Unassociated Document

INDEX TO SOMANTA FINANCIAL STATEMENTS

SOMANTA PHARMACEUTICALS, INC. AND SUBSIDIARIES

	PAGE

Report of Independent Registered Public Accounting Firm	F-31

Consolidated Balance Sheet as of April 30, 2007	F-32

Consolidated Statements of Operations for the years ended April 30, 2007 and 2006 and for the period from inception of operations (April 19, 2001) to April 30, 2007	F-33

Consolidated Statements of Stockholders’ Deficit for the period from inception of operations (April 19, 2001) to April 30, 2007	F-34

Consolidated Statements of Cash Flows for the years ended April 30, 2007 and 2006 and for the period from inception of operations (April 19, 2001) to April 30, 2007	F-36

Notes to Consolidated Financial Statements as of April 30, 2007	F-37

Condensed Consolidated Balance Sheets at October 31, 2007 (unaudited)	F-62

Condensed Consolidated Statements of Operations for the Three and Six Months Ended October 31, 2007 and 2006 and for the Period from Inception of Operations (April 19, 2001) to October 31, 2007 (unaudited)	F-63

Condensed Consolidated Statement of Stockholders’ Deficit for the Period from Inception of Operations (April 19, 2001) to October 31, 2007 (unaudited)	F-65

Condensed Consolidated Statements of Cash Flows for the Six Months Ended October 31, 2007 and 2006 and for the Period from Inception of Operations (April 19, 2001) to October 31, 2007 (unaudited)	F-69

Notes to Condensed Consolidated Financial Statements as of October 31, 2007	F-71

F-30

Report of Independent Registered Public Accounting Firm

To the Board of Directors of Somanta Pharmaceuticals, Inc.

Irvine, California

We have audited the accompanying consolidated balance sheet of Somanta Pharmaceuticals, Inc., formerly Hibshman Optical Corp. (a development stage company) as of April 30, 2007, and the related consolidated statements of operations and consolidated stockholders’ deficit and consolidated cash flows for the years ended April 30, 2007 and 2006, and for the period from inception of operations (April 19, 2001) to April 30, 2007. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Somanta Pharmaceuticals, Inc. as of April 30, 2007, and the results of its operations and its cash flows for the years ended April 30, 2007 and 2006, and for the period from inception of operations (April 19, 2001) to April 30, 2007, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s operating losses, negative working capital and stockholders’ deficit raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 2 to the consolidated financial statements, in 2006 the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payments.

/s/ STONEFIELD JOSEPHSON, INC.
Irvine, California
June 27, 2007

F-31

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Consolidated Balance Sheet

April 30, 2007

Assets
Current assets:
Cash	$	5,385
Prepaid expenses		43,308
Total current assets		48,693
Office equipment, net of accumulated depreciation of $6,750		16,560
Other assets:
Restricted funds		2,000
Deposits		73
Total other assets		2,073
Total assets	$	67,326
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	774,022
Due to related parties		241,874
Accrued expenses		811,539
Accrued research and development expenses		554,733
Note payable		33,462
Liquidated damages related to Series A preferred stock and warrants		35,200
Deferred revenue		7,143
Warrant liabilities		5,786,844
Total current liabilities		8,244,817
Stockholders’ deficit:
Preferred stock,$0.001 par value, 20,000,000 shares authorized Series A Convertible Preferred Stock, $0.001 par value, 2,000 shares designated, 591.6318 shares issued and outstanding		1
Common Stock, $0.001 par value, 100,000,000 shares authorized, 14,292,603 shares issued and outstanding		14,293
Additional paid-in capital		7,604,360
Deficit accumulated during the development stage		(15,796,145	)
Total stockholders’ deficit		(8,177,491	)
Total liabilities and stockholders’ deficit	$	67,326

The accompanying notes are an integral part of these consolidated financial statements.

F-32

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Consolidated Statements of Operations

Years ended April 30, 2007 and 2006 and for the Period from Inception of Operations

(April 19, 2001) to April 30, 2007

							From Inception of Operations(April 19, 2001) to April 30, 2007

	Year ended April 30,
	2007			2006
Revenue	$ 1,429			$ 1,428			$ 2,857
Operating expenses:
General and administrative	(3,312,660		)	(2,845,634		)	(7,337,118		)
Research and development		(1,239,146	)		(1,264,225	)		(3,100,647	)
Loss from operations		(4,550,377	)		(4,108,431	)		(10,434,908	)
Other income (expense):
Interest income		28,084			12,348			40,432
Interest expense		(54	)		(1,016,020	)		(1,016,074	)
Liquidated damages		(35,200	)		—			(35,200	)
Change in fair value of warrant liabilities		(2,931,118	)		137,543			(2,793,575	)
Gain on settlement of debt		—			5,049			5,049
Currency translation loss		(3,255	)		(30,241	)		(33,496	)
Loss before income taxes		(7,491,920	)		(4,999,752	)		(14,267,772	)
Income taxes		(3,717	)		(2,339	)		(6,056	)
Net loss		(7,495,637	)		(5,002,091	)		(14,273,828	)
Deemed dividends on convertible preferred stock		—			(1,522,317	)		(1,522,317	)
Net loss applicable to common shareholders	$	(7,495,637	)	$	(6,524,408	)	$	(15,796,145	)
Net loss per share—basic and diluted	$	(0.56	)	$	(0.47	)	$	(1.24	)
Weighted average number of shares outstanding—basic and diluted		14,278,247			14,274,365			13,247,052

The accompanying notes are an integral part of these consolidated financial statements.

F-33

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Consolidated Statement of Stockholders’ Deficit—(Continued)

For the Period from Inception of Operations (April 19, 2001) to April 30, 2006

	Peferred Stock				Common Stock				Additional Paid-in		Shares to be		Subscription			Deferred Equity- Based			Accumulated Other Comprehensive Loss-foreign Currency			Deficit Accumulated During Development			Total Stockholders' Equity/
	Shares		Amount		Shares		Amount		Capital		Issued		Receivable			Expense			Translation			Stage			(Deficit)
Balance at April 19, 2001(Inception)	-		$ -				$ -		$ -		$ -		$ -			$ -			$ -			$ -			$ -
Shares issued for cash at $.0326					4,299,860		4,300		135,680				(97,245)												42,735
Shares issued for services at $.0139					514,674		515		11,801							(11,177)									1,139
Amortization of deferred expense																521									521
Comprehensive loss—foreign currency translation adjustment																			29,905						29,905
Net loss for the period from inception to April 30, 2002																						(95,901)			(95,901)
Balance at April 30, 2002	—		—		4,814,534		4,815		147,481		—		(97,245)			(10,656)			29,905			(95,901)			(21,601)
Shares issued for cash at $1.0677					14,601		15		15,575																15,590
Shares issued for services at $.0214					219,010		219		4,472							(3,127)									1,564
Amortization of deferred expense																3,808									3,808
Receipt of cash for subscription receivable													91,517												91,517
Comprehensive loss—foreign currency translation adjustment																			1,534						1,534
Net loss for the year ended April 30, 2003																						(111,456)			(111,456)
Balance at April 30, 2003	—		—		5,048,145		5,049		167,528		—		(5,728)			(9,975)			31,439			(207,357)			(19,044)
Shares issued for cash at $1.2479					350,164		350		436,637				(81,464)												355,523
Shares issued for services at $1.2587						22,233		22		27,962							(25,216	)								2,768
Amortization of deferred expense																	7,691									7,691
Exchange for loan payment and compensation										181,371				2,909												184,280
Comprehensive loss—foreign currency translation adjustment																				(51,651	)					(51,651	)
Net loss for the year ended April 30, 2004																							(439,453	)		(439,453	)
Balance at April 30, 2004		—		—		5,420,542		5,421		813,498		—		(84,283	)		(27,500	)		(20,212	)		(646,810	)		40,114
Shares issued for cash at $1.3218						374,073		374		494,069																494,443
Shares issued for services at $1.2308						21,901		22		26,933																26,955
3,650 shares to be issued for service at $1.4973												5,465														5,465
Amortization of deferred expense																	26,939									26,939
Receipt of cash for subscription receivable														84,283												84,283
Options issued for services										257,515																257,515
Comprehensive loss—foreign currency translation adjustment																				(5,719	)					(5,719	)
Net loss for the year ended April 30, 2005																							(1,129,290	)		(1,129,290	)
Balance at April 30, 2005		—		—		5,816,516		5,817		1,592,015		5,465		—			(561	)		(25,931	)		(1,776,100	)		(199,295	)

The accompanying notes are an integral part of these consolidated financial statements.

F-34

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Consolidated Statement of Stockholders’ Deficit—(Continued)

For the Period from Inception of Operations (April 19, 2001) to April 30, 2007

	Preferred			Stock			Common		Stock		Additional Paid-in			Shares to be			Subscription		Deferred Equity Based-		Accumulated other Comprehensive Loss-Foreign Currency Translation		Deficit Accumulated During Development			Total Stockholders' Equity
	Shares			Amount			Shares		Amount		Capital			Issued			Receivable		Expense		Adjustments		Stage			(Deficit)
Write off foreign currency translation adjustment																					25,931					25,931
Shares issued for cash at $1.5656							12,669		13		19,821															19,834
Shares issued for prior service							3,650		3		5,462			(5,465		)										—
Amortization of deferred expense																			561							561
Options issued for services											300,616															300,616
Recapitalization with Bridge Oncology							7,865,000		7,865		(92,335		)													(84,470		)
Beneficial conversion feature associated with convertible debt financing												364,721															364,721
Convertible Series A Preferred Stock issued for cash at $10,000 (net of issuance costs of $544,169)		464.0000			0.464							4,095,830															4,095,830
Convertible Series A Stock issued on conversion of notes payable		128.6318			0.1286							1,286,318															1,286,318
Deemed dividend on account of beneficial conversion feature associated with issuance of Convertible Series A Preferred Stock												1,522,317												(1,522,317	)		—
Issuance costs on warrants issued to placement agent in connection with the Convertible Series A Preferred Stock												(429,757	)														(429,757	)
Discount on warrant issued with Convertible Series A Preferred Stock												(2,048,531	)														(2,048,531	)
Recapitalization with Hibshman Optical Corp.								576,700		577		(7,708	)														(7,131	)
Warrant expense												92,689															92,689
Net loss for the year ended April 30, 2006																								(5,002,091	)		(5,002,091	)
Balance at April 30, 2006		592.6318		$	0.5926			14,274,534	$	14,275	$	6,701,458		$	—		$	—	$	—	$	—	$	(8,300,508	)	$	(1,584,775	)
Options issued for services												739,000															739,000
Warrant expense												163,920															163,920
Conversion of preferred stock		(1.000	)		(.0010	)		18,069		18		(18	)														—
Net loss for the year ended April 30, 2007																								(7,495,637	)		(7,495,637	)
Balance at April 30, 2007		591.6318		$	0.5916			14,292,603	$	14,293	$	7,604,360		$	—		$	—	$	—	$	—	$	(15,796,145	)	$	(8,177,492	)

F-35

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Consolidated Statements of Cash Flows

Years ended April 30, 2007 and 2006 and for the Period from Inception of Operations

(April 19, 2001) to April 30, 2007

	Year ended April 30,						From Inception of operations (April 19, 2001) to
	2007			2006			April 30, 2007
Cash flows provided by (used for) operating activities:
Net loss	$	(7,495,637	)	$	(5,002,091	)	$	(14,273,828	)

Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Depreciation			5,462			1,496			6,994

Gain on sale of equipment

(622

)

—

(622

)

Amortization of stock based expense		—			561			39,520
Write off foreign currency translation adjustment		—			25,931			25,931
Change in fair value of warrant liabilities		2,931,118			(137,543	)		2,793,575
Shares issued for services and compensation		—			—			219,262
Gain on settlement of debts		—			(5,049	)		(5,049	)
Options expense		739,000			300,616			1,297,131
Warrant expense		163,920			92,689			256,609
Interest expense related to beneficial conversion feature on convertible note		—			364,721			364,721
Interest expense related to warrants issued on convertible note		—			514,981			514,981
Changes in assets and liabilities:
(Increase) decrease in assets—
VAT receivable		1,628			61,952			3,444
Restricted funds		150,048			(152,048	)		(2,000	)
Prepaid expenses		47,767			(82,166	)		(43,037	)
Deposits		2,627			(2,700	)		(73	)
Increase (decrease) in liabilities:
Accounts payable		516,222			199,086			776,723
Accrued liabilities		1,052,994			137,846			1,354,412
Liquidated damages		35,200			—			35,200
Deferred revenue		(1,429	)		8,572			7,143
Due to officer and related party		233,874			(186,263	)		95,980
Net cash used for operating activities		(1,617,828	)		(3,859,409	)		(6,532,983	)
Cash flows used for investing activities:
Purchase of equipment		—			(21,391	)		(24,824	)
Sale of equipment		2,000			—			2,000
Net cash used for investing activities		2,000			(21,391	)		(22,824	)
Cash flows provided by financing activities:
Loan payable—related party		—			—			79,402
Loan payment—related party		—			—			(7,367	)
Proceeds from convertible note-related party		—			1,250,000			1,250,000
Proceeds from note payable - related party		33,462			—			33,462
Proceeds from issuance of common stock		—			19,834			928,125
Proceeds from issuance of preferred stock		—			4,095,831			4,095,831
Cash received for subscription receivable		—			—			175,801
Net cash provided by financing activities		33,462			5,365,665			6,555,254
Effect of exchange rate changes on cash		—			—			5,938
Increase (decrease) in cash		(1,582,366	)		1,484,865			5,385
Cash, beginning of year		1,587,750			102,885			—
Cash, end of year	$	5,385		$	1,587,750		$	5,385
Supplemental disclosure of cash flow information:
Interest paid		54		$	1,016,020		$	1,016,074
Income tax paid	$	3,717		$	2,339		$	6,056
Supplemental disclosure of non-cash operating and financing activities:
Loan reduction with shares	$	—		$	—		$	2,909
Issuance of warrants in conjunction with convertible preferred stock	$	—		$	2,341,785		$	2,341,785
Deemed dividends related to convertible preferred stock	$	—		$	1,522,317		$	1,522,317
Conversion of note and accrued interest	$	—		$	1,286,318		$	1,286,318

The accompanying notes are an integral part of these consolidated financial statements.

F-36

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Notes to Consolidated Financial Statements

1. ORGANIZATION, BASIS OF PRESENTATION AND NATURE OF OPERATIONS

Organization

Somanta Pharmaceuticals, Inc. is a Delaware corporation that was formed for the purpose of effecting the reincorporation of Hibshman Optical Corp., a New Jersey corporation, into the State of Delaware and for the purpose of consummating a business combination via a reverse merger of Somanta Incorporated and Hibshman Optical Corp. Pursuant to this reverse merger, Somanta Incorporated became the wholly-owned subsidiary of Somanta Pharmaceuticals, Inc. and the sole operating subsidiary of Somanta Pharmaceuticals, Inc. For financial reporting purposes, this transaction has been reflected in the accompanying financial statements as a recapitalization of Somanta Incorporated and the financial statements of Somanta Pharmaceuticals, Inc. reflect the historical financial information of Somanta Incorporated. References herein to the “Company” or “Somanta” are intended to refer to each of Somanta Pharmaceuticals, Inc. and its wholly owned subsidiary Somanta Incorporated, as well as Somanta Incorporated’s wholly-owned subsidiary Somanta Limited.

Hibshman Optical Corp. was originally incorporated in the State of New Jersey in 1991 under the name PRS Sub I, Inc. The name was subsequently changed to Service Lube, Inc., then to Fianza Commercial Corp. and then to Hibshman Optical Corp. The business plan since that time had been to seek to enter into a business combination with an entity that had ongoing operations through a reverse merger or other similar type of transaction.

Somanta Incorporated was incorporated as Somantis Limited under the laws of England and Wales on April 19, 2001. Somantis Limited changed its name to Somanta Limited on March 14, 2005, and performed business as a United Kingdom entity through the fiscal year ending April 30, 2005. On August 22, 2005, Somanta Limited became a wholly owned subsidiary of Bridge Oncology Products, Inc. (“BOPI”), a privately held Delaware corporation, pursuant to a share exchange with BOPI.; however, Somanta Limited was deemed the accounting acquirer in this share exchange transaction. On August 24, 2005, the name of BOPI was changed to Somanta Incorporated.

Somanta Pharmaceuticals, Inc. is a development stage biopharmaceutical company engaged in the development of products for the treatment of cancer. The Company has in-licensed five product development candidates from academic and research institutions in the United States and Europe designed for use in anti-cancer therapy in order to advance them along the regulatory and clinical pathways toward commercial approval. The Company intends to obtain approval from the United States Food and Drug Administration (“FDA”) and from the European Medicines Evaluation Agency (“EMEA”) for the products.

Somanta is a development stage enterprise since the Company has not generated revenue from the sale of its products, and its efforts have been principally devoted to identification, licensing and clinical development of its products as well as raising capital through April 30, 2007. Accordingly, the financial statements have been prepared in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises.”

Basis of Presentation

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation have been included.

Going Concern

The Company reported a net loss and net loss applicable to common shareholders of $7,495,637 for the year ended April 30, 2007. The net loss from date of inception, April 19, 2001 to April 30, 2007, totaled $14,273,828 (net loss applicable to common shareholders of $15,796,145). The Company’s operating activities have used cash since its inception. These losses raise substantial doubt about the Company’s ability to continue as a going concern.

F-37

On April 18, 2007, the Company, Somanta Incorporated, a wholly-owned subsidiary of the Company and Somanta Limited, a wholly-owned subsidiary of Somanta Incorporated, and Access Pharmaceuticals, Inc. (“Access”) and Somanta Acquisition Corporation (“Merger Sub”), a wholly-owned subsidiary of Access and a Delaware corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Somanta, with Somanta continuing as the surviving corporation and becoming a wholly-owned subsidiary of Access (the “Merger”). The Board of Directors of Somanta has approved the Merger and the Merger Agreement.

In connection with the Merger, all of Somanta’s common stock that is outstanding at the effective time of the Merger (the “Effective Time”) will be converted into 500,000 shares of Access common stock. No fractional shares of Access common stock will be issued as a result of the Merger. In addition, all of Somanta’s preferred stock, included accrued and unpaid dividends, that is outstanding at the Effective Time of the Merger will be converted into 1,000,000 shares of Access’ common stock. No shares of Access preferred stock will be issued as a result of the Merger.

On April 26, 2007, the Company entered into a Note Purchase Agreement, a Security Agreement, a Patent Collateral Assignment and Security Agreement and a Trademark Collateral Security and Pledge Agreement (collectively, the “Loan Documents”) with Access Pharmaceuticals, Inc. as more fully described in Note 15. Under the terms of the Loan Documents, Access initially loaned the Company $33,462. Access, in its sole discretion, may from time to time advance additional loan amounts to the Company. All amounts loaned to the Company by Access are secured by substantially all of the assets of the Company pursuant to the terms of the Loan Documents. The Note bears interest at 10% and is repayable at the earlier of: (i) August 31, 2007, or (ii) the date of the termination of the Agreement and Plan of Merger dated as of August 18, 2007 between the Company and Access.

If the merger fails to close, the Company expects that it will no longer be able to operate its business and will not have the resources to repay the loan.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Reclassifications

For comparative purposes, prior periods’ consolidated financial statements have been reclassified to conform with report classifications of the current period.

2. Significant Accounting Policies

Cash and Cash Equivalents

The Company considers all highly liquid financial instruments with a maturity of three months or less when purchased to be cash equivalents. At April 30, 2007, there were no cash equivalents.

F-38

Office Equipment

Office equipment is recorded at cost, net of accumulated depreciation. Depreciation on equipment is calculated using the straight-line method over the estimated useful lives of the assets, five years. The Company recorded depreciation expense for the years ended April 30, 2007 and 2006 of $5,462 and $1,496, respectively.

Intangible Assets—Patents and Licenses

All patent and license costs are charged to expense when incurred.

Revenue Recognition

The Company recognizes revenue from licensing its proprietary technology in accordance with SEC staff Accounting Bulletin No. 104 (“SAB 104”). SAB 104 requires revenue to be recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determined, and collection is reasonably assured. Licensing fees, including upfront payments upon execution of a new agreement, are recognized ratably over the license term of such agreement.

Research and Development

All research and development costs consist of expenditures for royalty payments, licensing fees, contracted research by third parties and the fees and expense of consultants to manage the research and development efforts.

Stock Based Compensation

On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment” (SFAS 123R). SFAS 123R eliminates the alternative of applying the intrinsic value measurement provisions of APB 25 to stock compensation awards issued to employees. Rather, the new standard requires enterprises to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). On April 14, 2005, the Securities and Exchange Commission announced the adoption of a rule that defers the required effective date of SFAS 123R. The SEC rule provides that SFAS 123R is now effective for registrants as of the beginning of the first fiscal year beginning after June 15, 2005.

Effective May 1, 2006, the Company adopted SFAS 123R and accordingly has adopted the modified prospective application method. Under this method, SFAS 123R is applied to new awards and to awards modified, repurchased, or cancelled after the effective date. Additionally, compensation cost for the portion of awards that are outstanding as of the date of adoption for which the requisite service has not been rendered (such as unvested options) is recognized over a period of time as the remaining requisite services are rendered. The amounts recorded as expense in the years ended April 30, 2007 and 2006 was $739,000 and $300,615, respectively. As of April 30, 2007, there were 3,483,163 options outstanding.

Prior to May 1, 2006, the Company accounted for its employee stock option plan in accordance with the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” and SFAS No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure.”

Translation of Foreign Currency in Financial Statements

From inception through the fiscal year ended April 30, 2005, the functional currency of the Company was the United Kingdom pound and its reporting currency was United States dollar.

F-39

Assets and liabilities of foreign operations where the functional currency is other than the U.S. dollar are translated at fiscal year-end rates of exchange, and the related revenue and expense amounts are translated at the weighted average rates of exchange during the fiscal year. Translation adjustments arising from differences in exchange rates from these transactions are reported as accumulated other comprehensive loss—foreign currency translation adjustment in the statement of stockholders’ deficit. The currency exchange rate as of April 30, 2005 was $1.9122.

On August 22, 2005, the Company, then known as Somanta Limited, took part in a share exchange with Bridge Oncology Products, Inc., a Delaware company, and became a subsidiary of Bridge Oncology Products, Inc. (Note 10). As a result of this transaction, Somanta Limited became a wholly owned subsidiary of a U.S. entity and accordingly changed its functional currency to the U.S. dollar as of the fiscal year beginning May 1, 2005.

Use of Estimates

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

Income Taxes

Deferred taxes are provided for on a liability method for temporary differences between the financial reporting and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will be realized.

Income taxes are calculated in accordance with the tax laws of the United States for the years ended April 30, 2007 and April 30, 2006. Since the Company had net losses for the years ended April 30, 2007 and 2006, provisions for income taxes in the financial statements include only state minimum taxes for the year ended April 30, 2007.

Segment Reporting

The Company has adopted SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.” Since the Company operates in one business segment dedicated to development of therapeutic candidates for the treatment of cancers, segment disclosure has not been presented.

Fair Value of Financial Instruments

Statement of Financial Accounting Standard No. 107, Disclosures about Fair Value of Financial Instruments, requires that the company disclose estimated fair values of financial instruments. The carrying amounts reported in the balance sheets for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Basic and diluted net loss per share

Net loss per share is calculated in accordance with the Statement of Financial Accounting Standards No. 128 (SFAS No. 128), Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all potential dilutive convertible shares and stock options or warrants were converted or exercised. The calculation of diluted net loss per share excludes potential common stock equivalents if the effect is anti-dilutive. The Company’s weighted common shares outstanding for basic and dilutive were the same since the effect of common stock equivalents was anti-dilutive.

The Company has the following dilutive convertible shares, stock options and warrants as of April 30, 2007 and 2006 which were excluded from the calculation since the effect is anti-dilutive.

	2007	2006
Convertible preferred stock	9,859,125	9,877,194
Stock options	3,483,163	3,825,249
Warrants	7,102,838	6,952,838
Total	20,445,126	20,655,281

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The Company’s undeclared dividend on it’s Preferred Stock amounting to $115,604 was included in the computation of net loss per share in accordance with SFAS No. 129 for the year ended April 30, 2006.

The Company’s undeclared dividends on its Preferred Stock amounting to $474,104 for the year ended April 30, 2007 was included in the computation of net loss per share in accordance with SFAS No. 129.

Aggregate undeclared dividends on Preferred Stock amounting to $589,708 are included in the computation of net loss per share for the period from inception (April 19, 2001) to April 30, 2007.

Recent Accounting Pronouncements

In February 2006, the FASB issued SFAS 155 “Accounting for Certain Hybrid Financial Instruments,” an amendment of FASB Statements No. 133 and in February 2006, the FASB issued SFAS 155, “Accounting for Certain Hybrid Financial Instruments,” an amendment of FASB Statements No. 133 and 140. This Statement amends FASB Statements No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interests in Securitized Financial Assets. This Statement:

	a.	Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation;

	b.	Clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133;

	c.	Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation;

	d.	Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and

	e.	Amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.

This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The fair value election provided for in paragraph 4(c) of this Statement may also be applied upon adoption of this Statement for hybrid financial instruments that had been bifurcated under paragraph 12 of Statement 133 prior to the adoption of this Statement. Earlier adoption is permitted as of the beginning of an entity’s fiscal year, provided the entity has not yet issued financial statements, including financial statements for any interim period for that fiscal year. Provisions of this Statement may be applied to instruments that an entity holds at the date of adoption on an instrument-by-instrument basis. The Company is currently evaluating the impact of SFAS 155.

In March 2006, the FASB issued SFAS No. 156 (“FAS 156”), “Accounting for Servicing of Financial Assets-An Amendment of FASB Statement No. 140.” Among other requirements, FAS 156 requires a company to recognize a servicing asset or servicing liability when it undertakes an obligation to service a financial asset by entering into a servicing contract under certain situations. Under FAS 156 an election can also be made for subsequent fair value measurement of servicing assets and servicing liabilities by class, thus simplifying the accounting and providing for income statement recognition of potential offsetting changes in the fair value of servicing assets, servicing liabilities and related derivative instruments. The Statement will be effective beginning the first fiscal year that begins after September 15, 2006. The Company does not expect the adoption of FAS 156 will have a material impact on the financial position or results of operations.

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In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, “Accounting for Uncertainty in Income Taxes” that provides guidance on the accounting for uncertainty in income taxes recognized in financial statements. The interpretation will be adopted by us on May 1, 2007. We are currently evaluating the impact of adopting FIN 48; however, we do not expect the adoption of this provision to have a material effect on our financial position, results of operations or cash flows.

In July 2006, the FASB issued FASB Staff Position (FSP) No. FAS 13-2, “Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged

Lease Transaction,” that provides guidance on how a change or a potential change in the timing of cash flows relating to income taxes generated by a leveraged lease transaction affects the accounting by a lessor for the lease. This staff position will be adopted by us on May 1, 2007. The Company is currently evaluating the impact of adopting this FSP; however, the Company does not expect the adoption of this provision to have a material effect on the financial position, results of operations or cash flows.

In September 2006, the FASB issued Statement No. 157, “Fair Value Measurements” (SFAS 157). This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this Statement does not require any new fair value measurements. However, for some entities, the application of this Statement will change current practice. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not expect the adoption of SFAS No. 157 to have a material impact on the consolidated financial statements.

In September 2006, the FASB issued Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (SFAS 158). This Statement improves financial reporting by requiring an employer to recognize the over funded or under funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity or changes in unrestricted net assets of a not-for-profit organization. This Statement also improves financial reporting by requiring an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. This Statement is effective as of the end of the fiscal year ending after December 15, 2006. The Company does not have any defined benefit plans, or other post-retirement plans. Therefore, the Company does not expect SFAS No. 158 to have any impact on the consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. The objective of this statement is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected by the Board to expand the use of fair value measurement, consistent with the Board’s long-term measurement objectives for accounting for financial instruments. This statement is effective for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact of adopting this statement; however, the Company does not expect the adoption of this provision to have a material effect on its financial position, results of operations or cash flow.

3. ACCRUED EXPENSES

Accrued expenses consist of the following at April 30, 2007:

Payroll & vacation	$	472,014
Accounting & legal		326,325
Consultant		13,200
	$	811,539

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4. WARRANT LIABILITIES

The Company issued 6,792,852 warrants in conjunction with convertible note (Note 10) and private placement (Note 11). These warrants have registration rights for the underlying shares. EITF 00-19 provides that contracts that include any provision that could require net-cash settlement cannot be accounted for as equity of the Company. The warrant agreements require net cash settlement, at the option of the holders, in the event the Company fails to issue and deliver common stock on exercise of the warrants within three business days of receipt of a written exercise notice by a holder. Pursuant to EITF 00-19, the fair value of the warrants revalued at April 30, 2007 was recorded as a warrant liability amounting $5,786,844. The change in fair value of warrant liabilities from April 30, 2006 to April 30, 2007 in the amount of $2,931,118 was recorded as other expense in the consolidated statements of operations for the year ended April 30, 2007. The change in fair value from the issuance date to April 30, 2006 in the amount of $137,543 was recorded as other income in the consolidated statements of operations for the year ended April 30, 2006.

In the year ended April 30, 2007, the Company issued warrants to non-employees to purchase up to 150,000 common shares over a period of six years at a price of $.01. The Company recorded $163,920 to permanent equity as, pursuant to EITF 00-19, no criteria were met requiring liability classification.

5. RELATED PARTY TRANSACTIONS

Fees Paid to Related Parties

Pursuant to a financial advisory agreement dated March 2005 between Bridge Oncology and SCO Financial Group LLC (SCO), which the Company has assumed, the Company compensates SCO with a monthly fee of $12,500 and an annual grant of warrants (Note 4) to purchase 150,000 shares of Company common stock at an exercise price of $.01 for the term of the agreement for financial advisory services. The Company recorded advisory service fees totaling $150,000 and $112,500 to SCO for the years ended April 30, 2007 and 2006, respectively. The Company recorded non-cash advisory service fees to SCO related to the warrant grants totaling $163,920 (Note 4) and $88,734 for the years ended April 30, 2007 and 2006, respectively.

The Company recorded board of director fees of $76,000 and $38,187 for the years ended April 30, 2007 and 2006, respectively.

Agreement with Related Party

Virium Pharmaceuticals, Inc.

The Company entered into an exclusive co-development and sublicense agreement in February 2005 with a related entity, Virium Pharmaceuticals, Inc. These two entities share a common director and their largest single shareholder, SCO Capital Partners LLC. On May 19, 2005, the Company paid $50,000 to this related party to in-license phenylbutyrate and expensed this amount.

6. LEASES

The lease on the Company’s London office space of approximately 500 sq. ft. for its United Kingdom operations is an operating lease which expired on May 16, 2007. Lease expense for the years ended April 30, 2007 and 2006 were $22,370 and $26,724, respectively.

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7. INCOME TAXES

The significant components of the Company’s income tax provision (benefit) at April 30, 2007 and April 30, 2006 are as follows:

	April 30, 2007		April 30, 2006
Current Taxes:
Federal	$	—	$	—

State		3,717		2,339
Foreign		—		—
Total	$	3,717	$	2,339
Deferred Taxes:
Federal		—		—
State		—		—
Foreign		—		—
Total		—		—

The principal components of the Company’s deferred tax assets at April 30, 2007 and April 30, 2006 are as follows:

			April 30, 2007			April 30, 2006
US Net Operating Loss Carryforwards at statutory rate		$	2,602,000		$	1,107,000

UK Net Operating Loss Carryforwards at statutory rate

703,000

Total

3,305,000

1,810,000

Less Valuation Allowance

(3,305,000

)

(1,810,000

)

Net Deferred Tax assets

—

A reconciliation of the provision (benefit) for income taxes to the amount computed by applying the statutory income tax rate to the loss before income taxes is as follows:

			April 30, 2007			April 30, 2006
Income tax (benefit) expense at statutory rate		$	(2,549,000	)		(1,701,000	)

Non Deductible Expenses at statutory rate

1,050,000

335,000

Other

4,000

18,000

Change in valuation allowance at statutory rate			1,495,000			1,348,000
		$	-		$

The Company has established a valuation allowance against its deferred tax asset, due to the uncertainty of the realization of the asset. Management periodically evaluates the recoverability of the deferred tax asset. At such time as it is determined that it is more likely than not that deferred tax assets are realizable, the valuation allowance will be reduced.

At April 30, 2007 and 2006, the Company had US net operating loss carryforwards of approximately $7,652,000 and $3,256,000 respectively, which may be available to offset future taxable income for tax purposes. These net operating loss carryforwards expire through 2026. At April 30, 2007 and 2006, the Company also had UK net operating loss carryforwards of approximately $2,696,000.

The Internal Revenue Code limits the availability of net operating losses that arose prior to certain cumulative changes in a corporation’s ownership resulting in a change of control of the Company. The Company’s use of $167,000 of its prior net operating loss carryforwards will be significantly limited, because the Company underwent “ownership changes” during the fiscal year ended April 30, 2006. Further, the use of UK net operating loss carryforwards may be limited.

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8. STOCKHOLDERS’ TRANSACTIONS

Common Stock

From inception through April 30, 2003, the Company financed its operations through the sale of 4,314,461 shares of common stock to individual investors at prices in United Kingdom Pounds translated into US Dollars ranging from approximately $0.03, to $1.10, for a total of $155,570. Of this total, $5,728 remained unpaid at the end April 30, 2003 and was recorded as subscription receivable. In addition, 733,684 shares were issued at $0.03 for the services of consultants, for a total of $17,007. Of this total, $9,975 was recorded to deferred equity-based expense, because some services were performed in the subsequent years. The services were accounted for at the fair value of the common stock issued, measured at the dates the commitments for service were reached with the contractors. The fair value of these shares was determined as equal to the value at which shares were being sold to unaffiliated investors at the times of the commitments for service.

For the year ending April 30, 2004, the Company completed additional sales of 350,164 shares of common stock at approximately $1.23 for a total of $436,987. At the end of April 30, 2004, the amount remaining unpaid for all prior equity sales was $84,283 and was recorded as subscription receivable. The Company issued 22,233 shares of common stock at approximately $1.23 for the services of a consultant, for a total of $27,985. Of this total, $25,216 was recorded as deferred equity-based expense. During the year ended April 30, 2004, 146,007 issued shares were purchased by the President and Chief Executive Officer of the Company from an individual who had not paid for the shares. The fair value of these shares was determined as equal to the value at which shares were being sold to all other unaffiliated investors at the time of this share purchase. The Company recorded the difference between the purchase price and the fair value of the shares as compensation expense amounting to $181,371.

For the year ending April 30, 2005, the Company sold 374,074 shares to individual investors at approximately $1.33, for a total of $494,443. In this period, 21,901 shares of common stock were issued at approximately $1.23 per share for the services of a consultant, for a total of $26,955.

During the year ended April 30, 2006, the Company sold 12,669 shares to an individual investor at approximately $1.57, for a total of $19,834. In this period, 3,650 shares of common stock were issued at approximately $1.50 in satisfaction of the shares to be issued at April 30, 2005 for a balance of $5,465.

Stock-Based Compensation

The Board of Directors adopted and the stockholders approved the 2005 Equity Incentive Plan in June 2005. The plan was adopted to recognize the contributions made by the Company’s employees, officers, consultants, and directors, to provide those individuals with additional incentive to devote themselves to its future success, and to improve the Company’s ability to attract, retain and motivate individuals upon whom the Company’s growth and financial success depends. Under the plan, stock options may be granted as approved by the Board of Directors or the Compensation Committee. There are 8,000,000 shares reserved for grants of options under the plan, of which 2,204,701 have been issued as substitutions with the exact same terms for the 2,204,701 previously issued options outstanding as of April 30, 2005. Stock options vest pursuant to individual stock option agreements. No options granted under the plan are exercisable after the expiration of ten years (or less in the discretion of the Board of Directors or the Compensation Committee) from the date of the grant. The plan will continue in effect until terminated or amended by the Board of Directors or until expiration of the plan on August 31, 2015.

On April 13, 2007, the Company’s Board of Directors approved a merger agreement with Access Pharmaceuticals, Inc, as more fully described in Note 15. Under the terms of that agreement Access will not assume, or provide a substitute option, for any of the Company’s stock options. Rather, all of the outstanding options to purchase Company common stock issued pursuant to the Company’s 2005 Equity Incentive Plan will be cancelled prior to the closing of the transaction in accordance with Section 11.3(d) of the Equity Incentive Plan. As a result, pursuant to the terms of Section 11.3(d) of the Equity Incentive Plan, the Company’s Board of Directors has resolved to: (i) allow the immediate and accelerated vesting of all of the options granted, and (ii) allowed the exercise of the option in whole or in part until May 31, 2007. Based on FAS 123(R), no incremental expense was recorded for these options with accelerated vesting as the fair value of the modified options was less than the fair value of the original options calculated immediately before the terms were modified. None of the options were exercised thru May 31, 2007. Additional expenses of $507,284 was due to the acceleration of the vesting.

FAS 123(R) requires the use of a valuation model to calculate the fair value of each stock-based award. Since May 1, 2003, the Company has used the Black-Scholes model to estimate the fair value of stock options granted. For the valuation of stock-based awards granted in the years ended April 30, 2007 and 2006, respectively, the Company used the following significant assumptions:

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Compensation Amortization Period. All stock-based compensation is amortized over the requisite service period of the options, which is generally the same as the vesting period of the options. For all stock options, the Company amortizes the fair value on a straight-line basis over the service periods.

Expected Term or Life. The expected term or life of stock options granted or stock purchase rights issued represents the expected weighted average period of time from the date of grant to the estimated date that the stock option would be fully exercised. To calculate the expected term, the Company used the total of one-half of the option term and one-half of the vesting periods.

Expected Volatility. Expected volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate. The Company’s stock is currently traded on the over-the -counter bulletin board under the trading symbol “SMPM”. The Company estimated the expected volatility of the stock options at grant date using the daily stock price of three comparable companies over a recent historical period equal to the Company’s expected term.

Risk-Free Interest Rate. The risk-free interest rate used in determining the fair value of our stock-based awards is based on the implied yield on U.S. Treasury zero-coupon issues with remaining terms equivalent to the expected term of our stock-based awards.

Expected Dividends. The Company has never paid any cash dividends on common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero in valuation models.

Expected Forfeitures. As stock-based compensation expense recognized in the consolidated statements of operations for year ended April 30, 2007 is based on awards that are ultimately expected to vest, it should be reduced for estimated forfeitures. FAS 123(R) requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Pre-vesting forfeitures were estimated to be 0% for stock options granted for the year ended April 30, 2007 based upon historical forfeitures.

Summary of Significant Assumptions of the Valuation of Stock-Based Awards. The weighted-average estimated fair value of stock options granted during the year ended April 30, 2007 and 2006 was $0.43 and $0.42 per share, respectively. The fair value for these stock options was estimated at the date of grant with the following weighted-average assumptions for the years ended April 30, 2007 and April 30, 2006, respectively:

	Year ended April 30,
	2007	2006
Expected volatility	80.17 to 81.38%	101.80%
Weighted-average volatility	80.41%	101.80%
Expected dividend yield	0%	0%
Expected term in years	6.0	6.0 to 7.0
Risk-free interest rate	4.8% to 5.1%	4.1% to 4.6%

During the years ended April 30, 2007 and 2006, the Company recognized compensation costs related to stock options of $739,000 and $300,615, respectively.

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The following table summarizes activity for stock options issued to employees, consultants and directors for the years ended April 30, 2007 and 2006:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at April 30, 2005		2,204,701		$	1.23		7.6	$	44,094
Granted		1,781,170			0.60
Exercised		—
Forfeited		(160,622	)		1.23
Expired		—
Outstanding at April 30, 2006		3,825,249			0.94		7.9	$	65,696
Granted		122,500			0.60
Exercised		—
Forfeited		(339,417	)		0.60
Expired		(125,169	)		1.15
Outstanding at April 30, 2007		3,483,163		$	0.95		0.1	$	1,040,399
Exercisable at April 30, 2007		3,483,163		$	0.95		0.1	$	1,040,399

The aggregate intrinsic value represents the difference between the stock price on the last day of the fiscal year, April 30, 2007, which was $1.25, and the exercise price multiplied by the number of options outstanding.

The following table summarizes information about non-vested Company stock options as of April 30, 2007 (unaudited):

Weighted Average

Grant Date Fair Value

Non-vested at April 30, 2006

1,849,128

0.43

Granted	122,500		$	0.43
Vested	(1,632,211	)	$	0.48
Forfeited	(339,417	)	$	0.18
Non-vested at April 30, 2007	-0-

Stock Warrants

Through the year ended April 30, 2005, the Company issued no warrants. During the year ended April 30, 2006, the Company issued warrants to non-employees to purchase up to 6,952,838 common shares over periods ranging from 5 to 7 years at prices ranging from $0.01 to $2.25. Included in the warrants issued were warrants to a non-employee to purchase up to 9,987 common shares over a five year period at a price of $2.25. In the year ended April 30, 2007, the Company issued warrants to non-employees to purchase up to 150,000 common shares over a period of six years at a price of $.01 (Note 4). In accordance with EITF 96-18, the Company determined that the fair value of the equity instrument issued was more reliably measured because it was difficult to determine the value of the services performed. In accordance with FASB Statement No. 123R, the Company has expensed the fair value of all the warrants issued during the year. The fair value was estimated using the Black-Scholes valuation method. The assumptions utilized in the valuation model were a dividend yield of zero, volatility factors ranging from 76.5 to 97.2%, the risk-free interest rates prevailing at the warrant issuance dates, which ranged from 4.1 to 4.9%, and expected warrant lives ranging from 2.5 to 3.5 years. The fair market value of the warrants used in the Black-Scholes valuation model was equal to the most recent value at which shares were being sold to unaffiliated investors.

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The following table summarizes the activity for warrants issued during the years ended April 30, 2007 and 2006.

	Shares		Wtd. Avg. Exercise Price
Outstanding April 30, 2005	—
Granted	6,952,838	$	.62
Exercised	—

Forfeited	—
Expired	—
Outstanding April 30, 2006	6,952,838	$	.62
Granted	150,000	$	.01
Exercised	—
Forfeited	—
Expired	—
Outstanding April 30, 2007	7,102,838	$	.61

The following table summarizes information about warrants outstanding as of April 30, 2007:

Warrants Outstanding

Warrants Exercisable

Exercise Prices	Number Outstanding	Wtd. Avg Remaining Contr. Life		Wtd. Avg Exercise Price	Number Exercisable		Wtd. Avg Exercise Price
$0.01	1,166,534	5.8 years	$	0.01	1,166,534	$	0.01
$0.60	987,720	4.8 years	$	0.60	987,720	$	0.60
$0.75	4,938,597	4.8 years	$	0.75	4,938,597	$	0.75
$2.25	9,987	3.1 years	$	2.25	9,987	$	2.25

9. SHARE EXCHANGE AGREEMENT AND PLAN OF MERGER AGREEMENT

On August 22, 2005, Somanta Limited, a company organized under the laws of England and Wales, became a wholly-owned subsidiary of Bridge Oncology Products, Inc. (“BOPI”), a privately held Delaware corporation pursuant to a share exchange with BOPI. BOPI was formed in February 2005, and its only operation was to in-license a product development candidate for development outside the United States and Canada.

Under the terms of a Share Exchange Agreement by and among BOPI, Somanta Limited, and the shareholders and option holders of Somanta Limited, BOPI (i) issued 5,832,834 shares of BOPI to the twenty-five holders of 79,898,686 ordinary shares of Somanta Limited and (ii) issued substitute options to purchase 2,032,166 shares of BOPI to the eleven holders of Somanta Limited options covering 27,836,800 ordinary shares of Somanta Limited. The exchange ratio in the share exchange was 1 share of BOPI for each 13.698 shares of Somanta Limited. As a result of this share exchange, the shareholders of Somanta Limited owned 50% of the fully diluted ownership of BOPI, and the holders of BOPI owned the remaining 50%.

Somanta Limited options were all priced at 5 pence pursuant to Somanta Limited’s Board resolution dated May 18, 2005. These option grant prices were converted into US dollars at the exchange rate on June 13, 2005, to $0.09 per share. After the exchange ratio from the share exchange was applied, these options now have an exercise price of $1.232828 per share for each BOPI option issued in the share exchange.

The acquisition was accounted for as a recapitalization, as described in FASB 141, 17-3. This transaction is treated as a capital transaction in substance, rather than a business combination. That is, the transaction is equivalent to Somanta Limited issuing stock for the net monetary assets of BOPI, accompanied by a recapitalization. The assets of BOPI were recorded at the historical value. The intangible asset on BOPI’s books was written off to the income statement on the date of the acquisition (August 22, 2005). Accordingly, the historical financial statements of Somanta Limited became the historical financial statements of BOPI after this transaction. In accounting for this transaction, since Somanta Limited is deemed to be the purchaser and surviving company, its net assets have been included in the consolidated balance sheets at their historical book values.

F-48

On August 24, 2005, the name of BOPI was changed to Somanta Incorporated (“SI”).

On September 7, 2005, SI entered into a letter of intent to effect a merger with Hibshman Optical Corp (“Hibshman”), a New Jersey corporation, and a public reporting company that did not have a market for its common stock. Hibshman was formed in 1991 under the name PRS Sub I, Inc., as a subsidiary of People Ridesharing Systems, Inc. (“PRS”), a public corporation that had filed for Bankruptcy in 1989. In March 1992, the name of PRS Sub I was changed to Service Lube, Inc., in anticipation of becoming an operating business. In April 1992 the name was changed to Fianza Commercial Corp. Again in April 1992 the name was changed to Hibshman. Hibshman never had an operating business, its stock never traded publicly, and its shareholders never received stock certificates.

On September 27, 2005, Hibshman, pursuant to an action taken by the written consent of its board and shareholders, adopted an Agreement and Plan of Merger to effect the reincorporation of Hibshman into Delaware prior to the merger with SI. Hibshman formed a new Delaware corporation which was a wholly owned subsidiary of Hibshman (“Delaware NewCo”). At the closing of the reincorporation, Hibshman merged into Delaware NewCo and each outstanding Hibshman share was exchanged for .01305340 of Delaware NewCo shares with each registered holder of a fractional share being issued 50 Delaware NewCo shares in lieu of such fractional share. Delaware NewCo was the surviving entity and the successor issuer under the Exchange Act and had 576,700 outstanding shares. Delaware NewCo was named “Somanta Pharmaceuticals, Inc.”

On January 31, 2006, pursuant to an Agreement and Plan of Merger by and among Delaware NewCo, SI, and Somanta Merger Sub (“Merger Sub”), a wholly-owned subsidiary of Delaware NewCo, SI merged with Merger Sub and became a wholly-owned subsidiary of Delaware NewCo. In connection with this merger transaction, Delaware NewCo issued to the holders of SI capital stock an aggregate of 13,697,834 shares of Delaware NewCo common stock and assumed the SI 2005 Equity Incentive Plan and all options outstanding thereunder which options became options to purchase 3,831,864 shares of Delaware NewCo common stock. As a result, (i) the shareholders and optionholders of SI owned approximately 97% of the total outstanding common stock of Delaware NewCo on a fully diluted basis, (ii) Delaware NewCo assumed the SI 2005 Equity Incentive Plan and reserved 8,000,000 common shares for issuance under the Plan, and (iii) Delaware NewCo changed its name to Somanta Pharmaceuticals, Inc.

The acquisition was accounted for as a recapitalization, as described in FASB 141, 17-3. This transaction is treated as a capital transaction in substance, rather than a business combination. That is, the transaction is equivalent to Somanta Incorporated issuing stock for the net monetary assets of Hibshman Optical Corp., accompanied by a recapitalization. Accordingly, the historical financial statements of Somanta Incorporated became the historical financial statements of Hibshman Optical Corp. after this transaction. In accounting for this transaction, since Somanta Incorporated is deemed to be the purchaser and surviving company, its net assets have been included in the consolidated balance sheets at their historical book values. Somanta Pharmaceuticals, Inc., elected to change the fiscal year end from December 31 to April 30 of Somanta Incorporated.

10. CONVERTIBLE NOTE

On August 23, 2005, Bridge Oncology Products, Inc. (“BOPI”) issued a $1,000,000 secured convertible note to SCO Capital Partners LLC (“SCO”). The note was secured by BOPI’s assets, carries an annual interest rate of 7.5%, and was due at the earlier of (i) BOPI’s completion of a qualified equity financing of at least $10,000,000 or (ii) August 23, 2006. SCO had the option to be repaid in cash or to convert the debt into the shares of a qualified equity financing at the lowest price paid by institutional investors.

On November 7, 2005, SCO agreed to expand its secured convertible note to SI from $1,000,000 up to $1,250,000. Under the terms of the revised arrangement with SI, the security and interest rate remained unchanged. The terms were amended to require repayment at the earlier of (i) SI’s completion of an equity financing of at least $5,000,000 or (ii) February 28, 2006. Consistent with the secured convertible note above, SCO had the option to be repaid in cash or to convert the debt into the shares of a qualified equity financing at the lowest price paid by institutional investors.

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In addition, for each $50,000 borrowed on the additional $250,000 line of credit, the Company agreed to issue a six-year warrant to purchase 173,307 shares of common stock in the amount of 1% of the Company’s fully diluted common shares outstanding at an exercise price of $0.01 per share. SI has drawn an additional $250,000 under this arrangement, for a total amount outstanding of $1,250,000 and has issued warrants to purchase a total of 866,534 shares of common stock to SCO. These warrants are immediately exercisable upon issuance and expire on November 8, 2012. The fair market value of these warrants, as discussed further below, was estimated to be $0.59 per share at the issuance date and re-measured at $0.59 as of April 30, 2006. The assumptions used in the Black-Scholes model were risk-free interest rate of 4.5% at the time of issuance and 4.95% at April 30, 2006, volatility factors of 97.24% at the issuance and 76.63% at April 30, 2006, calculated as the weighted average of the stock price volatility of ranked comparable public companies, and contractual terms equal to the exercise periods of the respective warrants. The fair value of the common stock as used in this calculation was $.60 per share, as negotiated between the Company and the Series A Convertible Preferred Stock investors. None of these warrants have been exercised as of April 30, 2007.

These warrants have registration rights for the underlying shares. The investor rights agreement for the warrant requires the Company pay a penalty in cash as liquidated damages if the underlying shares are not registered in a Registration Statement and such Registration Statement is not declared effective on or prior to the 90th day following the initial closing date. The Company will be required to pay, in cash, liquidated damages for such failure, equal to 1% of the holder’s subscription amount. Pursuant to Emerging Issues Task Force (EITF) No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, the fair value of the warrants at the issuance was recorded as a warrant liability, as 1) the shares are required to be registered and 2) net cash settlement could occur. EITF 00-19 provides that contracts that include any provision that could require net-cash settlement cannot be accounted for as equity of the Company. The warrant agreements require net cash settlement, at the option of the holders, in the event the Company fails to issue and deliver common stock on exercise of the warrants within three business days of receipt of a written exercise notice by a holder and the holder purchases shares of common stock to deliver in satisfaction of a sale of the shares of warrants stock which the holder anticipated to receive upon exercise.

In accordance with Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, (“FASB 133”), the Company determined that the conversion feature of the notes did not meet the criteria for bifurcation of the conversion option, as the debt met the definition of “conventional convertible debt”, as defined under EITF 00-19, and therefore the conversion feature of the debt did not need to be bifurcated and accounted for as a derivative.

In accordance with EITF No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, which provides guidance on the calculation of a beneficial conversion feature on a convertible instrument, the Company has determined that the convertible note payable had a non-cash beneficial conversion feature of $364,721, which was determined once the qualified equity financing was finalized. The beneficial conversion feature was calculated on the note commitment date but recognized when the contingency of conversion was resolved and was determined based on the difference between the calculated conversion value after the allocation of the full fair value of the warrants of $514,981 to the debt as debt discount and the fair value of the Company’s common stock of $0.60 per share. The value of the Company’s common stock of $0.60 per share was based on the value of common stock obtained through negotiation for independent sales of common stock to unaffiliated investors. After the allocation of proceeds between the debt and warrants are made, conversion price of $0.425 was calculated based on the allocated amount to debts divided by 2,083,333, the total number of shares into which the note is convertible. The calculated amount of $0.175, the difference of the fair value of the common stock of $0.60 and the effective conversion price of $0.425, represents the beneficial value per share. This beneficial value was applied to the total shares into which the note is convertible, to calculate the beneficial conversion feature. The proceeds of $1,250,000 on the note were recorded net of the discount of $364,721 on account of the beneficial conversion feature and discount of $514,981 on account of the full fair value of the warrants. In conjunction with the private placement (Note 12), the debt and accrued interest was converted into 128.6318 shares of Series A Convertible Preferred Stock. The discounts on account of the beneficial conversion feature and fair value of the warrants have been recognized as additional interest expense on conversion.

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11. PRIVATE PLACEMENT

On January 31, 2006, Somanta Pharmaceuticals, Inc. completed a private placement of 592.6318 shares of its Series A Convertible Preferred Stock (“Series A Preferred”) at a price of $10,000 per share, including six-year warrants to purchase an additional 4,938,598 shares of its common stock. The Series A Preferred shares consisted of 464 shares purchased by investors which are convertible into 7,733,333 shares of common stock and 128.6318 shares that gave effect to the conversion amount of $1,286,318, representing the value of the converted note of $1,250,000 (Note 11) and the associated accrued interest of $36,318. The total 592.6318 preferred shares are convertible into 9,877,197 common shares. Gross proceeds to Somanta were $4,640,000, including $3,671,209 in cash, payments to various vendors amounting $968,791, which included cash payment of $624,105 to SCO Securities, LLC, its placement agent.

The Series A Preferred is initially convertible into 9,877,197 shares of the Company’s common stock at a conversion price of $0.60 per share. The conversion value is subject to adjustment. The exercise price for the warrants is $0.75 per share and they are immediately exercisable upon issuance. The fair market value of these warrants, as discussed further below, was estimated to be $0.41 per share at the issuance date. The warrants expire on January 31, 2012. None of the warrants have been exercised as of April 30, 2007.

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The Series A Preferred stockholders have a liquidation preference, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, senior to the holders of common stock in an amount equal to $10,000 per share of preferred stock plus any accumulated and unpaid dividends on the preferred stock. In the alternative, the holders of the Series A Preferred may elect to receive the amount per share that would be distributed among the holders of the preferred stock and common stock pro rata based on the number of shares of the common stock held by each holder assuming conversion of all preferred stock, if such amount is greater than the amount such holder would receive pursuant to the liquidation preference. A change of Control of the Corporation will not be deemed a liquidation.

The Series A Preferred Stock is not redeemable for cash. The holder of any share or shares of Series A Preferred can, at the holder’s option, at any time convert all or any lesser portion of such holder’s shares of Series A Preferred stock into such number of shares of common stock as is determined by dividing the aggregate liquidation preference of the shares of preferred stock to be converted plus accrued and unpaid dividends thereon by the conversion value then in effect for such Preferred Stock (“Conversion Value”). The Company can, on the occurrence of a conversion triggering event, elect to convert all of the outstanding preferred stock into common stock. A conversion triggering event is (i) a time when the registration statement covering the shares of common stock into which the Series A Preferred is convertible is effective and sales may be made pursuant thereto or all of the shares of common stock into which the Series A Preferred is convertible may be sold without restriction pursuant to Rule 144(k) promulgated by the SEC and the daily market price of the common stock, after adjusting for stock splits, reverse splits, stock dividends and the like is $5 or more for a period of 30 of the immediately preceding 60 consecutive trading days and the volume of common stock traded on the applicable stock exchange on each such trading day is not less than 100,000 shares, or (ii) a time when the Company consummates a sale of common stock in a firm commitment underwritten public offering in which the offering price before deduction of expenses of the common stock is greater than 200% of the Conversion Value and the aggregate gross proceeds of the offering to the Company are greater than $25 million.

All the outstanding preferred stock will be automatically converted to common stock upon an occurrence of a qualified change of control provided that upon consummation of a qualified change of control the holders of the shares issuable on automatic conversion shall be entitled to receive the same per share consideration as the qualified change of control transaction consideration. The holders of the Series A Preferred may require the Company to redeem the shares upon the Company’s failure or refusal to convert any shares of Preferred Stock in accordance with the terms of issue, or by providing a written notice to that effect.

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The Series A Preferred has been classified as equity, as the Series A Preferred stock is not redeemable. In accordance with EITF No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, the Company has determined that the Series A Preferred had a beneficial conversion feature of $1,522,317 as of the date of issuance. As such, the Company recorded a non-cash deemed dividend of $1,522,317 resulting from the difference between the conversion price determined after allocation of the full fair value of the warrants of $0.41 at the issuance date, revalued at $0.78 as of April 30, 2007, and the fair value of common stock of $0.60. The carrying value of the Series A Preferred of $5,926,318 was recorded net of the deemed dividend of $1,522,317 and a discount of $2,048,531 at the issuance date. The change in fair value of the warrants was recorded as other income in the consolidated statement of operations for the year ended April 30, 2007.

The holders of the Series A Preferred and warrants have registration rights which obligate the Company to file a registration statement with the Securities and Exchange Commission (“SEC”) covering the resale of the common stock issuable upon conversion of the Series A Preferred and the common stock issuable upon exercise of the warrants (as well as certain other securities of the Company) within 30 days after the closing of the private placement. In the event the registration statement is not filed within such thirty day period or if the registration statement is not effective within 120 days after the date it is filed, or a registration statement, once declared effective ceases to remain effective during the period that the securities covered by the agreement are not sold, the Company will be required to pay, in cash, liquidated damages for such failure, equal to 1% of the holders of the Series A Preferred investment amount for each thirty day period in which the registration statement is not filed or effective, or maintained effective, as the case may be. This penalty obligation expired on January 31, 2007 since the SEC declared the Registration Statement effective on August 10, 2006.

In accordance with EITF Issue 05-4, The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument Subject to Issue No. 00-19, the Company believes that the effect of the liquidated damages should be treated under the first view (View A), which states that a registration rights agreement should be treated as a combined unit together with the underlying financial instruments, warrants and derivative debenture and evaluated as a single instrument under EITF Issue 00-19 and FAS 133. The Company concluded that this view is the most appropriate for the transaction. The Registration Rights Agreement and the financial instruments to which it pertains (the warrants and the preferred stock) were considered a combined instrument and accounted for accordingly. The SEC declared the Registration Statement effective on August 10, 2006. As a result, during the quarter ended July 31, 2006, the Company accrued a liability of liquidated damages of $120,502. During the quarter ended October 31, 2006 an agreement was reached with SCO on the liquidated damages matter. The agreement concluded that since the securities owned by SCO Capital Partners, LLC were not registered because SCO voluntarily withdrew them from the Registration because of the resale restrictions required by the SEC, the Company is not obligated for any liquidated damages pertaining specifically to SCO Capital Partners, LLC. Accordingly, the Company reversed out $85,302 of liquidated damages in the prior quarter ended October 31, 2006.

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The Company also issued six year warrants to its placement agent to purchase 987,720 common shares at $0.60 per share to SCO Securities LLC, as part of the success fees of 10% of the aggregate value of the transaction at sales price of common stock. These warrants are immediately exercisable upon issuance. The fair value of these warrants at the date of issuance was estimated to be $0.44 per share and revalued at $0.41 as of April 30, 2006 and has been recorded as issuance costs and offset against the proceeds of the Series A Preferred. On February 27, 2007, the Company issued a six year warrant to SCO Financial Group to purchase 150,000 common shares at $.01 per share.

The fair value of warrants issued in connection with the issue of convertible debt and convertible preferred stock, including the agent warrants, was estimated at the date of grant and revalued at April 30, 2007 using a Black Scholes option pricing model with the following assumptions: a risk free interest rate of approximately 4.5% at the issuance date and 4.6% on April 30, 2007, no dividend yield, volatility factors of 81.89% to 97.24% at the issuance date and 50.89% to 60.56% at April 30, 2007, contractual terms of 6 and 7 years and expected terms based upon the formula prescribed in SEC Staff Accounting Bulletin 107 of 3 years and 3.5 years. These assumptions use the interest rate prevailing at the time of issuance, volatility factors calculated as the weighted average of the stock price volatility of ranked comparable public companies, and contractual terms equal to the exercise periods of the respective warrants. The fair value of the common stock as used in this calculation was $.60 per share at the issuance date, as negotiated between the Company and unaffiliated third party Series A investors, and $1.25 on April 30, 2007. The change in fair value of the warrants for the year ended April 30, 2007 of $2,931,118 was reported in other expense and disclosed in the financial statements.

The fair value of the above warrants has been classified as a liability pursuant to EITF 00-19 as described in Note 4 for the years ended April 30, 2007.

The fair value of the warrants was reassessed at the end of the fiscal year 2007 with changes in fair value recorded in other income (expense) and disclosed in the financial statements.

The holders of the Series A Preferred Stock are entitled to receive, when, if and as declared by the Board, dividends at 8% per annum cumulative from the date of issuance of the shares of Preferred Stock. The board did not declare the dividends as of April 30 2007. Therefore, a dividend of $589,708 and $115,604 for the year ended April 30, 2007 and 2006, respectively, on the Preferred Stock has not been recorded in the consolidated financial statements, but in accordance with SFAS No. 129, the dividend amount has been included in the calculation of net loss per share.

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12. SECURED NOTE

On April 26, 2007, the Company entered into a Note Purchase Agreement, a Security Agreement, a Patent Collateral Assignment and Security Agreement and a Trademark Collateral Security and Pledge Agreement (collectively, the “Loan Documents”) with Access Pharmaceuticals, Inc. (“Access”). Under the terms of the Loan Documents, Access initially loaned the Company $33,462. Access, in its sole discretion, may from time to time advance additional loan amounts to the Company. All amounts loaned to the Company by Access are secured by substantially all of the assets of the Company pursuant to the terms of the Loan Documents. The Note bears interest at 10% and is repayable at the earlier of: (i) August 31, 2007, or (ii) the date of the termination of the Agreement and Plan of Merger dated as of August 18, 2007 between the Company and Access.

13. COMMITMENTS—EMPLOYMENT AND CONSULTING AGREEMENTS

In January 2006, the Company entered into employment agreements with the Company’s President and Chief Executive Officer (“CEO”), and with the Company’s Executive Chairman, for one year terms. These agreements were automatically renewed for an additional on year term on January 31, 2007. Under these agreements, the President and Executive Chairman are to be paid annual base salaries of $275,000 and $248,000, respectively. Both officers are eligible to receive annual bonuses and additional stock option grants at the discretion of the Company’s board of directors. In July 2006, the Company’s CEO and Executive Chairman agreed to defer 50% of their base salaries until the completion of the Company’s next fund raising at which time the deferred amounts would be repaid and the deferrals would cease. Effective October 1, 2006, the Company’s CEO and Executive Chairman agreed to defer 100% of their base salaries until the completion of the Company’s next fund raising, or the completion of a merger or other consolidation with another company, at which time the deferred amounts would be repaid and the deferrals would cease. Effective June 30, 2006, our Executive Chairman was appointed by our Board to be our Chief Financial Officer, Secretary and Treasurer.

In January 2006, the Company entered into an employment agreement with the Company’s Chief Financial Officer (“CFO”). Under the agreement, the CFO was to be paid an annual base salary of $215,000 and also entitled to receive an annual bonus and additional stock option grants at the discretion of the Company’s board of directors. In June 2006, the Company’s CFO resigned. The Company is not obligated to pay him any severance or other payments as the result of his departure; however, the board agreed to amend the terms of his stock option agreement to immediately vest him in twenty five percent (25%) of the shares covered by the option, or 101,668 shares, and enable him to exercise such option until June 30, 2007. Based on FAS 123R, no incremental expense was recorded for these options with accelerated vesting as the fair value of the modified options was less than the fair value of the original options calculated immediately before the terms were modified.

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In November 2005, the Company entered into two consulting agreements: (i) a Service Provision Agreement with Pharma Consultancy Limited, a UK company controlled by Luiz Porto, one of the Company’s stockholders pursuant to which the Company will pay Dr. Porto approximately $278,000 per year, for services rendered by Dr. Porto to the Company as an independent consultant in connection with the management of the Company’s clinical activities, that will terminate on December 31, 2006 unless extended by a mutual written agreement of the parties and may be terminated, with or without cause, by giving the other party thirty (30) days’ prior written notice; and (ii) a Service Provision Agreement with Gary Bower pursuant to which the Company will pay Mr. Bower approximately $156,000 per year for services rendered by Mr. Bower to the Company as an independent consultant in connection with the pre-clinical activities related to the manufacturing of the Company’s product candidates, that will terminate on December 31, 2006 unless extended by a mutual written agreement of the parties and that may be terminated, with or without cause, by giving the other party thirty (30) days’ prior written notice.

The agreement with Mr. Bower was amended in April 2006 to include GTE Consultancy Limited, a company organized under the laws of United Kingdom and owned by Mr. Bower, as the service provider pursuant to the agreement. With the approval of the Company’s board of directors, both Dr. Porto and Mr. Bower may also be granted cash bonuses and stock options in the future. In July 2006, Pharma Consultancy Limited and GTE Consultancy Limited amended their agreements to reduce, effective September 1, 2006, their consulting services to the Company by 33%, which in turn, will reduce the Company’s payments by approximately $91,000 and $51,000, respectively, on an annualized basis. Both agreements expired by there terms on December 31, 2006 and were not renewed.

The Company’s former CFO resigned in August 2005, in connection with the closing of the share exchange agreement with Bridge Oncology. In January 2006, he entered into a consulting arrangement with the Company under which he is paid $5,000 per month retroactive to June 2005. Effective June 1, 2006, the former CFO agreed to modify his consulting arrangement to provide his services for $100 per hour in lieu of a fixed retainer and was granted options to acquire 25,000 of the Company’s common stock at $.60 per share vesting quarterly over twenty four months. Those options expired as of May 31, 2007.

14. SIGNIFICANT CONTRACTS AND LICENSES

IN-LICENSING AGREEMENTS

De Montfort University

In November 2001, the Company entered into a Patent and Know-how Assignment and License Agreement with De Montfort University of Leicester, England, pursuant to which De Montfort University agreed to assign to the Company the key patent related to chloroethylaminoanthraquinone, a cytotoxic small molecule and to exclusively license to the Company certain know-how related to this molecule for use in field of the treatment of cancer. In March 2003, the Company amended and restated that agreement to extend the time period in which the assignment and license would be triggered. In October 2005, De Montfort University formally assigned the patent that covers the molecule to the Company. Pursuant to the agreement with De Montfort University, the Company paid De Montfort an initial assignment fee of $42,815 in March 2004 and issued 219,010 shares of common stock to De Montfort valued at $4,677 in December 2001. The Company is not obligated to make any royalty payments to De Montfort based on the sale of any product that is based on this small molecule, but it is obligated to pay De Montfort certain milestone payments based on the achievement of agreed upon clinical milestones. If the Company successfully achieves each of these milestones, it would be obligated to pay De Montfort a total aggregate amount of milestone payments of GBP 250,000, or approximately $500,000. The Company is obligated to use its commercial best efforts to achieve these agreed upon clinical milestones. The Company has the right to terminate its agreement with De Montfort on 90 days advance notice, and either party has the right to terminate the agreement for breach by the other party upon 90 days advance notice (60 days for payment failures), if such breach is not cured within the notice period.

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Immunodex, Inc.

On January 25, 2002, the Company entered into a Patent Know-How and License Option Agreement with Immunorex, Inc. (later renamed Immunodex, Inc.) giving it a worldwide, exclusive sublicense, with the right to further sublicense, to all human radioimmunotherapy applications of certain patents on BrE3 and Mc3 monoclonal antibodies for use in breast cancer and other types of cancer. Pursuant to this agreement, the Company paid Immunodex an initial license fee of $10,000 and sold 292,012 shares of common stock to Immunodex for $5,638. On August 16, 2005, the Company entered into a Patent and Know-how Exclusive Sublicense Agreement with Immunodex, Inc. which had essentially the same terms and conditions as the 2002 agreement and which superseded that agreement. It also superseded prior agreements dated March 1, 2002 and September 17, 2002 related to the same subject matter. Pursuant to this August 2005 agreement, the Company paid Immunodex an initial license fee of $300,000. In addition, the Company is obligated to pay Immunodex $150,000 upon the delivery by Immunodex of each cell line that is necessary to manufacture each of the BrE3 and Mc3 monoclonal antibodies. The Company is further obligated to pay Immunodex annual license maintenance fees and all costs and expenses associated with the prosecution and maintenance of each of the patents licensed to the Company under the agreement. The Company’s obligation to pay this fee is reduced at such time as it begins to sell a product based on either of the antibodies, and terminates in its entirety at such time as the Company is selling products based on both antibodies. As noted below, on November 3, 2006 we terminated our license with respect on one of the monoclonal antibodies (huBrE-3 mAb), and continue to develop on Angiolix.

Assuming that we begin to sell products based on Angiolix fifteen (15) years after the date of the August 2005 agreement, or August 2020, which is our anticipated development timetable, we would have to pay to Immunodex an additional $2,600,000 in maintenance fees during that time period. In addition, we are obligated to pay Immunodex a royalty based on the net sales, if any, of products based on Angiolix. Further, we are obligated to develop Angiolix on an agreed upon timetable. If we fail to achieve any of the agreed upon clinical development and regulatory milestones, Immunodex would then have the right to terminate the August 2005 agreement, and if such a termination occurs, we would be obligated to pay Immunodex a termination fee of up to $500,000. We are also entitled to terminate the agreement with respect to Angiolix upon ninety (90) days advance notice to Immunodex. If we do so without cause, we would also be required to pay a termination fee of up to $500,000. Notwithstanding the foregoing, we do not have to pay a termination fee with respect to Angiolix if the agreement is terminated due to: (i) negative results of toxicity testing for the applicable drug candidate that the FDA indicates would preclude further testing of such drug candidate, (ii) a third party being granted orphan drug status by the FDA for a drug that would preclude us from receiving orphan drug status with respect to the applicable drug candidate, or (iii) our inability to achieve commercially viable yields with respect to the manufacture of the applicable drug candidate.

If we sublicense our rights with respect to Angiolix, we would be obligated to pay to Immunodex a sublicensing fee not to exceed $1,000,000 for each such sublicense granted based on payments received from each such sublicensee.

The term of the August 2005 agreement expires on the latter to occur of: (i) the expiration of the last to expire licensed patent, or (ii) fifteen (15) years after the first commercial sale of a product covered by the licensed patents. The August 2005 agreement superseded prior agreements with Immunodex dated January 25, 2002, March 1, 2002 and September 17, 2002, in each case related to the same subject matter.

In February 2006, the Company made a deposit of $150,000 into an escrow account pursuant to the agreement. This amount was released on November 7, 2006.

Effective November 3, 2006, the Company entered into a Side Amendment to Patent and Know-how Exclusive Sublicense Agreement with Immunodex and the Cancer Research Institute of Contra Costa (“CRICC”) (the “Side Amendment”). Pursuant to the Side Amendment, the Company has agreed with Immunodex and CRICC to reduce the amount of the annual maintenance fee under the License Agreement from $250,000 to $200,000 and to defer the annual maintenance fee that was due in August 2006 until the earlier of (i) the closing of a fundraising resulting in gross proceeds to us of at least $5,000,000, or (ii) January 31, 2007 (the “2006 Annual Maintenance Fee”). If the Company is unable to timely pay the 2006 Annual Maintenance Fee, the annual maintenance fee due under the License Agreement would revert to $250,000.

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The Company has retained its rights with respect to huMc-3 mAb and its product candidate Angiolix; however, the Company has agreed to suspend the development of Angiolix until such time as the Company has paid the 2006 Annual Maintenance Fee. In addition, each of the product development milestones with respect to Angiolix set forth in the License Agreement has been reset to begin at such time as we make the 2006 Annual Maintenance Fee payment.

In addition, the Company agreed to reimburse Immunodex for certain out of pocket expenses in the aggregate amount of approximately $21,000, which amount was payable upon the execution of the Side Amendment.

On January 18, 2007 the Company entered into an Amendment to the Side Amendment which defers the amounts due on January 31, 2007, including the 2006 Annual Maintenance Fee, until July 31, 2007. In consideration for the deferral, the Company will pay $12,000 for each month of the deferral. In addition, the Company paid $2,050 of patent annuity payments.

On November 8, 2006, the Company made application to the National Institutes of Health for a non-exclusive license to certain patents held by NIH related to the humanization of Angiolix (huMc-3 mAb). On December 5, 2006 NIH provided the Company with proposed terms for a non-exclusive license. On May 15, 2007, the NIH terminated Somanta’s non-exclusive license application since Somanta had not accepted the terms and had not executed the proposed license agreement.

The School of Pharmacy, University of London (SOP)

In March 2004, the Company entered into a Patent and Know-how Assignment and License Option Agreement with The School of Pharmacy, University of London. The Agreement granted to the Company an option to acquire the rights to the key patent application related to di-N-oxides of chloroethylaminoanthraquinone as a bioreductive prodrug and an exclusive worldwide license to the related know-how for development and commercialization in the field of the treatment of cancer. Pursuant to this agreement, the Company paid an initial option fee of $44,575 and issued 131,505 shares of common stock valued at $2,630 to The School of Pharmacy. In September 2005, The School of Pharmacy formally assigned to the Company the rights to the key patent application and the relevant know-how in the field of the treatment of cancer. The Agreement obligate the Company to pay The School of Pharmacy certain milestone payments based on the achievement of agreed upon clinical milestones with respect to the prodrug. If the Company successfully achieve each of these milestones, it would be obligated to pay The School of Pharmacy a total aggregate amount of milestone payments of GBP 275,000, or approximately $550,000. The Company is obligated to use its commercial best efforts to achieve these agreed upon clinical milestones. If the Company fails to achieve any of these agreed upon clinical milestones, The School of Pharmacy would have the right to terminate the know-how license under the agreement. In addition, the Company is obligated to pay The School of Pharmacy a royalty on net sales, if any, of products based on the prodrug. The Company has the right to terminate the agreement with the The School of Pharmacy on 90 days advance notice, and either party has the right to terminate the agreement for breach by the other party upon 90 days advance notice (60 days for payment failures), if such breach is not cured within the notice period. In February, 2006, SOP waived the condition in the agreement that the Company assign the patent back to SOP if the Company was unable to complete a substantial funding by December 31, 2005.

Virium Pharmaceuticals, Inc. (Virium)

In February 2005, Bridge Oncology Products, Inc. (BOPI), entered into a Phenylbutyrate Co-development and Sublicense Agreement with Virium Pharmaceuticals, Inc. covering the worldwide rights, excluding the United States and Canada, for the treatment of cancer, autoimmune diseases and other clinical indications. BOPI paid an upfront license fee of $50,000. As a result of the exchange agreement with BOPI, the Company has succeeded to the rights and obligations under this Agreement. The Company’s single largest stockholder, SCO Capital Partners, LLC, is also the single largest stockholder of Virium Pharmaceuticals, Inc., and the companies share a common director.

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Virium is also a party to a sublicense agreement with VectraMed, Inc. for the rights to develop and commercialize PB worldwide for the treatment of cancer, autoimmune diseases and other clinical indications. In turn, VectraMed has obtained its rights to the product under an Exclusive Patent License Agreement dated May 25, 1995 with the U.S. Public Health Service (“PHS”) representing the National Institutes of Health. VectraMed subsequently assigned all its rights to PB to Virium pursuant to a novation agreement dated May 10, 2005. Virium is in the process of obtaining PHS approval for this agreement.

The Company is responsible for the conduct of clinical trials and patent prosecution outside the United States and Canada and payment of royalties to Virium on net product sales until such time as the patents covering such products expire. These patents expire at various times between 2011 and 2016.

The Company’s agreement with Virium does not fully comply with the sublicensing requirements set forth in Virium’s agreement with the National Institutes of Health because it does not expressly incorporate by reference all of the relevant sections of Virium’s license with NIH. The Company is currently seeking to amend its agreement with Virium to bring it into full compliance with such sublicensing requirements and to permit the Company to become a direct licensee of the NIH, should Virium default on its license with the NIH.

On October 20, 2006, NIH conditionally consented to the sublicense to the Company. However, the NIH conditions include an amendment to the Virium license to reflect an updated Virium development plan and milestones, the payment of $216,971 in past due patent expenses and the payment of a $5,000 sublicense royalty. Based on the information provided by NIH, it appears that about $200,000 relates to foreign patent expenses for calendar 2005 which would be the Company’s responsibility under its license agreement with Virium. Of that amount, approximately $12,000 relates to foreign patent maintenance fees and $197,000 largely relates to foreign patent legal expenses. Somanta accrued an additional approximately $38,700 as patent annuity and legal expense for the year ended April 30, 2007. Virium advised Somanta that they satisfied two of the three conditions to obtaining final NIH approval for Somanta’s sublicense. Virium is in the process of negotiating an installment payment plan with respect to the past due patent expenses.

On December 6, 2006, the Company signed a letter of intent (LOI) pertaining to a license and collaboration agreement with Virium covering all formulations or drug combinations where Phenylbutyrate is an active ingredient. Pursuant to the LOI, in addition to current worldwide rights, excluding North America, involving the current formulation of Phenylbutyrate, Somanta would obtain a participation in any revenue or royalties derived from sales in North America. In return, we would grant Virium a reciprocal participation in Europe. In the rest of the world, Somanta and Virium would share revenues and royalties equally. The LOI’s terms provide that both companies will, among other things, share data and jointly undertake the necessary pre-clinical and clinical studies, seek regulatory approvals and file for patent protection in all territories. It also provides for the formation of a joint development committee to oversee all aspects of the development and commercialization of Phenylbutyrate. Completion of the transaction contemplated by the LOI remains subject to the negotiation and execution of a definitive agreement.

COLLABORATIONS

Cancer Research Institute of Contra Costa (CRICC)

In August 2005, the Company entered into an Agreement Regarding Academic Clinical Study with the Cancer Research Institute of Contra Costa to provide financial support for an on-going Phase I-II clinical trial of patients with recurrent, metastatic breast cancer using the humanized monoclonal antibody BrE-3, labeled with Yttrium-90. In this trial, the antibody is being administered to patients in combination with the chemotherapeutic drug, Xeloda®. This agreement superseded a similar agreement signed in October 2003, which related to the same subject matter. Pursuant to this agreement, the Company is obligated to reimburse the Cancer Research Institute of Contra Costa over the twenty-four moths after the date of the agreement for the costs associated with the treatment of at least 10 patients with recurrent, metastatic breast cancer that are enrolled in the current Phase I/II clinical trial of Phoenix, which is being conducted at New York University/Bellevue Hospital. The Company does not expect these reimbursement payments to exceed $300,000 in the aggregate.

F-59

Effective November 3, 2006, the Company entered into a Side Amendment to Patent and Know-how Exclusive Sublicense Agreement with Immunodex and the Cancer Research Institute of Contra Costa (“CRICC”) (the “Side Amendment”). Pursuant to the Side Amendment, the Company elected to terminate the License Agreement with respect to huBrE-3 mAb product candidate. As a result, the Company has terminated all development activities with respect to huBrE-3 mAb and returned the related cell lines to Immunodex. In connection therewith, the Company has terminated its financial support of the clinical trial currently being conducted at New York University with respect to huBrE-3 mAB (the “huBrE-3 mAb Clinical Trial”). The Company has agreed to pay a total of $31,400 to CRICC for the two patients that were dosed in the huBrE-3 mAb Clinical Trial, which amount shall become due and payable at the time the Company becomes obligated to make the 2006 Annual Maintenance Fee payment.

University of Bradford (“UoB”)

On March 1, 2006, the Company entered into an agreement with the University of Bradford, Leeds, United Kingdom for the Company to fund a two-year research and development project staffed by UoB scientists to evaluate di-N-oxides of chloroethylaminoanthraquinones as a bioreductive prodrug and to evaluate and provide data on chloroethylaminoanthraquinones to support the requirements to initial clinical trials. The Company paid $84,835 and accrued $180,000 for project costs based on this agreement as of April 30, 2007. In May 2007, UoB threaten suit for non-payment of the amounts owed.

Imperial College of Science, Technology and Medicine (“Imperial College”)

On July 27, 2006, the Company entered into an agreement with Imperial College and a post-graduate student for the Company to fund a three-year pre-clinical research project staffed by Imperial College scientists to evaluate Angiolix (huMc-3 mAb) for anti-vascular cancer therapy. The Company has accrued $10,000 for the project costs in the year ended April 30, 2007.

OUT-LICENSING AGREEMENT

Advanced Cardiovascular Devices LLC (ACD)

On August 31, 2004, the Company entered into a research collaboration and license agreement with ACD. Under the agreement Somanta granted to ACD an exclusive license to use Somanta’s intellectual property, including the licensed patent and know-how related to chloroethlylaminoanthraquinone (see De Montfort University), a cytotoxic small molecule, in the field of vascular disorders using stents and devices in that field. The term of this agreement expires when the underlying patent expires in 2015. ACD agreed to pay Somanta a licensing fee at such time as ACD had received funding, plus milestones, and royalties on future product sales. In August, 2005, ACD paid the Company a non-refundable licensing fee of $10,000. In addition, ACD is obligated to develop a product based on the small molecule pursuant to an agreed-upon timetable. If ACD fails to achieve any of the agreed upon milestones, the Company would have the right to terminate the agreement; provided, however, that ACD could prevent the Company from so terminating the agreement with respect to the applicable failure by paying the Company a fee not to exceed $500,000 to reinstate its rights under the agreement. In addition, ACD is also obligated to pay the Company a royalty based on net sales, if any, of products based on the small molecule. Either party may terminate this agreement on 30 days advance notice for breach by the other party if the breach is not cured within such 30 day period. In addition, ACD may terminate the agreement upon written notice to the Company and without any further obligation if the licensed technology does not perform to the reasonable satisfaction of ACD or cannot be commercialized because of safety or efficacy reasons or because ACD is unable to raise the funds necessary to develop a product based on the licensed technology.

F-60

15. MERGER AGREEMENT

On April 18, 2007, the Company, Somanta Incorporated, a wholly-owned subsidiary of the Company and Somanta Limited, a wholly-owned subsidiary of Somanta Incorporated, and Access Pharmaceuticals, Inc. (“Access”) and Somanta Acquisition Corporation (“Merger Sub”), a wholly-owned subsidiary of Access and a Delaware corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Somanta, with Somanta continuing as the surviving corporation and becoming a wholly-owned subsidiary of Access (the “Merger”). In addition, Access has received voting agreements with certain executive officers, directors and affiliates of Somanta representing approximately 81% of Somanta’s outstanding common and approximately 60% of its outstanding preferred shares under which the parties, subject to certain limited exceptions, have granted an irrevocable proxy to Access to vote their shares in favor of the merger.

In connection with the Merger, all of Somanta’s common stock that is outstanding at the effective time of the Merger (the “Effective Time”) will be converted into 500,000 shares of Access common stock. No fractional shares of Access common stock will be issued as a result of the Merger. In addition, all of Somanta’s preferred stock, including accrued and unpaid dividends, that is outstanding at the Effective Time of the Merger will be converted into 1,000,000 shares of Access’ common stock. No shares of Access preferred stock will be issued as a result of the Merger.

As of April 18, 2007, there were (i) 15,459,137 shares of Somanta’s common stock outstanding, including 1,166,534 shares issuable upon the exercise of warrants that are expected to be exercised prior to the Effective Time, and (ii) 591.6 shares of Somanta’s preferred stock outstanding. Also as of April 18, 2007, there were outstanding warrants to purchase 5,936,304 shares of Somanta’s common stock that are not expected to be exercised prior to the Effective Time and are expected to be converted into warrants to purchase approximately 192,000 shares of Access’ common stock (subject to adjustment as provided in the Merger Agreement).

F-61

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Condensed Consolidated Balance Sheets


	(Unaudited) October 31, 2007			(Audited) April 30, 2007

Assets
Current assets:
Cash	$	1,424		$	5,385
Prepaid expenses		25,391			43,308

Total current assets		26,815			48,693
Office equipment, net of accumulated depreciation of $9,441 and $6,750 for the period ended October 31, 2007 and April 30, 2007, respectively		13,870			16,560
Other assets:
Restricted funds		—			2,000
Deposits		73			73

Total other assets		73			2,073

Total assets	$	40,758		$	67,326


Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	1,027,819		$	774,022
Due to related parties		281,335			241,874
Accrued expenses		969,121			811,539
Accrued research and development expenses		354,733			554,733
Note payable		822,712			33,462
Liquidated damages related to Series A preferred stock and warrants		35,200			35,200
Deferred revenue		6,429			7,143
Warrant liabilities		117,636			5,786,844

Total current liabilities		3,614,985			8,244,817
Stockholders’ deficit:
Preferred stock - $0.001 par value, 20,000,000 shares authorized Series A Convertible Preferred Stock, $0.001 par value, 2,000 shares designated, 591.6318 issued and outstanding as of October 31, 2007 and April 30, 2007		1			1
Common stock, $0.001 par value, 100,000,000 shares authorized, 15,459,137 shares issued and outstanding as of October 31, 2007 and April 30, 2007		15,460			14,293
Additional paid-in capital		7,614,859			7,604,360
Deficit accumulated during development stage		(11,204,549	)		(15,796,145	)

Total stockholders’ deficit		(3,574,229	)		(8,177,491	)

Total liabilities and stockholders’ deficit	$	40,756		$	67,326

F-62

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Condensed Consolidated Statements of Operations

Three Months and Six Months Ended October 31, 2007 and 2006 and for the Period

from Inception of Operations

(April 19, 2001) to October 31, 2007

(Unaudited)


													From Inception of Operations (April 19, 2001) to October 31, 2007
	Three Months Ended October 31,						Six Months Ended October 31,

	2007			2006			2007			2006


Revenue	$	357		$	357		$	714		$	714		$	3,571

Operating expenses:

General and administrative		(293,809	)		(874,810	)		(726,685	)		(1,700,359	)		(8,063,803	)

Research and development		(269,688	)		(583,318	)		(321,827	)		(901,352	)		(3,422,474	)


Loss from operations		(563,140	)		(1,457,771	)		(1,047,798	)		(2,600,997	)		(11,482,706	)

Other income (expense):

Interest income		—			11,475			5			28,554			40,437

Interest expense		(20,181	)		—			(27,316	)		—			(1,043,390	)

Liquidated damages		—			85,302			—			(35,200	)		(35,200	)

Change in fair value of warrant liabilities		88,157			119,762			5,669,206			394,324			2,875,631

Gain on settlement of debt		—			—			—			—			5,049

Currency translation loss		(589	)		(768	)		(710	)		(2,002	)		(34,206	)


Income (loss) before income taxes		(495,753	)		(1,242,000	)		4,593,387			(2,215,321	)		(9,674,385	)

Income taxes		(1,600	)		—			(1,791	)		(250	)		(7,847	)


Net income (loss)		(497,353	)		(1,242,000	)		4,591,596			(2,215,571	)		(9,682,232	)

F-63


Deemed dividends on convertible preferred stock		—			—			—		—			(1,522,317	)


Net income (loss) applicable to common shareholders	$	(497,353	)	$	(1,242,000	)	$	4,591,596	$	(2,215,571	)	$	(11,204,549	)


Net income (loss) per share-basic	$	(0.03	)	$	(0.09	)	$	0.31	$	(0.16	)	$	(0.84	)


Weighted average number of shares outstanding—basic		14,630,402			14,274,534			14,630,402		14,274,534			13,364,892

Net income (loss) per share-diluted	$	(0.03	)	$	(0.09	)	$	0.19	$	(0.16	)	$	(0.84	)

Weighted average number of shares outstanding—diluted		14,630,402			14,274,534			23,889,527		14,274,534			13,364,892

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

F-64

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Condensed Consolidated Statement of Stockholders’ Deficit

For the Period from Inception of Operations (April 19, 2001) to October 31, 2007 (Unaudited)


	Preferred Stock			Common Stock
	Shares		Amount	Shares		Amount		Additional Paid-in Capital		Shares to be Issued
Balance at April 19, 2001 (Inception)	—	$	—	—	$	—	$	—	$	—
Shares issued for cash at $.0326				4,299,860		4,300		135,680		—
Shares issued for services at $.0139				514,674		515		11,801
Amortization of deferred expense
Comprehensive loss—foreign currency translation adjustment
Net loss for the period from inception to April 30, 2002

Balance at April 30, 2002	—		—	4,814,534		4,815		147,481		—
Shares issued for cash at $1.0677				14,601		15		15,575
Shares issued for services at $.0214				219,010		219		4,472
Amortization of deferred expense
Receipt of cash for subscription receivable
Comprehensive loss—foreign currency translation adjustment
Net loss for the year ended April 30, 2003

Balance at April 30, 2003	—	—	5,048,145	5,049	167,528		—
Shares issued for cash at $1.2479			350,164	350	436,637
Shares issued for services at $1.2587			22,233	22	27,962
Amortization of deferred expense
Exchange for loan payment and compensation					181,371
Comprehensive loss—foreign currency translation adjustment
Net loss for the year ended April 30, 2004

Balance at April 30, 2004	—	—	5,420,542	5,421	813,498		—
Shares issued for cash at $1.3218			374,073	374	494,069
Shares issued for services at $1.2308			21,901	22	26,933
3,650 shares to be issued for service at $1.4973							5,465
Amortization of deferred expense
Receipt of cash for subscription receivable
Options issued for services					257,515
Comprehensive loss—foreign currency translation adjustment
Net loss for the year ended April 30, 2005

Balance at April 30, 2005	—	—	5,816,516	5,817	1,592,015		5,465
Write off foreign currency translation adjustment
Shares issued for cash at $1.5656			12,669	13	19,821
Shares issued for prior service			3,650	3	5,462		(5,465	)
Amortization of deferred expense
Options issued for services					300,616
Recapitalization with Bridge Oncology			7,865,000	7,865	(92,335	)

F-65


Beneficial conversion feature associated with convertible debt financing					364,721
Convertible Series A Preferred shares issued for cash at $10,000 (net of issuance costs of $544,169)	464	0.464			4,095,830
Convertible Series A Shares issued on conversion of notes payable	128.6318	0.1286			1,286,318
Deemed dividend on account of beneficial conversion feature associated with issuance of Convertible Series A Preferred Shares					1,522,317
Issuance costs on warrants issued to placement agent in connection with the Convertible Series A Preferred stock					(429,757	)
Discount on warrant issued with Convertible Series A Preferred stock					(2,048,531	)
Recapitalization with Hibshman Optical Corp.			576,700	577	(7,708	)
Warrant expense					92,689
Net loss for the year ended April 30, 2006

Balance at April 30, 2006	592.6318			.5926		14,274,535		14,275		6,701,458		—
Options issued for services										739,000
Warrant expense										163,920
Conversion of preferred stock	(1.000	)		(.0010	)	18,069		18		(18	)
Net loss for the year ended April 30, 2007

Balance at April 30, 2007	591.6318			.5916		14,292,604		14,293		7,604,360

Conversion of warrants						1,166,534		1,167		10,499
Net income for the six months ended October 31, 2007

Balance at October 31, 2007 (unaudited)	591.6318		$	.5916		15,459,138	$	15,460	$	7,614,859		—

F-66

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Condensed Consolidated Statement of Stockholders’ Deficit

For the Period from Inception of Operations

(April 19, 2001) to October 31, 2007 (Unaudited)

	Subscription Receivable			Deferred Equity- Based Expense			Accumulated Other Comprehensive Loss - Foreign Currency Translation Adjustment			Deficit Accumulated During Development Stage			Total Stockholders’ Equity/(Deficit)

Balance at April 19, 2001(Inception)	$	—		$	—		$	—		$	—		$	—
Shares issued for cash at $.0326		(97,245	)		—			—			—			42,735
Shares issued for services at $.0139					(11,177	)								1,139
Amortization of deferred expense					521									521
Comprehensive loss—foreign currency translation adjustment								29,905						29,905
Net loss for the period from inception to April 30, 2002											(95,901	)		(95,901	)

Balance at April 30, 2002		(97,245	)		(10,656	)		29,905			(95,901	)		(21,601	)
Shares issued for cash at $1.0677														15,590
Shares issued for services at $.0214					(3,127	)								1,564
Amortization of deferred expense					3,808									3,808
Receipt of cash for subscription Receivable		91,517												91,517
Comprehensive loss—foreign currency translation adjustment								1,534						1,534
Net loss for the year ended April 30, 2003											(111,456	)		(111,456	)

Balance at April 30, 2003		(5,728	)		(9,975	)		31,439			(207,357	)		(19,044	)
Shares issued for cash at $1.2479		(81,464	)											355,523
Shares issued for services at $1.2587					(25,216	)								2,768
Amortization of deferred expense					7,691									7,691
Exchange for loan payment and compensation		2,909												184,280
Comprehensive loss—foreign currency translation adjustment								(51,651	)					(51,651	)
Net loss for the year ended April 30, 2004											(439,453	)		(439,453	)

F-67

Balance at April 30, 2004	(84,283	)	(27,500	)	(20,212	)	(646,810	)	40,114
Shares issued for cash at $1.3218									494,443
Shares issued for services at $1.2308									26,955
3,650 shares to be issued for service at $1.4973									5,465
Amortization of deferred expense			26,939						26,939
Receipt of cash for subscription receivable	84,283								84,283
Options issued for services									257,515
Comprehensive loss—foreign currency translation adjustment					(5,719	)			(5,719	)
Net loss for the year ended April 30, 2005							(1,129,290	)	(1,129,290	)

Balance at April 30, 2005	—		(561	)	(25,931	)	(1,776,100	)	(199,295	)
Write off foreign currency translation adjustment					25,931				25,931
Shares issued for cash at $1.5656									19,834
Shares issued for prior service									—
Amortization of deferred expense			561						561
Options issued for services									300,616
Recapitalization with Bridge Oncology									(84,470	)
Beneficial conversion feature associated with convertible debt financing									364,721
Convertible Series A Preferred shares issued for cash at $10,000 (net of issuance costs of $544,169)									4,095,830
Convertible Series A Shares issued on conversion of notes payable									1,286,318
Deemed dividend on account of beneficial conversion feature associated with issuance of Convertible Series A Preferred Shares							(1,522,317	)	—
Issuance costs on warrants issued to placement agent in connection with the Convertible Series A Preferred stock									(429,757	)
Discount on warrant issued with Convertible Series A Preferred stock									(2,048,531	)
Recapitalization with Hibshman Optical Corp.									(7,131	)

Warrant expense										92,689
Net loss for the year ended April 30, 2006							(5,002,091	)		(5,002,091	)

Balance at April 30, 2006		—		—	—		(8,300,508	)		(1,584,775	)
Options issued for services										739,000
Warrant expense										163,920
Conversion of preferred stock										—
Net loss for the year ended April 30, 2007							(7,495,637	)		(7,495,637	)

Balance at April 30, 2007		—		—	—		(15,796,145	)		(8,177,492	)
Conversion of warrants										11,666
Net income for the six months ended October 31, 2007							4,591,596			4,591,596

Balance at October 31, 2007 (unaudited)	$	—	$	—	—	$	(11,204,549	)	$	(3,574,229	)

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

F-68

Somanta Pharmaceuticals, Inc.

(Formerly Hibshman Optical Corp.)

(A Development Stage Company)

Condensed Consolidated Statements of Cash Flows

Six Months Ended October 31, 2007 and 2006 and for the Period from Inception of Operations

(April 19, 2001) to October 31, 2007

(Unaudited)


							From Inception of Operations (April 19, 2001) to October 31, 2007
	Six Months Ended October 31,

	2007			2006

Cash flows provided by (used for) operating activities:
Net income (loss)	$	4,591,596		$	(2,215,571	)	$	(9,682,232	)
Adjustments to reconcile net loss to net cash provided by (used for) operating activities:
Depreciation		2,690			2,770			9,684
Gain on sale of equipment		—			(622	)		(622	)
Amortization of stock based expense		—			—			39,520
Write off foreign currency translation adjustment		—			—			25,931
Change in fair value of warrant liabilities		(5,669,206	)		(394,324	)		(2,875,631	)
Shares issued for services and compensation		—			—			219,262
Gain on settlement of debts		—			—			(5,049	)
Options expense		—			124,376			1,297,131
Warrants expense		—			—			256,609
Interest expense related to beneficial conversion feature on convertible note		—			—			364,721
Interest expense related to warrants issued on convertible note		—			—			514,981
Changes in assets and liabilities:
(Increase) decrease in assets -
VAT receivable		—			1,628			3,444
Other receivable		—			(22,509	)		—
Restricted funds		2,000			(2,269	)		—
Prepaid expenses		17,917			33,093			(25,120	)
Deposits		—			—			(73	)
Increase (decrease) in liabilities:
Accounts payable		229,784			214,931			1,012,445
Accrued liabilities		(42,418	)		783,221			1,311,994
Liquidated damages		—			35,200			35,200
Deferred revenue		(714	)		(714	)		6,429
Due to officers and related parties		75,140			152,003			171,120

Net cash used for operating activities		(793,211	)		(1,288,787	)		(7,320,256	)

Cash flows used for investing activities:
Purchase of equipment		—			—			(24,824	)
Proceeds from sale of equipment		—			2,000			2,000

Net cash used for investing activities		—			2,000			(22,824	)

Cash flows provided by financing activities:
Loan payable—related party		—			—			79,402
Loan payment-related party		—			—			(7,367	)
Proceeds from convertible note-related party		—			—			1,250,000
Proceeds from note payable		789,250			—			822,712
Proceeds from issuance of common stock		—			—			928,125
Proceeds from issuance of preferred stock		—			—			4,095,831
Cash received for subscription receivable		—			—			175,801

F-69

Net cash provided by financing activities		789,250			—			7,344,504

Effect of exchange rate changes on cash		—			—			—

Increase (decrease) in cash		(3,961	)		(1,286,787	)		1,424
Cash, beginning of period		5,385			1,587,751			—

Cash, end of period	$	1,424		$	300,964		$	1,424

Supplemental disclosure of cash flow information:
Interest paid	$	—		$	—		$	—

Income tax paid	$	—		$	—		$	—

Supplemental disclosure of non-cash operating and financing activities:
Loan reduction with shares	$	—		$	—		$	2,909

Receivable from issuance of convertible stock	$	—		$	—		$	—

Issuance of warrants in conjunction with convertible preferred stock	$	—		$	—		$	2,341,785

Deemed dividends related to convertible preferred stock	$	—		$	—		$	1,522,317

Conversion of note and accrued interest	$	—		$	—		$	1,286,318
Accrued issuance costs related to convertible stock	$	—		$	—		$	—

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

F-70

SOMANTA PHARMACEUTICALS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


1.	ORGANIZATION, BASIS OF PRESENTATION, AND NATURE OF OPERATIONS

Organization

Hibshman Optical Corp. was originally incorporated in the State of New Jersey in 1991 under the name PRS Sub I, Inc. The name subsequently changed to Service Lube, Inc., then to Fianza Commercial Corp. and then to Hibshman Optical Corp. The business plan since that time had been to seek to enter into a business combination with an entity that had ongoing operations through a reverse merger or other similar type of transaction.

Somanta Incorporated was incorporated as Somantis Limited under the laws of England and Wales on April 19, 2001. Somantis Limited changed its name to Somanta Limited on March 14, 2005, and performed business as a United Kingdom entity through the fiscal year ending April 30, 2005. On August 22, 2005, Somanta Limited became a wholly owned subsidiary of Bridge Oncology Products, Inc. (“BOPI”), a privately held Delaware corporation, pursuant to a share exchange with BOPI; however, Somanta Limited was deemed the accounting acquirer in this share exchange transaction. On August 24, 2005, the name of BOPI was changed to Somanta Incorporated.

Somanta Pharmaceuticals, Inc. is a development stage biopharmaceutical company engaged in the development of products for the treatment of cancer. The Company has in-licensed four product development candidates from academic and research institutions in the United States and Europe designed for use in anti-cancer therapy in order to advance them along the regulatory and clinical pathways toward commercial approval. The Company intends to obtain approval from the United States Food and Drug Administration (“FDA”) and from the European Medicines Evaluation Agency (“EMEA”) for the products.

Somanta is a development stage enterprise since the Company has not generated revenue from the sale of its products, and its efforts have been principally devoted to identification, licensing and clinical development of its products as well as raising capital through October 31, 2007. Accordingly, the financial statements have been prepared in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises.”

Basis of Presentation

The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes for the years ended April 30, 2007 and 2006.

The Company reported a net income and net income applicable to common stockholders of $4,591,596 for the six month period ended October 31, 2007. The net loss from date of inception, April 19, 2001 to October 31, 2007, totaled $9,682,232 (net loss applicable to common stockholders of $11,204,549). The Company’s operating activities have used cash since its inception. These losses raise substantial doubt about the Company’s ability to continue as a going concern.

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In connection with the Merger, all of Somanta’s common stock that is outstanding at the effective time of the Merger (the “Effective Time”) will be converted into 500,000 shares of Access common stock. No fractional shares of Access common stock will be issued as a result of the Merger. In addition, all of Somanta’s preferred stock, included accrued and unpaid dividends, that are outstanding at the Effective Time of the Merger will be converted into 1,000,000 shares of Access’ common stock. No shares of Access preferred stock will be issued as a result of the Merger.

On April 26, 2007, the Company entered into a Note Purchase Agreement, a Security Agreement, a Patent Collateral Assignment and Security Agreement and a Trademark Collateral Security and Pledge Agreement (collectively, the “Loan Documents”) with Access Pharmaceuticals, Inc. as more fully described in Note 7. Under the terms of the Loan Documents, Access initially loaned the Company $33,462 ($822,712 at October 31, 2007). Access, in its sole discretion, may from time to time advance additional loan amounts to the Company. All amounts loaned to the Company by Access are secured by substantially all of the assets of the Company pursuant to the terms of the Loan Documents. The Note bears interest at 10% and is repayable at the earlier of: (i) August 31, 2007, or (ii) the date of the termination of the Agreement and Plan of Merger dated as of August 18, 2007 between the Company and Access. No demand for repayment has been made by Access. To date the Merger has not closed since the Company has not been able to meet one of the key closing conditions.

If the merger fails to close, the Company expects that it will no longer be able to operate its business and will not have the resources to repay the loan.

Reclassifications

For comparative purposes, prior periods’ consolidated financial statements have been reclassified to conform with report classifications of the current period. The Company has reclassified certain expenses related to the in-licensing of product candidates, milestone and license maintenance payments and patent expense from general and administrative expense to research and development expense.

Share-Based Compensation

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Fair Value of Financial Instruments

Statement of Financial Accounting Standard No. 107, Disclosures About Fair Value of Financial Instruments, requires that the company disclose estimated fair values of financial instruments. The carrying amounts reported in the balance sheets for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value.

Basic and diluted net income (loss) per share

Net income (loss) per share is calculated in accordance with the Statement of Financial Accounting Standards No. 128 (SFAS No. 128). Basic net income (loss) per share is based upon the weighted average number of common shares outstanding. Diluted net income (loss) per share is based on the assumption that all potential dilutive convertible shares and stock options or warrants were converted or exercised.

The Company has the following dilutive convertible shares, stock options and warrants as of October 31, 2007 and 2006 which were excluded from the calculation for the six months ended October 31, 2007 and from inception to date since the effect is anti-dilutive. For the six months ended October 31, 2007, the convertible preferred stock have been included.


	2007
	Three Months Ended October 31		Six Months Ended October 31		2006

Convertible preferred stock		9,859,125		9,859,125		9,877,194
Stock options		—		—		3,642,747
Warrants		5,936,304		7,102,838		6,952,838

Total		15,795,429		16,961,963		20,472,779

The Company’s undeclared dividends on its Preferred Stock amounting to $115,605 for the three months ended October 31, 2007 are included in the computation of net income per share for the period ended October 31, 2007 in accordance with SFAS No. 129.

Aggregate undeclared dividends on Preferred Stock amounting to $820,918 are included in the computation of net loss per share for the period from inception (April 19, 2001) to October 31, 2007.

Recent Accounting Pronouncements

In February 2006, the FASB issued SFAS 155 “Accounting for Certain Hybrid Financial Instruments,” an amendment of FASB Statement No. 133 and in February 2006, the FASB issued SFAS 155, “Accounting for Certain Hybrid Financial Instruments,” an amendment of FASB Statements No. 133 and 140. This Statement amends FASB Statements No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. This Statement resolves issues addressed in Statement 133 Implementation Issue No. D1, Application of Statement 133 to Beneficial Interests in Securitized Financial Assets. This Statement:

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	a.	Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation;

	b.	Clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133;

	c.	Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation;

	d.	Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and

	e.	Amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.

In June 2006, the FASB issued FASB Interpretation (FIN) No. 48, “Accounting for Uncertainty in Income Taxes,” that provides guidance on the accounting for uncertainty in income taxes recognized in financial statements. The interpretation was adopted by us on May 1, 2007. Because of the Company’s operating losses, adoption of this provision does not have material effect on the financial position, results of operations or cash flows.

In July 2006, the FASB issued FASB Staff Position (FSP) No. FAS 13-2, “Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction,” that provides guidance on how a change or a potential change in the timing of cash flows relating to income taxes generated by a leveraged lease transaction affects the accounting by a lessor for the lease. This staff position was adopted by us on May 1, 2007. The Company does not expect the adoption of this provision to have a material effect on the financial position, results of operations or cash flows.

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In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations”. The objective of this statement will significantly change the accounting for business combinations. Under Statement 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition –date fair value will limited exceptions. Statement 141 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 141R to have a material impact on the consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements-An Amendment of ARB No. 51". The objective of this statement is to establish new accounting and reporting standards for the Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.. Statement 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. The Company does not expect the adoption of SFAS No. 160 to have a material impact on the consolidated financial statements.

In late 2007, the Emerging Issues Task Force (“EITF”) added two new issues to their agenda. These include EITF Issue No. 07-1, “Accounting for Collaborative Arrangements Relating to the Development and Commercialization of Intellectual Property”, and EITF Issue No. 07-3, “Accounting for Nonrefundable Payments for Goods or Services to be Used in Future Research and Development Activities”. The Company expects that its activities will be subject to the EITF’s determination on these matter.


2.	PRIVATE PLACEMENT

On January 31, 2006, Somanta Pharmaceuticals, Inc. completed a private placement of 592.6318 shares of its Series A Convertible Preferred Stock (“Series A Preferred”) at a price of $10,000 per share, including six-year warrants to purchase an additional 4,938,598 shares of its common stock. The Series A Preferred shares consisted of 464 shares purchased by investors which are convertible into 7,733,333 shares of common stock and 128.6318 shares that gave effect to the conversion amount of $1,286,318, representing the value of the converted note of $1,250,000 and the associated accrued interest of $36,318. The total 592.6318 preferred shares are convertible into 9,877,197 common shares. Gross proceeds to Somanta were $4,640,000, including $3,671,209 in cash, payments to various vendors amounting $968,791, which included cash payment of $624,105 to SCO Securities, LLC, its placement agent.

The Series A Preferred is initially convertible into 9,877,197 shares of the Company’s common stock at a conversion price of $0.60 per share. The conversion value is subject to adjustment. The exercise price for the warrants is $0.75 per share and they are immediately exercisable upon issuance. The fair market value of these warrants, as discussed further below, was estimated to be $0.41 per share. The warrants expire on January 31, 2012. None of the warrants have been exercised as of October 31, 2007.

Holders of the Series A Preferred stock are entitled to receive dividends at 8% per annum. Dividends will accrue and will be cumulative from the date of issuance, whether or not earned or declared by the Board of Directors. Dividends can be paid at the Company’s option either in cash or shares of the Company’s common stock on April 30 and October 31 of each year. The holders of the Series A Preferred stock have full voting rights and powers, subject to the Beneficial Ownership Cap, equal to the voting rights and powers of the Common stock holders. The Board of Directors did not declare the dividends as of October 31, 2007. Therefore, a dividend of $115,605 for the quarter ended October 31, 2007, and $820,918 for the period from inception (April 19, 2001) to October 31, 2007 on the Preferred Stock have not been recorded in the consolidated financial statements, but in accordance with SFAS No. 129, the dividend amount has been included in the calculation of the net income per share.

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The Series A Preferred stockholders have a liquidation preference, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, senior to the holders of common stock in an amount equal to $10,000 per share of preferred stock plus any accumulated and unpaid dividends on the preferred stock. In the alternative, the holders of the Series A Preferred may elect to receive the amount per share that would be distributed among the holders of the preferred stock and common stock pro rata based on the number of shares of the common stock held by each holder assuming conversion of all preferred stock, if such amount is greater than the amount such holder would receive pursuant to the liquidation preference. A change of control of the Corporation will not be deemed a liquidation.

The Series A Preferred Stock is not redeemable for cash. The holder of any share or shares of Series A Preferred can, at the holder’s option, at any time convert all or any lesser portion of such holder’s shares of Series A Preferred Stock into such number of shares of common stock as is determined by dividing the aggregate liquidation preference of the shares of preferred stock to be converted plus accrued and unpaid dividends thereon by the conversion value then in effect for such Preferred Stock (“Conversion Value”). The Company can, on the occurrence of a conversion triggering event, elect to convert all of the outstanding preferred stock into common stock. A conversion triggering event is (i) a time when the registration statement covering the shares of common stock into which the Series A Preferred is convertible is effective and sales may be made pursuant thereto or all of the shares of common stock into which the Series A Preferred is convertible may be sold without restriction pursuant to Rule 144(k) promulgated by the SEC and the daily market price of the common stock, after adjusting for stock splits, reverse splits, stock dividends and the like is $5 or more for a period of 30 of the immediately preceding 60 consecutive trading days and the volume of common stock traded on the applicable stock exchange on each such trading day is not less than 100,000 shares, or (ii) a time when the Company consummates a sale of common stock in a firm commitment underwritten public offering in which the offering price before deduction of expenses of the common stock is greater than 200% of the Conversion Value and the aggregate gross proceeds of the offering to the Company are greater than $25 million.

The Series A Preferred has been classified as equity, as the Series A Preferred stock is not redeemable. In accordance with EITF No. 00–27, Application of Issue No. 98–5 to Certain Convertible Instruments, the Company has determined that the Series A Preferred had a beneficial conversion feature of $1,522,317 as of the date of issuance. As such, the Company recorded a non-cash deemed dividend of $1,522,317 resulting from the difference between the conversion price determined after allocation of the full fair value of the warrants of $0.41 and the fair value of common stock of $0.60. The carrying value of the Series A Preferred of $5,926,318 was recorded net of the deemed dividend of $1,522,317 and a discount of $2,048,531 on account of the full fair value of the warrants at the issuance date.

The fair value of the above warrants has been classified as a liability pursuant to EITF 00-19.


3.	LIQUIDATED DAMAGES AND WARRANT LIABILITIES

In connection with the additional $250,000 line of credit drawn pursuant to a convertible note which was converted into Series A Preferred on January 31, 2006 (Note 4), the Company issued warrants to purchase a total of 866,534 shares of common stock at an exercise price of $0.01 per share to SCO. The warrants are immediately exercisable upon issuance and expire on November 8, 2012. The fair market value of these warrants, as discussed further below, was estimated to be $0.59 per share. The assumptions used in the Black-Scholes model were risk-free interest rate of 4.5% at the time of issuance, volatility factors of 97.24% calculated as the weighted average of the stock price volatility of ranked comparable public companies, and contractual terms equal to the exercise periods of the respective warrants. The fair value of the common stock as used in this calculation was $.60 per share, as negotiated between the Company and the Series A Convertible Preferred Stock investors. These warrants were exercised on August 20, 2007 by a partial forgiveness of $11,666 of debt owed by the Company to SCO Financial Group.

The holders of the Series A Preferred and warrants have registration rights which obligate the Company to file a registration statement with the Securities and Exchange Commission (“SEC”) covering the resale of the common stock issuable upon conversion of the Series A Preferred and the common stock issuable upon exercise of the warrants (as well as certain other securities of the Company) within 30 days after the closing of the private placement. In the event the registration statement is not filed within such thirty day period or if the registration statement is not effective within 120 days after the date it is filed, or a registration statement, once declared effective ceases to remain effective during the period that the securities covered by the agreement are not sold, the Company will be required to pay, in cash, liquidated damages for such failure, equal to 1% of the holders of the Series A Preferred investment amount for each thirty day period in which the registration statement is not filed or effective, or maintained effective, as the case may be. The SEC declared the Registration Statement effective on August 10, 2006.

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The Company also issued six year warrants to its placement agent to purchase 987,720 common shares at $0.60 per share to SCO Securities LLC, as part of the success fees of 10% of the aggregate value of the transaction at sales price of common stock. These warrants are immediately exercisable upon issuance. The fair value of these warrants at the date of issue was estimated to be $0.44 per share and has been recorded as issuance costs and offset against the proceeds of the Series A Preferred.

The fair value of warrants issued in connection with the issue of convertible debt and convertible preferred stock, including the agent warrants, was estimated at the date of grant and revalued at October 31, 2007 using a Black Scholes option pricing model with the following assumptions: a risk free interest rate of approximately 4.5% at the issuance date and 3.94% on October 31, 2007, no dividend yield, volatility factors of 81.89% to 97.24% at the issuance date and 53.6% at October 31, 2007, contractual terms of 6 and 7 years and expected terms based upon the formula prescribed in SEC Staff Accounting Bulletin 107 of 2.1 years and years. These assumptions use the interest rate prevailing at the time of issuance, volatility factors calculated as the weighted average of the stock price volatility of ranked comparable public companies, and contractual terms equal to the exercise periods of the respective warrants. The fair value of the common stock as used in this calculation was $.60 per share at the issuance date, as negotiated between the Company and unaffiliated third party Series A investors, and $0.17 on October 31, 2007. The change in fair value of the warrants for the three months ended October 31, 2007 of $88,157, was reported in other income and disclosed in the financial statements.

The following table summarizes the activity for warrants issued during the six month period ended October 31, 2007.

On August 20, 2007, SCO Capital Partners LLC exercised warrants on 1,166,534 shares of common stock at $.01 per share by forgiving $11,666 owed by the Company to SCO Financial Group LLC.


	Number of shares		Weighted Average Exercise Price

Balance—April 30, 2007		7,102,838		0.61
Granted		—		—
Exercised		1,166,534		0.001
Forfeited		—		—
Expired		—		—

Balance—October 31, 2007		5,936,304		0.61

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The following table summarizes information about warrants outstanding as of October 31, 2007.


		Warrants Outstanding						Warrants Exercisable

Exercise Prices		Number Outstanding		Wtd. Avg Remaining Contr. Life		Wtd. Avg Exercise Price		Number Exercisable		Wtd. Avg Exercise Price

$	0.60		987,720		4.2 years	$	0.60		987,720	$	0.60
$	0.75		4,938,597		4.2 years	$	0.75		4,938,597	$	0.75
$	2.25		9,987		2.5 years	$	2.25		9,987	$	2.25


4.	EMPLOYMENT AND CONSULTING AGREEMENTS

In January 2006, the Company entered into employment agreements with the Company’s President and Chief Executive Officer (“CEO”), and with the Company’s Executive Chairman, for one year terms. These agreements were automatically renewed for an additional oneyear term on January 31, 2007. Under these agreements, the President and Executive Chairman are to be paid annual base salaries of $275,000 and $248,000, respectively. Both officers are eligible to receive annual bonuses and additional stock option grants at the discretion of the Company’s board of directors. In July 2006, the Company’s CEO and Executive Chairman agreed to defer 50% of their base salaries until the completion of the Company’s next fund raising at which time the deferred amounts would be repaid and the deferrals would cease. Effective October 1, 2006, the Company’s CEO and Executive Chairman agreed to defer 100% of their base salaries until the completion of the Company’s next fund raising, or the completion of a merger or other consolidation with another company, at which time the deferred amounts would be repaid and the deferrals would cease. Effective June 30, 2006, our Executive Chairman was appointed by our Board to be our Chief Financial Officer, Secretary and Treasurer.


5.	STOCK- BASED COMPENSATION

On April 13, 2007, the Company’s Board of Directors approved a merger agreement with Access Pharmaceuticals, Inc, as more fully described in Note 15. Under the terms of that agreement Access will not assume, or provide a substitute option, for any of the Company’s stock options. Rather, all of the outstanding options to purchase Company common stock issued pursuant to the Company’s 2005 Equity Incentive Plan will be cancelled prior to the closing of the transaction in accordance with Section 11.3(d) of the Equity Incentive Plan. As a result, pursuant to the terms of Section 11.3(d) of the Equity Incentive Plan, the Company’s Board of Directors has resolved to: (i) allow the immediate and accelerated vesting of all of the options granted, and (ii) allowed the exercise of the option in whole or in part until May 31, 2007. Based on FAS 123(R), no incremental expense was recorded for these options with accelerated vesting as the fair value of the modified options was less than the fair value of the original options calculated immediately before the terms were modified. None of the options were exercised thru May 31, 2007. Additional expense of $507,284 was recorded in the year ended April 30, 2007 due to the acceleration of the vesting. There is no stock-based compensation expense for the three months ended October 31, 2007.


6.	RELATED PARTY TRANSACTIONS

Fees Paid to Related Parties

Pursuant to a financial advisory agreement dated March 2005 between Bridge Oncology and SCO Financial Group LLC (SCO), which the Company has assumed, the Company compensates SCO with a monthly fee of $12,500 and an annual grant of warrants to purchase 150,000 shares of Company common stock at an exercise price of $.01 for the term of the agreement for financial advisory services. The Company recorded advisory service fees totaling $75,000 and $75,000 to SCO for the six months ended October 31, 2007 and 2006, respectively.

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Agreement with Related Party

Virium Pharmaceuticals, Inc.


7.	SECURED NOTE

On April 26, 2007, the Company entered into a Note Purchase Agreement, a Security Agreement, a Patent Collateral Assignment and Security Agreement and a Trademark Collateral Security and Pledge Agreement (collectively, the “Loan Documents”) with Access Pharmaceuticals, Inc. (“Access”). Under the terms of the Loan Documents, Access initially loaned the Company $33,462 ($822,712 at October 31, 2007). Access, in its sole discretion, may from time to time advance additional loan amounts to the Company. All amounts loaned to the Company by Access are secured by substantially all of the assets of the Company pursuant to the terms of the Loan Documents. The Note bears interest at 10% and is repayable at the earlier of: (i) August 31, 2007, or (ii) the date of the termination of the Agreement and Plan of Merger dated as of August 18, 2007 between the Company and Access. To date the Merger has not closed since the Company has not been able to meet one of the key closing conditions. No demand for repayment has been received from Access.


8.	MERGER AGREEMENT

On April 18, 2007, the Company, Somanta Incorporated, a wholly-owned subsidiary of the Company and Somanta Limited, a wholly-owned subsidiary of Somanta Incorporated, and Access Pharmaceuticals, Inc. (“Access”) and Somanta Acquisition Corporation (“Merger Sub”), a wholly-owned subsidiary of Access and a Delaware corporation, entered into an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Somanta, with Somanta continuing as the surviving corporation and becoming a wholly-owned subsidiary of Access (the “Merger”). In addition, Access has received voting agreements with certain executive officers, directors and affiliates of Somanta representing approximately 81% of Somanta’s outstanding common and approximately 60% of its outstanding preferred shares under which the parties, subject to certain limited exceptions, have granted an irrevocable proxy to Access to vote their shares in favor of the merger.

In connection with the Merger, all of Somanta’s common stock that is outstanding at the effective time of the Merger (the “Effective Time”) will be converted into 500,000 shares of Access common stock. No fractional shares of Access common stock will be issued as a result of the Merger. In addition, all of Somanta’s preferred stock, including accrued and unpaid dividends, that is outstanding at the Effective Time of the Merger will be converted into 1,000,000 shares of Access’ common stock. No shares of Access preferred stock will be issued as a result of the Merger.

The completion of the Merger is subject to various conditions to closing, including, without limitation, obtaining the approval of the Somanta stockholders. The Merger is intended to qualify as reorganization for federal income tax purposes. To date the Merger has not closed since the Company has not been able to meet one of the key closing conditions.

As of December 19, 2007, the Company had borrowed $856,064 from Access under the Secured Note (Footnote 7).


9.	SUBSEQUENT EVENTS

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma condensed combined financial statements apply to the merger between Somanta and Access, by which Somanta became a wholly owned subsidiary of Access, and are based upon the historical condensed consolidated financial statements and notes thereto (as applicable) of Access and Somanta, which are incorporated by reference into this Form S-1/A. The unaudited pro forma condensed combined balance sheet gives pro forma effect to the merger as if the merger had been completed on December 31, 2007 and combines Access’s December 31, 2007 audited consolidated balance sheet with Somanta’s January 4, 2008 unaudited consolidated balance sheet. The unaudited pro forma condensed combined statement of operations gives pro forma effect to the merger as if it had been completed on January 1, 2007 and combines Access’ audited consolidated statement of operations for the year ended December 31, 2007, with Somanta’s unaudited consolidated statement of operations for the nine months ended October 31, 2007.

The pro forma adjustments are based upon available information and certain assumptions that Access believes are reasonable under the circumstances.

Total consideration paid in connection with the acquisition included:

Approximately 1.5 million shares of Access common stock was issued to the common and preferred shareholders of Somanta as consideration having a value of approximately $4,650,000 (the value was calculated using Access’ stock price on January 4, 2008 times the shares issued);

exchange all outstanding warrants for Somanta common stock for warrants to purchase 191,991 shares of Access common stock at exercise prices ranging between $18.55 and $69.57 per share. The warrants were valued at approximately $281,000. All of the warrants are exercisable immediately and expire approximately four years from date of issue. The weighted average fair value of the warrants was $1.46 per share on the date of the grant using the Black-Scholes pricing model with the following assumptions: expected dividend yield 0.0%, risk-free interest rate 3.26%, expected volatility 114% and an expected term of approximately 4 years;

·	an aggregate of $475,000 in direct transaction costs; and
·	cancelled receivable from Somanta of $931,000.

Approximately $8,879,000 of the purchase price represents the estimated fair value of the acquired in-process research and development projects that have no alternative future use. Accordingly this amount was immediately expensed and for the purposes of this pro forma is included in additional paid-in capital.

The following table summarizes the initial fair values of the assets acquired and liabilities assumed at the date of the acquisition (in thousands) based on a preliminary valuation. Subsequent adjustments may be recorded upon the completion of the valuation and the final determination of the purchase price allocation.

Cash	$	1
Prepaid expenses		25
Office equipment, net		14
Accounts payable		(2,582	)
In-process research & development		8,879
	$	6,337

These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical consolidated financial statements and related notes contained in the annual, quarterly and other reports filed by Access and Somanta with the Securities and Exchange Commission.

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Pro Forma Condensed Combined Balance Sheet

As of December 31, 2007

(Unaudited)

Historical

	Access			Somanta			Pro Forma Adjustments				Pro Forma Combined
ASSETS
Current assets
Cash and cash equivalents	$	159,000		$	2,000						$	161,000
Short term investments, at cost		6,762,000										6,762,000
Receivables		35,000										35,000
Receivables from Somanta		931,000						(931,000	)	(d)		-
Prepaid expenses and other current expenses		410,000			25,000			(410,000	)	(c)		25,000
Total current assets		8,297,000			27,000							6,983,000

Property and equipment, net		130,000			14,000							144,000
Patents net		710,000										710,000
Other assets		12,000										12,000
Total assets	$	9,149,000		$	41,000						$	7,849,000

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	1,796,000		$	2,583,000			(410,000	)	(c)	$	3,969,000
Accrued interest payable		130,000										130,000
Current portion of deferred revenue		68,000										68,000
Current portion of long-term debt net of discount		64,000			856,000			(856,000	)	(d)		64,000
Total current liabilities		2,058,000			3,439,000							4,231,000

Long-term deferred revenue		910,000										910,000
Long-term debt		5,500,000										5,500,000
Total liabilities		8,468,000			3,439,000							10,641,000

Stockholders’ equity (deficit)
Preferred stock		-			-							-
Common stock		36,000			15,000			15,000 (15,000	)	(a) (b)		51,000
Additional paid-in capital		116,018,000			7,615,000			4,756,000 (7,615,000	)	(a) (b)		120,774,000
Notes receivable from stockholders		(1,045,000	)									(1,045,000	)
Treasury stock, at cost		(4,000	)									(4,000	)
Accumulated deficit		(114,324,000	)		(11,028,000	)		(4,771,000	)	(a)		(122,568,000	)
								(3,398,000 11,028,000 (75,000	) )	(b) (b) (d)
Total stockholders’ equity (deficit)		681,000			(3,398,000	)						(2,792,000	)
Total liabilities and stockholders’ equity (deficit)	$	9,149,000		$	41,000						$	7,849,000

See accompanying Notes to Pro Forma Condensed Combined Balance Sheet

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Notes to Pro Forma Condensed Combined Balance Sheet

Note 1: The above statement gives effect to the following pro forma adjustments necessary to reflect the merger of Access and Somanta, as if the transaction had occurred January 1, 2007. Somanta statements used were as of January 4, 2008 (unaudited).

To record the exchange, for accounting purposes, by Somanta shareholders of their preferred and common stock (valued at $4,650,000) for 1,500,000 shares of Access (or 1,500,000 shares valued at the stock price of $3.10 per share) and record the exchange of Somanta warrants for Access warrants valued at a fair value of $281,000. The value placed on the shares was determined based on the Access stock price at January 4, 2008, the date of the acquisition.

To eliminate the shareholders equity section and warrant liabilities of Somanta in connection with the merger and credit the net equity to combined deficit.

c)	Accrual of $410,000 of legal, accounting and other professional fees relating to the merger.

d)	Eliminate intercompany notes receivable and payable of $856,000 and other Somanta costs of $75,000 totaling $931,000.

After the consummation of the transactions described herein, Access had 100,000,000 common shares authorized, approximately 5,085,023 common shares issued and outstanding, 2,000,000 preferred shares authorized with approximately 3,227.3617 shares of Series A cumulative Convertible Preferred Stock issued and outstanding.

F-82

Pro Forma Condensed Combined Statement of Operations

For The Twelve Months Ended December 31, 2007

(Unaudited)

Historical

	Access			Somanta			Pro Forma Combined

Revenues	$	57,000		$	1,000		$	58,000

Expenses
Research and development		2,602,000			445,000			3,047,000
General and administrative		4,076,000			1,889,000			5,965,000
Depreciation and amortization		279,000			-			279,000
Total expenses		6,957,000			2,334,000			9,791,000

Loss from operations		(6,900,000	)		(2,333,000	)		(9,233,000	)

Interest and miscellaneous income		125,000			(3,000	)		122,000
Interest and other expenses		(3,514,000	)		(27,000	)		(3,541,000	)
Loss on extinguishment of debt		(11,628,000	)					(11,628,000	)
Change in fair value of warrant liabilities		-			5,119,000			5,119,000
Currency translation loss		-			(1,000	)		(1,000	)
		(15,017,000	)		5,088,000			(9,929,000	)
Loss before discontinued operations and before income tax benefit		(21,917,000	)		2,755,000			(19,162,000	)
Income tax benefit		61,000			(5,000	)		56,000
Loss from continuing operations		(21,856,000	)		2,750,000			(19,106,000	)

Less preferred stock dividends		(14,908,000	)		-			(14,908,000	)
Loss from continuing operations allocable to common stockholders		(36,764,000	)		2,750,000			(34,014,000	)
Discontinued operations, net of taxes of $61,000		112,000			-			112,000
Net loss allocable to common stockholders	$	(36,652,000	)	$	2,750,000		$	(33,902,000	)

Basic and diluted loss per common share Loss from continuing operations allocable to all common stockholders Discontinued operations Net loss allocable to common stockholders	$ $	(10.35 0.03 (10.32	) )	$ $	0.19 - 0.19		$ $	(6.73 0.02 (6.71	) )

Weighted average basic and diluted common shares outstanding		3,552,006			14,630,402			5,052,006

Notes to Pro Forma Condensed Combined Statement of Operations

Note 1: The above statement gives effect to the merger of Access and Somanta, as if the merger had occurred on January 1, 2006. Somanta statements used were for the nine months ended October 31, 2007.

Note 2: The pro forma combined-weighted average number of common outstanding shares is based on the weighted average number of shares of common stock of Access during the period plus those shares to be issued in conjunction with the merger. A reconciliation between Access' historical weighted average shares outstanding and pro forma weighted average shares outstanding and pro forma weighted average shares outstanding is as follows:

Historical		3,552,006
Somanta equivalent shares giving effect to the merger		1,500,000
Total		5,052,006

F-83

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

Expenses of the Registrant in connection with the issuance and distribution of the securities being registered, are estimated as follows:

SEC Registration Fee	$	1,324
Printing and Engraving Expenses	$	2,500
Legal Fees and Expenses	$	50,000
Accountants' Fees and Expenses	$	25,000
Miscellaneous Costs	$	2,176
Total	$	81,000

Item 14. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation law empowers a Delaware corporation to indemnify its officers and directors and certain other persons to the extent and under the circumstances set forth therein.

The Registrant’s Certificate of Incorporation, as amended, and By-laws, as amended, provide for indemnification of officers and directors of the Registrant and certain other persons against liabilities and expenses incurred by any of them in certain stated proceedings and under certain stated conditions.

The above discussion of the Registrant's Certificate of Incorporation, as amended, By-laws, as amended, and Section 145 of the Delaware General Corporation Law is not intended to be exhaustive and is qualified in its entirety by such Certificate of Incorporation, By-Laws and statute.

Item 15: Recent Sales of Unregistered Securities

On February 4, 2008, we entered into securities purchase agreements (the “Purchase Agreements”) with accredited investors whereby we agreed to sell 272.50 shares of our “Series A Cumulative Convertible Preferred Stock”, par value $0.01 per share, for an issue price of $10,000 per share, (the “Series A Preferred Stock”) and agreed to issue warrants to purchase 499,584 shares of our common stock at an exercise price of $3.50 per share, for an aggregate purchase price for the Series A Preferred Stock and Warrants of $2,725,000. Proceeds, net of issuance costs from the sale were $2,444,000. The shares of Series A Preferred Stock are convertible into common stock at the initial conversion price of $3.00 per share.

In addition, $1,576,000 of Somanta Pharmaceuticals’ acquired accounts payable were settled by issuing 538,508 shares of Access common stock and warrants to purchase 246,753 shares of Access common stock at an exercise price of $3.50 per share. The value of the shares and warrants issued was determined based on the fair value of the accounts payable. The issuance of shares of our common stock in settlement of these accounts was made pursuant to Section 4(2) and Rule 506 of the Securities Act of 1933, as amended.

On November 7, 2007, we entered into securities purchase agreements (the “Purchase Agreements”) with accredited investors whereby we agreed to sell 954.0001 shares of a newly created series of our preferred stock, designated “Series A Cumulative Convertible Preferred Stock”, par value $0.01 per share, for an issue price of $10,000 per share, (the “Series A Preferred Stock”) and agreed to issue warrants to purchase 1,589,999 shares of our common stock at an exercise price of $3.50 per share, for an aggregate purchase price for the Series A Preferred Stock and Warrants of $9,540,001. The shares of Series A Preferred Stock are convertible into common stock at the initial conversion price of $3.00 per share.

On December 6, 2006, we entered into a note and warrant purchase agreement pursuant to which we sold and issued an aggregate of $500,000 of 7.5% convertible notes due November 15, 2007 and warrants to purchase 386,364 shares of common stock of Access. Net proceeds to Access were $450,000. The notes and warrants were sold in a private placement to a group of accredited investors led by SCO Capital Partners LLC (“SCO”) and affiliates.

Delaware (State or other jurisdiction of incorporation or organization)	3841 (Primary Standard Industrial Classification Code Number)	83-0221517 (I.R.S. Employer Identification No.)
2600 Stemmons Freeway, Suite 176 Dallas, Texas 75207 (214) 905-5100 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Stephen B. Thompson Chief Financial Officer Access Pharmaceuticals, Inc. 2600 Stemmons Freeway, Suite 176 Dallas, Texas 75207 (214) 905-5100 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)


Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Security	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee

Common stock, $0.01 par value per share	7,577,868(1)	$2.50 (3)	$18,944,670	$745 (3)
Common stock, $0.01 par value per share	1,582,360 (2)	$2.50 (3)	$3,955,900	$155 (3)
Total common stock, $0.01 par value per share	9,160,228		$22,900,570	$900 (4)

	Page

PROSPECTUS SUMMARY	1
EXPLANATORY NOTE	1
ABOUT ACCESS	1
SUMMARY OF THE OFFERING	5
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION	6

RISK FACTORS	10
FORWARD-LOOKING STATEMENTS	20
SELLING STOCKHOLDERS	21
USE OF PROCEEDS	32
PLAN OF DISTRIBUTION	32
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS	35
DESCRIPTION OF BUSINESS	46
DESCRIPTION OF PROPERTY	63
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS	64
LEGAL PROCEEDINGS	73
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	73
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS	78
MARKET FOR OUR COMMON STOCK	80
DESCRIPTION OF SECURITIES	82
EXPERTS	84
LEGAL MATTERS	84
WHERE YOU CAN FIND MORE INFORMATION	85
FINANCIAL STATEMENTS	F-1

Compound	Originator	Technology	Indication	Clinical Stage (1)

MuGard™	Access	Mucoadhesive liquid	Mucositis	Marketing clearance received
ProLindacTM (Polymer Platinate, AP5346) (2)	Access – U London	Synthetic polymer	Cancer	Phase 2
Phenylbutyrate (PB)	National Institute of Health	Small molecule	Cancer	Phase 2
Oral Insulin	Access	Cobalamin	Diabetes	Pre-clinical
Oral Delivery System	Access	Cobalamin	Various	Pre-clinical
Angiolix®	Immunodex, Inc.	Humanized monoclonal antibody	Cancer	Pre-clinical
Prodrax®	Univ London	Small molecule	Cancer	Pre-clinical
Alchemix®	DeMontford Univ	Small molecule	Cancer	Pre-clinical
Cobalamin-Targeted Therapeutics	Access	Cobalamin	Anti-tumor	Pre-clinical

Total revenues	$	170		$	-		$	57		$	-		$	-		$	-		$	-
Operating loss		(12,718	)		(3,337	)		(6,900	)		(5,175	)		(9,622	)		(6,003	)		(5,426	)
Interest and miscellaneous income		105			60			125			294			100			226			279
Interest and other expense		(225	)		(2,959	)		(3,514	)		(7,436	)		(2,100	)		(1,385	)		(1,281	)
Loss on extinguishment of debt		-			-			(11,628	)		-			-			-			-
Unrealized loss on fair value of warrants		-			-			-			(1,107	)		-			-			-
Income tax benefit		-			-			61			173			4,067			-			-
Loss from continuing operations		(12,838	)		(6,236	)		(21,856	)		(13,251	)		(7,555	)		(7,162	)		(6,428	)

Preferred stock dividends		(2,350	)		-			(14,908	)
Discontinued operations net of taxes
($61 in 2007, $173 in 2006 and $4,067 in 2005)		-			-			112			377			(5,855	)		(3,076	)		(507	)
Net loss		(15,188	)		(6,236	)		(36,652	)		(12,874	)		(1,700	)		(10,238	)		(6,935	)

Common Stock Data:
Net loss per basic and diluted common share	$	(2.76	)	$	(1.76	)	$	(10.32	)	$	(3.65	)	$	(0.53	)	$	(3.38	)	$	(2.61	)
Weighted average basic and diluted common shares outstanding		5,508			3,537			3,552			3,532			3,237			3,032			2,653

	June 30,						December 31,
	2008			2007			2007			2006			2005			2004			2003
							(in thousands)

For the Six Months Ended June 30		For the Year Ended December 31,
2008	2007	2007	2006	2005	2004	2003
		(in thousands, except per share amounts)

Consolidated Balance Sheet Data:
Cash, cash equivalents and short term investments	$	5,888		$	1,900		$	6,921	$	4,389		$	474		$	2,261		$	2,587
Total assets		6,920			3,634			9,149		6,426			7,213			11,090			11,811
Deferred revenue		2,047			173			978		173			173			1,199			1,184
Convertible notes, net of discount		5,500			16,395			5,564		8,833			7,636			13,530			13,530
Total liabilities		10,994			19,135			8,468		16,313			11,450			17,751			17,636
Total stockholders' equity (deficit)		(4,074	)		(15,501	)		681		(9,887	)		(4,237	)		(6,661	)		(5,825	)

	For the Year Ended April 30,
	2007			2006			2005
	(In thousands, except per share amounts)
Consolidated Statement of Operations and Comprehensive Loss Data
Total revenues	$	1		$	1		$	-
Operating loss		(4,550	)		(4,108	)		(1,129	)
Interest and miscellaneous income		28			17			-
Interest and other expense		(2,969	)		(908	)		-
Income tax		4			2			-
Net loss		(7,496	)		(5,002	)		(1,129	)
Deemed dividends on convertible preferred stock		-			(1,522	)		-
Net loss applicable to common shareholders		(7,496	)		(6,524	)		(1,129	)
Comprehensive loss-foreign currency translation adjustment		-			-			(6	)
Comprehensive loss		(7,496	)		(6,524	)		(1,135	)

Common Stock Data:
Net loss per basic and diluted common share	$	(0.56	)	$	(0.47	)	$	(0.20	)
Weighted average basic and diluted common shares outstanding		14,278,247			14,274,365			5,576,845

		As of April 30,
		2007			2006
		(In thousands)
Consolidated Balance Sheet Data
Cash, cash equivalents and short term investments	$	5		$	1,588
Restricted cash		2			152
Total assets		67			1,859
Current liabilities		8,245			3,443
Total liabilities		8,245			3,443
Total stockholders' equity (deficit)		(8,178	)		(1,585	)

Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations Data:		For the Twelve Months Ended December 31, 2006		For the Twelve Months Ended December 31, 2007
		(in thousands)		(in thousands)
Total revenues	$	1		$	58
Total expenses		9,727			9,791
Loss from operations		(9,726	)		(9,233	)
Interest and miscellaneous income		322			122
Interest and other expenses		(7,436	)		(3,541	)
Loss on extinguishment of debt		-			(11,628	)
Change in fair value of warrant liabilities		(4,038	)		5,119
Currency translation loss		-			(1	)
Loss before discontinued operations and before tax benefit		(20,916	)		(19,162	)
Income tax benefit		169			56
Loss from continuing operations		(20,747	)		(19,106	)
Less preferred stock dividends		-			(14,908	)
Loss from continuing operations allocable to common stockholders		(20,747	)		(34,014	)
Discontinued operations, net of taxes of $173,000 and $61,000		377			(112	)
Net loss allocable to common stockholders	$	(20,370	)	$	(33,902	)

	•	Exclusive Patent and Know-how Sub-license Agreement between Somanta and Immunodex, Inc. dated August 18, 2005, as amended;

	•	Patent and Know-how Assignment and License Agreement between Somanta and De Montfort University dated March 20, 2003;

	•	Patent and Know-how Assignment and License Option Agreement between Somanta and The School of Pharmacy, University of London dated March 16, 2004, as amended on September 21, 2005; and

	•	The Phenylbutyrate Co-Development and Sublicense Agreement between Somanta and Virium Pharmaceuticals, Inc. dated February 16, 2005, as amended.

Selling Stockholder	Shares Beneficially Owned Before Offering (1)	Percentage of Outstanding Shares Beneficially Owned Before Offering	Shares to be Sold in the Offering (23)	Percentage of Outstanding Shares Beneficially Owned After Offering
Beach Capital LLC (2)	949,496	12.8%	514,299	6.3%
Brio Capital LP (3)	75,000	1.1%	-	1.1%
Catalytix LDC Life Science Hedge AC (4)	24,999	*	-	*
Cobblestone Asset Mangement LLC (5)	155,450	2.4%	-	2.4%
Cranshire Capital, LP (6)	183,333	2.8%	-	2.8%
Credit Suisse Securities (USA) LLC (7)	500,000	7.2%	-	7.2%
Enable Growth Partners LP (8)	249,999	3.7%	-	3.7%
William G. Garrison (9)	66,667	1.0%	-	1.0%
Edward and Patricia Kelly (10)	99,999	1.5%	-	1.5%
Lake End Capital LLC (11)	1,637,788	20.4%	709,734	12.7%
Dennis Lavalle (12)	45,000	*	-	*
David P. Luci (13)	43,500	*	-	*
Midsummer Investment, Ltd (14)	750,000	10.4%	-	10.4%
Oracle Institutional Partners LP (15)	779,997	10.8%	493,221	4.3%
Oracle Offshore Ltd. (16)	76,893	1.2%	47,924	*
Oracle Partners, LP (17)	1,622,482	20.7%	916,554	10.2%
Perceptive Life Sciences Master Fund Ltd (18)	666,666	9.3%	-	9.3%
Rockmore Investment Master Fund Ltd (19)	249,999	3.7%	-	3.7%
Schroder & Co. Bank AG, Zurich (20)	125,000	1.9%	-	1.9%
SCO Capital Partners LLC (21)	11,947,915	67.8%	4,896,136	55.4%
SCO Capital Partners LP (22)	999,999	13.4%	-	13.4%

Total:	21,250,182		7,577,868

Event Type	Form of Consideration	Date Acquired		Underlying Common Shares Acquired		Conversion/Exercise Price per Share		Consideration Paid				Market Price		Market Value			Profit (loss) on Conversion
Series A Purchase	Cash	11/9/2007			3,179,996	$	3.00	$	9,540,001	(3	)	$	3.11	$	9,889,788			349,787
Series A Purchase/Exchange of Note	Exchange of Note	11/9/2007			7,577,868	$	3.00	$	21,468,927	(1	)	$	3.11	$	23,567,169			2,098,242
Series A Purchase Warrant	Unexercised Warrant	11/9/2007			3,649,880	$	3.50		N/A	(2	)	$	3.11	$	11,351,127
Series A Purchase	Cash	2/4/2008			908,331	$	3.00	$	2,725,000	(3	)	$	2.80	$	2,543,327			(181,673	)
Series A Purchase - Warrant	Unexercised Warrant	2/4/2008			499,584	$	3.50		N/A	(2	)	$	2.80	$	1,398,835
Other - Paid in Kind Dividends	Possible dividends (value at time of dividend date equal to 20 day moving average)		N/A		1,582,360		N/A		N/A	(4	)		N/A		N/A			N/A
Total					17,398,019			$	33,733,928					$	48,750,246	(3)	$	2,266,356


SCO Capital Partners LLC	2/16/2006	272,727	(1)	$	1.32			Warrant	$	1.05	$	286,363
Lake End Capital Partners LLC	2/16/2006	90,909	(1)	$	1.32			Warrant	$	1.05	$	95,454
Howard Fischer	2/16/2006	45,454	(1)	$	1.32			Warrant	$	1.05	$	47,727
Mark Alvino	2/16/2006	45,454	(1)	$	1.32			Warrant	$	1.05	$	47,727
SCO Capital Partners LLC	2/16/2006					$	400,000	Cash			$	400,000

SCO Capital Partners LLC	10/24/2006	36,364	(1)	$	1.32			Warrant	$	1.20	$	43,637
Lake End Capital Partners LLC	10/24/2006	9,091	(1)	$	1.32			Warrant	$	1.20	$	10,909
SCO Capital Partners LLC	10/24/2006					$	40,000	Cash			$	40,000

SCO Capital Partners LLC	12/6/2006	18,182	(1)	$	1.32			Warrant	$	1.80	$	32,728
Lake End Capital Partners LLC	12/6/2006	9,091	(1)	$	1.32			Warrant	$	1.80	$	16,364
Howard Fischer	12/6/2006	9,091	(1)	$	1.32			Warrant	$	1.80	$	16,364
Mark Alvino	12/6/2006	9,091	(1)	$	1.32			Warrant	$	1.80	$	16,364
SCO Capital Partners LLC	12/6/2006					$	40,000	Cash			$	40,000

SCO Capital Partners LLC	11/9/2007	100,000	(2) (4)	$	3.50			Warrant	$	3.11	$	311,000
SCO Capital Partners LLC	11/9/2007		(2) (4)			$	240,000	Cash			$	240,000
Rodman & Renshaw LLC	11/9/2007	109,000	(2) (3)	$	3.50			Warrant	$	3.11	$	338,990
Rodman & Renshaw LLC	11/9/2007		(2) (3)			$	482,800	Cash			$	482,800
SCO Capital Partners LLC	2/4/2008	39,667	(2) (4)	$	3.50			Warrant	$	2.80	$	111,068
SCO Capital Partners LLC	2/4/2008		(2) (4)			$	190,750	Cash			$	190,750
Lake End Capital LLC	2/4/2008	5,750	(2) (4)	$	3.50			Warrant	$	2.80		16,100
Total		799,871				$	1,393,550					1,962,554

Stockholder	Date Acquired/ Amount Due	Warrants/ Options		Exercise Price per Share		Form of Consideration	Market Price at Time of Sale		Combined Market Value at Time of Sale		Total Possible Profit (Loss) at Time of Sale
SCO Capital Partners LLC	2/24/2004		18,949	$	27.00	Warrant	$	27.70	$	524,887	$	13,264
Jeffrey B. Davis	2/24/2004		5,820	$	27.00	Warrant	$	27.70	$	161,214	$	4,074
Mark Alvino	2/24/2004		980	$	27.00	Warrant	$	27.70	$	27,146	$	686

SCO Capital Partners LLC	2/16/2006		2,727,272	$	1.32	Warrant	$	1.05	$	2,863,636	$	(736,363	)
Beach Capital LLC	2/16/2006		340,909	$	1.32	Warrant	$	1.05	$	357,954	$	(92,045	)
Lake End Capital Partners LLC	2/16/2006		340,909	$	1.32	Warrant	$	1.05	$	357,954	$	(92,045	)
SCO Capital Partners LLC	2/16/2006		272,727	$	1.32	Warrant	$	1.05	$	286,363	$	(73,636	)
Lake End Capital Partners LLC	2/16/2006		90,909	$	1.32	Warrant	$	1.05	$	95,454	$	(24,545	)
Howard Fischer	2/16/2006		45,454	$	1.32	Warrant	$	1.05	$	47,727	$	(12,273	)
Mark Alvino	2/16/2006		45,454	$	1.32	Warrant	$	1.05	$	47,727	$	(12,273	)

Jeffrey B. Davis	8/16/2006		25,000	$	0.63	Option	$	0.63	$	15,750	$	-

SCO Financial Group	1/4/2008		39,722	$	3.50	Warrant	$	3.10	$	123,138	$	(15,889	)
Jeffrey B. Davis	1/4/2008		3,667	$	3.50	Warrant	$	3.10	$	11,368	$	(1,467	)
Total			3,957,772						$	4,920,318	$	(1,042,512	)

Stockholder	Date of Transaction	Convertible Notes Principal Amount		Common Stock k to be Issued upon the Exercise of Warrants	Common Stock Underlying Convertible Notes	Market Price per Share (immediately prior to transaction)*	Placement Agent Fees Paid
Shares Registered In Prior Transactions *

Oracle Institutional Partners LP	9/20/2000	698,500	(a)		25,400
					139,700
Oracle Offshore Ltd	9/20/2000	132,000	(a)		4,800
					26,400
Oracle Partners, LP	9/20/2000	2,524,500	(a)		91,800
					504,900
SAM Oracle Investments, Inc.	9/20/2000	660,000	(a)		24,000
					132,000
		4,015,000	(a)		949,000

SCO Capital Partners LLC	2/24/2004			18,949		$ 27.00
Jeffrey B. Davis	2/24/2004			5,820		$ 27.00
Mark Alvino	2/24/2004			980		$ 27.00
SCO Capital Partners LLC	2/24/2004						$ 560,000	(e)
				25,749			$ 560,000

SCO Capital Partners LLC	2/16/2006	4,000,000	(b)		3,636,363
Lake End Capital LLC	2/16/2006	500,000	(b)		454,545
Beach Capital LLC	2/16/2006	500,000	(b)		454,545
SCO Capital Partners LLC	2/16/2006			2,727,272		$ 1.32
Lake End Capital LLC	2/16/2006			340,909		$ 1.32
Beach Capital LLC	2/16/2006			340,909		$ 1.32
SCO Capital Partners LLC	2/16/2006			272,727		$ 1.32
Lake End Capital LLC	2/16/2006			90,909		$ 1.32
Howard Fischer	2/16/2006			45,454		$ 1.32
Mark Alvino	2/16/2006			45,454		$ 1.32
SCO Capital Partners LLC	2/16/2006						$ 400,000	(f)
		5,000,000		3,863,634	4,545,453		$ 400,000
Sub-total 2/16/06 issue					8,409,087

Total Shares Previously Registered				3,889,383	5,494,453

Prior Securities Transactions between Issuer and the Selling Stockholders

SCO Capital Partners LLC	10/24/2006	400,000	(c)		363,636
Lake End Capital LLC	10/24/2006	100,000	(c)		90,909
SCO Capital Partners LLC	10/24/2006			272,727		$ 1.32
Lake End Capital LLC	10/24/2006			68,182		$ 1.32
SCO Capital Partners LLC	10/24/2006			36,364		$ 1.32
Lake End Capital LLC	10/24/2006			9,091		$ 1.32
SCO Capital Partners LLC	10/24/2006						$ 40,000	(f)
		500,000		386,364	454,545		$ 40,000

SCO Capital Partners LLC	12/6/2006	400,000	(d)		363,636
Lake End Capital LLC	12/6/2006	100,000	(d)		90,909
SCO Capital Partners LLC	12/6/2006			272,727		$ 1.32
Lake End Capital LLC	12/6/2006			68,182		$ 1.32
SCO Capital Partners LLC	12/6/2006			18,182		$ 1.32
Lake End Capital LLC	12/6/2006			9,091		$ 1.32
Howard Fischer	12/6/2006			9,091		$ 1.32
Mark Alvino	12/6/2006			9,091		$ 1.32
SCO Capital Partners LLC	12/6/2006						$ 40,000	(f)
		500,000		386,364	454,545		$ 40,000

Total Shares Not Previously Registered				772,728	909,090

Total Prior Security Transactions		10,015,000		4,662,111	6,403,543		$ 1,040,000

Stockholder	Registration Statement	Total Shares Registerd in Registration Statement *	Total Common Shares Outstanding Prior to Transaction *	Total Common Shares Held By Persons Other Than Selling Shareholder & Affiliates *	Percentage of Total & Outstanding Securities Issued/or Issuable in Transaction
Shares Registered In Prior Transactions *
	S-3/A File # 333-92210 – 7/15/03	146,000	2,520,696	2,327,598	5.8%
Oracle Institutional Partners LP	S-1 File # 333-135734 – 7/13/06	803,000	3,530,908	2,837,555	22.7%
Oracle Offshore Ltd
Oracle Partners, LP
SAM Oracle Investments, Inc.
Sub-total 9/20/00 issue		949,000

SCO Capital Partners LLC	S-3 File # 333-113909 – 3/24/04	25,749	2,705,089	2,229,630	1.0%
Jeffrey B. Davis
Mark Alvino
SCO Capital Partners LLC
Sub-total 2/24/04 issue		25,749

SCO Capital Partners LLC	S-1 File # 333-135734 – 7/13/06	8,409,087	3,530,908	3,177,519	238.2%
Lake End Capital LLC
Beach Capital LLC
Howard Fischer
Mark Alvino
Sub-total 2/16/06 issue		8,409,087


Total Shares Previously Registered		9,383,836

Prior Securities Transactions between Issuer and the Selling Stockholders

SCO Capital Partners LLC
Lake End Capital LLC
Sub-total 10/24/06 issue		840,909	3,534,408	2,789,605	23.8%

SCO Capital Partners LLC
Lake End Capital LLC
Howard Fischer
Mark Alvino
Sub-total 12/6/06 issue		840,909	3,535,408	2,790,305	23.8%

Total Shares Not Previously Registered		1,681,818

Total Prior Security Transactions		11,065,654

Selling Stockholder		Natural Person or Persons who exercise sole or shared voting and/or dispositive powers
Beach Capital LLC		Steven H. Rouhandeh
Brio Capital LP		Shaye Hirsch
Catalytix LDC Life Science Hedge AC		Ken Sorenson
Cobblestone Asset Management LLC		Michael J. Palazzi
Cranshire Capital, LP		Lawrence A. Pross or M. Kopin
Credit Suisse Securities (USA) LLC		Greg Grimaldi
Enable Growth Partners LP		Brendan O'Neil
William G. Garrison		William G. Garrison
Edward W. Kelly and Patricia A. Kelly Jt Ten		Edward W. Kelly or Patricia A. Kelly
Lake End Capital LLC		Jeffrey B. Davis
Dennis Lavalle		Dennis Lavalle
David P. Luci		David P. Luci
Midsummer Investment, Ltd		Michael Amsalem
Oracle Institutional Partners LP		Larry A. Feinberg
Oracle Offshore Ltd		Larry A. Feinberg
Oracle Partners, LP		Larry A. Feinberg
Perceptive Life Sciences Master Fund Ltd		J. Edelman
Rockmore Investment Master Fund Ltd		Michael Clateman
SAM Oracle Investments, Inc.		Larry A. Feinberg
Schroder & Co Bank AG, Zurich		Schroder & Co Bank AG
SCO Capital Partners LP		Steven H. Rouhandeh
SCO Capital Partners LLC		Steven H. Rouhandeh

Territory	Partner	Date
United States & Canada	Milestone Biosciences, LLC	August 2008
Europe	SpePharm IP BV	August 2007
China (PRC), Hong Kong, Macau, Taiwan, Brunei, Cambodia, Laos, Malaysia, Myanmar, Phillippines, Singapore, Thailand & Vietnam	RHEI, Pharmaceuticals, Inc.	January 2008

·	lower salary related expenses due to stock option expenses ($470,000);
·	lower salary and other salary related expenses ($49,000);

(in thousands)	Twelve Months ended December 31,				Six Months ended June 30,		Inception To Date (1)
Project	2007		2006		2008
Polymer Platinate (ProLindac™)	$	2,563	$	2,043	$	1,944	$	24,161
Mucoadhesive Liquid Technology (MLT)		21		10		-		1,511
Others (2)		18		-		68		5,130
Total	$	2,602	$	2,053	$	2,012	$	30,802



Steven H. Rouhandeh	51	Chairman of the Board
Jeffrey B. Davis	45	Chief Executive Officer, Director
Esteban Cvitkovic, M.D.	58	Vice Chairman – Europe
Mark J. Ahn, Ph.D.	46	Director
Mark J. Alvino	40	Director
Stephen B. Howell, M.D.	64	Director
David P. Luci	41	Director
David P. Nowotnik, Ph.D.	59	Senior Vice President Research & Development
Phillip S. Wise	50	Vice President, Business Development & Strategy
Stephen B. Thompson	55	Vice President, Chief Financial Officer, Treasurer,
		Secretary

Name and Principal Position (8)	Year			Salary ($) (1)		Bonus ($)		Stock Awards ($) (2)		Option Awards ($) (3)		All Other Compensation(4)		Total ($)
Stephen R. Seiler (5) Former President and CEO	2007		$	350,000	$	-	$	-	$	270,000	$	14,840	$	634,840
Rosemary Mazanet(5) Former Acting CEO		2007 2006	$	8,076 357,385	$	- 100,000	$	- -	$	263,071 81,464	$	- 2,594	$	271,147 541,443

David P. Nowotnik, Ph.D. Senior Vice President Research and Development		2007 2006	$	253,620 253,620	$	20,000	$	-	$	40,732	$	12,225 7,152	$	265,845 321,504

Phillip S. Wise(7) Vice President, Business Development		2007 2006	$	200,000 116,667	$	- 25,000	$	- -	$	- 40,732	$	9,876 $ 358	$	209,876 182,757

Stephen B. Thompson Vice President, Chief Financial Officer		2007 2006	$	154,080 154,080	$	- 20,000	$	- -	$	- 40,732	$	7,427 4,508	$	161,507 219,320

Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)	Option Expiration Date

Stephen R. Seiler	100,000	-	-	2.90	03/12/10
Rosemary Mazanet(2)	33,333 200,000 48,251 6,000	66,667 - 1,749 -	-	2.90 0.63 5.45 12.50	01/04/17 08/17/16 11/02/15 05/11/15
David P. Nowotnik, Ph.D. (3)	100,000 6,000 5,000 7,000 10,000 10,000 10,000 10,000	- 2,000 - - - - - -	-	0.63 11.60 29.25 10.10 18.65 12.50 10.00 15.00	08/17/16 05/23/15 01/23/14 01/30/13 03/22/12 03/01/10 07/20/09 11/16/08
Phillip S. Wise	100,000	-	-	0.63	08/17/16
Stephen B. Thompson (3)	100,000 3,750 3,000 4,000 6,000 9,000 4,000 4,000	- 1,250 - - - - - -	-	0.63 11.60 29.25 10.10 18.65 12.50 10.00 15.00	08/17/16 05/23/15 01/23/14 01/30/13 03/22/12 03/01/10 07/20/09 06/18/08

Name	Fees earned or Paid in Cash ($)	Stock Awards ($)	Option Awards ($)(1)	All Other Compensation ($)	Total ($)
Mark J. Ahn, PhD (2)	16,000	-	2,000	-	18,000
Mark J. Alvino	16,000	-	-	-	16,000
Esteban Cvitkovic, MD (3)	11,000	-	256,000	153,000	420,000
Jeffrey B. Davis	22,000	-	-	-	22,000
Stephen B. Howell, MD (4)	15,000	-	2,000	67,000	84,000
David P. Luci (5)	13,000	-	50,000	-	63,000
Rosemary Mazanet, MD, PhD (6)	12,000	-	330,000	29,000	371,000
John J. Meakem, Jr. (7)	18,000	-	2,000	-	20,000

	(1)		The value listed in the above table represents the fair value of the options recognized as expense under FAS 123R during 2007, including unvested options granted before 2007 and those granted in 2007. Fair value is calculated as of the grant date using a Black-Sholes (“Black-Sholes”) option-pricing model. The determination of the fair value of share-based payment awards made on the date of grant is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. Our assumptions in determining fair value are described in note 10 to our audited financial statements for the year ended December 31, 2007, included in our Annual Report on Form 10-K.
	(2)		Represents expense recognized in 2007 in respect of 25,000 options to purchase shares based on a grant date fair value of $7,592.
	(3)		Represents expense recognized in 2007 in respect of 25,000 options to purchase shares based on a grant date fair value of $157,027 and an additional 25,000 options to purchase shares based on a grant date fair value of $99,347. Includes $153,000 Dr. Cvitkovic received for scientific consulting services in 2007.
	(4)		Represents expense recognized in 2007 in respect of 25,000 options to purchase shares based on a grant date fair value of $5,581. Includes $67,000 Dr. Howell received for scientific consulting services in 2007.
	(5)		Represents expense recognized in 2007 in respect of 25,000 options to purchase shares based on grant date fair value of $65,768.
	(6)		Represents expense recognized in 2007 in respect of 50,000 options to purchase shares based on a grant date fair value of $147,737; 200,000 options to purchase shares based on a grant date fair value of $81,464; and an additional 100,000 options to purchase shares based on a grant date fair value of $263,071. Includes $29,000 Dr. Mazanet received for scientific consulting services in 2007.
	(7)		Represents expense recognized in 2007 in respect of 25,000 options to purchase shares based on a grant date fair value of $5,581.

Common Stock Beneficially Owned
Name of Beneficial Owner	Number of Shares(1)	% of Class
Steven H. Rouhandeh(2)	-	*
Jeffery B. Davis (3)	30,820	*
Mark J. Ahn, Ph. D. (4)	31,000	*
Mark J. Alvino (5)	86,525	1.3%
Esteban Cvitkovic, M.D. (6)	106,000	1.6%
Stephen B. Howell, M.D. (7)	56,422	*
David P. Luci (8)	43,500	*
David P. Nowotnik, Ph.D. (9)	176,682	2.7%
Phillip S. Wise (10)	100,000	1.5%
Stephen B. Thompson (11)	144,000	2.2%
SCO Capital Partners LLC, SCO Capital Partners LP, and Beach Capital LLC (12)	13,897,410	71.0%
Larry N. Feinberg (13)	2,483,032	28.7%
Lake End Capital LLC (14)	1,637,788	20.4%
Midsummer Investment, Ltd. (15)	750,000	10.4%
All Directors and Executive Officers as a group (consisting of 10 persons) (16)	774,950	10.8%

Plan Category	Number of securities to be issued upon exercise of outstanding options warrants and rights	Weighted-average exercise price of outstanding options warrants and rights	Number of securities remaining available for the issuance under equity compensation plans (excluding securities reflected in column (a)

Equity compensation plans
approved by security holders
2005 Equity Incentive Plan	926,386	$ 1.59	717.328
1995 Stock Awards Plan	162,417	15.53	-
2001 Restricted Stock Plan	-	-	52,818

Equity compensation plans
not approved by security holders
2007 Special Stock Option Plan	100,000	2.90	350,000
Total	1,188,803	$ 3.60	1,120,146

First quarter March 31, 2008	$	3.50	$	1.35
Second quarter June 30, 2008		3.30		1.40
Third quarter September 30, 2008		3.49		2.50
Fourth quarter October 6, 2008		2.75		2.45

Fiscal Year Ended December 31, 2007
First quarter	$	10.66	$	2.50
Second quarter		6.75		4.30
Third quarter		5.16		2.10
Fourth quarter		4.48		2.10

Fiscal Year Ended December 31, 2006
First quarter	$	2.65	$	0.80
Second quarter		1.50		0.10
Third quarter		1.30		0.45
Fourth quarter		3.00		1.05

	PAGE

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets at December 31, 2007 and 2006	F-3

Consolidated Statements of Operations and Comprehensive Loss for 2007 and 2006	F-4

Consolidated Statement of Stockholders' Equity (Deficit) for 2007 and 2006	F-5

Consolidated Statements of Cash Flows for 2007 and 2006	F-6

Notes to Consolidated Financial Statements (Two years ended December 31, 2007)	F-7

Condensed Consolidated Balance Sheets at March 31, 2008 (unaudited)	F-23

Condensed Consolidated Statements of Operations for March 31, 2008 and 2007 (unaudited)	F-24

Condensed Consolidated Statements of Cash Flows for March 31, 2008 and 2007 (unaudited)	F-25

Notes to Condensed Consolidated Financial Statements (Three Months Ended March 31, 2008 and 2007) (unaudited)	F-26

Current assets Cash and cash equivalents Short term investments, at cost Receivables Receivables due from Somanta Pharmaceuticals Prepaid expenses and other current assets		$	159,000 6,762,000 35,000 931,000 410,000			$	1,194,000 3,195,000 359,000 - 283,000
Total current assets			8,297,000				5,031,000


Property and equipment, net		130,000		212,000

Debt issuance costs, net		-		158,000

Patents, net		710,000		878,000

Licenses, net		-		25,000

Other assets		12,000		122,000
Total assets	$	9,149,000	$	6,426,000

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Total current liabilities	2,058,000	10,813,000

Long-term deferred revenue	910,000
Long-term debt	5,500,000	5,500,000

Total liabilities	8,468,000	16,313,000


Balance, December 31, 2005	3,528,000	$	35,000	-	$	-	$	62,942,000		$	(1,045,000	)	$	(4,000	)	$	(66,165,000	)
Common stock issued for compensation	7,000		-	-		-		77,000			-			-			-
Warrants issued	-		-	-		-		100,000			-			-			-
Stock option compensation expense	-		-	-		-		248,000			-			-			-
Issuance of convertible debt with warrants	-		-	-		-		5,432,000			-			-			-
Cumulative effect of change in accounting principle	-		-	-		-		-			-			-			1,367,000
Net loss	-		-	-		-		-			-			-			(12,874,000	)
Balance, December 31, 2006	3,535,000		35,000	-		-		68,799,000			(1,045,000	)		(4,000	)		(77,672,000	)

Common stock issued for services	19,000		-	-		-		83,000			-			-			-
Options exercised	31,000		1,000	-		-		35,000			-			-			-
Stock option compensation expense	-		-	-		-		1,048,000			-			-			-
Preferred stock issuances	-		-	954.0001		-		5,560,000			-			-			-
Warrants issued with preferred stock	-		-	-		-		3,980,000			-			-			-
Costs of stock issuances								(868,000	)		-			-			-
Beneficial conversion Feature	-		-	-		-		14,648,000			-			-			-
Preferred stock dividend beneficial conversion feature	-		-	-		-		-			-			-			(14,648,000	)
Conversion of convertible debt into preferred stock	-		-	2,273.3616		-		6,472,000			-			-			-
Warrants issued with preferred stock	-		-	-		-		4,633,000			-			-			-
Loss on extinguishment of debt – preferred stock	-		-	-		-		6,777,000			-			-			-
Loss on extinguishment of debt – warrants	-		-	-		-		4,851,000			-			-			-
Preferred dividends	-		-	-		-		-			-			-			(260,000	)
Net loss	-		-	-		-		-			-			-			(21,744,000	)
Balance, December 31, 2007	3,585,000	$	36,000	3,227.3617	$	-	$	116,018,000		$	(1,045,000	)	$	(4,000	)	$	(114,324,000	)

	Year ended December 31,
	2007			2006

Cash flows from operating activities:
Net loss	$	(21,744,000	)	$	(12,874,000	)
Adjustments to reconcile net loss to net cash used
in operating activities:
Unrealized loss		-			1,107,000
Loss on extinguishment of debt		11,628,000			-
Stock option expense		1,048,000			248,000
Stock issued for compensation/services		83,000			77,000
Depreciation and amortization		279,000			309,000
Amortization of debt costs and discounts		2,316,000			6,749,000
Loss (gain) on sale of assets		2,000			(550,000	)
Change in operating assets and liabilities:
Receivables		(607,000	)		4,129,000
Prepaid expenses and other current assets		(127,000	)		14,000
Other assets		14,000			127,000
Accounts payable and accrued expenses		310,000			(1,657,000	)
Accrued interest payable		1,150,000			363,000
Deferred revenues		805,000			-
Net cash used in operating activities		4,843,000			(1,958,000	)

Cash flows from investing activities:
Capital expenditures		(18,000	)		(3,000	)
Proceeds from sale of equipment		13,000			-
Proceeds from sale of oral/topical care assets		-			550,000
Purchases of short-term investments
and certificates of deposit, net		(3,567,000	)		(3,070,000	)
Net cash used in investing activities		(3,572,000	)		(2,523,000	)

Cash flows from financing activities:
Payments of notes payable		(1,327,000	)		(106,000	)
Proceeds from secured convertible notes payable		-			5,432,000
Exercise of stock options		35,000			-
Proceeds from preferred stock issuances, net of costs		8,672,000			-
Net cash provided by financing activities		7,380,000			5,326,000

Net increase (decrease) in cash and cash equivalents		(1,035,000	)		845,000
Cash and cash equivalents at beginning of year		1,194,000			349,000
Cash and cash equivalents at end of year	$	159,000		$	1,194,000

Cash paid for interest	$	34,000		$	315,000

Supplemental disclosure of noncash transactions
Common stock issued for SEDA and
Debt issuance costs		-			568,000
Accrued interest capitalized		511,000			433,000
Warrants issued per professional agreement
of consulting services		-			100,000
Cumulative change of accounting principle		-			1,367,000
Issuance of convertible debt with warrants		-			5,432,000
Preferred stock dividends		260,000			-
Debt exchanged for preferred stock		10,015,000			-
Accrued interest exchanged for preferred stock		1,090,000			-