SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549


                                   FORM 10-KSB

(Mark One)

[ x ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2003
                                       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.
                 (Name of small business issuer in its charter)

              Delaware                                36-3463683
      (State of incorporation)             (I.R.S. employer identification no.)


          37 Loring Drive
     Framingham, Massachusetts                           01702
(Address of principal executive offices)               (Zip Code)

Issuer's telephone number  (508) 620-7676

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

                                      None
                                (Title of class)

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


                 Class A Common Stock, $.001 par value per share
                                (Title of class)


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

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

The issuer's revenues for its most recent fiscal year (year ended December 31,
2003) were $270,772.

As of March 17, 2004, the aggregate market value of the voting stock of the
issuer held by non-affiliates of the issuer was approximately $4,942,613 based
upon the closing price of such stock on that date.

As of March 17, 2004, 4,196,204 shares of Class A Common Stock of the issuer
were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement to be delivered to
stockholders in connection with the Annual Meeting of Stockholders to be held on
May 19, 2004 are incorporated by reference into Part III hereof. With the
exception of the portions of such Proxy Statement expressly incorporated into
this Annual Report on Form 10-KSB by reference, such Proxy Statement shall not
be deemed filed as part of this Annual Report on Form 10-KSB.

    Transitional Small Business Disclosure Format (check one): Yes ___ No X



<PAGE>



Special Note Regarding Forward Looking Statements

         In addition to the historical information contained herein, this Annual
Report on Form 10-KSB contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, including, but not
limited to statements concerning plans, objectives, goals, strategies,
prospects, financial needs, future performance and future costs and
expenditures. Such statements may be identified or qualified, without
limitation, by words such as "likely", "will", "suggests", "may", "would",
"could", "should", "expects", "anticipates", "estimates", "plans", "projects",
"believes", or similar expressions (and variants of such words or expressions).
Investors are cautioned that forward-looking statements are inherently
uncertain. Actual performance, achievements and results may differ materially
from those expressed, projected or suggested in the forward-looking statements
due to certain risks and uncertainties, including, but not limited to, the risks
and uncertainties described or discussed in the section "Risk Factors" in this
Annual Report on Form 10-KSB. The forward-looking statements contained herein
represent the Company's judgment as of the date of this Annual Report on Form
10-KSB, and the Company cautions readers not to place undue reliance on such
statements.

                                     PART I

Item 1.  Description of Business

General Background

         We are engaged in development and commercialization of proprietary
iodine-based pharmaceutical agents and antimicrobials (collectively referred to
as "applications"). Symbollon is a Delaware corporation incorporated in August
1993 and is the successor by merger to a Massachusetts corporation incorporated
in May 1991, which was the successor by merger to an Illinois corporation, which
was incorporated in July 1986. Following stockholder approval at the 2001 Annual
Meeting of Stockholders, we changed our name from Symbollon Corporation to our
current name.

The Company's Technology

         Iodine has been shown to be a rapid acting, broad-spectrum
antimicrobial and an effective therapeutic for certain pharmaceutical
applications. We have developed proprietary iodine technology that Symbollon
believes maximizes the "therapeutic index" of iodine. The "therapeutic index" of
a drug is the ratio of the largest safe dose to the smallest effective dose. Our
technology accomplishes this by controlling the ratio of molecular iodine (I2),
to the other inactive species of iodine typically present in solution. We
believe that this will enable it to produce iodine-based applications having
advantages over currently available products.

         Symbollon believes that our iodine-based technology has potential use
in a number of product application areas. These applications can be grouped into
women's healthcare and infection control.

         When used for infection control applications, we believe that the major
strengths of our patented technology are the minimization of staining and color
associated with traditional iodine products, broad spectrum of antimicrobial
activity, rapidity of cidal activity, safe residues, no known resistance and no
environmental disposal concerns. The primary weaknesses of our technologies are
the inconvenience and cost of a multi-part delivery system and the potential for
staining and corrosivity.

         Concerning women's healthcare, Symbollon believes that a relationship
exists between iodine deficiency and the increased incidence of certain female
health problems. These include some types of premenopausal breast cancer,
fibrocystic breast disease and endometriosis. We believe that the underlying
causation of these problems relates to the monthly ovarian cycle and the proper
functioning of the gonadotropic hormones.

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<PAGE>

Bovine Teat Sanitizer Product

         During 1994, we co-developed a bovine teat sanitizer, marketed as
"IodoZyme(R)", with West Agro, Inc. of Kansas City, MO ("West Agro"), a
subsidiary of the Tetra Laval Group and a leading manufacturer and distributor
of iodophor-based products for dairy use. In January 1995, Symbollon and West
Agro signed a marketing and supply agreement covering IodoZyme, and we began
shipping IodoZyme to West Agro in early 1995. Pursuant to this agreement, West
Agro was granted the exclusive worldwide right to market, distribute, promote
and sell IodoZyme. Under the agreement, we manufacture and supply West Agro with
IodoZyme in finished product form.

         Total product sales for 2003 and 2002 from IodoZyme were $270,772 and
$379,254, respectively. Our invoice terms are net 30 days. We had no orders for
future delivery of IodoZyme at December 31, 2003. Net product sales by market
are as follows:



       Year ended December 31,               2003                2002
-------------------------------------------------------------------------------

       United States                      $  221,588            $ 379,254
       United Kingdom                         49,184                    -
-------------------------------------------------------------------------------

                                          $  270,772            $ 379,254
-------------------------------------------------------------------------------

Product Development

         Since 2000, we have concentrated our product development work on the
proposed product application for a treatment for fibrocystic breast disease.
Symbollon spent approximately $280,000 and $315,000 on research and development
during the years ended December 31, 2003 and 2002, respectively.

         Given our limited financial resources, the uncertainty of the
development effort and the necessity for regulatory approval, there can be no
assurance of ultimate success with respect to any product development program or
that resulting products, if any, will be commercially successful. Additionally,
our limited resources will require substantial support for new business
initiatives from corporate partners who would ultimately introduce the products
into the marketplace.

         Recent material developments in our ongoing programs are described
below.

         Women's Healthcare

         We have developed an oral dosage form of our technology which generates
molecular iodine in situ in the stomach of the patient. We refer to this tablet
as IoGen(TM). Based on the available scientific literature, we believe that
IoGen may be effective in the prevention and treatment of certain female health
problems, including some types of premenopausal breast cancer, fibrocystic
breast disease ("FBD") and endometriosis.

         We have chosen to pursue a treatment for moderate to severe cyclic pain
and tenderness ("mastalgia") associated with FBD based on the published results
covering previous independent third party testing conducted for this indication.
Collectively, more than 1,500 women afflicted with FBD have been orally
administered various forms of iodine with reported clinical improvement in their
symptoms occurring in 60% or greater of those women. FBD is a benign breast

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<PAGE>

condition characterized by lumpiness, breast pain and tenderness. FBD affects
approximately thirty-five percent of the women of childbearing age, which
represents in the United States about 24 million women. It has been estimated
that moderate to severe mastalgia occurs in approximately 11% of the women of
childbearing age, or about 7.5 million women.

         In 1995, Symbollon discovered a proprietary method for generating
molecular iodine in situ in a person's stomach. IoGen is the first formulation
developed utilizing this novel technique. In 1998, we initiated human clinical
trials evaluating its effectiveness for the treatment of FBD. During 2000,
Symbollon completed Phase I and Phase II trials.

         The Phase I trial was structured as a single-center, open-labeled,
randomized crossover study. Eighteen healthy females participated. The trial was
designed to assess dose proportionality and relative bioavailability of IoGen
tablets at three concentrations, 1.5 mg, 3.0 mg and 6.0 mg. These tablets were
the same as used in the Phase II trials. In the Phase I study, IoGen was well
tolerated at all dose levels. There were no drug-related adverse events.

         The results of the Phase I trial were based on blood and urine samples,
collected over a 48-hour period following dosing. Pharmacokinetic analysis
demonstrated that IoGen is dose-proportional when evaluated by either peak or
mean iodine concentration in the blood samples. The results also indicated
relative bioavailability among the 1.5, 3.0 and 6.0 mg IoGen tablets, as
measured by the excreted iodine in urine samples and serum concentrations.

         The multi-center Phase II clinical trial treated 111 patients with
moderate to severe FBD in a placebo-controlled, double-blinded, randomized
study. Three drug concentrations, 1.5 mg, 3.0 mg and 6.0 mg, were dosed daily
for six months, followed by a two-month observation period.

         In the Phase II trial, IoGen was well tolerated by the patients. There
were also no drug-related serious adverse events. The trial results indicate
that there were no dose-related increases in incidence, severity and causality
of treatment-emergent adverse events or clinically significant changes in
laboratory parameters or vital signs. With regard to treatment-emergent
headaches, a statistically significant decrease in incidence was observed
between the placebo and the IoGen groups. Headaches were reported in 7 of 17
(41%) patients in the placebo, compared to 1 of 16 (6%) patients in the 1.5-mg
group, 10 of 38 (26%) patients in the 3.0-mg group and 5 of 40 (13%) patients in
the 6.0-mg group (p=.033).

         We evaluated IoGen's clinical success utilizing two validated
independent assessment tools. In the first tool, the physicians measured IoGen's
effectiveness by analyzing the three primary endpoints of breast nodularity,
pain and tenderness. The 6.0-mg group showed improvement in 21 of 27 (78%)
patients for pain, 19 of 26 (73%) for tenderness and 10 of 27 (37%) for
nodularity. This compares favorably to the placebo group which had observed
improvement in 6 of 10 (60%) patients for pain, 3 of 10 (30%) for tenderness and
3 of 15 (20%) for nodularity.

         In the second assessment tool the patients evaluated their pain and
tenderness by completing a validated, health-related quality of life
questionnaire. The questionnaire was developed by the Lewin Group for women with
FBD, who were treated with iodine. Its results show a correlation between
increased dosing and improved quality of life symptoms for the women in the
study.

         During 2002, the United States Food and Drug Administration ("FDA")
provided comments regarding the structure of the proposed IoGen Phase III
pivotal trials. Based on FDA's advice, we modified the criterion for measuring
the primary endpoint of the IoGen pivotal trials to provide for daily patient
assessment of their breast pain and tenderness. The secondary endpoint is a
clinically significant reduction of the patients' nodularity as measured by the
physicians' assessment. We anticipate having to dose approximately 1,500
patients with IoGen prior to filing for marketing approval with the FDA. We do
not plan to initiate further clinical trials for IoGen until the resources
necessary to conduct the trials are secured.

                                       4
<PAGE>

         For the last several years we have been attempting to secure the
resources necessary to complete the clinical development of IoGen. Our primary
focus has been to identify a corporate partner that would provide the funding
required. As a result of our efforts, various medical professionals have
provided insight into the likely treatment group that would be most appropriate
for IoGen. We have been treating patients with IoGen who have moderate to severe
mastalgia. Based on the benign nature of the condition and the pregnancy
category X labeling indicated for IoGen by FDA, medical professionals have
indicated that IoGen is appropriate for only severely impacted patients.

         The pregnancy category X designation means that the risk to the neonate
involved in the use of the drug by pregnant women clearly outweighs any possible
benefits. The pregnancy category X labeling indicated for IoGen by FDA is based
on the historical medical literature. The medical literature indicates that
increased maternal iodine consumption during pregnancy can cause certain serious
adverse effects to the neonate. While these adverse effects occurred from pure
iodine intake 30 times the 6.0 mg level of iodine contained in an IoGen tablet,
the FDA has indicated that IoGen's proposed label would state that it is not
appropriate for women who are or may become pregnant. However, in the medical
literature adverse effects were observed in doses only twice IoGen's level of
iodine when taken in combination with certain other drugs. We have not conducted
any studies to ascertain whether the level of iodine contained in IoGen would
pose a risk to the neonate.

         In March 2003, we filed with the FDA an Application for Orphan Drug
Designation for the treatment of severe cyclic mastalgia associated with FBD.
Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs
intended to treat a "rare disease or condition." The Orphan Drug Act generally
defines a "rare disease or condition" as one that affects populations of fewer
than 200,000 people in the United States. We received notification from the FDA
that our request had been denied because the FDA believed the prevalence of
severe cyclic mastaglia associated with FBD exceeds the statutory 200,000
threshold.

         In 2001, we conducted a dose-ranging study in rodents for the purpose
of determining the appropriate dose at which to conduct a two-year toxicity
study in rodents. In 2002, the FDA provided its recommendation for the
appropriate dose to carryforward into the two-year study. However, we will need
additional resources to continue the development of IoGen, and until such
resources are obtained, Symbollon will not initiate the two-year rodent study or
further clinical development of IoGen. Symbollon is seeking a corporate
relationship with a pharmaceutical company to commercialize IoGen and help
finance the remaining clinical development of IoGen. Clinical investigation of
IoGen for other female health indications will be investigated only as resources
allow.

         As we continue our efforts to create a relationship with a corporate
partner for IoGen, we are making plans to initiate a new study to help establish
a link between IoGen and breast cancer prevention. The study would determine if
elevated levels of dietary iodine lead to the formulation of antiproliferative
iodinated arachidonic acid derivatives in the breast tissue of fibrocystic
patients. We believe that establishing this link between iodine intake and these
iodolipids could provide the first concrete human data warranting the need for
further clinical investigation of the possible use of IoGen as a breast cancer
preventive. The uncertainty regarding the ultimate size of the market
opportunity for IoGen has hampered our efforts to find a corporate partner. We
believe establishing the first potential link to breast cancer prevention, and
thereby, overall good breast health, would be an important value-added step for
the IoGen program. We are pursuing additional funding to conduct such a trial
from both public and private sources.

         Other Potential Applications

         We believe that our technology has potential applications in the
development of a variety of human healthcare and other products such as
dermatology, topical anti-infectives, oral care and hygiene products, wound care
applications, and as a preventive for urinary tract infection. Given our limited
resources, although certain preliminary research, development and regulatory
activities may be undertaken by us in some of these potential product areas, our
ability to fund the development and commercialization of such applications will

                                       5
<PAGE>

depend in large part on entering into product development and commercialization
agreements with corporate partners. We are not currently pursuing any new
applications other than IoGen.

Manufacturing and Supplies

         The development and manufacture of our products are subject to good
laboratory practices ("GLP") and current good manufacturing practices ("cGMP")
requirements prescribed by the FDA and to other standards prescribed by the
appropriate regulatory agency in the country of use. We currently produce
IodoZyme in our Framingham facality. We have limited in-house manufacturing
capacity, and if we continue to perform manufacturing activities related to
IodoZyme in-house, additional manufacturing space and equipment may be necessary
if product volumes increase. See "Description of Property."

         We do not presently have FDA certified facilities capable of producing
quantities of human pharmaceutical products required for clinical trials or
commercial production. We will need to rely on collaborators, licensees or
contract manufacturers to produce such materials. There can be no assurance that
we will be able to obtain an adequate supply of our product from a third party
manufacturer, or that if such a supply can be obtained, that it will comply with
GLP and cGMP, as applicable.

         We believe that there are adequate sources of the raw materials
required for commercial production and testing purposes. We have been and expect
to continue to be able to obtain all materials needed for these purposes without
any significant interruption or sudden price increase, although there can be no
assurance thereof.

Marketing and Distribution

         In accordance with the marketing and supply agreement signed with West
Agro, West Agro is marketing and distributing IodoZyme, and has agreed to market
and distribute other potential cleaners, sanitizers and disinfectants covered by
the agreement to dairy farms and dairy processing plants as Symbollon's
exclusive distributor. The principal market for IodoZyme is dairy farms.

         If we are able to develop any other products, we intend to market and
distribute our potential products through others having pre-established
marketing and distribution networks pursuant to contractual arrangements such as
joint venture, licensing, distribution or similar collaborative agreements. The
principal markets for the potential pharmaceutical and healthcare products
include hospitals, medical offices, dental offices, dialysis centers, outpatient
clinics and nursing homes.

Government Regulation

         Our research and development activities and the production and
marketing of our current and proposed products are subject to regulation by
numerous governmental authorities in the United States and comparable state
agencies. Foreign governments also regulate the development, production and
marketing of products in their countries. The development, manufacturing and
marketing of human pharmaceuticals are subject to regulation in the United
States for safety and efficacy by the FDA in accordance with the Federal Food,
Drug and Cosmetic Act. There can be no assurances that regulatory approvals or
clearances will be obtained for any applications of our technology once
developed, that if granted they will not be withdrawn or that other regulatory
action might not have an adverse impact on the ability to market our proposed
products.

         In the United States, human pharmaceuticals are subject to rigorous FDA
regulation including preclinical and clinical testing, The process of completing
clinical trials and obtaining FDA approvals for a new drug is likely to take a
number of years, requires the expenditure of substantial resources and is often

                                       6
<PAGE>

subject to unanticipated delays. There can be no assurance that any proposed
product will receive such approval on a timely basis, if at all.

         The steps required before new products for use in humans may be
marketed in the United States include (i) preclinical trials, (ii) submission to
the FDA of an Investigational New Drug ("IND") application, which must be
approved before human clinical trials commence, (iii) adequate and
well-controlled human clinical trials to establish the safety and efficacy of
the product, (iv) submission of a New Drug Application ("NDA") for a new drug to
the FDA and (v) FDA approval of the NDA prior to any commercial sale or shipment
of the product.

         Preclinical tests include laboratory evaluation of product formulation,
as well as animal studies (if an appropriate animal model is available) to
assess the potential safety and efficacy of the product. Formulations must be
manufactured according to cGMP and preclinical safety tests must be conducted by
laboratories that comply with FDA regulations regarding GLP. The results of the
preclinical tests are submitted to the FDA as part of an IND application and are
reviewed by the FDA prior to the commencement of human clinical trials. There
can be no assurance that submission of an IND application will result in FDA
authorization to commence clinical trials. Clinical trials involve the
administration of the investigational new drug to healthy volunteers and to
patients under the supervision of a qualified principal investigator.

         Clinical trials are typically conducted in three sequential phases,
although the phases may overlap. In Phase I, the investigational new drug
usually is administered to healthy human subjects and is tested for safety,
dosage, tolerance, absorption, distribution, metabolism, excretion and
pharmacokinetics. Phase II involves studies in a limited patient population to
(i) determine the efficacy of the investigational new drug for specific
indications, (ii) determine dosage tolerance and optimal dosage and (iii)
identify possible adverse effects and safety risks. When an investigational new
drug is found to be effective and to have an acceptable safety profile in Phase
II evaluation, Phase III trials are undertaken to further evaluate clinical
efficacy and to further test for safety within an expanded patient population at
geographically dispersed clinical study sites. There can be no assurance that
Phase I, Phase II or Phase III testing will be completed successfully within any
specified time period, if at all, with respect to any of our proposed products
subject to such testing. Furthermore, we or the FDA may suspend clinical trials
at any time if the participants are being exposed to an unacceptable health
risk. The FDA may deny an NDA if applicable regulatory criteria are not
satisfied, require additional testing or information, or require post-marketing
testing and surveillance to monitor the safety of our proposed products.

         All data obtained from development programs are submitted as an NDA to
the FDA and the corresponding agencies in other countries for review and
approval. FDA approval of the NDA is required before marketing may begin in the
United States. Although the FDA's policy is to review priority applications
within 180 days of their filing, in practice longer times may be required. The
FDA frequently requests that additional information be submitted, requiring
significant additional review time. Essentially, all our proposed products will
be subject to demanding and time-consuming NDA or similar approval procedures in
the countries where we intend to market our proposed products. These regulations
define not only the form and content of the development of safety and efficacy
data regarding the proposed product, but also impose specific requirements
regarding manufacture of the proposed product, quality assurance, packaging,
storage, documentation and record keeping, labeling and advertising and
marketing procedures. Effective commercialization also requires inclusion of our
proposed products in national, state, provincial or institutional formularies or
cost reimbursement systems.

         In addition to regulations enforced by the FDA, we also are subject to
regulation under the Occupational Safety and Health Act, the Environmental
Protection Act, the Toxic Substances Control Act, the Resource Conservation and
Recovery Act and other present and potential future federal, state or local
regulations. Our research and development involves the controlled use of
hazardous materials and chemicals. Although we believe that our safety

                                       7
<PAGE>

procedures for handling and disposing of such materials comply with the
standards prescribed by state and federal regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated. In
the event of such an accident, we could be held liable for any damages that
result, and any such liability could exceed our resources.

         In both domestic and foreign markets, our ability to commercialize our
proposed product candidates will depend, in part, on the availability of
reimbursement from third-party payers, such as government health administration
authorities, private health insurers and other organizations. Third-party payers
are increasingly challenging the price and cost-effectiveness of medical
products. There can be no assurance that Symbollon-developed products will be
considered cost effective. Significant uncertainty exists as to the
reimbursement status of newly-approved medical products. Government and other
third-party payers are increasingly attempting to contain medical costs by
limiting both coverage and the level of reimbursement for new therapeutic
products approved for marketing by the FDA and by refusing, in some cases, to
provide coverage for uses of approved products for disease indications for which
the FDA has not granted marketing approval. There can be no assurance that
adequate third-party insurance coverage will be available for us to establish
and maintain price levels sufficient for realization of an appropriate return on
our investment in developing new therapies. If adequate coverage and
reimbursement levels are not provided by government and third-party payers for
uses of our proposed therapeutic products, the market acceptance of these
products would be adversely affected.

         There have been a number of federal and state proposals during the last
few years to subject the pricing of pharmaceuticals to government control and to
make other changes to the medical care system of the United States. It is
uncertain what legislative proposals will be adopted or what actions federal,
state or private payers for medical goods and services may take in response to
any medical reform proposals or legislation. We cannot predict the effect
medical reforms may have on our business, and no assurance can be given that any
such reforms will not have a material adverse effect on us.

         IodoZyme, the bovine teat dip manufactured by us, is subject to
regulation by the FDA as an animal drug. Although a lengthy new animal drug
application ("NADA") approval process is generally required prior to marketing
an animal drug, under regulatory discretion afforded by the FDA, the agency does
not currently require manufacturers of bovine teat sanitizers to undergo this
process. The only current FDA requirements applicable to teat treatment
manufacturers are compliance with the FDA's labeling, establishment
registration, drug listing, and manufacturing requirements. We believe that we
are in compliance with the current FDA requirements applicable to teat treatment
manufacturers. However, in February 1993, the FDA issued draft guidelines
setting forth the types of data necessary to demonstrate that a teat treatment
is safe for the cow, effective and fulfills human food safety, manufacturing and
environmental requirements. Testing of IodoZyme was not conducted in accordance
with such guidelines. Future required compliance with these guidelines or other
FDA requirements which may be adopted, the probability or scope of which cannot
currently be ascertained by us, would have a significant adverse effect on the
marketing of IodoZyme and, consequently, on our results of operations.


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<PAGE>


Patents and Proprietary Rights

         We consider patent protection of our iodine technology to be critical
to our business prospects. We currently hold seventeen patents in the United
States relating to our technology. In addition, we hold patents and have filed a
number of patent applications relating to our technology in foreign countries.

                        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

 5,419,902     "Method for Inactivating Pathogens"                  May 30, 1995

 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

 5,962,029     "Iodine Germicides that Continuously Generate
                Free Molecular Iodine"                          November 5, 1999

 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


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<PAGE>


         Much of the know-how of importance to our technology and many of our
processes are dependent upon the knowledge, experience and skills, which are not
patentable, of key scientific and technical personnel. To protect our rights to
and to maintain the confidentiality of trade secrets and proprietary
information, we require employees, Scientific Advisory Board members,
consultants and collaborators to execute confidentiality and invention
assignment agreements upon commencement of a relationship with us. These
agreements prohibit the disclosure of confidential information to anyone outside
us and require disclosure and assignment to us of ideas, developments,
discoveries and inventions made by such employees, advisors, consultants and
collaborators while engaged by us. There can be no assurance, however, that
these agreements will not be breached or that our trade secrets or proprietary
information will not otherwise become known or developed independently by
others. Also, to the extent that consultants or other third parties apply
technological information independently developed by them or by others to our
projects, disputes may arise as to the proprietary rights to such information
which may not be resolved in our favor. We are required to pay royalties to a
co-inventor on certain patents relating to our technology based on revenues
received by us from sales of products falling within the scope of such patents.

Competition

         Our proposed products and products incorporating our proposed products
would compete with many other applications currently on the market. In addition,
we are aware of other companies engaged in research and development of other
novel approaches to applications in some or all of the markets identified by us
as potential fields of application for our products. Many of our present and
potential competitors have substantially greater financial and other resources
and larger research and development staffs than we have. Many of these companies
also have extensive experience in testing and applying for regulatory approvals.
In addition, colleges, universities, government agencies, and public and private
research organizations conduct research and are becoming more active in seeking
patent protection and licensing arrangements to collect royalties for the use of
technology that they have developed, some of which may be directly competitive
with our applications.

         We are aware of a few companies developing drugs to treat FBD. Of these
companies, we are aware of only one company, Mimetix Inc., which was conducting
human clinical trials in the United States and Canada utilizing an iodine-based
compound for the treatment of FBD. If any company receives marketing approval
for its drug compound before we do, it could adversely affect our ability to
receive marketing approval, or if approved, our ability to sell our product.

         The bovine teat sanitizer market is currently dominated by iodophor
products, which generally compete on the basis of price and the ratio of
microbial killing power to total iodine. We believe that IodoZyme competes on
the basis of its superior convenience and high ratio of killing power to total
iodine. Additionally, IodoZyme, manufactured by us and sold by West Agro,
competes directly with products currently being manufactured and sold by West
Agro.

Employees

         As of December 31, 2003, we had two employees, both of whom are
full-time. We have relationships with and from time to time engage the services
of university professors and other qualified consultants to assist us in
technological research and development. None of our employees are currently
represented by a labor union. Management considers its employee relations to be
good. We believe that our future success is dependent to a significant degree on
our being able to continue to attract and retain skilled personnel.


                                       10
<PAGE>


Executive Officers

         The Company's executive officers are:

         Name                      Age       Position with the Company
         ----                      ---       -------------------------
         Jack H. Kessler, Ph.D.     53       Chief Executive Officer, Chief
                                             Scientific Officer, Secretary and
                                             Chairman of the Board of Directors

         Paul C. Desjourdy          42       President, Chief Operating Officer,
                                             Chief Financial Officer, General
                                             Counsel, Treasurer and Director

         Certain biographical information regarding each executive officer of
the Company is set forth below:

         Jack H. Kessler, Ph.D., is the founder of the Company and has served as
Chief Executive Officer since December 1999, as Chief Scientific Officer,
Secretary, and a director since the Company's move to Massachusetts in May 1991,
and as Chairman of the Board of Directors since May 1996. Dr. Kessler held the
title of Executive Vice-President of the Company from May 1991 to December 1999,
and from the Company's formation in Illinois in 1986 until 1991 Dr. Kessler was
the Company's sole stockholder and served as its sole officer and director. From
January 1990 until May 1991, he served as principal systems engineer for
Kollsman Manufacturing Company, a diagnostic instrument design and manufacturing
company.

         Paul C. Desjourdy has served as President, Chief Operating Officer and
General Counsel since December 1999, as Chief Financial Officer since July 1996,
as Treasurer from May 1994, and as a director since August 1996. He held the
titles of Executive Vice President from July 1996 to December 1999, and
Vice-President - Finance and Administration of the Company from September 1993
to June 1996. From September 1989 to September 1993, Mr. Desjourdy, a certified
public accountant, was an attorney at the law firm of Choate Hall & Stewart.

         Officers are elected annually and serve at the discretion of the Board
of Directors.

Risk Factors

         The following important factors, among others, could cause our
performance, achievements and results to differ materially from those we express
or suggest in forward-looking statements in this report or in other materials
from time to time. Stockholders and prospective investors should carefully
consider these risk factors when deciding whether to invest in or hold our
common stock.


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

         We have incurred a cumulative operating loss of $9,518,670 through
December 31, 2003. Our losses have resulted principally from costs incurred in
research and development activities related to our efforts to develop IodoZyme,
IoGen and other potential product formulations, and from the associated
administrative and patent costs. We expect to incur additional operating losses
over the next several years and expect cumulative losses to increase. In the
next few years, our revenues may be limited to sales, if any, of IodoZyme and
any amounts received under research or development collaborations that we may
establish.

                                       11
<PAGE>

         Based on the current status of our development efforts, we will not
receive revenues or royalties from commercial sales of our drugs under
development for a significant number of years, if at all. For at least the next
few years, we expect our revenues to be less than our expenses. We will
therefore need to raise additional funding or enter into a relationship with a
corporate partner to sustain our operations. If we fail to achieve profitable
operations, raise additional funding to cover losses, or enter into a corporate
partner relationship, we will not be able to sustain operations.

Sales from our only product have significantly decreased and our marketing
partner may choose to discontinue offering it for sale

         Our only source of revenue is from a licensing relationship with West
Agro, Inc. covering IodoZyme. They can terminate their collaboration with us at
any time. Sales of IodoZyme have significantly decreased in 2003. Based on the
sudden decrease in the sales volume of IodoZyme, it is possible that West Agro
may exercise their termination right. If that happens, and we are not able to
enter into new relationships, our revenues for 2003 and beyond will
significantly decrease.

We could go out of business if we are unable to commercialize a new product

         Since our inception, we have engaged in limited business activities
attempting to develop products based on our technology. To date, we have only
commercialized one product, IodoZyme. IodoZyme sales are not significant enough
to support our operations. The development of our other product opportunities
will require further capital investments, development and regulatory approvals.
We may be faced with problems, delays, expenses and difficulties, which are
typically encountered by companies in an early stage of development, many of
which may be beyond our control. These include, but are not limited to,
unanticipated problems and costs related to development, regulatory compliance,
production, marketing, economic and political factors and competition. If we are
not able to commercialize a new product, we could go out of business.

If we are not able to enter into a corporate licensing relationship covering
IoGen, it will be difficult to commercialize IoGen

         We estimate that the cost to complete the development of IoGen will be
approximately $20 million. We do not have enough resources to support further
clinical development of IoGen. Based on the present price and trading volume of
our stock, it will be difficult for us to raise the additional capital to fund
the development of IoGen. We have been seeking a corporate licensing partner for
IoGen for several years, and have not been able to finalize a relationship.
Given the large amount of resources required to complete the clinical
development of IoGen, we will need to enter into a licensing relationship to
commercialize IoGen.

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

         We did not conduct any animal or human studies to evaluate the
potential effectiveness of IoGen before launching the Phase II trial. The Phase
II clinical trial that we completed in 2000 generated the first data regarding
the effectiveness of IoGen. The primary purpose of the Phase II trial was to
evaluate the safety of IoGen. We believe that the Phase II data concerning the
drug's effectiveness indicate that IoGen can successfully treat cyclic pain and
tenderness associated with fibrocystic breast, but we need to establish IoGen's
effectiveness in two well-controlled clinical trials. We estimate that our
investment in the IoGen development program has exceeded $3 million. We expensed
these development costs as incurred. We do not have the necessary resources to
fund further clinical trials for IoGen. If we are not able to secure the
necessary resources or enter into a relationship with a corporate partner, our
financial situation may force us to discontinue the IoGen development program.

If we cannot raise additional funds or find a corporate partner for IoGen, then
we will have to limit or cease our future activities

         We have adequate cash resources to continue our base operations through
the end of the first quarter of 2005. However, we do not have sufficient
resources to initiate the IoGen Phase III clinical trials or any other remaining

                                       12
<PAGE>

development activities required to commercialize IoGen. We will require
substantial additional funds if we are to continue the clinical development of
IoGen or pursue the development of additional products. We currently estimate
that approximately $20 million will be required over the next three years to
complete the clinical development of IoGen.

         We intend to seek additional funds for such future product development
through public or private financing or collaborative or other arrangements with
corporate partners. We have not been able to enter into a new corporate
relationship since 1997. We believe that before we can enter into any
significant new relationships, we will have to generate clinical results on our
potential drugs. Our limited financial resources may require us to finance the
cost of generating these results. During 1999, when we last sought financing, we
had difficulty raising funds by selling equity. We obtained stockholder approval
to sell up to 1,250,000 shares, with a like number of warrants. We were only
able to sell 836,685 shares and warrants.

         Our common stock was delisted from the Nasdaq SmallCap market in
December 2002. Our common stock is currently traded on the OTC Bulletin Board,
is thinly traded, and is subject to the "penny stock rules." There is very
little market support for our common stock. So long as these conditions exist,
future financings will continue to be difficult. This could impact the terms and
conditions upon which we are able to sell securities and raise funds. In light
of our depressed stock price, any funds raised through equity financing would
likely be dilutive to our existing stockholders. If adequate funds are not
available when needed, we would be forced to limit the scope of our development
or perhaps cease operations. We cannot assure you that we will be able to raise
the necessary financing on acceptable terms, or at all, or succeed in entering
into a corporate partnering relationship.

We may not be able to access sufficient funds under the equity line of credit
with Dutchess when needed

         We have entered into an Investment Agreement creating an equity line of
credit with Dutchess Private Equities Fund. The equity line of credit permits us
to "put" up to $10 million in shares of common stock to Dutchess. However, due
to the terms of the Investment Agreement, this equity line of credit may not be
available in sufficient amounts or at all when needed. As a result, we may not
be able to raise the necessary funds under the equity line of credit continue
our business as planned. As of December 31, 2003, no funds were raised through
the equity line of credit.

Dutchess will pay less than the then-prevailing market price of our common stock
which may cause our stock price to decline

         The common stock to be issued under our agreement with Dutchess will be
purchased at a 5% discount to the average of the three lowest closing bid prices
for the five days immediately following our notice to Dutchess of our election
to exercise our put right. Dutchess has indicated that it intends to sell in the
public market the shares of common stock sold to it under the equity line of
credit. Such sales are likely to cause our stock price to decline.

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

         Any drug candidates we develop will require significant additional
research and development efforts, including extensive preclinical (animal and in
vitro data) and clinical testing and regulatory approval, prior to commercial
sale. Our only active drug development effort is IoGen. We must pay for all
future clinical trials concerning IoGen. Our ability to conduct the necessary
clinical trials depends on our generating the resources required to pay for this
from future revenues, financings or licensing relationships. We may not be able
to generate the necessary financial resources or enter into the necessary
relationships.

                                       13
<PAGE>

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

         A key element of our strategy has been to fund most of our product
development programs through collaborative agreements with larger pharmaceutical
companies. As part of these licensing relationships we may have to grant to the
other party control over the development and commercialization process. For
example, a potential corporate partner may be responsible for:

o        conducting preclinical and clinical trials;
o        obtaining required regulatory approvals of drug candidates;
o        manufacturing any resulting products; and
o        commercializing any resulting products.

         The potential corporate partner may not be obligated to develop or
commercialize any drug candidates under the collaboration. The potential
corporate partner alone could control the amount and timing of resources
dedicated by it to the program. Accordingly, the potential corporate partner
would control the development program. Moreover, the potential corporate partner
may view certain drug candidates developed utilizing Symbollon's technology as
competitive with its own drugs or drug candidates. Accordingly, the potential
corporate partner may develop its existing or alternative technologies in
preference to the drug candidates based on our technology. In addition, the
potential corporate partner may have the right to terminate the relationship at
any time. Without the involvement of a corporate partner, our limited resources
would severely hamper our ability to develop a product.

         IodoZyme's future growth and profitability will depend, in large part,
on the success of West Agro's personnel and others conducting marketing efforts
on their behalf in fostering acceptance of IodoZyme as an alternative to other
available products. West Agro also markets and distributes products which
compete directly with IodoZyme.

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

         The only drug approved by the FDA for the treatment of fibrocystic
breast disease is danazol, a masculinizing hormone. We are aware of a few
companies developing drugs for the treatment of fibrocystic breast disease. We
are aware of only one company, Mimetix Inc., that has conducted human clinical
trials in the United States and Canada utilizing an iodine-based compound for
the treatment of fibrocystic breast disease. If Mimetix, or any other
competitor, receives marketing approval for its drug compound before we do, they
may achieve a significant competitive advantage by being first to market and
through certain marketing exclusivity rights, which could extend up to seven
years. This would delay our ability to receive marketing approval.

IodoZyme could become subject to FDA marketing clearance that could affect our
ability to market IodoZyme

         Teat sanitizers, although considered animal drugs by the FDA, do not
currently require clearance by the FDA prior to marketing. The FDA, however,
issued draft guidelines in 1993 governing teat dips and it is possible that if
such guidelines are adopted that IodoZyme will require clearance by the FDA in
the future. Required compliance with these guidelines or other FDA requirements
which may be adopted, would have a significant adverse effect on the marketing
of IodoZyme and, consequently, on our results of operations.

                                       14

<PAGE>


We have no marketing experience within our company

         Although we have no present plans to do so, we may, in the future,
determine to directly market certain of our proposed products. We have no
marketing experience and significant additional capital expenditures and
management resources would be required to develop a direct sales force. In the
event we elect to engage in direct marketing activities, we might have
difficulty obtaining the requisite funds or attracting and retaining the human
resources necessary to successfully market any products.

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

         Our success depends to a significant extent on the performance and
continued service of our two employees, our Chief Executive Officer, Jack H.
Kessler, Ph.D. and our President and Chief Operating Officer, Mr. Paul C.
Desjourdy. The loss of the services of either of our senior officers would
disrupt our operations and would adversely effect our efforts to commercialize
new products while we worked to replace those employees. We do not maintain "key
man" life insurance on any of our employees. As a result, if any of our key
employees were to die or become unable to provide services for us, our
operations would be disrupted and we would have no means of recovering any
resulting losses.

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

         An important aspect of our present and future product candidates is
that they must be compatible with the surfaces with which they come into
contact. We have ceased efforts to develop products that clean germs from
certain medical and dental instruments as a result of staining and corrosion
caused by the required concentrations of iodine in the formulations. We continue
to investigate the balance between the level of efficacy and the need to avoid
staining and corrosion. For any proposed product application, staining or
corrosion from a product candidate could be sufficient to limit or forestall
regulatory approval or, if approved, could adversely affect market acceptance of
such product. We might not be successful in overcoming these staining and
corrosion problems.

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

         Our manufacturing and development activities involve the controlled use
and shipment of hazardous chemicals and other materials. Although we believe
that our safety procedures for handling, shipping and disposing of such
materials comply with the standards prescribed by federal, state and local
regulations, we cannot completely eliminate the risk of accidental contamination
or injury from these materials. In the event of such an accident, we could be
held liable for any damages that result and any such liability could exceed our
resources. There can be no assurance that current or future environmental or
transportation laws, rules, regulations or policies will not have a material
adverse effect on us.

We may never receive a benefit from our net operating losses

         We have not recognized any benefit from the future use of existing NOL
carryforwards. We have not recognized any such benefit because our evaluation of
all the available evidence does not indicate that it is more likely than not
that we will generate sufficient future taxable income to realize such benefit.
We had consolidated federal income tax NOL carryforwards of approximately $9.3
million at December 31, 2003. Our NOL carryforwards will begin to expire in 2008
to the extent they have not been used to reduce taxable income prior to such
time. Our ability to use our NOL carryforwards to reduce taxable income is
dependent upon, among other things, our not experiencing an "ownership change"
of more than 50 percent during any three-year testing period as defined in the
Internal Revenue Code. While we have not made the necessary determination, we
may have experienced an ownership change in the past, and could every likely

                                       15
<PAGE>

experience an ownership change from future sales of our securities. If we have,
or if we do, experienced an ownership change, of more than 50 percent as defined
in the Internal Revenue Code, it could substantially limit the availability of
our NOL carryforwards.

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

         Trading in our securities is subject to the SEC's "penny stock" rules
and it is anticipated that trading in our securities will continue to be subject
to the penny stock rules for the foreseeable future. The SEC has adopted
regulations that generally define a penny stock to be any equity security that
has a market price of less than $5.00 per share, subject to certain exceptions.
These rules require that any broker-dealer who recommends our securities to
persons other than prior customers and accredited investors must, prior to the
sale, make a special written suitability determination for the purchaser and
receive the purchaser's written agreement to execute the transaction. Unless an
exception is available, the regulations require the delivery, prior to any
transaction involving a penny stock, of a disclosure schedule explaining the
penny stock market and the risks associated with trading in the penny stock
market. In addition, broker-dealers must disclose commissions payable to both
the broker-dealer and the registered representative and current quotations for
the securities they offer. The additional burdens imposed upon broker-dealers by
such requirements may discourage broker-dealers from recommending transactions
in our securities, which could severely limit the liquidity of our securities
and consequently adversely affect the market price for our securities.

Existing  stockholders  may  experience  significant  dilution  from the sale of
securities in future financing

         The sale of shares in future financings, including under our equity
line of credit with Dutchess, will likely have a dilutive impact on our
stockholders. As a result, our net income per share, if any, could decrease in
future periods, and the market price of our common stock could decline. In
addition, the lower our stock price at the time we raise funds, the more shares
we will have to issue to raise the funds we need to continue planned operations.
If our stock price decreases, then our existing stockholders would experience
greater dilution.

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

         Our securities are quoted on the Over-the-Counter Bulletin Board. The
Over-the-Counter Bulletin Board is an inter-dealer, over-the-counter market that
provides significantly less liquidity than the NASDAQ Stock Market or national
or regional exchanges. Securities traded on the Over-the-Counter Bulletin Board
are usually thinly traded, highly volatile, have fewer market makers and are not
followed by analysts. The Securities and Exchange Commission's order handling
rules, which apply to NASDAQ-listed securities, do not apply to securities
quoted on the Over-the-Counter Bulletin Board. Quotes for stocks included on the
Over-the-Counter Bulletin Board are not listed in newspapers. Therefore, prices
for securities traded solely on the Over-the-Counter Bulletin Board may be
difficult to obtain and holders of our securities may be unable to resell their
securities at or near their original acquisition price, or at any price.

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

         Even though our securities are quoted on the Over-the-Counter Bulletin
Board, the Over-the-Counter Bulletin Board may not permit our investors to sell
securities when and in the manner that they wish. There are no automated systems
for negotiating trades on the Over-the-Counter Bulletin Board. In times of heavy
market volume, the limitations of this process may result in a significant
increase in the time it takes to execute investor orders. Therefore, when

                                       16
<PAGE>

investors place orders to buy or sell a specific number of shares at the current
market price it is possible for the price of a stock to go up or down
significantly during the lapse of time between placing a market order and its
execution.

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

         We do not anticipate the payment of cash dividends on our common stock
in the foreseeable future. We anticipate that any profits from our operations
will be devoted to our future operations. Any decision to pay dividends will
depend upon our profitability at the time, cash available and other factors.
Therefore, investors may never see a return on their investment. Investors who
anticipate a need for immediate income from their investment should not purchase
our securities.

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

         We currently have 18,750,000 shares of Class A Common Stock, 1,250,000
shares of Class B Common Stock and 5,000,000 shares of preferred stock
authorized. As a result, we have substantial amounts of authorized but unissued
capital stock. Our Amended Certificate of Incorporation and applicable
provisions of Delaware law provide that we may issue authorized capital stock at
the approval of our Board of Directors, and no stockholder vote or other form of
stockholder approval is required for us to issue such capital stock.
Consequently, we could issue shares of either class of our common stock or our
preferred stock in connection with future financings or acquisitions or in
conjunction with equity compensation arrangements. The offering prices in
connection with those future issuances could be less than the current sales
prices of our securities. Any future issuances of any of our securities could
cause the trading price of our securities to decline.


Item 2.  Description of Property

         We lease approximately 5,400 square feet of office, research and
development and manufacturing space in Framingham, Massachusetts for a current
base annual rental of approximately $37,000 increasing $0.25 per square foot
each year effective September 1. The lease expires on August 31, 2007. As of
December 31, 2003, future minimum payments under our non-cancellable operating
lease total $142,000. We believe that this space is suitable and adequate for
our current needs; however, because the existing space has limited in-house
manufacturing capacity, additional manufacturing space may be necessary if
product volumes increase.

Item 3.  Legal Proceedings

         We are not a party to any legal proceedings.

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

         No matters were submitted to a vote of security holders during the
quarter ended December 31, 2003.

                                       17
<PAGE>



                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

(a)  Price Range of Securities

         Our Class A Common Stock traded on the Nasdaq SmallCap Market till
December 20, 2002, and thereafter, it has traded on the OTC Bulletin Board under
the symbol "SYMBA." There can be no assurance that we will continue to be listed
on the OTC Bulletin Board. The following sets forth the high and low sales
prices for the Class A Common Stock for each of the quarterly periods during
fiscal 2003 and 2002, as reported by the OTC Bulletin Board (and, prior to
December 21, 2002, Nasdaq).

                              Fiscal 2003                Fiscal 2002
                           ----------------      -----------------------
                             High      Low          High           Low

         First quarter     $ 0.51    $ 0.05      $  2.40         $ 1.50
         Second quarter      0.44      0.13         2.44           1.25
         Third quarter       0.45      0.22         1.50           0.19
         Fourth quarter      0.30      0.18         0.76           0.05

         There are no outstanding shares of our Class B Common Stock.

 (b)  Approximate Number of Equity Security Holders

         Based upon information supplied by our transfer agent, we believe that
there were over 100 record holders of our Class A Common Stock as of March 17,
2004. Based upon information supplied by our transfer agent, we believe that the
number of beneficial holders of the Company's Class A Common Stock as of March
17, 2004 is in excess of 900.

(c)  Dividends

         We have never paid a cash dividend on any class of our common stock and
anticipate that for the foreseeable future any earnings will be retained for use
in its business and, accordingly, does not anticipate the payment of cash
dividends.

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

         The following discussion contains forward-looking statements which
involve risks and uncertainties. See "Special Note Regarding Forward Looking
Statements" and "Risk Factors" above in this Annual Report on Form 10-KSB.

Overview

         We are a specialty pharmaceutical company. We have a formulation
iodine-based proprietary technology that has potential product applications in
the areas of infection control and women's healthcare. In 1995, we launched our
first commercial product, IodoZyme. Through December 31, 2003, it has generated
approximately $2.6 million in sales.


                                       18
<PAGE>


         Since 2000, we have concentrated our product development efforts on the
proposed product application for the treatment of fibrocystic breast disease. We
believe we have adequate cash reserves to continue base operations through the
first quarter of 2005. In order for us to continue the clinical development of
IoGen, we must raise additional resources. If we cannot secure additional
resources before existing resources are exhausted, we will have to curtail, or
perhaps cease, operations.

Critical Accounting Policies and Estimates

         The following is a discussion of the more significant accounting
policies and methods we use.

         Estimates - The financial statements are prepared in accordance with
accounting principles generally accepted in the U.S., which require us to make
estimates and assumptions. On an on-going basis, we evaluate our estimates
related to the useful lives of fixed and intangible assets. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates under different assumptions or conditions.

         Revenue recognition - The Company recognizes revenue from its product
sales in accordance with SEC Staff Accounting Bulletin No. 101, "Revenue
Recognition in Financial Statements," as updated by 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.

         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.

Results of Operations

         Fiscal 2003 versus Fiscal 2002

         Symbollon's net loss in fiscal 2003 was $628,123, reflecting an
increase of $26,270 or 4.4% from a net loss of $601,853 in fiscal 2002. This
increased loss resulted primarily from decreased product sales from IodoZyme and
interest income, partially offset by decreased research and development expenses
related to the IoGen clinical trials.

         Product revenues from sales of IodoZyme (our bovine teat sanitizer)
decreased by $108,482 or 28.6% from $379,254 in fiscal 2002 to $270,772 in
fiscal 2003. The decreased revenues resulted primarily from significantly
decreased demand for IodoZyme in the first three quarters of 2003. At this time,
we can not adequately forecast product revenues for 2004. Although we are not
aware of any plans to do so, it is possible that IodoZyme's marketing partner
may choose to discontinue offering IodoZyme for sale.

         Cost of goods sold for IodoZyme decreased by $64,052 or 21.2% from
$301,535 in fiscal 2002 to $237,483 in fiscal 2003. The gross profit margin on
product sales decreased from 20.5% in fiscal 2002 to 12.3% in fiscal 2003. The
decreased profit margin resulted primarily from higher overhead cost due to
lower sales volumes and increased labor costs.

         Research and development expenses decreased by $35,419 or 11.2% from
$315,102 in fiscal 2002 to $279,683 in fiscal 2003. The decrease resulted from
decreased development expenses related to IoGen. We anticipate that research and
development expenses will increase in 2004 as we invest further in the clinical
development of IoGen.

                                       19
<PAGE>

         General and administrative expenses increased by $2,796 or 0.7% from
$386,710 in fiscal 2002 to $389,506 in fiscal 2003. The Company anticipates that
general and administrative expenses in 2004 will remain consistent with 2003.

         The Company's interest income decreased by $14,463 or 65.0% from
$22,240 in fiscal 2002 to $7,777 in fiscal 2003. This decrease resulted from a
decrease in available funds for investment, coupled with a decrease in the
average rate of interest earned throughout 2003.

Financial Condition, Liquidity and Capital Resources

         We have funded our activities primarily through proceeds from private
and public placements of equity securities. During 1999, we sold 836,685 shares
of common stock, together with warrants for a like number of shares, in a
private placement, realizing net proceeds of approximately $1,356,000. During
2000, we received net proceeds of approximately $1,761,000 from the exercise of
586,910 warrants issued as part of the 1999 private placement.

         During 2003, we continued to incur operating losses and have incurred a
cumulative loss through December 31, 2003 of $9,518,670. As of December 31,
2003, we had working capital of $635,881. We believe that we have the necessary
liquidity and capital resources to sustain planned operations into early 2005.
Our planned operations for 2004 include manufacturing IodoZyme, conducting
certain scale-up manufacturing activities relating to IoGen and securing
additional resources to sustain our operations and to continue the clinical
development of IoGen. We estimate that it will cost approximately $20 million to
complete the clinical development of IoGen. Until we secure additional
resources, we will not be able to conduct any further significant clinical
development of IoGen, including necessary clinical trials or animal toxicity
studies that are required to submit IoGen for FDA marketing approval, on which
our future is likely dependent. If we cannot secure additional resources before
existing resources are exhausted, which is estimated to occur by the end of the
first quarter of 2005, we will have to curtail, or perhaps cease, operations.

         During 2004, we are committed to pay approximately $440,000 as
compensation to our current executive officers and approximately $37,000 for
lease payments on its facilities. We have plans to incur approximately $150,000
for certain scale-up manufacturing activities relating to development of IoGen.
We have no other material capital expenditures planned during fiscal 2004. At
December 31, 2003, we had a net operating loss carryforward for federal income
tax purposes of approximately $9,291,000 expiring through 2023.



                                       20
<PAGE>


Item 7.  Financial Statements

Report of Independent Certified Public Accountants

The Board of Directors and Stockholders
Symbollon Pharmaceuticals, Inc.
Framingham, Massachusetts

We have audited the accompanying balance sheets of Symbollon Pharmaceuticals,
Inc., as of December 31, 2003 and 2002, and the related statements of
operations, stockholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Symbollon Pharmaceuticals, Inc.
at December 31, 2003 and 2002, and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.


Vitale, Caturano & Company P.C.


Boston, Massachusetts
February 23, 2004







                                       21
<PAGE>



                         Symbollon Pharmaceuticals, Inc.

                                 Balance Sheets

<TABLE>
<CAPTION>



                                                                                                  Year Ended
                                                                                                  December 31,
                                                                                     ----------------------------------
                                                                                            2003                 2002
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                   <C>

Assets

Current assets:
   Cash and cash equivalents                                                         $    617,897          $ 1,244,606
   Accounts receivable                                                                    100,189              100,999
   Inventory (Note 3)                                                                      23,896               34,642
   Prepaid expenses                                                                        27,594               59,403
-----------------------------------------------------------------------------------------------------------------------------------

       Total current assets                                                               769,576            1,439,650

Equipment and leasehold improvements, net of
  accumulated depreciation and amortization (Note 4)                                       56,486               76,470

Other assets:
   Patent and trademark costs, net of accumulated
     amortization (Note 5)                                                                391,428              330,767
   Deposit                                                                                  2,364                2,364
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                     $  1,219,854          $ 1,849,251
-----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

                                       22

<PAGE>



                         Symbollon Pharmaceuticals, Inc.

                                 Balance Sheets
                                   (Continued)

<TABLE>
<CAPTION>



                                                                                                   Year Ended
                                                                                                   December 31,
                                                                                    -----------------------------------
                                                                                            2003                 2002
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                  <C>

Liabilities and Stockholders' Equity

Current liabilities:
   Accounts payable                                                                 $      33,832         $     21,559
   Accrued clinical development expenses                                                   80,507               92,850
   Other current liabilities                                                               19,356               20,560
-----------------------------------------------------------------------------------------------------------------------------------

       Total current liabilities                                                          133,695              134,969
-----------------------------------------------------------------------------------------------------------------------------------

Commitments (Notes 6, 7 and 10)

Stockholders' equity (Notes 6 and 7):
   Common stock, Class A, par value $.001 per share, 18,750,000
     shares authorized, 4,196,204 shares issued and outstanding                             4,196                4,196
   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                                                          11,435,193           11,435,193
   Accumulated deficit                                                                 (9,518,670)          (8,890,547)
----------------------------------------------------------------------------------------------------------------------------------

                                                                                        1,920,719            2,548,842
   Common stock subscriptions receivable                                                 (834,560)            (834,560)
----------------------------------------------------------------------------------------------------------------------------------

       Total stockholders' equity                                                       1,086,159            1,714,282
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                    $   1,219,854         $  1,849,251
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                    See accompanying notes to financial statements.

</TABLE>
                                       23

<PAGE>



                         Symbollon Pharmaceuticals, Inc.

                            Statements of Operations


<TABLE>
<CAPTION>


                                                                                                 Year Ended
                                                                                                 December 31,
                                                                                   ------------------------------------
                                                                                        2003                     2002
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                    <C>

Revenue (Note 11):
   Net product sales                                                               $  270,772             $    379,254

Operating expenses (Notes 10 and 12):
   Cost of goods sold                                                                 237,483                  301,535
   Research and development costs                                                     279,683                  315,102
   General and administrative expenses                                                389,506                  386,710
-----------------------------------------------------------------------------------------------------------------------------------

     Total operating expenses                                                         906,672                1,003,347
-----------------------------------------------------------------------------------------------------------------------------------

Loss from operations                                                                 (635,900)                (624,093)

Interest income                                                                         7,777                   22,240
-----------------------------------------------------------------------------------------------------------------------------------

Net loss                                                                           $ (628,123)           $    (601,853)
-----------------------------------------------------------------------------------------------------------------------------------

Basic and diluted net loss per share of
  common stock (Note 8)                                                            $    (.15)            $        (.14)
-----------------------------------------------------------------------------------------------------------------------------------

Weighted average number of common shares
  outstanding - basic and diluted                                                    4,196,204               4,193,886
-----------------------------------------------------------------------------------------------------------------------------------

                                                                                    See accompanying notes to financial statements.

</TABLE>
                                       24

<PAGE>



                         Symbollon Pharmaceuticals, Inc.

                       Statements of Stockholders' Equity
                                    (Note 6)

<TABLE>
<CAPTION>





                                        Common Stock
                                      $.001 Par Value                                                     Common
                                          Class A               Additional                                 Stock
                                    ------------------           Paid-in            Accumulated         Subscriptions
                                     Shares     Amount           Capital              Deficit             Receivable         Total
------------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>           <C>         <C>                     <C>                <C>             <C>

Balance, December 31, 2001        4,186,204     $4,186      $    11,424,372         $(8,288,694)       $ (834,560)     $  2,305,304
   Option exercises                  10,000         10               10,821                   -                 -            10,831
   Net loss for the year                  -          -                    -            (601,853)                -          (601,853)
------------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2002        4,196,204      4,196           11,435,193          (8,890,547)         (834,560)        1,714,282
   Net loss for the year                  -          -                    -            (628,123)                -          (628,123)
------------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2003        4,196,204     $4,196      $    11,435,193         $(9,518,670)       $ (834,560)     $  1,086,159
------------------------------------------------------------------------------------------------------------------------------------

                                                                                    See accompanying notes to financial statements.

</TABLE>
                                       25

<PAGE>


                         Symbollon Pharmaceuticals, Inc.

                            Statements of Cash Flows

<TABLE>
<CAPTION>



                                                                                                   Year Ended
                                                                                                  December 31,
                                                                                     ----------------------------------
                                                                                           2003                  2002
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                  <C>                   <C>

Cash flows from operating activities:

   Net loss                                                                          $  (628,123)          $  (601,853)
   Adjustments to reconcile net loss to net cash used in
     operating activities:
     Depreciation and amortization                                                        46,534                45,819
     Loss on disposition of equipment and patents                                              -                14,770
     Changes in operating assets and liabilities:
       Accounts receivable                                                                   810               (54,119)
       Inventory                                                                          10,746                20,290
       Prepaid expenses                                                                   31,809                   145
       Accounts payable and other current liabilities                                     (1,274)              (87,176)
-----------------------------------------------------------------------------------------------------------------------------------
         Net cash used in operating activities                                          (539,498)             (662,124)
-----------------------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:

   Purchase of equipment and leasehold improvements                                            -               (22,933)
   Patent and trademark cost additions                                                   (87,211)              (28,404)
   Proceeds from sale of equipment                                                             -                   750
-----------------------------------------------------------------------------------------------------------------------------------
         Net cash used in investing activities                                           (87,211)              (50,587)
-----------------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:

   Option exercises                                                                            -                10,831
-----------------------------------------------------------------------------------------------------------------------------------
         Net cash provided by (used in) financing activities                                   -                10,831
-----------------------------------------------------------------------------------------------------------------------------------

Net decrease in cash and cash equivalents                                               (626,709)             (701,880)

Cash and cash equivalents, beginning of period                                         1,244,606             1,946,486
-----------------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                             $   617,897           $ 1,244,606
-----------------------------------------------------------------------------------------------------------------------------------

Supplemental information:
   There were no payments made for interest or income taxes during 2003 or 2002.

                                                                                    See accompanying notes to financial statements.
</TABLE>
                                       26

<PAGE>


                         Symbollon Pharmaceuticals, Inc.

                          Notes to Financial Statements



1. Description of        Symbollon   Pharmaceuticals,    Inc.
   Business and          (formerly Symbollon Corporation) was formed to
   Basis of              develop and commercialize  proprietary iodine-based
   Presentation          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.
                         During 2003, the Company  continued to incur  operating
                         losses  and has  incurred  a  cumulative  loss  through
                         December  31, 2003 of  $9,518,670.  As of December  31,
                         2003, the Company had working capital of $635,881.  The
                         Company  believes that it has the  necessary  liquidity
                         and capital  resources  to sustain  planned  operations
                         through  the  first  quarter  of 2005.  If the  Company
                         cannot  secure  additional  resources  before  existing
                         resources  are  exhausted,  the  Company  will  have to
                         curtail, or perhaps cease, operations.

                       The Company has previously been in the development stage,
                         but through  December  31, 2003 has sold  approximately
                         $2.6 million of iodine based products. Accordingly, the
                         Company  has   determined   that  it  is  no  longer  a
                         development  stage  company,  as the term is defined by
                         Statement of Financial  Accounting Standards (SFAS) No.
                         7,  "Accounting  and  Reporting  by  Development  Stage
                         Enterprises."

 2.    Summary of
       Significant
       Accounting Policies

       Use  of           The preparation of financial statements in
       Estimates         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     Cash and cash equivalents  include short-term,
       Equivalents       highly liquid  investments with  maturities
                         of less than three months when acquired.

       Concentration     The  Company   has  one   customer.   The
       of Credit         Customer's financial condition is reviewed on an
       Risks             ongoing  basis,  and  collateral is not required.
                         The  Company  believes a reserve for  potential  credit
                         losses is not  necessary  as of  December  31, 2003 and
                         2002.


                                       27

<PAGE>



 2.    Summary of
       Significant
       Accounting Policies
       (Continued)

       Account           Accounts   receivable   are  customer
       Receivable        obligations  due  under  normal  trade  terms.  The
       and Allowance     Company  performs   continuing   credit
       for Doubtful      evaluations  of  its  customer's   financial  condition
       Accounts          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 is not
                         necessary  as of December  31, 2003 and 2002.  However,
                         actual write-offs might exceed the Company's estimates.

       Inventory         Inventory is stated at the lower of cost (determined on
                         a first-in,  first-out basis) or market.

       Long-Lived        Long-lived  assets,  such as  intangible assets
       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.  The  Company  does  not
                         believe that any of its long-lived  assets are impaired
                         at December 31, 2003 or 2002.

      Depreciation       Equipment  is  stated  at  cost  and  is
      and                depreciated over its estimated useful life
      Amortization       (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 15-17 years and a weighted
                         average  useful  life of 15.6 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). Total patent application
                         costs  not  subject  to  amortization  totaled  $0  and
                         $94,980 as of December 31, 2003 and 2002, respectively,
                         and are included in patent and  trademark  costs in the
                         accompanying balance sheets.


                                       28
<PAGE>



 2.    Summary of
       Significant
       Accounting Policies
       (Continued)

       Income Taxes      The  Company  follows the  liability  method of
                         accounting  for income taxes,  as set forth in 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    The  carrying   amounts  of  cash  and  cash
       Financial         equivalents,   accounts  receivable,   other
       Instruments       current assets and accounts  payable  approximate  fair
                         value based on their short-term  maturities.

       Revenue           The  Company  recognizes  revenue  from its  product
       Recognition       sales  in   accordance   with  SEC  Staff
                         Accounting  Bulletin No. 101,  "Revenue  Recognition in
                         Financial   Statements,"   as   updated  by  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      Research and development costs are expensed as
       Development       incurred.

       Stock-Based       The  Company   accounts  for  its   stock-based
       Compensation      compensation    plan   using   the   intrinsic    value
                         method.   Accordingly,   there   was  no
                         compensation  expense  recognized in 2003 or 2002.  The
                         Company provides pro forma disclosures for compensation
                         expense  under the fair value  method of SFAS No.  123,
                         "Accounting for Stock-Based Compensation," and SFAS No.
                         148,         "Accounting         for        Stock-Based
                         Compensation-Transition and Disclosure." If the Company
                         had  elected  to  recognize  compensation  cost for the
                         plans  based on the fair  value at the  grant  date for
                         awards  granted  under the plans,  consistent  with the
                         method  prescribed  by SFAS No. 123,  the effect on net
                         loss and earnings per share would have been as follows:


                                       29
<PAGE>



 2.    Summary of
       Significant
       Accounting Policies
       (Continued)

<TABLE>
<CAPTION>

       Stock-Based                    December 31,                                                2003                2002
       Compensation                   --------------------------------------------------------------------------------------
       (Continued)
                                      <S>                                                   <C>              <C>

                                      Net loss                                              $ (628,123)      $    (601,853)

                                      Add: Stock-based employee compensation
                                        expense included in reported net income,
                                        net of related tax effects                                   -                   -

                                      Deduct: Total stock-based employee
                                        compensation determined under fair
                                        value method of all awards, net of
                                        related tax effects                                     (53,412)          (161,036)
                                      --------------------------------------------------------------------------------------

                                      Basic and diluted loss per share                      $ (681,535)      $    (762,889)
                                      --------------------------------------------------------------------------------------

                                      Basic and diluted loss per share:
                                         As reported                                        $     (.15)      $        (.14)
                                         Pro forma                                          $     (.16)      $        (.18)


</TABLE>
                    The  fair  value  of the  Company's  stock  options  used to
                         compute  the pro  forma net loss and net loss per share
                         disclosures is the estimated  value at grant date using
                         the   Black-Scholes   option-pricing   model  with  the
                         following  weighted-average  assumptions  for  2003 and
                         2002,  respectively:  dividend  yield  of 0%  for  both
                         years; expected volatility of 270% and 70%; a risk-free
                         interest  rate of between 0.95% and 2.72% and 4.49% and
                         4.72%, respectively,  and an expected holding period of
                         .1 to 5 years and 2 to 9 years, respectively.


       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.


                                       30
<PAGE>



 2.    Summary of
       Significant
       Accounting Policies
       (Continued)

       Recent            In January 2003, the Financial  Accounting  Standards
       Accounting        Board issued Interpretation No.  46 (FIN 46),
       Standards         "Consolidation  of  Variable  Interest   Entities,   an
                         interpretation  of ARB    No. 51." In December
                         2003, the Financial  Accounting Standards Board revised
                         FIN 46 by  issuing  Interpretation  No.  46R.  FIN  46R
                         clarifies the requirements for consolidation of certain
                         entities  in  which  equity  investors  do not have the
                         characteristics of a controlling  financial interest or
                         do not have sufficient equity at risk for the entity to
                         finance its activities without additional  subordinated
                         financial  support from other parties.  FIN 46R applies
                         immediately to variable interest entities created after
                         December 31, 2003.  It applies in the first fiscal year
                         beginning  after  December  15,  2004,  to all variable
                         interest    entities   that   are   subject   to   this
                         Interpretation.  The Company  believes  the adoption of
                         FIN  46R  will  not  have  a  material  effect  on  its
                         financial  position,  future  results of  operations or
                         cash flows.

 3. Inventory            Inventory consists of the following:

<TABLE>
<CAPTION>

                                      December 31,                                                 2003               2002
                                      --------------------------------------------------------------------------------------
                                      <S>                                                     <C>               <C>

                                      Raw materials                                            $ 23,896           $ 34,190
                                      Finished goods                                                  -                452
                                      --------------------------------------------------------------------------------------

                                                                                               $ 23,896           $ 34,642
                                      --------------------------------------------------------------------------------------

 4.    Equipment and                   Equipment and leasehold improvements are stated at cost and consist of the following:
       Leasehold
       Improvements                   December 31,                                                 2003               2002
                                      --------------------------------------------------------------------------------------

                                      Equipment and fixtures                                  $ 190,018         $  190,018
                                      Leasehold improvements                                     63,146             63,146
                                      --------------------------------------------------------------------------------------

                                                                                                253,164            253,164
                                      Less accumulated depreciation and
                                        amortization                                            196,678            176,694
                                      --------------------------------------------------------------------------------------

                                      Equipment and leasehold improvements, net               $  56,486         $   76,470
                                      --------------------------------------------------------------------------------------

                                      Depreciation expense for the years ended
                                      December 31, 2003 and 2002 totaled $19,984
                                      and $26,751, respectively.

</TABLE>
                                       31
<PAGE>



 5. Patent and           Patent and trademark costs consist of the following:
    Trademark
    Costs
<TABLE>
<CAPTION>

                                      December 31,                                                 2003               2002
                                      --------------------------------------------------------------------------------------
                                      <S>                                                     <C>               <C>

                                      Patent costs                                            $ 485,074         $  397,862
                                      Trademark costs                                             2,444              2,444
                                      --------------------------------------------------------------------------------------

                                                                                                487,518            400,306

                                      Less accumulated amortization                              96,089             69,539
                                      --------------------------------------------------------------------------------------

                                      Patent and trademark costs, net                         $ 391,429         $  330,767
                                      --------------------------------------------------------------------------------------
</TABLE>

                         Amortization expense related to these assets is
                         estimated to be approximately  $32,900 per year in
                         fiscal years 2004 through 2008.  Amortization expense
                         for the years ended December 31, 2003 and 2002 totaled
                         $26,550 and $19,068, respectively.

 6.    Stockholders'
       Equity

       Capital Stock     The Company has authorized  18,750,000  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, 2003 and
                         2002,  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, 2003
                         and  2002,  there  were no shares  of  preferred  stock
                         issued and outstanding.

       Common Stock      In fiscal 1999, the Company raised net proceeds
       Purchase          of $1,356,007 in  connection  with a
       Warrants          private   placement  equity   offering.   The  offering
                         consisted of the sale of 836,685  units,  at a price of
                         $1.75  with  each unit  consisting  of one share of the
                         Company's  Class A  common  stock  and  one  redeemable
                         common stock warrant.  In addition,  the Company issued
                         to the  placement  agent 60,940  warrants  having terms
                         similar to the common  stock  warrant  issued with each
                         unit.  In August 2000,  the warrant  holders  purchased
                         586,910  shares  of Class A common  stock at $3.00  per
                         share in accordance with the terms of the warrants. The
                         remaining 310,715 warrants expired on August 10, 2003.

                                       32
<PAGE>



       6.Stockholders'
       Equity
       (Continued)

       Common  Stock     In  January  2001,  certain  officers  of the
       Subscriptions     Company entered into Promissory Notes and
       Receivable        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  bear
                         interest  at a fixed  rate of 5.61% and are due in full
                         on December 31, 2005. The Notes are  collateralized  by
                         the  462,895  shares  of Class A common  stock  and the
                         Company has full  recourse to pursue  collection in the
                         event of default. The Company's recourse may be 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  accounts for the
                         Notes under FIN 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 2003 or 2002.

       Investment        On October 1, 2003, the Company entered
       Agreement         into an  Investment  Agreement  with  Dutchess  Private
                         Equities  Fund,  L.P.   (Dutchess).   Pursuant  to  the
                         Investment   Agreement,   the   Company   may,  at  its
                         discretion,  periodically put to Dutchess shares of its
                         Class A  common  stock  at a price  equal to 95% of the
                         average of the three  lowest  closing bid prices on the
                         Over-the-Counter  Bulletin  Board  for  the  five  days
                         immediately  following  the date that the Company gives
                         its notice to  Dutchess  of its  intention  to put such
                         stock.

                      Subject to a $1 million per put cap, the maximum amount of
                         each  put  exercise  is  equal  to,  at  the  Company's
                         election  (i) 200% of the average  daily  volume of the
                         Class A common  stock for the 20 trading  days prior to
                         the applicable put notice  multiplied by the average of
                         the  three  daily   closing   bid  prices   immediately
                         preceding the date of the put, or (ii) $10,000.

                        The Company may continue to put shares to Dutchess until
                         October 17,  2006 or  Dutchess  has paid a total of $10
                         million, whichever occurs first.

    7.   Stock Plans     The Company has adopted  three stock plans:
                         a stock option plan,  an employee  stock  purchase 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 1,600,000
                         shares for issuance under this plan.

                                       33
<PAGE>



 7.   Stock Plans        The employee  stock  purchase plan provides
      (Continued)        for the purchase of Class A common stock  at
                         85 percent of the fair market value at specific  dates,
                         to encourage stock ownership by all eligible employees.
                         The Company has  reserved  200,000  shares for purchase
                         under this plan.  During the years ended  December  31,
                         2003 and 2002,  the  Company  did not issue any  shares
                         under the stock purchase plan.

                         On May 17, 1995 the Company adopted a 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, 1996.  The Company has reserved  100,000  shares for
                         issuance under the plan. Each outside director shall be
                         granted an option to purchase  2,500  shares of Class A
                         common stock at fair market value,  vesting 50% on each
                         of the first two anniversaries of the grant.

                         Under the above plans 683,842 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 2003 and 2002:

<TABLE>
<CAPTION>

                                                                                                         Weighted-Average
                                                                                                          Exercise Price
                                                                                          Shares             Per Share
                                      --------------------------------------------------------------------------------------
                                      <S>                                                <C>                     <C>

                                      Balance, December 31, 2001                          873,000                $4.15
                                         Granted                                            7,500                 1.93
                                         Exercised                                        (10,000)                1.08
                                         Cancelled                                       (123,000)                2.27
                                      --------------------------------------------------------------------------------------

                                      Balance, December 31, 2002                          747,500                 4.50
                                         Granted                                          607,500                 0.28
                                         Exercised                                              -                    -
                                         Cancelled                                       (690,000)                4.71
                                      --------------------------------------------------------------------------------------

                                      Balance, December 31, 2003                          665,000                $0.44
                                      --------------------------------------------------------------------------------------

</TABLE>

                                       34

<PAGE>



 7.   Stock Plans        All  options  outstanding  at December  31,
      (Continued)        2003   are   categorized   by  the   following   ranges
                         in the table below:

<TABLE>
<CAPTION>

                                                                                            Weighted-
                                                                        Weighted -           Average
                                                                          Average           Remaining
                                                     Share               Exercise          Contractual           Number of
                                                  Price Range              Price          Life (years)             Shares
                                      --------------------------------------------------------------------------------------
                                           <S>                               <C>               <C>                  <C>

                                           $ 0.28   to   $1.00               $0.28             4.9                  607,500
                                           $ 1.00   to   $5.00               $2.11             5.3                   57,500
                                                                                                                    --------
                                                                                                                    665,000
                                                                                                                    ========

                         All options exercisable at December 31,  2003  are
                         categorized by the following ranges in the table below:

                                                                                            Weighted-
                                                                        Weighted -           Average
                                                                          Average           Remaining
                                                     Share               Exercise          Contractual          Number of
                                                  Price Range              Price          Life (years)           Shares
                                      --------------------------------------------------------------------------------------

                                           $ 0.28   to   $1.00               $0.28             4.9                  200,000
                                           $ 1.00   to   $5.00               $2.12             5.1                   53,750
                                                                                                                    -------
                                                                                                                    253,750
                                                                                                                    =======
                         All options exercisable at December 31, 2002 are
                         categorized by the following ranges in the table below:

                                                                                            Weighted-
                                                                        Weighted -           Average
                                                                          Average           Remaining
                                                     Share               Exercise          Contractual          Number of
                                                  Price Range              Price          Life (years)           Shares
                                      --------------------------------------------------------------------------------------

                                           $ 1.02   to   $4.00               $1.95             7.2                  261,250
                                           $ 4.00   to   $9.06               $7.25             2.0                  360,000
                                                                                                                    -------
                                                                                                                    621,250
                                                                                                                    =======
</TABLE>

                                       35
<PAGE>



 7.   Stock Plans        The weighted-average  fair value of options
      (Continued)        granted during the years ended  December 31,
                         2003  and  2002  was  $0.25   and   $1.93  per   share,
                         respectively.

                         In November 2003, the Company's Board  of  Directors
                         authorized the repricing of employee 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 will be subject to variable plan accounting, as
                         defined  by FIN 44.  The  repriced  options  have  been
                         reflected  as  grants  and  cancellations  in the stock
                         option  activity for the year ended  December 31, 2003.
                         As prescribed  by the  provisions of FIN 44 the Company
                         will  remeasure  the  intrinsic  value of the  repriced
                         options,  through the earlier of the date of  exercise,
                         cancellation or expiration,  at each reporting date. As
                         of December  31, 2003,  the Company has not  recognized
                         any  compensation   expense  to  date  related  to  the
                         repriced  options,  as the  fair  market  value  of the
                         Company's  common stock at December 31, 2003, was below
                         the exercise price of the repriced options.

 8.   Loss Per Share     The Company's basic and diluted net loss
                         per share of common stock for the years ended  December
                         31, 2003 and 2002 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, 2003 and 2002 but not
                         included  in the  calculation  of diluted  net loss per
                         share because such shares are antidilutive:

<TABLE>
<CAPTION>

                                      December 31,                                                2003                2002
                                      --------------------------------------------------------------------------------------
                                      <S>                                                      <C>                 <C>

                                      Stock options                                            665,000             747,500
                                      Stock warrants                                                 -             310,715
</TABLE>

 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:

<TABLE>
<CAPTION>

                                      December 31,                                                2003                2002
                                      --------------------------------------------------------------------------------------
                                      <S>                                                          <C>                <C>

                                      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                                          -  %                -  %
                                      --------------------------------------------------------------------------------------

</TABLE>

                                       36
<PAGE>



 9.   Income Taxes       Deferred  income taxes reflect the impact
      (Continued)        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:

<TABLE>
<CAPTION>

                                      December 31,                                                2003                2002
                                      --------------------------------------------------------------------------------------
                                      <S>                                                 <C>                <C>

                                      Tax credit carryforwards                            $    393,000       $     376,000
                                      Net operating loss carryforwards                       3,716,000           3,465,000
                                      --------------------------------------------------------------------------------------

                                      Gross deferred tax asset                               4,109,000           3,841,000

                                      Deferred tax assets valuation
                                        allowance                                           (4,109,000)         (3,841,000)
                                      --------------------------------------------------------------------------------------

                                      Net deferred tax assets                             $          -       $           -
                                      --------------------------------------------------------------------------------------
</TABLE>

                       As of December 31, 2003 and 2002, 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 2003 and 2002
                         was $268,000 and $287,000, respectively.

                         As of December 31, 2003, the Company has net operating
                         loss carryforwards totaling  approximately  $9,291,000.
                         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:
<TABLE>
<CAPTION>

                                                                                                             Amount of
                                      Expiration Date                                                      Remaining NOL
                                      ------------------------------------------------------------------------------------
                                      <S>                                                                     <C>

                                      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                                                                         628,000
                                      ---------------------------------------------------------------------------------------

                                                                                                              $  9,291,000
                                      ---------------------------------------------------------------------------------------
</TABLE>


                                       37
<PAGE>



 9.   Income Taxes       In addition, the Company has available tax
      (Continued)        credit  carryforwards  (adjusted to reflect
                         provisions   of  the  Tax   Reform   Act  of  1986)  of
                         approximately  $393,000,  which are available to offset
                         future taxable income and income tax liabilities,  when
                         earned or  incurred.  These  amounts  expire in various
                         years through 2023.

10.    Commitments

       Facilities Lease  The Company leases its research  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, 2003 and 2002
                         was approximately $36,000 and $34,000, respectively.

                         Future minimum rental payments due are as follows:
<TABLE>
<CAPTION>

                                      Year ending December 31,                                                       Total
                                      --------------------------------------------------------------------------------------
                                      <S>                                                                        <C>

                                      2004                                                                       $  37,000
                                      2005                                                                          38,000
                                      2006                                                                          40,000
                                      2007                                                                          27,000
                                      ---------------------------------------------------------------------------------------

                                                                                                                 $ 142,000
                                      ---------------------------------------------------------------------------------------
</TABLE>

      Employment         The Company has  employment  agreements  with its
      Agreements         principal  officers  providing for    minimum
                         base   compensation  and  severance  pay  which  expire
                         December  31,  2005.  For the years ended  December 31,
                         2003 and 2002,  the  aggregate  amount paid under these
                         agreements   was  $440,000  per  year.  The  employment
                         agreements provide for inflationary adjustments and are
                         subject  to  other  increases  based  on the  Board  of
                         Directors'  approval.  Minimum amounts to be paid under
                         these agreements total approximately $440,000 per year.

      Royalty            A  royalty  agreement  with  one  of the
      Agreement          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, 2003 no  royalties  have been earned under
                         this agreement.


                                       38
<PAGE>



10.    Commitments
       (Continued)

       Consulting        The Company has entered into  various  scientific
       Agreements        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, 2003 and
                         2002  amounted to  approximately  $48,000 and  $37,000,
                         respectively.

       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'  fee  are  based  on  a   percentage   of  the
                         investment or revenue.

      Employee Benefit   Effective  January 1, 1999,  the  Company
      Plan               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's   contribution   to  the  plan   amounted  to
                         approximately  $13,200  for  each  of the  years  ended
                         December 31, 2003 and 2002.

 11.  Major  Customers   For the years ended  December 31, 2003
                         and 2002,  the Company has  generated  its revenue from
                         one customer,  its exclusive  marketing partner for its
                         bovine teat  santizer.  Net product sales by market are
                         as follows:
<TABLE>
<CAPTION>

                                      Year ended December 31,                                 2003                2002
                                      --------------------------------------------------------------------------------------
                                      <S>                                                  <C>                   <C>

                                      United States                                        $  221,588            $ 379,254
                                      United Kingdom                                           49,184                    -
                                      --------------------------------------------------------------------------------------

                                                                                           $  270,772            $ 379,254
                                      --------------------------------------------------------------------------------------
</TABLE>

 12.  Related  Party     A  member  of the  Board  of  Directors
      Transactions       provides  legal   services  to  the  Company.   Amounts
                         paid for legal  services  rendered by the
                         director,  either  individually  or  through  his firm,
                         totaled approximately $99,000 and $51,000 for the years
                         ended December 31, 2003 and 2002, 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  2003  and  2002  of  the
                         relationship is $9,600 and $4,800, respectively.


                                       39
<PAGE>



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

         In a Current Report on Form 8-K filed and dated December 16, 2003 we
previously reported that we had changed our independent auditor.

Item 8A.  Controls and Procedures

         The Company's management carried out an evaluation, with the
participation of its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the Company's disclosure controls and procedures as of December
31, 2003. Based upon that evaluation, the Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures were effective to ensure that information required to be disclosed by
the Company in reports that the Company files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the Securities and Exchange
Commission.

         There has not been any change in the Company's internal control over
financial reporting in connection with the evaluation required by Rule 13a-15(d)
under the Exchange Act that occurred during the quarter ended December 31, 2003
that has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.


                                    PART III

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

         We incorporate herein by reference the information appearing under the
captions "Board of Directors" and "Section 16(a) Beneficial Ownership Reporting
Compliance" in our definitive Proxy Statement to be filed with the Securities
and Exchange Commission in connection with our 2004 Annual Meeting of
Stockholders.

         Information concerning our executive officers is contained in Part I of
this report under the caption "Executive Officers."

Item 10.  Executive Compensation

         We incorporate herein by reference the information appearing under the
caption "Executive Compensation" in our definitive Proxy Statement to be filed
with the Securities and Exchange Commission in connection with our 2004 Annual
Meeting of Stockholders.

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

         We incorporate herein by reference the information appearing under the
captions "Principal Stockholders" and "Equity Compensation Plan Information" in
our definitive Proxy Statement to be filed with the Securities and Exchange
Commission in connection with our 2004 Annual Meeting of Stockholders.


                                       40
<PAGE>


Item 12.  Certain Relationships and Related Transactions

         We incorporate herein by reference the information appearing under the
caption "Certain Transactions" in our definitive Proxy Statement to be filed
with the Securities and Exchange Commission in connection with our 2004 Annual
Meeting of Stockholders.

Item 13.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

         See Index to  Exhibits  on Page E-1.  Compensatory  plans and
arrangements required to be filed as exhibits are as follows:

         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        1994 Employee Stock Purchase Plan.

         4        1995 Non-Employee Directors' Stock Option Plan.

         5        Employment Agreement, dated December 14, 1999, between the
                  Company and Dr. Jack H. Kessler.

         6        Employment Agreement, dated December 14, 1999, between the
                  Company and Paul C. Desjourdy.

         (b) Reports on Form 8-K

         During the fourth quarter we filed a report on Form 8-K on December 16,
2003. The report contained an Item 4 disclosure concerning our change in
certifying accountants.

Item 14.  Principal Accountant Fees and Services

         We incorporate herein by reference the information appearing under the
caption "Ratification of Appointment of Independent Auditors" in our definitive
Proxy Statement to be filed with the Securities and Exchange Commission in
connection with our 2004 Annual Meeting of Stockholders.


                                       41
<PAGE>



                                   SIGNATURES

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


                         SYMBOLLON PHARMACEUTICALS, INC.

                         By:   /s/ Paul C. Desjourdy
                               -----------------------------
                               Paul C. Desjourdy
                               President

Date: March 30, 2004

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.

         Signature          Title                                  Date

    /s/ Jack H. Kessler     Chief Executive Officer,              March 30, 2004
--------------------------  Chief Scientific Officer,
      Jack H. Kessler       Secretary and Chairman
                            of the Board of Directors
                            (Principal Executive Officer)


   /s/ Paul C. Desjourdy    President, Chief Operating Officer,   March 30, 2004
--------------------------  Treasurer, General Counsel, Chief
     Paul C. Desjourdy      Financial Officer, and Director (Principal
                            Financial and Accounting Officer)


   /s/ James C. Richards    Director                              March 30, 2004
--------------------------
    James C. Richards

   /s/ Richard F. Maradie   Director                              March 30, 2004
--------------------------
     Richard F. Maradie

   /s/ Eugene Lieberstein   Director                              March 30, 2004
--------------------------
   Eugene Lieberstein



                                       42
<PAGE>


                         Symbollon Pharmaceuticals, Inc.
                                Index to Exhibits

3.1  Amended Certificate of Incorporation of the Company;  including Certificate
     of Designations,  Preferences and Rights of Series A Preferred Stock of the
     Company.  (previously  filed as exhibit  3.1 to Form 10-QSB for the quarter
     ended June 30, 2001 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.  (previously  filed as
     exhibit  10.1 to Form  10-QSB  for the  quarter  ended  June  30,  1999 and
     incorporated by reference)
10.2 Employment Agreement, dated December 14, 1999, between the Company and Paul
     C. Desjourdy.  (previously  filed as exhibit number 10.2 to Form 10-KSB for
     the year ended December 31, 1999 and incorporated by reference)
10.3 Employment Agreement,  dated December 14, 1999, between the Company and Dr.
     Jack H. Kessler.  (previously  filed as exhibit  number 10.3 to Form 10-KSB
     for the year ended December 31, 1999 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 1994  Employee  Stock  Purchase  Plan  of  the  Company.  (incorporated  by
     reference to Exhibit B to the Company's  1994 Annual  Stockholders  Meeting
     Proxy Statement filed under cover of Schedule 14A dated May 4, 1994)
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  Promissory Note, dated January 11, 2001, between the Company and Dr. Jack
     H. Kessler, together with the Pledge Agreement and Letter Agreement related
     thereto.  (previously  filed as exhibit number 10.13 to Form 10-KSB for the
     year ended December 31, 2000 (the `2000 Form 10-KSB") and  incorporated  by
     reference)
10.12  Promissory  Note,  dated  January 11, 2001,  between the
     Company  and Paul C.  Desjourdy,  together  with the Pledge  Agreement  and
     Letter Agreement related thereto. (previously filed as exhibit number 10.14
     to the 2000 Form 10-KSB and  incorporated  by reference)
 10.13  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"))
10.14  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)
23.1 Consent of Vitale, Caturano & Company P.C. relating to Forms S-3 and S-8.
31.1 Certification  of  the  Chief  Executive  Officer  required  by  Securities
     Exchange  Act Rule  13a-14(a)  as adopted  pursuant  to Section  302 of the
     Sarbanes-Oxley Act of 2002.
31.2 Certification  of  the  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  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.
32.2 Certification  of  the  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.
------------------------------------------------------
* Indicates that material has been omitted and  confidential  treatment has been
granted  or  requested  therefor.  All such  omitted  material  has  been  filed
separately with the Commission pursuant to Rule 24b-2.


                                       43