based**Compensation**(Continued)*                                                                        |  The                following table summarizes the Company’s stock option information as of,                and for the year ended December 31,                2006: |

|                                                                                                                                                                                                                   |    Number                ofShares |  WeightedAverageExercisePrice |  Weighted                AverageRemainingContractualTerm |   AggregateIntrinsicValue                (1) |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|------------------------------------|---------------------------------------------------------------|--------------------------------------------------------|
|                                                                                                                                                                                                                   |                                             |                               |                                                          |                                                   |
| Outstanding                at December 31, 2005                                                                                                                                                                        | 785,000                                          | $                0.58              |                                                          |                                                   |
|  Options                granted                                                                                                                                                                                   |  1,717,500                                  |  $                0.88        |                                                          |                                                   |
| Options                expired                                                                                                                                                                                         | (2,500)                                          | $                5.00              |                                                          |                                                   |
|  Outstanding                at December 31, 2006                                                                                                                                                                  |  2,500,000                                  |  $                0.78        |  7.6                                                     |  $415,538                                         |
|  Exercisable                at December 31, 2006                                                                                                                                                                  |  1,208,750                                  |  $                0.68        |  5.8                                                     |  $384,713                                         |
|  (1)                The intrinsic value of a stock option is the amount by which the                current                market value of the underlying stock exceeds the option exercise                price. |

|   | For                the years ended December 31, 2006 and 2005, the Company granted options                for 1,717,500 and 37,500 shares exercisable between $.87 and $1.70                per                share. The weighted-average grant date fair value of stock options                granted                during the years ended December 31, 2006 and 2005 was $0.88 and $1.11                per                share, respectively. No stock options were exercised during the years                ended December 31, 2006 or                2005. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**33**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **2.** **Summary                of****Significant****Accounting                Policies**(Continued)  |                                                                                                                                                                                                              |
|-----------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Stock-Based**Compensation**(Continued)*                                                                        | The                fair value of each option granted was estimated on the date of grant                using                the Black-Scholes option-pricing model with the following                assumptions: |

|                                                            |   | Years                Ended December                31, |
|-----------------------------------------------------------------|--------|--------------------------------------------------------|
|                                                            |   | **2006**                                               | 2005 |
|                                                            |   |                                                   |   |
| Weighted-average                expected stock-price volatility |   | **64.8-102%**                                          | 220-236% |
|                                                            |   |                                                   |   |
| Weighted-average                expected option life            |   | **5-6                years**                           | 7-9                years |
|                                                            |   |                                                   |   |
| Average                risk-free interest rate                  |   | **4.32-4.70%**                                         | 3.93                - 4.30% |
|                                                            |   |                                                   |   |
| Average                dividend yield                           |   | **0.0%**                                               | 0.0% |
|                                                            |   |                                                   |   |

|   | The                dividend yield of zero is based on the fact that the Company has                never                paid cash dividends and has no present intention to pay cash dividends.                Expected volatility is based on the historical volatility of the                Company’s                common stock over the period commensurate with the expected life of                the options. The risk-free interest rate is the U.S. Treasury Strips                rate                on the date of grant. The expected life was calculated using the                method                outlined in SEC Staff Accounting Bulletin Topic 14.D.2, “Expected Terms,”                as the Company’s historical experience does not provide a reasonable basis                for the expected term of the option. Based on the recent history                and                current expectations, the Company has not adjusted the calculated                value of                the options for the year ended December 31, 2006 to reflect a forefeiture                rate. A                summary of the nonvested option activity as of December 31, 2005                and for                the year ended December 31, 2006 is presented below: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   **Nonvested                Options** |   |  **Number                of****Options** | **Weighted                Average****Grant                Date****Fair                Value** |
|--------------------------------------------------|--------|-----------------------------------------------|-----------------------------------------------------------------------------------------------|
|                                             |   |                                          |                                                                                          |
| Outstanding                at December 31, 2005  |   | 78,750                                        | $                1.32                                                                         |
|                                             |   |                                          |                                                                                          |
| Granted                                          |   | 1,717,500                                     | $                0.88                                                                         |
|                                             |   |                                          |                                                                                          |
| Vested                                           |   | (505,000)                                     | $                0.96                                                                         |
|                                             |   |                                          |                                                                                          |
| Forfeited                                        |   | -                                             | -                                                                                             |
|                                             |   |                                          |                                                                                          |
| Outstanding                at December 31, 2006  |   | 1,291,250                                     | $                0.88                                                                         |

**34**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **2.** **Summary                of****Significant****Accounting                Policies**(Continued) |   |
|-----------------------------------------------------------------------------------------------------------|--------|

| *Stock-Based**Compensation**(Continued)* | Pro-forma                information regarding net income and earnings per share required                under                SFAS 123 before the adoption of SFAS 123(R)                follows: |
|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *For                the Year Ended December 31,*        |   |   | 2005                   |
|---------------------------------------------------------|--------|--------|------------------------|
|                                                    |   |   |                   |
| Net                loss                                 |   |   | $(645,973)             |
|                                                    |   |   |                   |
| Adjustments:                                            |   |   |                   |
| Stock-based                employee compensation        |   |   |                   |
| expense                included in reported net income, |   |   |                   |
| net                of related tax effects               |   |   | (296,749)              |
|                                                    |   |   |                   |
| Total                stock-based employee               |   |   |                   |
| compensation                determined under fair       |   |   |                   |
| value                method of all awards, net of       |   |   |                   |
| related                tax effects                      |   |   | (118,029)              |
|                                                    |   |   |                   |
| Basic                and diluted loss per share         |   |   | $(1,060,751)           |
|                                                    |   |   |                   |
| Basic                and diluted loss per share:        |   |   |                   |
| As                reported                              |   |   | $                (.09) |
| Pro                forma                                |   |   | $                (.15) |

| *Loss                Per Share* | The                Company follows SFAS No. 128, “Earnings per Share.” Under SFAS                No. 128, basic earnings per share excludes the effect of any dilutive                options, warrants or convertible securities and is computed by dividing                the net loss available to common shareholders by the weighted average                number of common shares outstanding for the period. Diluted earnings                per                share is computed by dividing the net loss available to common                shareholders by the sum of the weighted average number of common                shares                and common share equivalents computed using the average market price                for                the period under the treasury stock method.                                                                                                                |
|---------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Recent**Accounting*Standards   | In                June 2006, the FASB issued FASB Interpretation ("FIN") No. 48,*Accounting for Uncertainty in Income Taxes-an interpretation of FASB                Statement No. 109*                ("FIN 48"). FIN 48 prescribes a recognition threshold and measurement                attribute for the financial statement recognition and measurement                of a tax                position taken or expected to be taken in a tax return. FIN 48 also                provides guidance on derecognition, classification, treatment of                interest                and penalties, and disclosure of such positions. The Company will                adopt                the provisions of FIN 48 in the first quarter of 2007 as required.                The                adoption of FIN 48 is not expected to have a material effect on the                Company's consolidated financial                statements. |

**35**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **3.** **Inventory** | Inventory                consists of the following: |
|---------------------------|-----------------------------------------------------|

| *December                31,*      | **2006**                     | 2005                     |
|------------------------------------|------------------------------|--------------------------|
|  Raw                materials |  **$                -** |  $                - |
| Finished                goods      | **-**                        | 39,833                   |
|                               | **$                -**       | $                39,833  |

| **4.** **Equipment                and****Leasehold****Improvements** | Equipment                and leasehold improvements are stated at cost and consist of the                following: |
|---------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|

| *December                31*,                       | **2006**                   | 2005                     |
|----------------------------------------------------------|----------------------------|--------------------------|
|                                                     |                       |                     |
| Equipment                and fixtures                    | **$184,751**               | $                195,465 |
| Leasehold                improvements                    | **63,146**                 | 63,146                   |
|                                                     |                       |                     |
|                                                     | **247,897**                | 258,611                  |
|                                                     |                       |                     |
| Less                accumulated depreciation             | **238,432**                | 234,590                  |
|                                                     |                       |                     |
| Equipment                and leasehold improvements, net | **$                9,465** | $                24,021  |

|                                                                        | Depreciation                expense for the years ended December 31, 2006 and 2005 totaled $14,846                and                $18,336, respectively.  |
|-----------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **5.** **Patent                and****Trademark                Costs** | Patent                and trademark costs consist of the following:                                                                                               |

| *December                31,*                       | **2006**           | 2005           |
|-----------------------------------------------------|--------------------|----------------|
|                                                |               |           |
| Patent                costs                         | **$443,976**       | $528,743       |
| Trademark                costs                      | **2,444**          | 2,444          |
|                                                |  **446,420**  |  531,187  |
|  Less                accumulated amortization  |  **144,179**  |  166,119  |
|  Patent                and trademark cost, net |  **$302,241** |  $365,068 |

|   |  Amortization              expense related to these assets is estimated to be approximately $31,600              per year in fiscal years 2007 through 2010. Amortization expense for              the              years ended December 31, 2006 and 2005 totaled $38,136 and $35,880,              respectively. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**36**

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**Symbollon            Pharmaceuticals, Inc.**

**Notes            to Financial Statements**

|                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **6.** **Stockholders’****Equity**                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| *Capital                Stock*                                                                                                            | The                Company has authorized 93,750,000 shares of Class A common stock,                1,250,000 shares of Class B common stock and 5,000,000 shares of                preferred stock. The Class A and Class B common stock are                substantially identical except that holders of Class A common stock                have the right to cast one vote for each share held and the Class B                shareholders have the right to cast five votes for each share held.                As of                December 31, 2006 and 2005, there were no shares of Class B common                stock issued and outstanding. The preferred stock may be issued in                series,                and shares of each series will have such rights and preferences as                are                fixed by the Company’s Board of Directors. As of December 31, 2006                and 2005, there were no shares of preferred stock issued and                outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| *Issuance                of Common**Stock                and Common** * *Stock                Purchase** * *Warrants* | On                September 1, 2004, the Company sold in a private placement to accredited                investors 1,261,692 shares of Class A common stock and 630,846 redeemable                warrants for $634,300 in cash and $185,800 in prepaid services for                manufacturing, consulting and clinical trial expenses. Officers and                directors of the Company invested $127,000 of the cash raised as                part of                the private placement on the same terms and conditions as the third                party                investors. On                June 30, 2006, 77,000 shares that were issued for prepaid services                were                forfeited and returned to the Company as the services were not rendered                to                the Company. The                redeemable warrants entitled the holder thereof to purchase at any                time up                to February 28, 2006 (which was extended to March 31, 2006) a share                of                Class A common stock at a price of sixty-five cents ($0.65) per share.                From December 2005 through March 2006, redeemable warrants covering                511,961 shares were exercised, netting the Company $332,775 in cash,                and                103,500 shares were exercised for consulting services to be rendered                to                the Company over a 12-month period, which will be expensed at the                then                fair value of such shares ratably over such period. For 2006, the                Company                recorded an expense of $200,654 in general and administrative expenses.                At                December 31, 2006, 17,250 of these warrants with an aggregate fair                value                of $7,839 related to future services. Under Emerging Issues Task                Force                Issue No. 96-18 “Accounting                for Equity Instruments That Are Issued to Other Than Employees for                Acquiring, or in Conjunction with Selling, Goods or Services”, the                Company is required to record the expense related to these warrants                as the                underlying services are performed. These warrants are subject to                remeasurement; accordingly, the actual expense to be recognized may                be                materially different than the current fair value. In connection with                the                exercise of the redeemable warrants, the Company issued 615,461 warrants                entitling the holder thereof to purchase from September 1, 2006 to                February 28, 2009 a share of Class A common stock at a price of sixty-five                cents ($0.65) per share. The                fair value of the new warrants issued was estimated on the date of                grant                using the Black-Scholes option-pricing model to be $462,651 and was                recorded as a cost of raising the related capital. During March 2006,                warrants for 14,615 shares were exercised, netting the Company $9,500                in                cash. |

**37**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **6.** **Stockholders’****Equity**(Continued)                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Issuance                of Common**Stock                and Common** * *Stock                Purchase** * *Warrants**(Continued)* | The                Company accounts for certain of the shares and warrants issued for                prepaid                services under EITF 96-18 “Accounting for Equity Instruments That Are                Issued to Other Than Employees for Acquiring, or in Conjunction with                Selling, Goods or Services” (EITF 96-18). Accordingly, the Company has                recognized approximately $200,654 and $28,000 of expense related                to these                shares and warrants for the years ended December 31, 2006 and 2005,                respectively, in the accompanying statement of operations. On                September 15, 2005, the Company entered into a services agreement                with                Premier Funding Services LLC. In accordance with the services agreement,                and as partial consideration for the services provided by the vendor,                the                Company agreed to issue 20,000 shares of Class A common stock and                warrants                to purchase 40,000 shares of Class A common stock upon execution                of the                agreement. On November 1, 2006, the Company issued as additional                compensation to Premier 20,000 shares of Class A common stock. The                Company                accounts for these shares under EITF 96-18. Accordingly, the Company                has                determined the fair value of the shares and warrants to be $62,858                and has                recognized $50,474 of expense related to these shares and warrants                for the                year ended December 31, 2006, included in general and administrative                expenses in the accompanying statement of operations.  On                June 2, 2006 and August 21, 2006, the Company sold in a private placement                to accredited investors an aggregate of 1,366,500 shares of Class                A common                stock and a like number of redeemable warrants for net proceeds of                $1,342,340 in cash. The Company also issued redeemable warrants                exercisable for 24,160 shares to the placement agent as additional                compensation. The redeemable warrants entitle the holder thereof                to                purchase at any time up to August 21, 2011 a share of Class A common                stock                at a price of one dollar ($1.00) per share. The redeemable warrants                may be                redeemed by Symbollon at $0.01 per warrant in the event that the                closing                sales price of the Class A common stock over twenty successive trading                days is equal to or greater than $5.00 and the average trading volume                over                that period is in excess of twenty-five thousand (25,000) shares                per day,                subject to the holder’s right to exercise. The fair value of the new                warrants (inclusive of the warrants issued to the placement agent)                issued                was estimated on the date of grant using the Black-Scholes option-pricing                model to be $2,058,586. |

**38**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **6.** **Stockholders’****Equity**(Continued)                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Issuance                of Common**Stock                and Common** * *Stock                Purchase** * *Warrants**(Continued)* | On                November 1, 2006, we entered into a services agreement with the Number                One                Corporation. In accordance with the services agreement, and as partial                consideration for the services provided by the vendor, we agreed                to issue                40,000 shares of Class A common stock upon execution of the agreement.                The                Company accounts for these shares under EITF 96-18. Accordingly,                the                Company has determined the fair value of the shares and warrants                to be                $40,800 which was recognized as an expense in general and administrative                expenses in the accompanying statement of operations for the year                ended                December 31, 2006. On                December 1, 2004, the Company entered into a services agreement with                Dr.                Bernard A. Eskin. In accordance with the services agreement, and                as                consideration for the services provided by Dr. Eskin, the Company                issued                5,000 shares of Class A common stock on each of December 1, 2004,                2005 and                2006. The Company accounts for these shares under EITF 96-18. Accordingly,                the Company has determined the fair value of the shares to be $5,000                and                $5,350 which was recognized as an expense in general and administrative                expenses in the accompanying statement of operations for the years                ended                December 31, 2006 and 2005, respectively. On                December 29, 2006, the Company sold in a private placement to accredited                investors an aggregate of 3,169,804 shares of Class A common stock                and                2,377,353 redeemable warrants for net proceeds of $2,325,476 in cash.                On                January 15, 2007, the Company sold in a private placement to accredited                investors an aggregate of 43,828 shares of Class A common stock and                32,871                redeemable warrants for net proceeds of $34,263 in cash. The Company                also                issued redeemable warrants exercisable for 631,461 shares to the                placement                agent as additional compensation in connection with these offerings.                The                redeemable warrants entitle the holder thereof to purchase at any                time up                to December 29, 2011 a share of Class A common stock at a price of                one                dollar ($1.20) per share. The redeemable warrants may be redeemed                by                Symbollon at $0.01 per warrant in the event that the closing sales                price                of the Class A common stock over twenty successive trading days is                equal                to or greater than $5.00 and the average trading volume over that                period                is in excess of twenty-five thousand (25,000) shares per day, subject                to                the holder’s right to exercise. The fair value of the new warrants                (inclusive of the warrants issued to the placement agent) issued                was                estimated on the date of grant using the Black-Scholes option-pricing                model to be $1,420,286. |
|                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

**39**

----

**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **6.** **Stockholders’****Equity**(Continued)  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|----------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Common                Stock**Subscriptions**Receivable*       | In                January 2001, certain officers of the Company entered into Promissory                Notes and Pledge Agreements (the “Notes”) with the Company totaling                $834,560 in exchange for 462,895 shares of Class A common stock acquired                through the exercise of vested stock options. The Notes bore interest                at a                fixed rate of 5.61% and were due in full on December 31, 2005. The                Notes were collateralized by the 462,895 shares of Class A common                stock                and the Company had full recourse to pursue collection in the event                of                default. The Company’s recourse was limited to the pledged stock in the                event that the officer is no longer employed with the Company and                if the                then market value of the pledged stock is less than the outstanding                principal and accrued but unpaid interest on the officer’s Note.                 The                Company accounted for the Notes under FASB Intrepretation No. 44                “Accounting for Certain Transactions Involving Stock Compensation                (an                interpretation of APB Opinion No. 25)” (FIN 44) and Emerging Issues Task                Force Issue No. 00-23 “Issues Related to the Accounting of Stock                Compensation Under APB Opinion No. 25 and FASB Interpretation 44” as                variable arrangements. Pursuant to these pronouncements, no compensation                cost was recognized in 2005. On                December 30, 2005, the officers resigned from their employment with                the                Company in order to avail themselves of their contractual rights                to limit                the Company’s recourse to collect the Notes to the pledged stock. On                December 30, 2005, the two officers returned their stock and the                Notes                were cancelled. The officers were subsequently rehired on January                3, 2006                under new employment agreements.  |
| **7.** **Stock                Plans**                     | The                Company has adopted two stock plans: a stock option plan and a nonemployee                directors’ stock option plan. The                stock option plan provides for the grant of incentive stock options,                nonqualified stock options and stock appreciation rights. The Company                has                reserved 3,200,000 shares for issuance under this plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

**40**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **7.** **Stock                Plans**(Continued) | In                November 2003, the Company's Board of Directors authorized the repricing                of employee stock options, canceling 690,000 options with exercise                prices                ranging from $1.94 to $9.06 and issuing options to purchase 600,000                shares                of common stock at $0.28 per share, which was above the market value                on                the date of the repricing. These options were subject to variable                plan                accounting, as defined by FIN 44. As prescribed by the provisions                of FIN                44 the Company remeasured the intrinsic value of the repriced options,                through the earlier of the date of exercise, cancellation or expiration,                at each reporting date through the required adoption of SFAS 123                (R).                During the year ended December 31, 2005 the Company reversed $296,749                of                previously recognized compensation expense to reflect the decrease                in the                intrinsic value of the options. As of December 31, 2005, the Company                had                recognized aggregate compensation expense of approximately $297,000                related to the repriced options. No variable expense was recognized                pursuant to FIN 44 in the year ended December 31, 2006, as the Company                now                accounts for these options under SFAS 123 (R). On                May 24, 2006 the Company adopted a 2006 nonemployee directors’ stock                option plan that provides for the grant of nonstatutory stock options                automatically on January 1 of each calendar year commencing on                January 1, 2007. The Company has reserved 500,000 shares for issuance                under the plan. Each outside director shall be granted an option                to                purchase 10,000 shares of Class A common stock at fair market value,                vesting 50% on each of the first two anniversaries of the grant.                The                nonemployee directors’ stock option plan expires on the first business day                of 2017. Under                the above plans 741,355 shares are available for future grant or                purchase. The                Company had the following option activity under the stock option                plan and                the nonemployee directors’ stock option plan in 2006 and                2005: |
|-------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                          |      | Weighted-Average              |
|-----------------------------------------------|-----------|-------------------------------|
|                                          |      | Exercise                Price |
|                                          | Shares    | Per                Share      |
|                                          |      |                          |
| **Balance**,                December 31, 2004 | 747,500   | $0.56                         |
| Granted                                       | 37,500    | 1.11                          |
| Exercised                                     | -         | -                             |
| Cancelled                                     | -         | -                             |
|                                          |      |                          |
| **Balance**,                December 31, 2005 | 785,000   | 0.58                          |
| Granted                                       | 1,717,500 | 0.88                          |
| Exercised                                     | -         | -                             |
| Cancelled                                     | (2,500)   | 5.00                          |
|                                          |      |                          |
| **Balance**,                December 31, 2006 | 2,500,000 | $0.78                         |

**41**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **7.** **Stock                Plans**(Continued) | All                options outstanding at December 31, 2006 are categorized by the                following ranges in the table                below: |
|-------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    SharePrice                Range |  Weighted-AverageExercisePrice | Weighted-AverageRemainingContractualLife                (years) |    Number                ofShares |
|---------------------------------------------------|-------------------------------------|-----------------------------------------------------------------|--------------------------------------------------|
| $0.21                to $1.00                     | $0.73                               | 7.8                                                             | 2,370,000                                        |
| $1.00                to $3.63                     | $1.79                               | 5.3                                                             | 130,000                                          |
|                                              |                                |                                                            |  2,500,000                                  |

|   | All                options exercisable at December 31, 2006 are categorized by the                following ranges in the table                below: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    SharePrice                Range |  Weighted-AverageExercisePrice | Weighted-AverageRemainingContractualLife                (years) |    Number                ofShares |
|---------------------------------------------------|-------------------------------------|-----------------------------------------------------------------|--------------------------------------------------|
| $0.21                to $1.00                     | $0.55                               | 5.8                                                             | 1,078,750                                        |
| $1.00                to $3.63                     | $1.79                               | 5.3                                                             | 130,000                                          |
|                                              |                                |                                                            |  1,208,750                                  |

|   | All                options exercisable at December 31, 2005 are categorized by the                following ranges in the table                below: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|    SharePrice                Range |  Weighted-AverageExercisePrice | Weighted-AverageRemainingContractualLife                (years) |    Number                ofShares |
|---------------------------------------------------|-------------------------------------|-----------------------------------------------------------------|--------------------------------------------------|
| $0.21                to $1.00                     | $0.28                               | 3.0                                                             | 611,250                                          |
| $1.00                to $5.00                     | $1.93                               | 5.3                                                             | 95,000                                           |
|                                              |                                |                                                            |  706,250                                    |

|   | The                weighted-average fair value of options granted during the years ended                December 31, 2006 and 2005 was $0.88 and $1.11 per share,                respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**42**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **8.** **Loss                Per Share** | The                Company’s basic and diluted net loss per share of common stock for the                years ended December 31, 2006 and 2005 is computed by dividing the                net loss by the weighted average number of common shares outstanding                during the period.  |
|-----------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                          | The                following table summarizes securities that were outstanding as of                December 31, 2006 and 2005 but not included in the calculation of                diluted net loss per share because such shares are                antidilutive:                                          |

| *December                31,* | **2006**      | 2005    |
|-------------------------------|---------------|---------|
|                          |          |    |
| Stock                options  | **2,500,000** | 785,000 |
| Stock                warrants | **5,040,320** | 666,846 |

| **9.** **Income                Taxes** | The                following table summarizes the significant differences between the                benefit                that would be recognized under the United States federal statutory                tax                rate and the Company’s effective tax rate for financial statement                purposes: |
|---------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *December                31,*                           | **2006**               | 2005                   |
|--------------------------------------------------------------|------------------------|------------------------|
|                                                         |                   |                   |
| United                States statutory tax rate              | **34%**                | 34%                    |
| State                taxes, net of United States             |                   |                   |
| federal                tax benefit                           | **6%**                 | 6%                     |
|                                                         |                   |                   |
| Valuation                allowance provided against net      |                   |                   |
| operating                loss carry forwards and tax credits | **(40%)**              | (40%)                  |
|                                                         |                   |                   |
| Effective                tax rate                            | **-                %** | **-                %** |

|   | Deferred                income taxes reflect the impact of “temporary differences” between the                amount of assets and liabilities for financial reporting purposes                and such                amounts as measured by tax laws and regulations. Deferred tax assets                are                comprised of the following: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *December                31,*                   | **2006**                     | 2005                     |
|-------------------------------------------------|------------------------------|--------------------------|
|                                            |                         |                     |
| Tax                credit carryforwards         | **$                574,000** | $                492,000 |
| Net                operating loss carryforwards | **5,862,000**                | 4,926,000                |
|                                            |                         |                     |
| Gross                deferred tax asset         | **6,436,000**                | 5,418,000                |
|                                            |                         |                     |
| Deferred                tax assets valuation    |                         |                     |
| allowance                                       | **(6,436,000)**              | (5,418,000)              |
|                                            |                         |                     |
| Net                deferred tax assets          | **$                -**       | **$                -**   |

**43**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **9.** **Income                Taxes**(Continued) | As                of December 31, 2006 and 2005, the deferred tax assets have been                fully offset by valuation allowances, since the realization of such                amounts is uncertain. The change in the valuation allowance during                2006                and 2005 was $1,018,000 and $177,000, respectively. As                of December 31, 2006, the Company has net operating loss                carryforwards totaling approximately $14,656,000. The amount of the                net                operating loss carryforwards which may be utilized in any future                period                may be subject to certain limitations, based upon changes in the                ownership                of the Company’s common stock.   |
|--------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                   | The                following is a breakdown of the net operating loss expiration                period:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|                             | Amount                of     |
|----------------------------------|------------------------------|
| *Expiration                Date* | Remaining                NOL |
|                             |                         |
| 2008                             | $                743,000     |
| 2009                             | 1,514,000                    |
| 2010                             | 1,374,000                    |
| 2011                             | 921,000                      |
| 2018                             | 897,000                      |
| 2019                             | 739,000                      |
| 2020                             | 476,000                      |
| 2021                             | 1,387,000                    |
| 2022                             | 612,000                      |
| 2023                             | 638,000                      |
| 2024                             | 2,061,000                    |
| 2025                             | 953,000                      |
| 2026                             | 2,341,000                    |
|                             |                         |
|                             | $                14,656,000  |

|   | In                addition, the Company has available tax credit carryforwards (adjusted                to                reflect provisions of the Tax Reform Act of 1986) of approximately                $574,000, which are available to offset future taxable income and                income                tax liabilities, when earned or incurred. These amounts expire in                various                years through 2026. The amount of the tax credit carryforwards which                may                be utilized in any future period may be subject to certain limitations,                based upon changes in the ownership of the Company’s common                stock. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**44**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **10.** **Commitments**  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Facilities                Lease*  | The                Company leases its facilities under an operating lease that expires                on                August 31, 2007. The lease requires payment of real estate taxes and                other common area maintenance expenses. Rent expense for the years                ended                December 31, 2006 and 2005 was approximately $40,000 and $38,000,                respectively. Future                minimum rental payments due are as                follows: |

| *Year                ending December 31*, | Total                   |
|-------------------------------------------|-------------------------|
|                                      |                    |
| 2007                                      | 27,000                  |
|                                      |                    |
|                                      | $                27,000 |

| *Employment**Agreements*           | On                January 3, 2006, the Company entered into employment agreements with                its                principal officers providing for minimum base compensation and severance                pay which expire December 31, 2008. For the years ended                December 31, 2006 and 2005, the aggregate amount paid to the                Company’s principal officers was $455,000 and $497,000, respectively. For                2007, the minimum amounts to be paid under the new agreements total                approximately $478,500 per year.                                                                                  |
|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Royalty                Agreement* | A                royalty agreement with one of the inventors who assigned certain                patent                rights to the Company provides for royalties based on a percentage                of the                licensing revenues received by the Company from products falling                within                the scope of the patent rights. The percentage varies from 1.5% to                5%                depending on the gross revenues received, with maximum royalty payments                under the agreement not to exceed $2,884,000. Through December 31,                2006, no royalties have been earned under this agreement.  |
| *Consulting**Agreements*           | The                Company has entered into various scientific advisory and consulting                agreements to support its development activities. These agreements                generally expire over several future years. Amounts charged to operations                in connection with these agreements for the years ended December 31,                2006 and 2005 amounted to approximately $91,000 and $30,000,                respectively.                                                                                                                                                                                                                    |

**45**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **10.** **Commitments**(Continued)    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *Finder’s                Fees*            | The                Company has entered into agreements to pay finders’ fees for agreements                entered into with certain companies for investment or revenue purposes.                The finders’ fees are based on a percentage of the investment or revenue.                No amounts were paid or accrued pursuant to any of these agreements                during                2006 or 2005.                                                                                                                                                                                                       |
| *Employee                Benefit**Plan*         | Effective                January 1, 1999, the Company established a Savings Incentive Match                Plan for Employees of Small Employers (SIMPLE) IRA plan covering                substantially all of its employees. The Company makes contributions                to the                plan at the discretion of the Board of Directors based upon a percentage                of employee compensation as provided by the terms of the plan. The                Company                did not make any contributions to the plan for the year ended December                31,                2006 and 2005.  |
| **11.** **Major                Customers** | For                the years ended December 31, 2006 and 2005, the Company generated its                net product revenue from one customer, its exclusive marketing partner                for                its bovine teat sanitizer, and one partner for IoGen. Revenues from                major                customers were generated as                follows:                                                                                                                                                                                                                                                       |

| *Year                ended December 31,*      | **2006**                    | 2005                     |
|----------------------------------------------------|-----------------------------|--------------------------|
|                                               |                        |                     |
| Customer                A - Net Product Revenues   | **$                39,833** | $                49,627  |
| Customer                B - Collaboration Revenues | **-**                       | 400,000                  |
|                                               |                        |                     |
|                                               | **$                39,833** | $                449,627 |

| **12.** **Related                Party****Transactions** | A                member of the Board of Directors provides legal services to the Company.                Amounts paid for legal services rendered by the director, either                individually or through his firm, totaled $54,043 and $21,157 for the                years ended December 31, 2006 and 2005, respectively. The                Company exchanges office space for services with a company owned                by the                spouse and in-law of one of the Company’s officers and directors. The                officer and director is also a director in the other company. The                estimated annual value for 2006 and 2005 of the relationship is $9,600                for                each year.  |
|---------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                          | A                member of the Board of Directors provides consulting services to                the                Company. Amounts paid for consulting services rendered by the director                totaled approximately $40,000 and $15,000 for the years ended                December 31, 2006 and 2005,                respectively.                                                                                                                                                                                                                                                                                                                                                                                                                              |

**46**

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**Symbollon          Pharmaceuticals, Inc.**

**Notes          to Financial Statements**

| **13.** **Licensing** **Agreement** | On                April 12, 2005, Symbollon entered into an exclusive worldwide licensing                and co-marketing agreement covering the use of IoGen for the treatment                of                cyclic pain and tenderness in humans with Bioaccelerate Holdings                Inc.                (“Bioaccelerate”). Under the terms of the agreement, Bioaccelerate was                required to fund ongoing Phase III development of IoGen through its                wholly                owned subsidiary, Amilar Pharmaceuticals. Bioaccelerate had the primary                responsibility for the commercialization of IoGen, and Symbollon                was to                oversee the future clinical development efforts necessary to seek                marketing approval for IoGen. The parties were to share in any net                profits                upon commercialization. At                December 31, 2005, the Company had $84,583 of deferred research and                development collaboration revenue related to the Bioaccelerate                arrangement. Prior to its termination, the Company assessed collectibility                under the Bioaccelerate arrangement as being uncertain and reversed                the                deferred revenue. On                August 23, 2006, the parties mutually terminated the agreement with                all                rights to IoGen licensed under the agreement to Bioaccelerate reverting                back to Symbollon. (See Note 1). |
|-----------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**47**

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

**Item      8A. Controls and Procedures**

**Item      8B. Other Information**

**PART      III**

**Item      9. Directors, Executive Officers, Promoters and Control Persons and Corporate      Goverance; Compliance with Section 16(a) of the Exchange      Act**

**Item      10. Executive Compensation**

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

**48**

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**Item      12. Certain Relationships and Related Transactions, and Director      Independence**

**Item      13. Exhibits **

|   | 1 | 1993              Stock Option Plan, as amended.  |
|--------|---|-------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|
|   | 2 | Form                of Stock Option Agreement to be entered into between the Company                and each                option holder. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |   |
|--------|--------|--------|
|   | 3 |  2006              Non-Employee Directors' Stock Option              Plan. |
|--------|---|---------------------------------------------------------------------------------|

|   | 4 | Employment                Agreement, dated January 3, 2006, between the Company and Dr. Jack                H.                Kessler. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------|

|   | 5 | Employment                Agreement, dated January 3, 2006, between the Company and Paul C.                Desjourdy. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------|

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

**49**

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| **Signature**                         | **Title**                                          | ** ****Date**             |
|---------------------------------------|----------------------------------------------------|--------------------------------|
|                                  |                                               |                           |
| /s/                Paul C. Desjourdy  | President,                Chief Executive Officer, | March                22, 2007  |
| Paul                C. Desjourdy      | Treasurer,                General Counsel, Chief   |                           |
|                                  | Financial                Officer, and Director     |                           |
|                                  | (Principal                Executive, Financial     |                           |
|                                  | and                Accounting Officer)             |                           |
|                                  |                                               |                           |
|                                  |                                               |                           |
|                                  |                                               |                           |
| /s/                Jack H. Kessler    | Executive                Vice President,           | March                22, 2007  |
| Jack                H. Kessler        | Chief                Scientific Officer,           |                           |
|                                  | Secretary                and Chairman              |                           |
|                                  | of                the Board of Directors           |                           |
|                                  |                                               |                           |
| /s/                James C. Richards  | Director                                           | March                22, 2007  |
| James                C. Richards      |                                               |                           |
|                                  |                                               |                           |
| /s/                Richard F. Maradie | Director                                           | March                22, 2007  |
| Richard                F. Maradie     |                                               |                           |
|                                  |                                               |                           |
| /s/                Eugene Lieberstein | Director                                           | March                22 , 2007 |
| Eugene                Lieberstein     |                                               |                           |
|                                  |                                               |                           |

**50**

----

**Symbollon      Pharmaceuticals, Inc.**

**Index      to Exhibits**

| 3.1 | Amended                Certificate of Incorporation of the Company. (previously filed as                exhibit                3.1 to Form 10-KSB for the year ended December 31, 2005 and incorporated                by reference) |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Amended                By-Laws of the Company. (previously filed as exhibit 3.2 to Form                10-QSB                for the quarter ended June 30, 1999 and incorporated by                reference) |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Agreement                of Merger, dated as of August 4, 1993, between the Company and Symbollon                Corporation, a Massachusetts corporation (including Certificate of                Merger                and other state filings). (previously filed as exhibit number 3.3                of the                Registration Statement (the “Registration Statement”) on Form SB-2                (Registration No. 33-68828) filed on November 24, 1993 and declared                effective on December 7, 1993, and incorporated by                reference) |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1 | Form                of Specimen Class A Common Stock Certificate. (previously filed as                exhibit                number 4.2 of the Registration Statement and incorporated by                reference) |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | 1993                Stock Option Plan of the Company, as amended. (incorporated by reference                to Exhibit C to the Company’s 2005 Annual Stockholders Meeting Proxy                Statement filed under cover of Schedule 14A dated May 4,                2005) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Employment                Agreement, dated January 3, 2006, between the Company and Paul C.                Desjourdy. (previously filed as exhibit number 10.1 to Form 8-K filed                on                January 6, 2006 and incorporated by                reference) |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Employment                Agreement, dated January 3, 2006, between the Company and Dr. Jack                H.                Kessler. (previously filed as exhibit number 10.2 to Form 8-K filed                on                January 6, 2006 and incorporated by                reference) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Commercial                Lease, dated June 5, 1997, between Pine Street Realty Trust and the                Company. (previously filed as exhibit number 10.18 to Form 10-QSB                for the                quarter ended June 30, 1997 and incorporated by                reference) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | Form                of Indemnification Agreement between the Company and each officer                and                director of the Company. (previously filed as exhibit number 10.6                of the                Registration Statement and incorporated by                reference) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Marketing                and Supply Agreement, dated January 11, 1995, between the Company                and West                Agro. (previously filed as exhibit number 10.1 to Form 8-K of the                Registrant dated January 11, 1995 and incorporated by reference)                ** |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Agreement,                dated August 31, 1992, among the Company, Dr. Jack H. Kessler and                Dr.                Robert Rosenbaum. (previously filed as exhibit number 10.8 of the                Registration Statement and incorporated by                reference) |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8 | Form                of Stock Option Agreement to be entered into between the Company                and each                option holder. (previously filed as exhibit number 10.10 to Form                10-KSB                for the year ended December 31, 1993 and incorporated by                reference) |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9 | 2006                Non-Employee Directors’ Stock Option Plan of the Company. (previously                filed as exhibit number 10.1 to Form 8-K filed on May 30, 2006 and                incorporated by reference) |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | 1995                Non-Employee Directors’ Stock Option Plan of the Company. (previously                filed as exhibit number 10.1 to Form 10-QSB for the quarter ended                June 30,                1995 and incorporated by reference) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | Investment                Agreement, dated October 1, 2003, between the Company and Dutchess                Private                Equities Fund, L.P. (previously filed as exhibit 10.14 to the Registration                Statement on Form SB-2 (Registration No. 333-109772), filed on October                17,                2003 and declared effective on November 7, 2003 (the “2003 Registration                Statement”)) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Registration                Rights Agreement, dated October 1, 2003, between the Company and                Dutchess                Private Equities Fund, L.P (previously filed as exhibit 10.15 to                the 2003                Registration Statement) |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | Asset                Purchase Agreement, dated as of April 6, 2004, by and among the Company,                Mimetix Pharmaceuticals, Inc. and Mimetix Inc. (previously filed                as                exhibit number 10.1 to Form 10-QSB for the quarter ended June 30,                2004 and                incorporated by reference) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14 | Form                of Subscription Agreement, dated as of September 1, 2004, between                the                Company and certain purchasers of the Company’s securities. (previously                filed as exhibit number 10.1 to Form 8-K on November 8, 2005 and                incorporated by reference) |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15 | Form                of Redeemable Warrant for the purchase of shares of Class A Common                Stock,                dated as of September 1, 2004, issued to certain purchasers of the                Company’s securities. (previously filed as exhibit number 10.2 to Form 8-K                on November 8, 2005 and incorporated by                reference) |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16 | Licensing                and Co-Marketing Agreement, effective on April 12, 2005, by and between                the Company and Bioaccelerate Holdings Inc. (previously filed as                exhibit                number 10.1 to Form 10-QSB for the quarter ended September 30, 2005                and                incorporated by reference) ** |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17 | Form                of Warrant for the purchase of shares of Class A Common Stock, dated                as of                February 28, 2006, issued to certain purchasers of the Company’s                securities (previously filed as exhibit number 10.1 to Form 8-K filed                on                March 7, 2006 and incorporated by                reference) |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18 | Securities                Purchase Agreement, dated as of June 2, 2006, between Symbollon and                certain purchasers of Symbollon’s securities. (previously filed as exhibit                number 10.1 to Form 8-K filed on June 7, 2006 and incorporated by                reference) |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19 | Form                of Redeemable Warrant expiring on June and August 2011 for the purchase                of                shares of Class A common stock issued to certain purchasers of Symbollon’s                securities. (previously filed as exhibit number 10.2 to Form 8-K                filed on                June 7, 2006 and incorporated by                reference) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20 | Registration                Rights Agreement, dated as of June 2, 2006, between Symbollon and                certain                purchasers of Symbollon’s securities. (previously filed as exhibit number                10.3 to Form 8-K filed on June 7, 2006 and incorporated by                reference) |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.21 | Form                of Redeemable Warrant expiring December 2011 for the purchase of                shares of                Class A common stock issued to certain purchasers of Symbollon’s                securities (previously filed as exhibit number 10.22 to the Registration                Statement on Form SB-2 (Registration No. 333-140200) filed on January                25,                2007 (the “2007 Registration Statement”) and declared effective on                February 7, 2007, and incorporated by reference). |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.22 | Form                of Subscription Agreement, dated as of December 29, 2006, between                Symbollon and certain purchasers of Symbollon’s securities (previously                filed as exhibit number 10.23 to the 2007 Registration Statement,                and                incorporated by reference). |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 23.1  | Consent              of Vitale, Caturano & Company Ltd. Relating to Forms S-8 and              SB-2. * |
|------------|----------------------------------------------------------------------------------------------------------------------|

| 31.1 | Certification                of the Chief Executive Officer and Chief Financial Officer required                by                Securities Exchange Act Rule 13a-14(a) as adopted pursuant to                Section 302 of the Sarbanes-Oxley Act of 2002.                * |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification                of the Chief Executive Officer and Chief Financial Officer required                by                Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350, as                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                * |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| * | Filed                herewith. |
|---|--------------------------------|

| ** | Indicates                that material has been omitted and confidential treatment has been                granted                or requested therefore. All such omitted material has been filed                separately with the Commission pursuant to Rule                24b-2. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**E-1**